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Becker Business
Real Estate Private Equity, Deal Making, and Building a Business Through Law with Shams Merchant of MW Law 6-3-26
00:13:32
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- [00:00]
BetterHelp User 1
When I found out I was going to be a parent, I immediately felt a lot of anxiety and worry. So I went on to BetterHelp to try to look for a therapist to help me with that.
- [00:09]
BetterHelp User 2
My relationship with my family and with my boyfriend and with myself were suffering. I really needed help.
- [00:15]
BetterHelp User 3
I was ruminating a lot. Really getting those thoughts out to a therapist and getting feedback was just life changing.
- [00:23]
BetterHelp Narrator
Discover what BetterHelp online therapy can do for you and visit betterhelp.com today.
- [00:32]
Scott Becker
This is Scott Becker with the Becker Business and the Becker Private Equity Podcast. I'm thrilled today to be joined by your brilliant lawyer and a brilliant entrepreneur. But we're joined today by Shams Merchant. And Shams has built this incredible practice and related businesses around real estate, developers, private equity firms and more. Can you tell us a bit about yourself and about the business you've built and about MW Law?
- [01:00]
Shams Merchant
Sure, yeah. Thanks so much for having me, Scott. It's a pleasure to be here. Yeah. Like you said, I am a real estate private equity attorney by trade and represent private investment firms across the country that struck and structure their investment offerings, syndications and private equity funds, particularly for, for real estate. But we do others as well. And yeah, you know, had my start in, in big law and transition out to essentially grow this practice out with, with, with my cousin actually, who's the founder of the firm. And, and since then we've, we've, we've, we've built this practice, but also are in the business ourselves as fund managers and investors. And so we have a very practical way to look at things when we
- [01:49]
Scott Becker
represent clients well and, and talk about that for a second because I don't think people sometimes realize how valuable that can be that you're also a principal in things as well as an agent in that you understand the business. Like, until I've lost money in something or done well in something, I never really understand the client's perspective until I've really been in the middle of it somehow or another. Talk about how that experience transcends into helping you really represent developers, investors and others really well because you just have that innate sense of the business that it's really impossible to teach unless you actually do some of it.
- [02:25]
Shams Merchant
Yeah, that's exactly right. I think the easiest way it translates is, you know, sometimes lawyers and, you know, you've seen this probably in your, in your long and successful career, negotiate things for the sake of negotiation. Right. And I think that having, being in the business lets you kind of have that perspective of what's actually Important from a negotiation perspective and what's not and where the risks really lie and where the risks are just theoretical. And so I think that's what's really helped us the most.
- [03:01]
Scott Becker
And I think that's so right on. When I always looked at transactions and deals that there's probably five to seven or ten things that really count and then there's hundreds of things that people can get caught up on that really get in the way of getting a transaction done. And having that clarity of what's important to what's not, I think is so critical to what you do. You work with a lot of real estate entrepreneurs. When you look at real estate entrepreneurs, the ones that are doing really well, the ones that are struggling, what separates some of the more successful entrepreneurs from others?
- [03:37]
Shams Merchant
Yeah, I think the most successful entrepreneurs always have the mindset of deal making, of creative deal making. And I think that's how they're able to get, you know, amazing things done and, and accomplish what they do. It's, it's because of, they're always looking for how do I make this work versus, you know, kind of throwing their hands up and saying this deal just isn't going to pencil because they're looking at it, you know, because someone's looking at it the, the way, the way 99% of people are. Right. It's that 1% that are looking at it, looking at a project, looking at an opportunity in a different way. That's what separates them from the rest and that's what creates, you know, arbitrage. That's what creates the delta that these successful real estate entrepreneurs are able to, are able to get people that could
- [04:27]
Scott Becker
really pursue those opportunities. Differences. See, hey, we could do this with this and that would add enough value to make this project work versus somebody who says looks like a cap rate and says yeah, not, not worth doing. Because I don't see the extra opportunity, the special delta here. I, I love that talk about in commercial real estate, there's been a ton of volatility over the last several years. Where are you excited about in commercial real estate? Where do you see some of the opportunities for investors today?
- [04:56]
Shams Merchant
Oh, I think it's a fantastic question. Right now we are seeing a lot of uptick in transactions in the market and because there's a lot of opportunity, and particularly the opportunity right now lies in acquiring distressed assets, particularly in the multi family space, we're seeing a lot of action there and lot of clients jumping into the market to essentially take advantage of buying deals at a very attractive basis. And deals from operators that are struggling because you know, as you might be aware, a couple of years ago, you know, with the interest rate hikes, a lot of operators didn't get rate caps and pencil out their deals in a way that was based on the market just continually going up. And that's not really what, you know, happened. And so those operators are now struggling. And you see the articles all the time that come out and in the media and, and so those are the opportunities right now that the clients, the clients that we know are, are taking advantage of 100%.
- [06:06]
Scott Becker
And people that leverage really highly ended up in trouble when interest rates went in the wrong direction. And there's been a flood of challenges, although not as bad as we thought they were going to be in some places, although the big commercial office building. Some of these cities have been a disaster. But some of the other things have come back. You get a chance to visit with both large institutional players and emerging sponsors. What are some of the mistakes or things that people could do differently when they're first really getting deeply into real estate? They're first time fund managers. They're syndicating the raising capital was. What are some of the do's and don'ts and any thoughts there?
- [06:46]
Shams Merchant
Yeah, the best answer I can give you for this is the one thing I see first time fund managers or syndicators mess up on is thinking that they don't need to appear institutional. Right. And what I mean by that is, look, obviously it's extremely important to have the right legal infrastructure in place. I think that's the first thing. Right. But then from there you need to also have the right marketing in place. You need to have the right appearance in place. Because that's what investors will judge you on. Right? Investors will judge you on. Who's the law firm that's backing you? Who's the accounting firm that you're working with? You know, what does your social media look like? What does your pitch deck look like? These are all things that I counsel clients on all the time. And it's not particularly legal counseling. It's more, I think, you know, more business consulting. But these are very important because these things do determine how successful they will be when they're raising capital in the open market. And you know, as you mentioned, as fund managers ourselves, we've learned, we've learned these, some of these things the hard way as well. And so we know, we know where the mistakes can be made. We know and we know how to counsel clients on setting all of these things up the Right. Way to make sure that they're putting the best foot forward when they're approaching investors.
- [08:09]
Scott Becker
I think there's so much there. I mean, the, the production values and how you do things, what they look like that they're often an indicator of how professional somebody is. And you could obviously have artificiality where somebody looks really professional, but they're not. But more often these things go hand in hand where somebody's presenting really professionally, but they're also taking their business of investing and engaging in real estate transactions in a very professional way. Both. And you want to have both those things line up. I absolutely love that. What are some of the trends you're watching in real estate, in capital formation, in private equity that you're paying the closest attention to as we head into the next few years? I mean, what are you seeing out there? I see huge difference between some of the small funds, some of the large funds, some of the small funds are great, some are not great. Some of the large funds are making all their money off of fee income versus actually returning profitable transactions. What are some of the things that you're watching out there?
- [09:06]
Shams Merchant
Right. Yeah, those are excellent. Those are excellent insights. We're seeing very similar. Similar things happen. Right. We're seeing consolidation. Right. We're seeing consolidation in order for these real estate funds to build out platforms that can sustain the bases at where they're acquiring deals today. Right. And the operational expertise that has to go into acquiring these deals and running them. We're seeing that. That's, that's where the Delta is now. Sh TO is creating that machine and that infrastructure to be able to operate these deals across the country. And so that's why you're seeing consolidation at the top tier level. Right. At some of the biggest firms. That's what's happening there. I still think that in the middle market and in the lower middle market that there are still excellent operators, that there's excellent opportunities, especially for investors to get larger out more asymmetrical returns. Because these players are plugged in to their local communities. These players are boots on the ground. And so those are some of the trends that, that we're seeing.
- [10:19]
Scott Becker
Thank you. You and your partner have dealt this great reputation for being highly responsive and for sort of getting things done and having a great legal and business mind. How do you balance this concept of protecting clients legally, making sure they're aware of the risks, making sure you're negotiating the right risks with them, but also help to get deals done so they don't get sort of lambasted or bogged down and things that don't really count. How do you balance those things?
- [10:48]
Shams Merchant
Yeah, I think that's, again, going back to kind of what we talked about. It's the, the benefit of being in the business and having that perspective. That's where our value really shines because again, we can. We understand what risks are, genuine risks, and what are more, you know, risks that are just risks in theory. And so I think that's. That's probably the biggest value that we're able to provide to clients is the practicality of negotiating deals and getting things done, and not just particularly legal negotiation, but understanding from a business perspective, what's the most efficient way to accomplish something, especially in real estate investing, because we've had to probably do it ourselves at one point.
- [11:36]
Scott Becker
In a lot of ways, your trailblazer right at the intersection of law and real estate. And I love what you're doing. Take a second on what advice you would give to others that want to be lawyers but also want to build businesses. How do you manage and balance the both. So you're really good at both and really both building a business and, and adding value as a lawyer. How do you balance both? And what advice would you give to others?
- [12:04]
Shams Merchant
Yeah, that's a good question. I don't think I've figured out yet how to balance both of them because it is always tough. But what I would say is if you find something that you're really passionate about. For example, I went into the law because I knew I wanted to be in real estate. I just didn't know in what capacity I wanted to be in real estate. And so I decided to be a lawyer because I thought I'll go learn the legal side of real estate first. So that was always to be my, my path. And so I think it's about finding something that you already have a genuine passion for and then merging, seeing then, you know, what other things you could do that are tangential to, to that outside of the law. I think that's how you, you know, I think, I think that's the best way to, to go about it. And so I always knew I wanted to eventually do my own deals. I always, I always knew I eventually wanted to raise capital and do projects. And so for me, it was just from the beginning, it always made sense. But again, I think this goes back to passion. Right? Is what, what are you passionate about? And how do you find other things that are related to that that can help you grow professionally and personally as well?
- [13:20]
Scott Becker
No, but I think this concept Doing things that are closely adjacent to what you do is so helpful because there's synergies. You could. You. You're not reinventing yourself six latitudes away. You're. You're. You're. You're doing something else that's closely connected where they both are synergistic to each other. I just, I just love that whole approach. Shams. It's a pleasure to visit with you. We're so impressed what you have built at MW Law and what you're building on the real estate side. We look forward to having you back on and visiting with you more. You're an inspiration to myself. So, so thank you so much for joining us. We really appreciate getting a chance to visit with you.
- [13:57]
Shams Merchant
Yeah, thanks so much for having me, Scott. It's been a pleasure.
- [14:03]
BetterHelp User 1
When I found out I was going to be a parent, I immediately felt a lot of anxiety and worry. So I went on to BetterHelp to try to look for a therapist to help me with that.
- [14:12]
BetterHelp User 2
My relationship with my family and with my boyfriend and with myself were suffering. I really needed help.
- [14:18]
BetterHelp User 3
I was ruminating a lot. Really getting those thoughts out to a therapist and getting feedback from was just life changing.
- [14:26]
BetterHelp Narrator
Discover what BetterHelp online therapy can do for you. Visit betterhelp.com today.