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Christopher H. Loo, MD-PhD: We welcome Yosef Lee to the show.
We have a very special guest today, Yosef Lee, he is a lawyer by day. He is also a multifamily apartments syndicator, and investor and he has a strong faith, and is a father. He's a connector. And he's a strategist, and he's an entrepreneur. So his vision is to take back control of T P O, which stands for time, place and occurrence, through financial freedom. And he started his journey of investing in cash flowing multifamily apartments as a tool to create passive income streams, and to achieve generational wealth along his journey. He loves to make changes in other's lives and empower them to become better versions of themselves and to live life on their own terms. He's based out of New York City, and if you follow him on Facebook, you'll see that he's done a lot of multifamily syndicates. Welcome, Yosef.
Yosef Lee: Thank you, Chris. Thank you very much for inviting me. Very excited.
Christopher H. Loo, MD-PhD: Yeah, I'm really interested in how people are making money in the real estate space. You don't always have to be a landlord. You don't have to be a flipper. I'm happy to just bring people on the show and get the word out in awareness. Okay, so tell us more about yourself how you get started. And we'll go from there.
Yosef Lee: Sure, Chris, as you introduce myself briefly in the beginning, I'm a South Korean immigrant, a lawyer by trade. During the daytime, I'm a full time attorney, do a lot of litigation, civil litigation, but at night and weekends, I try to do my syndication and multifamily investing. I'm the father of two girls, and as you said, I'm aspiring to take back control of my time, place and occurrence. It's TPO as what New York City Police uses in their police report, it means time, place and occurrence. That means, like, as you said, when you mentioned the four freedom, I was like, oh, that's kind of correlates with what I think is TPO, like time place, is wherever you are, you want to achieve that freedom from place and occurrence, the events that you want to be free to decide your own terms, right. So that's basically what I aspire to.
As an attorney, I soon realized by the nature of my job, I trade my time for money. So the more money I want to make, I have to spend more time with work and the jobs and it's going against the notion of the lifestyle that I was pursuing back then. So I started looking into creating passive income. That was the conclusion I made through some research. And I was dipping my hands a little here and there like REITs, and stocks, bonds, mutual funds, I tried a little bit, not not too much. And then I quickly landed on real estate and more so multifamily apartment investing, because the benefits there multifamily apartment investing provides is just, for me, it was no brainer not to take.
So I started not too long ago, it's been about a year and a half by now. And I joined mastermind groups and other investor meetups and groups and started my networking and my partner through the mastermind groups. And we joined together and we tackled down appointments. My first deal was closed back in December of 20. Ever since then, I became a part of five more deals. And here I am, that's in a very nutshell, my real estate journey.
That's awesome. I saw your post on social media and we connected and I'm really excited to see people take back control and just do other things. People usually thought of freedom as having a high paying job. But I recently watched a movie back in the 80s, where there is just the high paid doctor. And he just had no time for his family. He was just making a lot of money, but he just had no time for his family. So why is it that busy professionals such as yourself, high paying doctors, need to invest? isn't their job enough so they can make six, seven figures and eight figures? What do they need to invest?
Yosef Lee: I think it's enough, but still, I see two different kinds of incomes, where we work as an attorney, you as a doctor, the money we make as an active income, Meaning, unless we're actively involved, physically, and also timewise, we put time in it, the money is not gonna come, right, it's gonna just stop there. I saw many different cases where somebody, like a busy professional, was hurt. And then for a while, they couldn't go to work. Now it's a little different story, because we could work remotely, but even so let's say, God forbid, I get into an accident, I lose my sight or something, right? My voice. What am I going to do? Like I can't speak, I can’t see, right? But it's not the same as before, my ability to make money will exponentially drop, and it will go down. So that's the sort of idea of how I started thinking about passive investing. Because the idea of making money for myself when I even go to sleep. That's great.
So yeah, that's how I started. And so not saying it's just for high paying professionals like you are me, I think it's for everybody. At one point or the other, you should have multiple income streams, so that you could be ready for any type of situation for your family and yourself, right?
Christopher H. Loo, MD-PhD: You brought up a lot of good points, because we are all limited by time and physical labor. So if we all have a finite amount of time. And as we age, our ability to work and physically work is going down. So we have to be able to leverage mental work and knowledge and the experience of an investor and business owners.
So I was recently talking with one colleague, and the idea of, we’re brought into this idea of job security. What do you think that job security exists today, and especially for lawyers and doctors in the age of automation? Recently, I was at a restaurant and we were served by a robot. So what do you think about the idea of investing because the idea of job stability and security is not there anymore?
Yosef Lee: I think there is no 100% job security or sustainability at this point, because unless you work hard, who knows what's gonna happen, right. And you have to be effective to someone so that that someone can continue to hire you. And if you call it job security, I don't know about that. Because you are in the fingertip of someone else's, like, if that person wants to let go of you, you gotta just let go of, right. And I don't know if you want to call it job security, it's really not, it's probably our parents' generation, for working for a big company, if you become a part of the company, the company will take care of you.
I think that's the notion that our parents' generation used to have. But now everything has changed. And I don't want to admit that reality. But a lot of times we are seen as a number, and in the office or in the firm, unless you establish a good relationship with your employer. My case is a little different story. My case was a little different. I have a very good relationship, my employer, and I have trust and some sort of job security here. I don't think it's a privileged situation. It's probably a little tiny portion out of 100%, maybe five-10%. But the rest 90%. I think being employed, I don't think it's a security, it's more of a well, you're you're just part of someone else's decision. You have no control.
Christopher H. Loo, MD-PhD: Yeah, exactly. Yeah, that was quite interesting, because a lot of doctors last year were caught off guard, because their hospitals got overwhelmed with COVID patients. So hospitals needed tons of support staff and workers. But at the same time revenues dwindled, the hospitals and executives made records off the stimulus, but they had to fire and furlough a lot of physicians, nurses, and staff. So I actually got an email requesting can you come on as a reserve volunteer? That's just incredible to me. But as you said, you're at the whim of some higher influence and authority.
So, we'll switch gears to multifamily. So why did you choose multifamily? And a lot of physicians are interested in real estate because of taxes and a safe place to put their wealth and cash flow. So what did tell us more about getting into it and why you chose it?
Yosef Lee: The reason why I chose real estate over stocks, or other investment vehicles, I'm not saying the stocks or other investment vehicles are better or worse or anything. It's just different and my preference is more multifamily real estate. I first saw, there are basic human needs for food, clothing and shelter, right? So apartments, so demand is always there. And demographic shifting, supports baby boomers downsizing from big housings to smaller ones with nice amenities and millennials as well. They're not buying homes anymore. They want to live in an apartment with convenient amenities and nice amenities. Right. And there's a cash flow monthly or quarterly checks coming in. Right, that's a good part.
The inflation rate nationally is 2-3% each year. I don't know about it now. But the last number I checked two years ago, it was about 2-3% Each year, whereas savings will get you not even 1% Sometimes. So saving money is no longer a wise choice, right? You're basically storing your money somewhere, it's just storage. But national rent growth is over 3% 3, 4, 5 percent. So it's definitely a hedge against inflation. And multifamily? Yes, scalability. There's an economy of scale, it's easier to manage a 25 unit apartment under one roof than to manage 25 single family homes here and there, scattered.
Tax benefits, you mentioned. Yes, there's something called cost segregation. And you get to expedite the depreciation process. So you could use that to offset your tax liability from your passive income. So that's another great point that you made. So these are mainly the benefits and I looked at and, using the proper strategy, repositioning and cashing out refi strategy. I looked at it as velocity of money. your money will at one point, you get on to the momentum, and your money will make more money, and it's easier for that.
Christopher H. Loo, MD-PhD: Yeah, you brought up so many good points. What are your thoughts? The current interest rate is less than 1%. And with the inflation starting to rise. The Feds are trying to keep it under check. And then there's a housing boom as well, there's continued construction. Where do you see the real estate market going? Do you think the interest rates are gonna stay the same? Or is it in for a housing bust or crash, similar to 2008? What do you think about that?
Yosef Lee: I'm not an expert in market knowledge, however, the things I hear is, at one point, sooner or later, sooner, rather than later, we'll have a kind of cooldown period. Now we're looking like a top market at this point. But I think in a year or two, I assume we'll have some cooldown period, and the interest rate will go up a little bit. But now it's going too low that a lot of people are just borrowing money and trying to spend that and I see a lot of people just overpaying for property. So it's always important to buy right. This will make it more profitable.
And as you mentioned, about new constructions, the target properties that we are looking at, or B and C type, sometimes A we look at two, but more so B type properties, B class and C Class D support rents are not built up anymore. It's always A class now, if they're building a new construction, right? So demand is still there. And throughout COVID, we saw over 90% occupancy all the time, for all the properties that we deal with the collection area was great, over 90%. So I think the rental market will continue to be strong. For years to come. I hope so too.
Christopher H. Loo, MD-PhD: Yeah, I think it's, if you got in early, I got in 2008. And as you had a build up period. And if you're a property owner, now's the best time because rents are higher, it's harder to get into a property. There was recently, I think, private equities buying up a lot of properties as well. There's a lot of development. So if you've got in early and you're a real estate investor, it's a great time.
So what if somebody, so for example you have a million million dollar property, somebody doesn't have 200,000 down? What are other ways that investors can participate in multifamily, commercial apartments? I know you're involved in syndicates. So tell us more about that.
Yosef Lee: Syndication is a little bit different from just buying a single family or flipping and renting it out as because, if you deal with single family or residential multifamily, you can do it yourself, your down payment will be very important, how much downpayment you have will be very important, because you're going to have to do yourself, inspections and closings and all that, you got to run the show. But syndication is a team play. So if you do not have the money to bring in, you can actually add value in a different way.
So for example, I look at a good syndication team, they have a team of somebody who's good at underwriting and finding the deal. Somebody who has high net worth, who can sign on the loan, somebody who has prior experience, who could add the credibility side, somebody who could be a boots in the ground, working as a local point person, somebody who's good at marketing investor relationship, you see all these titles.It doesn't have to be six or seven partnership groups, but two, three people can share this up.
But the point I'm trying to make is it's not only about money, right money as a syndication, syndicators, we raised Yes, in the beginning, we need some money to lock the deal as earnest money deposit. But again, if you don't have that money, you can add value by looking for a deal and finding the deal and bringing the deal. And then if this is the deal, all teams are agreeing to let you into the general partnership group, and you get that general partner partnership equity there, right.
If you're good at raising capital, you don't have to bring your own money, but you could actually bring in other potential investors and using their own using the potential investors' money. We close the deal together so you don't really have to have your own money. I think there are ways to come into the game. In the beginning, unless you have credibility, it will be hard. But it doesn't doesn't necessarily mean that it's impossible. There's still ways and you can do it.
Christopher H. Loo, MD-PhD: The sky's the limit. So, when there's a will there's a way. You don't have to do everything yourself. As Yosef said, you can combine your expertise with people with different skill sets, and work as a team, and pull your time telling your money together to achieve a goal. And then in that way, your returns on time money investment are much greater.
So how do you manage your time?
Yosef Lee: So time management will be critical for myself too. Because I have a full time job, and I got to work multifamily and night weekends, and I have my two kids. When I get home, they always ask like, how many zoom calls do you have tonight?
So I try to block time for them. So I am obsessed with planning, right? So I have a daily, weekly, monthly or yearly planner. And I constantly change, prioritize things and move things around as a block. So I have a time block at six o'clock tonight, things like that. So I think excessive planning, and prioritizing. And time blocking is the method I use. And with that I use a lot of calendar apps, and I do the list apps and at times, writing on paper. So, it's a constant effort to push myself to make sure things are aligned.
Christopher H. Loo, MD-PhD: That's great advice. How can people get in contact with you and follow you on social media? If they're interested in investing with you in a syndicate? How can they get in contact with you?
Yosef Lee: Okay, well, first of all, it's in such a short amount of time, I couldn't really talk about what I really do in terms of syndication, right. I’m very approachable, you can reach out through social media, @YosefYourBrosef, LinkedIn, Insta, Facebook page. So you could really find me easily and send me a text.
Again, I'm very approachable, I reply, and we'll set up a zoom call and explain what a syndication is, and how you can benefit from that. And you don't have to be a full time investor, right? You could still come in as passive investors. You don't have to worry about hassles of going through tenants, toilets, fixing issues and their calls. You don't have to pick it out. You don't have to manage the property. We have a team of people that do that for you, or you just enjoy your money, making money, as a passive investor. And you could enjoy tax benefits as well.
Awesome. And one last, thanks so much for coming on the show. What is one final word of inspiration?
Yosef Lee: I think I want to say this is so doable. You don't have to be intimidated by the number of units. My first deal was a 44 unit apartment in Kansas. And a lot of people said, well, how did you think about going to over 40 units as your first deal?
And I thought about it. And I said it's still doable. But you have to have a good team. Right? If you're alone, you can't do it yourself. But if you have a good team, you can do it together. Because again, it's not about having money. It's not only about finding a deal. It's about as a team, how to strategize and how to tackle this deal together. So yeah, it's doable. You can definitely do it. Reach out to me.
For all the listeners, it's a team. You can't do it alone. So what a one man show versus a team. So you've given so much inspiration and words of advice. And for all the listeners, all of Yosef’s references will be in the show notes. So, thanks so much. And I know you have a busy day. So we'll let you get back to it. And thanks so much for coming on the show.
Yosef Lee: Thank you, Chris, for having me. I enjoyed the conversation.
Christopher H. Loo, MD-PhD: Many thanks again for being here. If you’re new, you can find me online at Christopher H. Loo, MD-PhD, where I have links to other episodes or links to online resources that will support you on your financial literacy journey. I’ll see you there in on next week’s show. While I bring you thoroughly vetted information on this show regarding a variety of financial topics, I cannot promise you a one size fits all solution. This is why I caution you to continue to learn. Educate yourself and seek professional advice unique to your situation. If you want to talk to me, I welcome it. Please reach out via my website or email at email@example.com I read and personally respond to all of my emails. Talk soon!
Editor's note: This transcript has been edited for brevity and clarity.