← Coffeez with Joe Shalaby
Coffeez with Joe Shalaby
Real Estate Excellence ft. Visionary Robert Pereira | Coffeez for Closers with Joe Shalaby Ep. 51
00:52:53
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- [00:04]
A
What's up, everybody? Welcome to another episode of Coffee's Proposers. Today we're diving into the story of real of a real estate powerhouse who's revolutionized the multifamily sector. With over 250 residential projects under his belt right now and over $170 million in capital raised, his journey is a testament to strategic vision and relentless execution. His expertise has driven the acquisition of major properties across the Southeast, making his company a key player in the industry. He also has the investors like Alex Hermosi, Sharant Srivastava all invested in his platform. Stay tuned as we reveal the mastermind behind Ark Multifamily Group, the one, the only founder and CEO of Arkansas, Mr. Robert Pereira.
- [00:55]
B
Thanks a lot.
- [00:56]
A
Thanks for joining the show today.
- [00:58]
B
Absolutely. My pleasure.
- [00:59]
A
We're live now with the live studio audience across all platforms right now. I appreciate you coming down here. I appreciate what you're doing. I appreciate the platform that you've created for investors across the US you got some of the key players on the planet, I think, who are invested in ark, and that's a testament to their trust in what you're doing, what you've built, and, you know, all around the character that you are. So thank you.
- [01:29]
B
No, it's, it's been a, it's been a fun journey. And I always say, we're just warming up.
- [01:33]
A
Yeah, exactly. I love that. I love that. What I like to start the show out with is a. Is a traditional question I ask every single guest on the show and is, how does Robert Pereira start his morning. What is your morning routine?
- [01:46]
B
Great question. Well, I am an early riser. I've got a team that's based in the Southeast, and so they start their day, you know, we're here in California, three hours behind them, and they start their day west coast time around probably 4:00. So I'm up not too long after that. I'll check in with the team, find out what opportunities, what's happened the previous day and what opportunities exist for this day that I need to be involved with and then go about getting my work going to work on the bigger vision for our company, Arc Multifamily. And then I, you know, I'm, I'm an active dad, so I, I like to be. If, if I'm in the office early, I'll come back, want to be with the kids for some time before they head off to school. And they're usually out by 8:00. And then after that I go to the gym, get a workout in and then it's a full day of work.
- [02:41]
A
Love it, man. Yeah. Southeast, you're, you're grinding really early, way before the crack of dawn.
- [02:46]
B
Absolutely.
- [02:48]
A
So how did you get started in the multifamily space?
- [02:51]
B
Great question. So it's been, I've been in real estate investing now for 16 years. So I like to say I'm, I'm an old dog at this point because I've seen a lot. I started. I'll take it back even further and I'll, you know, I'll give you the abridged version, but I moved here from Canada in 2002 and raised a Canadian. I was an engineer that moved out here to Southern California to work for Broadcom, and I was an engineer for Broadcom for several years. While at Broadcom, I went to UC Irvine for business school and came out in 2008 with a focus in real estate and finance. There were no jobs in real estate and finance because we were in the crash. And so with a couple of good friends, started a company where we would renovate and sell foreclosed homes. Did a lot of that for about a dozen years. Built our investor base from a few hundred thousand dollars and it was just us pooling money to a little bit under 20 million. And then in 2019, you know, you and I had met just around that time and I was invested heavily in luxury properties at the time in and around Newport and coastal Los Angeles. Loved what we were doing, but there was a lot of stress. I got gray hairs from having, you know, a lot of debt on our books without cash flow. And we had a lot of success in the space. But I wanted to do something that was more scalable. I had more investors than I could responsibly deploy capital with. And so there was, it was one of those things where I, working with Shiran Srivatsa, who is started as a mentor and business consultant to me and then has become my partner. We decided to shift into Multifamily and started ARK in 2020, focused in the Southeast. Bought our first complex in 2020 and have grown from that $20 million investor base to a little bit over 100 million now. 2000 units that we own and operate and we've got another almost 500 in our development pipeline right now. So it's been a great ride. We've built a great company. We've got about 60 employees that are between our Irvine and our Atlanta office and all of our on site teams, very hands on. We live and breathe value, add multifamily all day.
- [05:15]
A
Long, you managed to build a company with $170 million on the books under management in four years. Basically four and a half years.
- [05:25]
B
Absolutely.
- [05:26]
A
So the 170 is what I've raised.
- [05:29]
B
Cumulatively over the years. 100 is what we currently have deployed. Our current portfolio of properties has a value of roughly 350 million. We've got another 100 million in our development pipeline that we're going to build. We're actually building units now with a couple of partners that are based in the southeast in Atlanta. So we're building another 457 units between now and end of 2025, which will take the current portfolio to about 450 million. And it's just a rent cycle repeat. We look for deals that have below market rents and some deferred maintenance. We, we buy them, go in, we buy them with where we syndicate the capital. So we're pooling investor capital to buy them. We have over 220 investors including yourself. And what we do is we, we go in day one. We're improving the property, improving the experience for the tenants. I always say at arc, I serve three people in, in servant leadership. I, I, I serve our tenants, make sure they're having a great experience at our assets, serve the on site and corporate teams to make sure that they're empowered to do what they need to do. And then thirdly, but not least importantly is our investors. If I take care of our tenants and I take care of our teams, the investors will be happy and we've done a pretty good job of that.
- [06:42]
A
You know, I was going to ask you and you could just add to this, you know, you've managed to bring in some big brands to invest with you, me, Sharon Srivasa, who's obviously your chairman. Alex Ramosi, what is the secret sauce for you to really draw in such great talented people to the ark multifamily?
- [07:01]
B
Honestly, we've just been blessed to have good organic relationships. You know, I've, you know, we've got, a lot of, my investors happen to come from Broadcom where I've worked. So I've got people who have millions of dollars with us that have been with me for a decade or more and you know, candidly I, it's all based on substance and authenticity and just doing what we said. We're going to do reporting religiously to the investors to make sure that they're fully informed of how things are going at the assets and you know, making sure that we under promise and over deliver and we set realistic goals like you know, when I'm talking to a prospective investor, be the big or small, you know, the question is, hey, you know, can you, if they tell, ask me, hey, can you hit a, can you double my money in 12 months? I said, well, you know, probably not, right? Well, I do shoot to double your money in five years. Between cash flow and equity growth, that's an attainable goal. If we hit it sooner, great. But I don't plan for that sometimes, you know, you might get a unicorn once in a while. Our first project that we bought in 2020 hit a 60% return to investors in 15 months.
- [08:06]
A
But that was in on that project.
- [08:08]
B
Yes, but that was early Covid and it was a great buy. And then because of a lot of money that had flooded the economy at the time, there was a lot of cap rate compression. So assets went up like crazy between 2020 and 2022, which resulted in that. But in general, all the other assets that we own, we have nine properties currently across 2,000 units. And they're all modeling very well to hit that 2x return in 5 years.
- [08:33]
A
Now what is it that drew you to states like Georgia, states like Alabama, you know, why are you going to the Southeast?
- [08:40]
B
Great question. Affordability. We live in Southern California in coastal Orange County. Right. So even if you go past, we're both in Newport beach, but even if you go to a city like Irvine, phenomenal location. But when you look at the price to rent ratio, it's just not nearly as attractive because of how expensive the real estate is here. The most recent complex that you're invested in with me that we bought called the Preston, it's in suburban Atlanta, 2003 build. It would fit very well in Orange county. As far as the look and feel of the asset. The difference is we bought it was 334 units. We bought it for $52 million, 156,000 per unit. We're going to add about 12,000 unit, $12,000 of improvements to each unit in the time we own it. So let's call it all in at just under 170 as per door. Yeah, we're getting rents pro forma at 1700. So you're getting about a 1% ratio, you know, 1700 divided by 170,000, about 1%. It's a very healthy ratio. You know, you've got a winner when you've got something like that or something close to that 1% mark. By comparison, if I was to buy that same complex in Irvine, you know, if I was getting $1,700 a month in rent. I probably would be paying at least twice the price. So you know, the. California's a great market but it is more based on speculation that there's going to be continued hyper growth in rents than pure fundamentals. It allows you to gain an appreciation as an investor. You can get, you know, equity growth through appreciation. But the actual cash flow, I want to be able to return to investors very quickly. Within six months of buying, I want to start distributing quarterly to investors so they're getting cash flow from operations and I can't as easily do that in California. So that's why we picked the Southeast.
- [10:29]
A
Nice. Now what year did you start your entrepreneurial journey?
- [10:34]
B
We started in. Oh, I started in 2008, you know, right out of the great financial crisis. I graduated from Mirage, which is UC Irvine's business school and we started. My partners and I started flipping homes in Moreno Valley. We were buying homes that had previously sold to give you an idea of how bad it was. You're a little bit younger than me, but you were probably in the game at that time already. We were buying homes for about $80,000 a door that had previously, previously sold for 4 to 500,000, 24 to 36 months earlier. So it was, it was a real mess that had been created at the time. We were part of the cleanup in a small way, but it got us and we've always, I've always had a, you know, I've always wanted to have a backup plan on whatever I own. Do I have what we called hold economics with those properties. We could have cash flowed them and rented them. We ended up, excuse me, we ended up selling all of them along the way. Some we sold too early. We probably should have held more because they would have gone. They did go up tremendously, but we would always make sure we had margin to make sure our investors could get yield. From day one we had a lot of quick turns where we would buy, fix and sell within six months. And as we got further and further into the game, we got into bigger projects. Right now you and I are co invested on a property that we bought for. We bought the lot for 3.6 million, built a brand new luxury home on it and one of our partners who's also the realtor on it is working with buyers right now in the 11 million dollar range. So it's great, there's great margins on those, but it's not for everyone. What we do at ARK is I think more for everyone in that it's got great hold economics and it's got cash flow nearly day one with the stuff that we do sometimes in the.
- [12:21]
A
Luxury property is super risky.
- [12:23]
B
Absolutely. It's not going to rent. You've got to sell it. And so we happen to be in a great market right now, so we're going to kill it on this one. But it's not for the faint of heart.
- [12:32]
A
Yeah, absolutely. And what's the minimum buy into ark? Will you take small guys, big guys?
- [12:36]
B
We do. Our minimum is $100,000. And so we, you know, we've just kept that number because it's worked well. But, you know, and we only work with accredited investors. Accredited meaning they've got to have a net worth of over a million dollars or in their last two years income of $200,000 if they're single, 300,000 if they're married. But we, you know, we've got investors that have a hundred thousand with us and you know, investors that have several million with us.
- [13:04]
A
That's awesome. You, you know, you've really delivered for every investor that I've seen. You've never let us down.
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B
And thank you.
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A
It's integral in our portfolio leveraging ARC's, you know, entire platform and all the education and all the stuff that we do with the luxury as well. I appreciate you under the ARK umbrella.
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B
Yeah.
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A
Now you started Ark in 2019. What put. And then the small stuff is what put you in a financial position to start doing the luxury.
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B
Yes. It all kind of stacked on itself. We won well on these $100,000 homes that became. Then we got into $500,000 homes. We got into our first million dollar home, you know, 10 years ago. And then it kind of just grew from there. And so it's. And then once we were in luxury, when I started ark, the investors that were with us realized that they could go from getting returns that were in the high single digits, low double digits to. At Ark, we're shooting for 16 to 20% annualized returns with cash flow along the way. So all of those investors that were with us in my previous company, they came in and said, hey, we'll write much bigger checks to come into multifamily because they knew it was safer.
- [14:15]
A
Yeah. And it's getting more. I feel like multifamily in the Southeast is by far the safest investment you can make in the country right now.
- [14:23]
B
Good population growth, you've got good job growth. There's not a lot not to like. And we're careful in what we buy. My team is actually very property management focused. You know, I took a different approach when building Ark than other small operators and that they, they worked from the position of, okay, let's analyze deals. Let's kind of work with a really a skeleton team, rely on third party help. I hired people before we even bought our first asset because I wanted to be in a position where we were getting expert advice from people on the ground. All of my assets have on site teams, but my corporate team is all within a two hour radius of all of our assets. So we can get out there, and we do get out there multiple times a week at each asset to make sure we're driving the business plan, making sure that we're handling any issues along the way, but also creating great culture. Day one.
- [15:15]
A
I love that. Now, recognizing your work ethic, it's just like you outgrind everybody and you're always on, right. So you have like a resilience about you. Where do you think that that grit mindset was established? Was it heritage? Was it.
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B
Good question.
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A
Birthright.
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B
I liked it. I think, I think it's the same for you. I think it's the immigrant mindset.
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A
Yeah.
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B
Honestly, it's one of those things where I don't take anything for granted. I tell people I have the immigrant mindset and then they find out I'm from Canada. My family, my family's from India. Right. So my mom and dad were immigrants to Canada. They really grinded and, and built.
- [15:48]
A
You weren't born in India.
- [15:50]
B
No, I wasn't. I was born.
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A
You're not an immigrant.
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B
No, but I'm an immigrant to the U.S. right. And, and honestly, it was one of those things. I, I came here 21 years in.
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A
The U.S. i know, I know.
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B
It's, it's, it's, you know, you still.
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A
Have that immigrant mindset from your parents.
- [16:02]
B
Totally. And well, it's, it's, it's more than that. Like, when I moved here, right, My parents were already really well established in Toronto. So when I moved here, I love the fact that, you know, I, I felt like I wasn't under, like I had nobody sort of to watch over and make sure that I had to take the safe approach. It was like, hey, I'm on my own. Right. And my parents actually live out here now. But for the longest time I was out here on my own and it really helped to feel like I had nothing holding me back. I never worried about failing. I've been very careful as an investor, but I wasn't worried about getting embarrassed or embarrassing family because of the fact that you know, something didn't go right or exactly as planned. So I think that's what allowed me to dream a little bit bigger and then work really hard to make it happen. So like, you know, for me it's like I have fun in the work. It's, you know, we're, we're at, you know, we'll be at 450 million as far as actual assets under management, you know, and plus in about a year's time. But the goal, you know, someone asked me the other day when what's your long term goal? I'd love to be at 10,000 plus doors between the Southeast and the Southwest. We're going to start a Southwest division within the next 18 months.
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A
What states are you going to hit there?
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B
Great question. So Southeast we're in currently Georgia and Alabama and we're probably going to buy our first asset in Nashville because I have a key employee that's joined us who's based in Nashville. So I'm going to buy something there.
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A
I've already pencil in Nashville.
- [17:28]
B
They are because of the, what's happening with the interest rates. Personally, I love these high interest rates for what we're doing on the acquisition side right now at Arkansas they're allowing us to buy while others are on the sidelines. So I feel like we're going to have a good entry point if the interest rates stay high in Tennessee and then the Carolinas is where I'd also like to be. I'm staying out of Florida purely because I'm a cautious, boring investor, as you know.
- [17:54]
A
And immigrant mindset.
- [17:56]
B
Exactly. But I can't do anything about what's going on with weather patterns and the fact that insurance is going through the roof in coastal areas. So I'm not coastal in, in the Southeast, I'm inland where I, you know, I can handle my insurance costs. You know, I want to make sure I can control everything as much as possible in the Southwest. Like I said, California is not in play right now, although I'd love it to be, but it isn't. So we're good. We're probably going to start in Arizona and Nevada, you know, Phoenix and Las Vegas and then I also like Colorado and Utah. So If I had 5,000 units in the southeast, 5,000 of the southwest, call it in a dream scenario, a couple hundred thousand per unit as far as costs. So that's, you know, that's about 2 billion worth of real estate. That's the 5 to 7 year goal. So I need a lot more people to want to come in and Invest with us.
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A
Yeah. Hey, hopefully this podcast will get you a couple people.
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B
I hope so too.
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A
About you guys. Absolutely. Now what invite, what really motivated you to start your own company?
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B
You know, I love the fact that we live in a very expensive part of America because that's what, that's what helped me.
- [19:02]
A
Have no choice isn't an option.
- [19:05]
B
Totally. You had Glenn Stearns on your show a few months back and he. And he's a legend, right? And he talks about how he was resting on a bench in CDM and then found out. He's like, what do you know? What does the homeowner do? And so it was the same thing for me. I was an engineer at a great company, Broadcom, but engineering wasn't going to.
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A
Get you to Newport.
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B
I was a good engineer. I wasn't like the best engineer on earth, so.
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A
Invented something.
- [19:29]
B
Exactly right. And so having said that, I was like, okay, real estate looks like a path that I can do something that I love. You know, I'm naturally a people person. And I was like, okay, let me try and see how big this could get. And that's really what this is, you know, becoming. It's really aspiring to bigger things because we're in an area where if you don't, then you can definitely feel like you're getting left behind.
- [19:51]
A
Yeah. You don't strike me as an engineer personality. You know, it's not, it's, it's.
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B
But you know, it's funny. I geek out on, on tech. I like even the studio setup you got here, you know it for me, I, I understand the tech behind it. So, you know, I love what's going on with AI. I love what's going on in general and, and the kind of stuff I used to do at Broadcom, it was like programming into semiconductors that went into things like iPhones and TVs and DVRs, all that, all that fun stuff.
- [20:19]
A
I love that you segued into AI because AI is obviously revolutionizing every business. We continue to implement different AI solutions and strategies into our ecosystem and tech stack now. So what are you guys doing at ARC to implement AI?
- [20:36]
B
Great question. We're using a lot of it. A lot of it right now is being used among our teams to make sure that we're being as efficient as possible and being able to. By efficient, I mean, if we can get a lot of the back office work done, it allows our on site teams to really be obsessed about the customer experience at our assets. Our smallest asset has 102 units. Our largest asset has 420 units. So these are big properties. Right. And so we need to make sure that we're connected to the tenants. I think AI and technology in general is a blessing when it allows you to free up your time to have more human interaction. Because ultimately we're creatures of interaction and communication, so we're using it for that purpose. We haven't yet gotten. And we do also have tools that are used to do virtual tours of different assets. If someone's coming in when the office is closed at any of our assets, they have the ability to get into our model, get a visual tour of the model, and then they can ask online. They can get into the point where they're leasing a property without having necessarily talked to one of our on site team members. So there's, there's that level of technology that's being used. It does play well, especially with millennials. They actually don't want to come in and meet someone at, you know, at one of the clubhouses of our assets. It's more, they want to see the product, see the amenities, and then make a decision so that it's been very helpful there. But like I said, for me it's like, how do we use technology to free up our time to work even more and more on culture now?
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A
Wanted to segue because we're talking about AI now. Given all these new revolutions, what do you foresee in the multifamily space in the next couple years?
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B
I think there's going to be, let me break it up into two parts. One, situation with interest rates and what we're going to go through as far as unwinding of certain assets that are probably going to go through some tough times and then secondly, where we're going to see the actual trends of the industry. So as far as the interest rate environment, in the last couple of years we've had higher interest rates, which at Ark has helped us buy assets at prices we wouldn't have gotten when interest rates were lower. So it's been a blessing. We aren't selling anything right now. We do have a few assets that are probably that are ready for sale. We have a three to five year business plan on our assets. Some of them we've really crushed the ops and so we've only owned it two years. But if we were in a lower interest rate environment, I'd be selling for a profit and then cycling the money. You know, we try and 10:31 exchange into the next asset. Right now we're on the sidelines on selling, but instead we're working really hard to bring in investor capital to buy where it makes strategic sense to do so. So I do think there's going to be turbulence caused by the higher interest rates because of the fact that you've got competitors that have assets where their debt is resetting and so they might be in a 3% mortgage, they're going to a 6 or 7% mortgage in multifamily and they don't have the income to support that. So they're going to have to either get an equity injection. I'm getting approached by other operators that are asking us to come in with rescue equity. And you know, we're looking at, actively looking at those opportunities where we can bring, you know, our own expertise because we also do. We're vertically integrated. We have on site property management at our assets that is run by Ark, it's a separate company we call Axia Residential. We're very, very heavy, heavily based in operations and so if we can add strength to an asset, we'll look to partner with someone if it makes sense to do so. So there's that opportunity.
- [24:15]
A
Huge opportunity.
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B
Yes.
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A
Because that could, like companies like yours, will save the multifamily and commercial space in general with that strategy and, and mindset.
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B
Yeah.
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A
There's a huge fear right now economically that, you know, commercial is just going to plummet and.
- [24:29]
B
Yeah.
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A
And totally implode and then cause a more devastating crash.
- [24:36]
B
Yeah.
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A
Then, then the 2008 crash. But what's your opinion on that?
- [24:40]
B
So I think, I think certain sectors are going to be in real trouble. It's very hard in office right now. I mean, you know, the work from home has fundamentally changed office and there's also functional obsolescence of office buildings that is hard right now. So I don't have an answer for how we're going to get through the office dilemma. The other segments, I think that you've, you know, if you've got good fixed rate debt and you've grown your income significantly, you know, we've had inflation the last three, four years, but that's actually caused in some cases our assets have seen rents grow by 30% plus.
- [25:13]
A
Yeah. So sadly though, that's.
- [25:15]
B
Right, there are. Yeah. I mean it does impact the consumer, but from an operator's perspective, you, you know, if debt's up a little bit in price, but you've grown your income that much, you've got no problems. So in general, I don't think multifamily is going to be. It'll get hit, but it's not going to be decimated. I think office is going to have, you know, a lot of distress that's going to have to be worked out between banks and operators because the banks don't want to take back the real estate. Especially something like office where they, you know, it's not like they can just go lease it up right away. Multifamily is a little bit easier in that sense. But to your point on trends that I see happening in multifamily, I think there'll be continued adoption of technology. I think that we are becoming more of a renter nation. Millennials are more inclined to rent than to own. And so I think that there's going to be more and more demand for multifamily as time goes on. I think there's also going to be even more and more 55 plus communities that are coming up as the boomers are aging, you know, wanting to, you know, potentially sell their properties. If they're living in colder states and want to come south, they may not want to buy, they might just want to rent. And so I think there's going to be active lifestyle communities that, you know, are already active but are going to, or already prevalent but are going to get more and more as the boomers become a bigger and bigger part of the apartment renting sector.
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A
Now how do you think AI is going to affect the multifamily space?
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B
I think that we're going to, you know, have more and more use of automation. You know, I think, you know, I do worry that we'll get to a point where you have almost nobody at certain sites where they've got just a, you walk into a clubhouse at a 400 unit apartment complex and you talk to a screen and you do everything remotely as far as service requests and everything else. And, you know, that might be the most profitable way to run things. But I think that it takes away from the consumer, consumer experience. Right. So I think, you know, I'm hoping there's a hybrid of the two where technology enriches the end user experience. But it doesn't make it so cold that people can't feel like they're part of a community because I think everyone wants, you know, a home is a home because it's got a sense of warmth. Whether you have a, you know, a big house or you have a modest apartment, but are part of a larger community. It's like, you know, that there's something to be said about being connected. I hope that always remains very well said.
- [27:38]
A
Now, given all your success over the years and you know, how established you are currently. How do you continue to find motivation every single morning, getting up at 4:30am knowing that you don't have to do this anymore?
- [27:52]
B
You know, I, my motivation comes from being able to, I'm at the point where I enjoy seeing and this is from talking to mentors that are 10 times bigger than ARK is and have been doing it a lot longer. They're like, you know, you get to a point where you're, you're serving, you're growing a company because you're helping people with jobs, which is great, you're providing a great experience for your tenants, but you're also helping your investors. That number, we've got 200 plus investors. One day that'll be a thousand investors. And so I am helping those investors grow their wealth which I hope allows them to live and lead better lives. But I also have, you know, part of my intentions as well is to be able to give back tremendously to the community, have a foundation and have a purpose for getting up. You know, my wife and I, Amy, have two kids who are wonderful. You know, they're eight and five. They're growing up really well. I hope one day they want to maybe take this over, but at the same time I want them to go out there and have a real sense of purpose. And I think, you know, for me, as I age, one of the biggest things is trying to make sure the world is a better place. And I think that ARK is going to allow me the platform to do that if I continue to scale it responsibly.
- [29:10]
A
Excellent. Now what I noticed when I first met you, one of the first encounters you had, one of the, one of.
- [29:17]
B
This is great coffee, by the way. I know it's coffee for closers, but.
- [29:19]
A
I mean, hey, we don't just serve coffee here, we serve cappuccinos here.
- [29:23]
B
Absolutely.
- [29:26]
A
Now what I noticed that you have a lot of talent at ark, a lot of very talented people. How are you fostering talent within ark?
- [29:34]
B
You know, I've been blessed in that my early employees came from some real powerhouse multifamily players, like multi billion dollar players that get the blackstones of the world investing with them, you know. And so I've been able to get talent from those companies by just giving people. So I started with some great employees who then told their friends and told them what we were building at ark. And so I've had that grow. But one of the big competitive advantages that I have is I come from my time at Broadcom. The founders of Broadcom Did a phenomenal job at getting employee engagement. They hired really good talent, but they also were able to keep them because they gave them equity in the company. And I'm doing the same thing at ark. It's a totally different platform. That's a, you know, trillion dollar tech company and we're a, you know, less than billion dollar multifamily operator. But my employees, the intention is for them to earn equity. As we succeed on properties, not only are the investors going to win, and obviously my wife and I will too, but I want the employees to feel that win as well. And I think if we do that, they're going to, the culture will, will be there because we work really hard. But why not have them build wealth along the way? It's super important to me.
- [30:45]
A
So that's your culture seeker right there, getting them all bought in. And they're all like owners in your organization 100%.
- [30:51]
B
Yeah. We grant shares to our senior people on all of our assets. And as we scale, that's just going to continue to be my intention is to carve out, I make a little bit less profit. But I have a great team that's watching the asset because they are owners. I just think that's the right way to go.
- [31:06]
A
Yeah, that's a great way to foster talent is to get them bought in that way. Now how important do you think taking risks are for ark?
- [31:16]
B
You know, I, we try and make sure we have a strong competitive advantage on everything we buy. We want to make sure that it's already a performing asset. So I'm not looking to take excessive risk at this point for myself.
- [31:28]
A
For your investors. Yeah.
- [31:29]
B
Yeah. But early in the game for someone, I think taking strategic risk is important. You have to think big.
- [31:35]
A
Buying a $3 million piece of dirt in Newport beach and building a $7 million house on it, that's a pretty big risk.
- [31:41]
B
But I mean, that's risk I with you, Joe and a couple of buddies. Right. Who are also, you know, in our, in our private lives, you don't mind gambling a little bit. Right. But when I'm as in scaling the investors, we have 100 million, I want to get to 500 million sooner rather than later.
- [31:55]
A
I'm more risk adverse with the bigger stuff.
- [31:57]
B
I'm pretty boring with that stuff. It's like I want to make sure that everybody's sleeping well at night. But you know, to further your question, early on in someone's career, I think you have to take risks. You're never going to be, you know, today is the you Know you're never going to be as young as you are today.
- [32:12]
A
Yeah.
- [32:12]
B
So why not do the things you want to do, take the risks, make sure they're calculated, get the right kind of advice, coaching. You know, I'm a big proponent of not solving problems in isolation. You know, Shiran Shravatsa says his, his trademark is that transformations do not happen in isolation. And it's so true. Right. Get the best people advising you, you know, or it may not be direct advice. It might be from listening to podcasts, it might be listening from you to YouTube. Like listen, listen to the show. Absolutely. 100% right. It just like soak it in, take some nuggets from, from these kind of shows and then from there great things will come. If you're willing to take strategic risk and also like save money to make sure you know, on, on rainy days are the best times. Like right now is a great time to be buying. When I'm talking to investors and they're like, is now a good time? With the interest rates high, I'm like, this is a phenomenal time. It wasn't easy to buy stuff two years ago when interest rates were 4%, but right now when they're at 6 plus, it's, it's like kid in a candy store.
- [33:15]
A
I love that. Yeah. And you're absolutely right. But I didn't think of the landscape of multifamily with the capital injection strategy that you're, you're leveraging right now.
- [33:23]
B
Excited about that. We've got our first two that we're going to be accomplishing this summer where we're coming into assets, all the returns.
- [33:29]
A
We'Re getting now, or what.
- [33:30]
B
I hope so, honestly. It'll be some juicy stuff for sure. But it also is one of those things where I look at it as from a relationship perspective. Like the investors who are in those deals that we're bailing out are going to know that we bailed them out. Right. And we'll be, will be humble about it, but they'll don't want to come on because of the fact that they see us succeed.
- [33:49]
A
Now, if Robert Pereira was to meet Robert, the 20 year old Robert Pereira, what's the best piece of advice that he would give him?
- [33:58]
B
That's a great question. I would say think even bigger. Right. You know, I think, I think if you, if you and work really hard, but dream big dreams and get a mentor sooner. I got my first mentor. I mean, candidly, you know, and you could say, you know, my parents were mentors and they and they have been, you know, and very supportive throughout my life. But my first real mentor was Shiran Srivatsa. And that was seven years ago, eight years ago. And I'm 46, so I got my first mentor 18 years after that 20 year old. Could have.
- [34:34]
A
He's your age, right? Or is he younger than you?
- [34:35]
B
He's younger than me, yeah. And he looks way younger than me because he hasn't flipped 250 homes. He's got no gray hairs. Yeah, right, so. So it, yeah. And. But it's been instrumental. As soon as I, you know, brought Sharon on my team, things lit up and from there I've continued to like, for me it's about collaboration and someone might be a mentor or they might be a collaborate collaborator, but it's that collaboration that makes it so powerful. I was telling you about, you know, you and I, you know, we live in the same neighborhood. And when you had bought your place, I said to our, you know, the person who built your home, I'm like, I gotta meet Joe. Right? And two weeks later we were, you know, having a bar and hanging out.
- [35:13]
A
That the 20 year old is crucial.
- [35:15]
B
And the 20 year old me wasn't thinking that way. And I, so I tell anybody who's young, it's like, get out there, meet people, network, try to bring tremendous value. Because you can't just hang out. After a while people are like, okay, what are you doing in the room? You need to bring value, but get in the room.
- [35:30]
A
You know, truth about me is like, I'm actively looking for mentors all the time. Like, please mentor me. Totally. You know, I got mad ishpi to mentor me because people are like, how'd you get a mentor? You're like, I asked them 100%. You just gotta ask.
- [35:43]
B
Absolutely.
- [35:44]
A
Because mentors are willing to give because that's how they succeed. You gotta give back.
- [35:48]
B
Absolutely. Because they've all been, most people who've been very successful have been mentored. So I think there's a sense of obligation that, hey, there's, there's a circle to life and, and if you don't, if you've, people are giving back to you, how do you not want to give back to others? I see you all the time mentoring people. You've got an army of people here at E Mortgage and it's, you know, for you and for Sam, it's about, you asked me the question about how do I get up in the morning when I don't necessarily have to get up. Same thing for you guys, right? You're up for other people. And it's even sweeter when it's that way, right?
- [36:19]
A
It is. We live a service based life.
- [36:21]
B
Absolutely.
- [36:22]
A
And we try to do God's work through this organization. And that's our number one pillar. Our number one pillar here is serves. Do God's work. Serve with all your heart, all your might, all your soul. Our second pillar is community. Because through this community we're able to collaborate and grow and win together. Because you don't win by yourself. No, you don't win by yourself. So, you know, community and collaboration are basically to me the same word. Because the community is how you win.
- [36:49]
B
Yeah.
- [36:49]
A
The community is how you grow and the community is how we're fostering talent.
- [36:53]
B
Absolutely.
- [36:54]
A
Now, what are like some of your hobbies that you like to pursue?
- [37:00]
B
I love sports, so, you know, it was great. I mean, I watched your podcast with Matt and just to see what he's doing, you know, with the Suns. I love, and I say love sports, I love playing sports, but I love watching sports too. Always been a fan, I don't get as much time as I used to, but growing up, I mean, I was a sports nut like NBA, NHL, mlb, World Cup Soccer. I mean religious. So that's still, that's still a real passion of mine. And now I get to spend some of that time with my kids, as not only are they playing sports, but also being able to watch and get them into the professional sports. You know, becoming a fan, you know, spending time with family is super important to me as far as actual hobbies. You know, I do a lot of things that are outdoors just in, you know, daily life. I love, I love to, you know, work out, I love to get, enjoy the fresh air travel. Those are, those are real, the real passions of mine. And I'm also at a point where I work is. Work is almost like a hobby for me. And what I mean by that is I pour a lot of effort into it, but I tap dance to work. Like it's a lot of fun to build what we're building. And it's a huge passion for me. It's what gets me up. And you know, ARK is very personal to me. I don't know if I told you this, but it's ARCE Multifamily Group. ARK Multifamily Group. And that's Amy, which my wife, Robert, myself. And then our children's names are Chloe and Christian, and so they're the C. And so my dad came up with the name when we were first starting he wanted to name it ARCC because there's. And I cut one of the Cs off. He forgave me. But it's very.
- [38:47]
A
I know that it was named after you, but it's a cool name too.
- [38:51]
B
No, it worked out. It worked out really well.
- [38:53]
A
What's your favorite quote?
- [38:55]
B
My favorite quote, you know, it comes from Kobe Bryant, and he got it from his high school English teacher. And it is rest at the end, not in the middle. You know, I'm 46. I'm midlife. I still feel like I'm 26 as far as energy, and I've got young kids and a great wife, so I feel younger than I probably am. But I feel like this is not a time to rest. It's a time to be active. And for all of us, it's like, you know, go through life and be energetic as much as possible. You know, you. You get. You get as much as you give, so just keep pouring in. And, you know, I think it's a more full life that way.
- [39:35]
A
What's the best piece of advice you have ever received?
- [39:38]
B
Best piece of advice I've ever received. You know, honestly, get the right kind of. What you pay for in consultants and mentors and coaches is a fraction of what it'll cost you for trying to go it alone. I think, you know, when we. Because I've made, you know, big mistakes along the way where, you know, when I first got into the luxury space, before I started working with Drew D'Angelo, who's a partner of ours, and I love Drew. He's, you know, he's done extremely well for us. But before I started working with Drew and his. Got his expertise, I went it alone. And that's after being a developer for 10 years, and we did well, but we were much more marginally profitable than when I started working with Drew.
- [40:20]
A
Yeah.
- [40:21]
B
So, you know, in every facet of my life, you know, now it's, you know, I. Sharon taught me a long time ago, it's like, when a problem comes up, everyone that says, how. How do I solve this problem, Sharon's like, I always say, who. Who's. Who has already faced this problem or who can I call to help me get counseled before I even start to work on the problem and how to fix it? And I think if you. If you say who, it's a lot easier, you know, if I. If I have a mortgage need or someone's got a complex. My own house, when I was doing it at the time, was a complex mortgage. It was a It was expensive mortgage. And so rather than saying, okay, how do I figure this out? Right, right. I was talking to. It was a home we were building. So I was already the developer in it, decided to keep the home and I wanted to put it into fixed rate debt. So while I was contemplating that, I texted you, you connected to me with the right mortgage broker on your team and we came up with a solution strategy. Yeah, absolutely. So it's all about who, not how.
- [41:16]
A
That really resonates with me because when I merged with my partner Sam Hijazan in 2020, and I was facing an issue of like, growth because I couldn't handle all the growth and all the compliance and I, you know, like, who's gonna totally handle this? You know? So I brought in my partner Sam and we exploded.
- [41:37]
B
Absolutely.
- [41:37]
A
You know, because, you know, I'm good at one part of the business and he's a genius at the other part of the business and he was able to help us catapult, you know, 10x our business. And, you know, within the first year, we doubled or tripled.
- [41:52]
B
Absolutely. When I first met Sam three years ago, like, I met, we chatted, we went out, we had some dinner. I only after learning later on that you guys had just started working together a couple years before, I had thought you guys were, had built this together since you were like 20 years old because you're, you're so yin and yang.
- [42:09]
A
Yeah.
- [42:09]
B
As far as being able to like, you're opposite sides of the business, but you bring so much together that that's why it's exploded. But it's also like you can read each other's thoughts because it's like, okay.
- [42:18]
A
You, you're, you know, and are like brothers. We've been best friends since we were 14, so, so they're there. So it's like we're like mind readers.
- [42:26]
B
But it is great. Right. And it's almost sweeter when you're building it together. Right.
- [42:30]
A
Yeah. And that's also what makes what we do so amazing. Because since we were kids, we always just wanted to hang out and, you know, just hang out together. So now we come to work and, like, you know, it's like, I'll never want to stop doing what I'm doing because what am I going to do?
- [42:44]
B
Totally.
- [42:45]
A
I got my best friend, I got my brother and my family. It's like everyone's here. We're just hanging out, you know, like, whatever tribulation. You can throw the craziest tribulation at us.
- [42:54]
B
Yeah.
- [42:54]
A
But because we're Family. And we have so much fun together and we really enjoy this organization as a big family. Like, nothing can fade.
- [43:04]
B
Totally. Well, I'll tell you, in the time I've known you, Joe, you've. You've helped me a lot, vision wise. When Drew first told me you were working with him, mentoring him in the. He's a prominent realtor and developer. And you know, he was telling me that, Joe, I hadn't even met you at the time, but Joe, he said, he said, you know, Joe wants me to try and do a billion dollar brand. And I'm like, who's this Joe? And a billion dollars, a lot of money. Right. And then after having met you, I'm like, okay, this, this is great. Joe's dreaming that and going to create that for himself, but he wants that for the people that he's mentoring. Right. And you kind of. That rubbed off on me as I was transitioning from luxury into ARC and kind of created that scale culturally. I love coming here because what you've got at HQ is like the, like not only do you have all the fun, you've got the basketball nets and everything else. Right. It's everything that can people an opportunity to work, but at the same time. Totally. But the culture is infectious.
- [43:59]
A
Yeah.
- [43:59]
B
You can just tell that there's people that get here at 6am and they.
- [44:04]
A
Don'T leave, they live, they eat, they enjoy it.
- [44:06]
B
And part of it is like, it's one thing to be at work, it's another one to feel like you're not at work, but you're succeeding because of that. And I think that's the kind of culture you've created. Candidly, I'm going to continue to copy that because I've learned a lot from you.
- [44:18]
A
There's a quote that we had a guest named Mateen Cleaves on this show and he says you either do you like it, do you love it or do you live it?
- [44:26]
B
Totally.
- [44:27]
A
And what we try are what we want our people here to experience is live. This is life. This is the best. You got to go beyond liking it. You got to go beyond, way beyond loving it. You got to live it. And that's where you really accomplish success and happiness.
- [44:42]
B
Totally. And I think, I think that's where like we work in products that are similar in that like there's a lot of day to day work that has to get done to get a mortgage over the finish line. Same thing with what we do at the property management side at ark. So there's a lot of mundane tasks but what kind of culture have you created so that people are taking so much pride in the mundane to make sure that it's a great experience for the end customer. Right? And you guys have done a great job with that.
- [45:05]
A
Now a couple last questions here, and this is a really important one for listeners, is how would you advise a 20 year old to build wealth?
- [45:15]
B
I would advise them to get world class at something first. Look for something that's got the ability to build wealth, right? You've gotta, you've gotta find something that is scalable and that actually can have the numbers add up. So, you know, talk to mentors and try and find something that fits your personality that allows you to create that wealth. And then after that, just go about focusing on just being as world class as possible at it. You know, don't be lifestyle driven. You know, you and I are still not lifestyle driven, right? We live well below our means. I'll always be in that boat because I'm just comfortable that way. But I'm, I'm most obsessed about making sure that I'm much better six and 12 months from now at what I do than I was, you know, in the prior period.
- [45:58]
A
Excellent. That's excellent advice. Now, what's the most painful thing you've ever been told?
- [46:06]
B
The most painful thing I've ever been told. You know, along the way I've had people doubt me in, you know, when I was, when I first started flipping homes, they're like, oh, that, you know, you can't make money at that. Or, you know, when I, you know, transitioned into luxury, it's like, oh my God, you're gonna lose your shirt. So, you know, just the, you know, there are haters out there that will tell you it can't be done. That fuels me. Like I honestly, I have a positive personality and I like to think I do anyway. And I, and I'm, you know, I go through life happy. But I also, I like the, the Michael Jordan analogy where it's like, you know, sometimes you need to have targets and you need to have access to grind, even if you're, even if they're just kind of like small slice along the way. So I use it as fuel. Someone tells me it can't be done. Right now we're building an apartment complex. We're in the stages of building it. I'm buying the land next week to build 175 units. It's going to be right next door to 420 units that I own. And so it's logically one where I think we're gonna have tremendous success. But I know I've had people in the industry tell me, oh, you can't do that, like, if you're. If you're not a builder. Despite all my experience, I've built 250 homes. Right. It's like, I know what I'm doing, but I've got people that are doubting me right now, and that's a lot of fun because it's, you know, I get an opportunity to prove them wrong. I'm doing it for our team and for, you know, for the right reasons. But along the way, it kind of quiets people. You know, you let yourself be so good at what you do that your success speaks for itself. You don't have to beat your chest.
- [47:46]
A
Now, a couple last questions here. It's a three pronged question. Okay, okay. What's a personal goal that you have for yourself? What's a goal that you have for the family? And then what's a goal that you have for arc?
- [47:59]
B
Okay, great questions. I'll start with. I'll start with least important and go to most important. And for me, the least important is the goal for ark. What I mean by that is it's most quantifiable. Right. And so for arc, I want to scale tremendously from where we are, but scale responsibly, put the right people in place to allow ourselves to build a big company that is a great steward of our investors capital. So we've got just a terrific track record. We're four years in, I want to be able to say, at 25 years in, that we've consistently returned, you know, that 2x. If someone puts $100,000 with us between cash flow and equity, we've turned it into $200,000 for them every five years or sooner. That's the goal at Ark, while at the same time building a great team that's bought in both culturally as well as invested in their success. Because I think it's the right thing to do. And I think we have the right fabric for making that happen on a. On a personal level. Because I feel like my family is even more important than my own personal goals is to, you know, enjoy what I do at arc, you know, maintain good health and then be a benefactor to others. You know, I. I'm not doing what I'm doing just to live a better lifestyle for myself. That. That changed a long time ago. It's more about how do I better the communities that I'm in, how do I make sure that we have A foundation that gives back in a very meaningful way to those in the world who are less fortunate. And then also, at some point, I'd love to get into a position where I can, you know, strongly influence people at getting into careers that allow them to make an impact as well. So they think beyond just the 9 to 5 job, want to get into entrepreneurialism and give themselves an opportunity to create something totally amazing at the family level. Which is. Which is most important to me, especially for Amy and myself, for our kids, is make sure they're happy. You know, I think that success is a great thing, but it's. But. But success does translate into happiness. And it's not just financial success. In fact, I think it's well beyond financial success. It's, you know, doing what you're meant to do, feeling like you've got a purpose and that you're, you know, what you're doing matters. You make your contributions matter and that you're healthy and happy. That's. That's the biggest goal I have for the time I have left.
- [50:29]
A
Excellent. Now, my last question. When you're in front of the Pearly gates, what do you think God's going to tell you?
- [50:35]
B
I honestly believe that God's going to tell me that he's put amazing people in front of me and alongside me to help me do something tremendous with my life. And I think he's going to start with that, and then I hope he says to me, and you did something great with it, and you did make an impact. With what? With what I gave you. The flip side of it is, you might say, you know, I put amazing people in front of you and you did well, but you didn't make the impact because you forgot that part of the equation. So I'm very cognizant of the fact that you have to give back. You have to try and help other people along the way. Right now, it's the people that are working alongside me at ark, but over time, it's going to become much bigger than that. Where you want to try and give everybody the shot at that proverbial American dream, that opportunity to go from humble beginnings and create something really amazing, to then give back and continue with that circle.
- [51:32]
A
Excellent. Robert, this was a great interview. Thank you so much for sitting down for this podcast. I hope that the guests got and got to dive deep into Robert's brilliance and to. Into the multifamily space, which is booming right now. And it's going to continue to explode under your vision, under your leadership. God bless you. God bless your family. Thank you. Keep dominating.
- [51:54]
B
Absolutely.
- [51:55]
A
And if people want to reach out to you, how do they reach out to you?
- [51:58]
B
Yeah, there's a couple ways. We our website is ark arcmf.com my email address is robert@arcmf.com she shoot me an email tell you know, to let me know that you you heard about ARC through the Coffee foreclosures podcast. And and I'm happy to connect and help mentor people, give them advice on what they're doing in the real estate investing space. I've been doing a long time. Happy to just serve. And if they're interested in learning more about Arkansas as an investment opportunity, you know, just hitting me up by emails the easiest way, I'll I respond to everybody same day.
- [52:35]
A
Awesome. Thank you. Thanks, guys. God bless you guys.
- [52:39]
B
Thanks a lot.