Meet Shrey of Bytes to Atoms

Good morning,

I keep hearing the following from new investors: “These high interest rates make it impossible to get funding”

My advice – study the late 1970’s when interest rates were double digits. There were plenty of people who bought rentals in the late 70’s FYI

Serious investors do not use high interest rates as an excuse to not buy great deals.

One such investor is a newcomer who recently secured his first deal at the age of 23. He has a long career ahead of him with plenty of ups & downs – and he embraces that challenge. It is my pleasure to introduce you to Shrey!

How many doors do you have?

Just bought my first!

What got you into real estate investing?

I started working full-time as a software engineer in 2020, which was quite an interesting time, both nationally and globally. Since stocks were too time-consuming and nerve-wracking (huge portions of hard-money going up and down every day), I took a closer look at real estate. I started with watching videos on BiggerPockets, learning about the numerous benefits: price appreciation, monthly cashflow, loan paydown, and depreciation.

I also liked how there were so many niches within real estate – one could be passive with long-term rentals or active with short-term flips. I’m really excited about making real estate a core part of my portfolio, and especially grateful to be sharing the ups and downs with the larger #RETwit community.

What market(s) do you operate in?

Charleston, SC

How would you describe your portfolio?

I’m only 1 month into the real estate game, so my portfolio is quite small! I have 1 SFH in a suburb near Charleston, SC. I like to invest for both cashflow and appreciation; having sizable margins is important to undergo tough times, but ultimately long-term wealth is generated with appreciation.

Since I’m relatively young, getting $500-1,000/mo isn’t as important to me; I want to instead take asymmetric bets that have a high chance of paying off big in the long-term.

What are you currently buying?

I’m currently not buying anything! With cash reserves low and interest rates high, I’m taking a backseat for the time being.

There’s a couple of deals on the table that don’t require investing capital myself, such as creating a multi-family STR in Seattle, WA, but they’re still a work-in-progress. I’m mostly using this time to further educate myself and expand my network.

Tell us about your biggest mistake in real estate?

I’ve only done 1 deal, and it went reasonably well, so I wouldn’t say I have a lot of “big mistakes”.

But something I would’ve done differently is putting 20% down instead of 30% down on the investment property. While the debt service would’ve been a bit higher, I’m planning on cash-out refinancing after a couple years anyways, and the extra cash would’ve helped me pursue other deals once this one closed.

Tell us about your biggest win in real estate?

Similar to above, take my “biggest win” with a grain of salt!

I was fortunate to have chanced upon an off-market deal when purchasing this SFH. I was getting out-bid on a couple of properties at the time. My agent then sends me an email one day with a couple of off-market deals that one of her agent-friends sends her.

One of them looked super attractive, especially because I didn’t have to bid higher than the list price, so I verbally accepted and the rest is history!

Outside of real estate what else do you invest in?

Outside of real estate, I largely invest in stocks and crypto. I max out out my 401K and Roth IRA every year, investing 100% of the proceeds into $QQQ (I’m a strong believer in tech!).

In 2020, I purchased some Bitcoin around $9,000, but ended up cashing out a couple months ago since I was up 5-6x. I’m generally bullish on cryptocurrencies and blockchains but not enough to chase Bitcoin / Ethereum; I may buy some as a hedge against governments in the future.

Books people should read before investing

Rich Dad Poor Dad

What advice would you give to a new investor?

GO 👏 FOR 👏 IT 👏 There’s an incredible amount of value in getting in the game, irrespective of how many books / videos / podcasts you have left to consume.

It doesn’t matter whether you have a cash-on-cash return of 10% or -10%. The first deal is all about real-world education – the type of education that you don’t get by studying.

You’ll learn how to build a team, evaluate deals, inspect properties, get financing, and so much more. There’s so much time to iterative, optimize, and advance your process, especially if you’re young.

Enough Business

Earlier this week I was at a contractor conference for my day job.

Wanted to share a conversation that stood out:

The contractor was a new comer to the industry. He started right at the beginning of COVID and has own to a $20 million dollar company.

I asked how he was doing with his installers. Finding good installers has been a massive issue for the industry.

He actually said that he was turning people away who wanted to work with him.

He shared that his focus was building a company that people wanted to work for. Giving flexibility, great pay, and above all respect. He said one of his competitors will regularly have guys who live in Illinois do jobs up in Green Bay, Wisconsin with very little notice that they will need to drive 4+ hours for a project.

My takeaway: in a tight labor market the companies that value revenue over people will struggle. Giving opportunity to new comers to take market share.

See you Tuesday – Wholesaler Pro

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