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Show Summary
In this episode of the Investor Fuel Podcast, host Skyler Byrd interviews Tenny Tolofari, co-founder of Excite Capital Investment. Tenny shares his journey from a cybersecurity professional to a private equity investor focusing on multifamily real estate. He discusses the advantages of passive real estate investment for busy professionals, the types of properties they target, their acquisition process, and the importance of market trends. Tenny also highlights the tax benefits associated with real estate investments and how accredited investors can participate in their opportunities.
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Investor Fuel Show Transcript:
Tenny Tolofari (00:00)
Of course, and we’ve done value add in the past. The very first deal that we bought, we bought it for $12.55 million. We spent around, I think, $800,000 to do value add on it. And we ended up exiting that deal. We bought it for $12.55 and sold for $17.8 million. We projected 18 % annualized return to our investors. We actually delivered 29.97%. That’s a typical value add deal.Skyler (01:56)
Hey everybody, welcome to the Investor Fuel Podcast. I am your host today, Skyler Byrd. And today I am joined by Tenny Tolofari. I’m very excited to speak with Tenny. He is from the private equity world. His company is Excite Capital Management or excuse me, Excite Capital Investment. And he is going to be talking about a way to invest in real estate ⁓ when you don’t necessarily have the time. So Tenny, thank you very much for hopping on the call.Tenny Tolofari (02:14)
Correct.Thank you so much, Skyler, for having me. Appreciate it. Looking forward to the conversation.
Skyler (02:30)
absolutely and in Tenny just before we get into what you’re doing currently can you share a little bit about your background because you do have you come from an interesting place yeahTenny Tolofari (02:39)
Thank you.Absolutely. I’d definitely love to
about who I am. To cut long story short, I came into the United States ⁓ to go to grad school, study for my master’s degree. I have a background in engineering. I studied electrical and electronics engineering in Nigeria. And then I came to the United States to pursue higher education. Graduated from grad school, got a job, started working with the likes of Deloitte and Boeing.
I worked there for over a decade and was a global cybersecurity professional for over a decade. And then in 2024, I went full-time in this private equity firm that I created with two of my partners, Dr. Julius Oni and Leslie Awasome. We co-founded Excite Capital in…
2019. And interestingly, we’ve been building the company since 2019. And now we have about 243 million dollar worth of assets with our investors, and we’ve distributed about $8 million to investors as well. So I’m looking looking forward to, you know, share with you all some of the things I’ve learned, some of the lessons that have made me who I am today. And hopefully some of you can see that there’s a lot of possibilities out there and how you can take advantage of that as well.
Skyler (03:57)
Absolutely. And how did you go from being a cybersecurity professional to being involved in real estate?Tenny Tolofari (04:04)
That’s a really good question. So I came in, went to school, graduated, got hired right before I graduated from grad school, got hired, and I started working. And you know, once you start working and you start earning certain amount of income, a lot of people talk about the American dream. And I got to understand that the American dream is to actually own a house. So I bought my very first property.Skyler (04:28)
Absolutely.Tenny Tolofari (04:32)
My wife at the time was pregnant and she’s like, man, I’m not going to bring my first daughter in an apartment, so we have to go get our house. I was like, yeah, let’s do it. So we went and we bought our very first house. And that was the American Dream achieved.But as you start growing in the ranks of your career, you start thinking about, okay, what’s next, what’s next. Of course I have the other ⁓ investment instrument like the 401k, the index funds, the index and life insurance policy.
I have a lot of these different instruments. have savings account. But in your mind is like everybody keep talking about real estate, real estate. If you want to invest real estate. And all I could think about at that point was, you know, maybe I should go buy, since I have my property now.
Maybe I should go buy me a single family home out there and put somebody in it so that they can rent it and I’ll build wealth that way. But one thing that me and my partner quickly realized was this. The folks that have actually built significant amount of wealth, some of them have done it using single family homes, but the ones that have done it in a significantly big way have done it using commercial real estate. ⁓
And when I say commercial real estate, I’m talking about large multifamily properties, five unit plus multifamily real estate. I’m talking about hotels, malls, mobile ⁓ home parks. All of these are considered commercial real estate, but we decided to focus on one. And the one we focused on was multifamily real estate. And there’s a whole lot of advantages that comes with it.
And we looked at it, we saw that there’s an opportunity for we to go in there and acquire it. But we had one big problem. The big problem we had was once you go commercial, the amount of money that you need to acquire the deal as a down payment increases significantly from, it goes from maybe 25 % all the way to 40%. And imagine if you’re buying a $1 million property, you need to bring in between $250,000 to ⁓ $400,000.
So that is the challenges that we faced and we now observe and started learning from a lot of people out there how they did it. And what we observe is a group of people, a group of professionals, busy professionals or doctors or IT professionals, they come together, the pool resources to go acquire these assets. So we were like, well, if our goal was to invest passively, create your wealth and reduce our tax burden.
And we have a lot of busy professionals that don’t want to deal with the headache that comes with real estate, but they want the benefit that comes with real estate. What if we can help them get in real estate? We get to get cashflow, appreciation, tax benefits without lifting a finger. Would that be appealing? And we did a sample in our professional community and we saw that, a lot of people are looking for what we got. And that’s how we, you know.
built this company and now we have 243 million dollars worth of deals we’ve done. We’ve raised over 80 million dollars from our investors and we’ve distributed over eight million dollars to investors passively. So the company is continuing to grow. We have big ambition and Skyler to your question, that’s exactly why I got into Water Family Real Estate.
Skyler (08:26)
that exactly I mean it makes it makes a lot of sense to me and as we’re talking about earlier right I think what stops from the majority of people from getting into real estate. ⁓ It’s either time or fear or both right you can’t put in the time to learn what you need to learn so this is a great way right like you said for busy professionals that want this you know to get into real estate for all the advantages that it has ⁓ without needing that the time to put into.to study the deals and be a landlord and go through all of that, right?
Tenny Tolofari (08:59)
Absolutely, absolutely. one of the things we observe is like, ⁓ a lot of these guys, just want to, love the work. They’ve spent so many years working and they want to continue to do because they went into that profession because they loved it. They want to continue to do that. And a lot of times when they say they want to invest in real estate, when they start dealing with tenants, Tamai Toilet, they start dealing with a lot of the issues that come with real estate, it becomes another job.Skyler (09:01)
soon. ⁓Tenny Tolofari (09:27)
And because of that, they hate it and they just decide not to do it at all. They have the job, they have families, they have kids, have their hobbies, they have things they’re interested in. Even though they want to build wealth in real estate, a lot of these busy professionals don’t want to spend that additional time to go learn about it and manage it and do all of that stuff, right? So what we’ve decided to do is to actually give investors all of the benefits. I’m talking about the…The tax saving strategy that comes with it. I’m talking about the cash flow that comes with it I’m talking about the appreciation that comes with it. I’m talking about a peace of mind of not
Worrying about what’s going on with asset at every point in time. I’m talking about not putting your credit score on the line. I’m talking about not Worrying about who is the property management company or who is the tenant or vetting the tenant all of that you get to you know Sit back and let us do that work. And of course for we doing all the that work we get paid but usually these deals
have enough money coming into these deals to manage, take care of all the expenses that come with the asset. I used to get to get a lot of returns.
Skyler (11:04)
No, that’s a very excellent point there. And let me ask you, what type of properties, I know it’s multifamily that you’re focusing on, but what do those look like to you? Do you want to, at this point in the market now, are you trying to find properties that you need to put a lot of work into and then value add? Do you want something that’s a little bit more put together? What does that look like on your side?Tenny Tolofari (11:28)
Yes, so we try to get assets that are a little bit more put together. ⁓ In today’s world, the cost of materials is pretty expensive. If you’re going to do value add, that means you’re going to spend a lot of money doing a lot of renovation. So what we’re trying to do is in what the family real estate, you have class A or the way to class D types of assets. We try to focus on class A and class B assets right now, where we don’t have to come in and spend a lot of money trying to do renovation and ⁓ try to figure out how to.value a lot do a lot of value add like a lot of people come in and do a complete repositioning meaning they spend $30,000 $50,000 to renovate a unit we don’t do all of that right now if you buy a deal our goal is we find a deal now it takes us more time to find this particular deal but when we find a deal what we have to do now is to optimize operation reduce expenses and do very what was what we call a very light value add where we come in and maybe just put in you know smart time will start
keyless entry, just to call light value a way to have to spend a significant amount of money and you’re still able to achieve a significant growth in terms of returns for your investors.
Skyler (12:35)
There you go. I like that. So, and I’m assuming if the environment changes, this is something where, if materials become a little bit better priced, things like that, you can look to do a little bit more on the value add side, correct, as business actually changes.Tenny Tolofari (12:50)
Of course, and we’ve done value add in the past. The very first deal that we bought, we bought it for $12.55 million. We spent around, I think, $800,000 to do value add on it. And we ended up exiting that deal. We bought it for $12.55 and sold for $17.8 million. We projected 18 % annualized return to our investors. We actually delivered 29.97%. That’s a typical value addBut now since then, we’ve been buying a lot more Class A and Class B assets rather than value ideal because we’ve seen that you’re still able to get those returns that you’re projecting to your investors without having to do a lot of that work upfront where you have to spend a lot of money.
Skyler (13:29)
Okay, yeah, absolutely. And in what part of the country are you focused on right now?Tenny Tolofari (13:35)
So we’re buying deals in the Southeast currently. So currently we have deals in several states. We have deals in DC, in Baltimore, in Columbia, South Carolina, in Georgia. We have three deals in Georgia. We have a deal in Indiana. But currently where we’re focusing on is North Carolina, South Carolina, and Georgia. We’re beginning to eye Tennessee a little bit. And the reason why we buy in these markets is basic economics, which is demand and supply.Skyler (14:01)
Yep.Tenny Tolofari (14:02)
Right? YouSkyler (14:02)
Yep.Tenny Tolofari (14:03)
want to buy properties in location where people are moving to. Now, people are moving to this area wide. A lot of them want more space. A lot of people are moving from north, from west all the way to the southeast because they want more affordability. Some of them want jobs are moving to this area. The schools are good. Crime is low. So a lot of these are things that are making us go to this market and we make sure we monitor the trend when it comes to population growth before we go into a market to acquire these assets.Skyler (14:31)
Absolutely. Okay. And any plans on the future, you know, in the future of expanding to other other markets or do you see yourself primarily sticking to the southeast right now?Tenny Tolofari (14:40)
Oh, absolutely. We’re definitely going to move sometime in the future. Again, like I said, it’s demand and supply. Where people are moving to is where we want to be. If we see that in the next couple of years, other places like in the Midwest right now, there are some places, Columbus, Ohio, I was just looking at that data yesterday, you’ve a significant amount of growth as well. Some other places in the Midwest are seeingin population, and those are driven by jobs going into those areas. Texas is seeing a significant amount of growth. Tennessee is seeing a significant amount of growth. Florida,
is seeing a significant amount of growth. ⁓ Vegas, Nevada is seeing a significant amount of growth. Dallas, Texas is seeing a significant amount of growth. So these are markets that are growing, but we cannot be in all of those markets at once. So what we’re looking to do is to have market dominance in certain areas. And then as we continue to ⁓ grow, we can potentially expand to other markets as well. But we are observing all the markets.
Skyler (16:17)
Okay, absolutely. So make sure you know the market that you’re in first and then kind of expand as you see fit. And I think that’s a smart way to go about it instead of just going and chasing deals. Yeah, all right. So you’re looking for class A and class B assets. ⁓ How long is your process from the time that you identify a property ⁓ to the time that you move in and try to buy it? What does that look like?Tenny Tolofari (16:24)
up.Absolutely, absolutely.
So when we wanna buy a deal, go through a lot of, we call it a sniff test. So we have like, it’s like a funnel. We have a bunch of deals coming into that funnel and we have to go through the filtration process where we say, okay, does this meet the location? Does it meet the market criteria? Does it meet our assets deal criteria? Does he have good school population, crime, low crime, media household income growth?
All of these check, check, check, check, check, it is check, and then we go to the next phase of our evaluation where we now bring in a review, the finances of the assets, because we have to look at the income and expense statement, income meaning the last 12 months of income and expense for the last 12 months. We
to look at all the tenants that have been on the property that have signed the lease for the last 12 months to do an audit.
When we see that all of this makes sense and we put it in our model and we see that when we do all of this, property have enough cashflow to produce returns to our investors. We do not buy a deal that does not cashflow day one. So we buy a deal that when we do all of this analysis and we acquire it at a particular price, the asset have enough revenue to service debt, take care of expenses and still produces cashflow to our investors. When we see that, now we can now submit and offer the deal.
And before we submit that offer, we also look at it and say, are we able to actually continue to increase the income on the asset because multifamily properties have valued based on the income the property is producing. What we, the operators have control over is the income. Are we able to increase the income by doing more renovation, by adding more amenities, tech package, reserved parking, valley trash?
All of this little, little income increases the value of the asset. So our job when we buy this asset is, can we identify opportunity for we to increase the income while we keep expense flat or reduce the expense? If we see that, then we go in and we buy the deal and then we execute our business plan of actually doing something to increase the income. And that income is called the net operating income on the asset.
Skyler (18:51)
Okay. And how long are you typically holding the assets?Tenny Tolofari (18:55)
So our whole time is five years, five to seven years, but we’ve been able to exit the deal in 21 months, meaning we were able to get ⁓ invested investors, implement our business plan and exit in 21 months. That’s our track record. But we typically tell investors that we’re going to hold the deal for five years because we need enough time. This is not get to it quick, any kind of thing. You have to go in and you have to actually do the work.and gradually increase the rent on the asset to actually achieve the returns that we’re projecting for our investors. So we typically save five to seven years for we to execute on our business plan and then exit the deal. And in addition to the returns the investors get, they also get tax benefits. They just passed the big, beautiful bill where they brought back 100 % bonus depreciation. I always tell people this. Real estate has been designed by the system for us to take advantage of it to reduce our tax burden.
Now, how you use it is all dependent on you. Well, one thing we as the operator would do, we have to make sure we give you those depreciation or those tax savings benefits. Even if it’s a dollar that you use to reduce your tax burden, that $1 is what you can spend towards or send or direct towards your kids’ education, towards retirement, towards more grocery, towards your vacation.
towards charity, towards anything that you wanna do for yourself and your family. So we always encourage people that if you wanna actually reduce your tax burden by investing, do that because real estate have a significant tax saving strategy that you can use to reduce your tax burden significantly. In addition to increasing your wealth growing capacity.
Skyler (20:26)
Absolutely.Yeah, absolutely. There’s a ton of advantages. So important thing is you get the advantages of owning real estate without having to put the time and effort in with you and your private equity firm, correct?
Tenny Tolofari (20:41)
Absolutely, he’s 100 % passive to the investors, 100 % passive. The only active part that we have them do is one, make sure you update your bank account information so that you get your distribution. Two, make sure you review the newsletter that we send about the performance of the asset every month. Three, make sure you join a quarterly call with all the investors. And four, make sure you look out for your quarterly distribution and your K1 at the end of the year so that you can filetaxes.
Skyler (21:07)
There you go. I like it. And you’re still actively taking on investors at this point, correct? All right. So if we do have some accredited investors that are listening to this podcast and they would like to get in touch with you, how can they do so?Tenny Tolofari (21:12)
100%.Please. then he, uh, Skyler mentioned accredited investor. Uh, what does that mean? It means that you have to earn if you’re a single, at least $200,000 a year, and you’d have been making that for the last two years. Or if you’re married, you need to be earning at least, at least $300,000 a year. And you would have been earning that for the last two years, or have a net worth of a million, excluding your primary residence. If you qualify as an accredited investor, you can reach out to me. Just Google my name, Tenny Tolofari . I’m on LinkedIn.
or social media platform, you can send me a direct DM or you can go to xsitecapital.com, meaning xsitecapital.com. You’ll be able to get in touch with us that way.
Skyler (22:04)
Excellent. All right, well, Tenny, thank you very much for hopping on the podcast here. I know I learned a lot and for all of our listeners out there, if you’ve got something of value ⁓ from this interview here, please hit that subscribe button. We have got more interviews just like this coming down the pipe all the time and we will see you all on the next episode.
