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Show Summary
In this episode of the Real Estate Pros podcast, host Micah Johnson interviews Emran Chowdhury, a seasoned real estate investor with a decade of experience in the buy and hold strategy. Emran shares his journey from being a software engineer to investing in real estate, emphasizing the importance of property management, understanding tax advantages like 1031 exchanges, and building strong relationships in the real estate market. He discusses his investment strategy, focusing on cash flow and ROI, and outlines his goals for future acquisitions.
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Investor Fuel Show Transcript:
Emran Chowdhury (00:00)
I really like that type of investment approach where actually you can find the deal.⁓ And then have them like give them long run away to make it work as long as you buy it, right? You don’t need to think about I need to sell it like next year or next five years then you don’t need to care about the Market noise right? So will the housing market crash in next five years? I don’t need to worry about that one as long as I’m buying it right So that is the main goal like each of peace of mind which gives me and which helps me to like on my financial independence
Micah Johnson (02:03)
Hey everyone, welcome to the Real Estate Pros podcast. I’m your host, Micah Johnson. And today I’m joined by Emran who’s been making some serious moves in the buy and hold space for about 10 years now. Emran, welcome in man, glad to have you.Emran Chowdhury (02:04)
Hey, thank you, glad to be here.Micah Johnson (02:18)
I’m excited for our call today. I think your listeners are really going to get some value out of how you’ve developed your approach over 10 years, the focus that you take and making sure that you pull your strategy off. So let’s dive in for people who may not know you yet. What’s yourmain focus right now and what markets are you operating in?
Emran Chowdhury (02:33)
Okay. Thank you. So, yep. My name is Emran. I’m working as a software engineer, but at the same time, I’m investing in real estate for the last 10 years. My main primary focus on buy and hold single family homes, mainly in the price point where like price to rent ratio makes sense. I don’t care about that much location specific in the US. So I’ve been investing in Ohio, Nebraska, Washington, Tennessee, and Alabama last 10 years.Micah Johnson (02:59)
Oh man. Excellent. Took that leap getting out of your backyard. So let’s go back to the time where you got into real estate. You said you were a software engineer at one point did real estate click in and say, you know what, I’m going to start doing this too.Emran Chowdhury (03:00)
Yeah, that’s a very interesting point in my life. So when I bought my first primary house in Redmond, Washington, the house price was like 550k. But the rent, when I was looking to rent a house, it was like very low.2000 to 2500 right so ⁓ when we bought our primary residence, ⁓ but Just for the reference I actually only put five percent down payment at that time and then so when we bought it then the Price acquisition was really high and I saw that there is a really gap on the price and the rent side, right? So then I thought now what why shouldn’t I talk about more investing in the side? That’s how I get it started
Micah Johnson (03:37)
Nice.Gotcha, gotcha and it just had you thought about it before or it was just an idea that was coming up as you were going through it.
Emran Chowdhury (03:55)
haven’t thought about it before but so when it comes to my mind at the same time actually I was seeing the lot of appreciation on the house prices and also I was looking for like hassle free income not like depending on w2 all the time ⁓Micah Johnson (04:17)
Gotcha. Gotcha. We’re looking for that freedom, man. It’s what a lot of us get into real estate for us to make sure that we’re, protectingourselves long-term. So you’ve been, you’ve been doing a great job at buy and hold for quite some time. Now you’re up to 22 doors, you’re building that cash flow. What we were talking about in our pre-recording call, what’s been the key for you to make that work consistently?
Emran Chowdhury (04:24)
The main key idea I would say, the property management company manages all of my properties. So I don’t need to day to day life manage all these properties, which is the operational side.At the beginning, I used to manage all these properties by myself, but I quickly found out that actually it’s taking lot of my time. So I want to spend more time on the acquisition side on actually finding the right deals, which makes sense. And then actually hand it over to the property management company. Obviously it’s another challenge to find good property management company. But if you can find one that really helps you a lot in the long run, because then you get out of the trouble of managing all these operational things.
Micah Johnson (05:20)
No, it makes sense, man. And it goes into how you’re trying to do real estate anyways, because you’re still doing software engineering and your time. There’s only so much of it. So when you’re going to engage with real estate, making sure that you’re using the strategy that you’re the best at, or that you’re doing the action that you’re the best at is how I should say it. Like you identified it. My time doesn’t need to be spent. Property managing. Now it’s also helpful that you did it.Emran Chowdhury (05:20)
No, it makes sense, man. And it goes into how you’re trying to be real estate anyways, because you’re still doing software engineering and your time, there’s only so much of it. So when you’re going to engage with real estate, making sure that you’re using the strategy that you’re the best at, doing the action that you’re the best at is how I can say it. You identified it. My time doesn’t need to be spent property managing. Now it’s also helpful thatyou did it.
Micah Johnson (05:46)
Right?think that’s the key thing for a lot of folks is at least experience what it’s like. when you’re working with a property management company, you know what to expect, right? You know, if you’re getting taken or not, and that’s, that’s invaluable knowledge.
Emran Chowdhury (05:47)
Yeah, that’s true. So when I first managed the first three years of my properties, I get to know all the process, how to do the tenant screening, how to actually market your property, how to find the actual rent, do the like analysis, all these kinds of things.The good thing about that actually when I was looking for property management company, I would ask this question to the property management company. Oh, how many properties are you managing? Right? So what is your fact, can see red looks like. Right? So I was asking this similar question what I used to do when I was property management. So that helps me a lot to figure out actually which property management company is the best on each of the market. Right? So then I found like a couple of property management company in Ohio. Then actually I found out this is the best and
Then I moved on my property to the second property management company when managing with. Nice. Yeah. So you went along, found the best operators and then put them there with them so that it can get them here. I know it makes sense. So let’s go into your buying strategy. So you’re in the acquisitions. How have you, because you’ve done, you use a particular method that we were talking about little bit beforehand to buy your properties, keep your tax burden. Take into that for them. What is it that you’ve been doing? Yeah, sure. So,
Micah Johnson (07:34)
Nice. Yeah. So you went along, found the best operators and then put them there with them so that it can get taken care of. No, it makes sense. So let’s go into your buying strategy. So you’re in the acquisitions. How have you, cause you’ve done, you’ve used a particular method that we were talking about a little bit beforehand to buy your properties and keep your tax burden low. Dig into that for us. What is it that you’ve been doing?Emran Chowdhury (07:57)
There is some like tax advantage of real estate properties, what I really like about it. So when we sold our primary residence in 2021, so we had about like a 400k tax gain, capital tax, but it was primary residence, so we hadn’t had to pay any taxes for that one. But after that, when ⁓ I sold my other properties in Washington, what I used to think about that, can I do tax?pre-exchange because if I can do that, I don’t have to pay taxes right now. But the good thing I can act more one upon itself and buy more properties. So that’s what I did next year 2021 when I sold my Seattle rental property, I 1031 exchange to six more properties. And in 2024, I did it again. And at this time, actually 1031 exchange to eight more properties. So
Micah Johnson (08:46)
Nice.Emran Chowdhury (08:47)
You can see that actually 14 properties is got out of just two properties and I don’t have to put any more money from my pocket. And see that’s a powerful way. So what led you to 1031 and for listeners that may not know exactly how it works dive into a little bit. What how how does it work? Is there a way to make sure that it’s going to happen? Gives you though. Yeah, sure. So 1031 exchange is a way to actually defer your.Micah Johnson (08:54)
Man, see that’s a powerful way. what led you to the 1031 and for listeners that may not know exactly how it works, dive into a little bit. how, how does it work? Is there a way you can make sure that it’s going to happen? Give us some details.Emran Chowdhury (09:12)
tax gain at this moment when you are exchanging the property. there you need to follow a couple of things. One thing for sure, you need to work with 1031 intermediary who will actually take care of these finances. One word of caution, you can’t touch any money. If you touch any money, this 1031 exchange would be invalid. So keep that in mind. The second thing when you are doing it, so there are some timeline you need toMake sure when you are selling a property, the next property you need to find it in 45 calendar days. And also you need to close all these properties 180 days, that means six months. So make sure you think through all these things. Where will you find these properties? Because you need to find all these properties in 45 days. Sometimes it might be challenging. And also talk about your intermediary. And also talk to your CPA. Talk to your CPA because sometimes the lender, you need to work three parties together.
the lender, the qualified intermediary, and also CPA, because they can figure out the best way to solve it. And even if you can’t find the property, typically the 1031 exchange, they charge around 1,000 bucks. So if you can’t find the property, that’s perfectly fine if it doesn’t work out. So people get very fearful about the process, but it’s not that much complicated. So you mentioned a term of the 1031.
Micah Johnson (10:09)
Mm.Gotcha. So you mentioned a term of a 1031 intermediary
a couple of times. Let folks know what that is and how do you find a good one? What are some good questions to ask someone you’d be interviewing to find out if they’re a good rep for that or not?
Emran Chowdhury (10:30)
Let folks know what that is and how do you find a good one? What are some good questions to ask someone to be interviewing? Find out if they’re a good repfor that or not.
Yeah, that’s a great question. So yeah, 1031 intermediary who manages all of your finances when you are doing the 1031 exchange. So their main responsibility is when you sell the property, all the money goes to their account. And when you buy property, they actually send the money to the lender or closing office.
Micah Johnson (11:26)
Mm.Emran Chowdhury (11:31)
And if you want to find a good 1031 intermediary, make sure you read about the reviews. Talk to your real estate partner who did it before, because there is lot of things, legal things you need to put into place to make it work and make sure actually you talk to the right person to get enough information and always ask them actually how many 1031 exchange they do per year. That’s a good metric, right? So if they’re doing only a couple of in a year, that means actually they didn’t have enough experience doing that.Micah Johnson (12:00)
Yeah, that’s a great way. That’s a great way for sure. You can tell if they’re specialized or not. And you mentioned there too, hitting your real estate relationships. Dig into that for a second. How is that? What kind of relationships have you built? How have they helped your career over time?Emran Chowdhury (12:01)
That’s a great way. That’s a way to say you can sell for specialized. And you mentioned there too, if you’re real estate relationships, you’re into that for a second. How is that? What kind of relationships have been built and how they know for careerover time? Yeah. So real estate, it helped me. So when I was doing my real estate investment, so I quickly found out that actually it takes long time to get into real estate or see the real estate deal. So during the pandemic, I got my real estate license. So that’s one more thing.
That helped me a lot because now actually I can go and see the house by myself based on my timing. And then when I moved out from Washington to Nebraska, I actually same thing I did transfer my license to Nebraska. I didn’t have to do the exam again. So I’m very good at like making all this process efficient. And at the same time, I met with like very amazing real estate agent who actually knows about local market, who knows about how to negotiate better. And
At the beginning, I was struggling with getting funding. once I found out that actually there are a few lenders who would actually fund all of your deals as long as you find good deals based on the cash flow using DSCR loan, those are really good points in the relationship of my real estate business. OK. All right. So what’s going into that? So you mentioned
Micah Johnson (13:14)
Okay. All right. So let’s lean into that. So you were mentioned about fundingwas originally one of your bottlenecks, which a lot of investors go through. Where do I get the money to get these projects done? And you’ve mentioned a couple of particular lenders you found and then a particular loan type. You said the DSCR. Explain a little bit about what that is and what to look for in a lender who does that type well.
Emran Chowdhury (13:22)
investors go through, where do I get the money to get these projects done? And you’ve mentioned a couple of particular lenders you found and then a particular long side, you said the VFCR. Explain a little bit about what that is and what to look for in a lender who does that quitewell. Yeah, sure. So for your single assistant, you can get 10 conventional loans for Intel properties. But as you hit that mark, you need to think about how you can get more funding.
So there are a couple of lenders or like few more about through the nationwide lending for DSCR. So one good thing about DSCR that actually there is no limit of lending. So you can get like hundreds of loans as long as the property cash flows. So DSCR, let me elaborate a little bit more in depth service coverage ratio. Basically what you do actually in the rental income and you calculate all the expenses, you find out the ratio. Typically nowadays the lender will allow like
DSCR 1. That means as long as ⁓ all the expenses is covered by the income, you are good. You will get the funding. So when you’re talking to the lender, ask them actually, what are the restrictions? What is the DSCR restriction or ratio they are looking for? And what is the minimum amount of down payment? And one more question I always ask actually, is there any prepayment penalty? Because most of the DSCR loan, they have like three to five years prepayment penalty. So if you are thinking, I’ll pay off in one year or two year of this property.
then make sure you talk to them and understand actually is there any penalty you need to pay. Yeah, excellent excellent points there. ⁓
Micah Johnson (14:48)
Yeah, excellent, excellent points there that that prepayment penalty getspeople sometimes, especially when you’re turning loans over fast. Interesting man. OK, awesome. So what’s what’s your big opportunity for 2026? What are you looking into this year? Where are your eyes pointing?
Emran Chowdhury (14:56)
Interesting man. Okay, awesome. So what’s what’s your big opportunity for 2026? What are you looking into this year? Whereyour eyes are?
Yeah, so 2026 I’m really excited about the current announcement by our president that actually the price might come a little bit lower to the range. So and I’m looking for like all over in the USA in different states where the deal makes sense. Mainly I look for like 20 % ROI.
for each single family homes and my screening criteria around actually I look for like 100k to 150k range price range with 20 % down payment and as long as it covers all the payment and I get enough return out of my money that’s my goal is to find and finding is still little bit getting harder but still getting once in a few and that’s the main goal for 2026. Do you have a number of doors you’re trying to add to your portfolio? Yeah typically I ⁓
Micah Johnson (16:26)
Do you have a number of doors you’re trying to add to your portfolio?Emran Chowdhury (16:32)
try to get four to six per year. So that’s my goal.Micah Johnson (16:34)
four to six per year right on. And are there any particular markets that you’re looking in that you’re starting to find stuff happening?Emran Chowdhury (16:37)
the markets that you’re looking in.Yeah, so when I started, I saw a lot of deals in the Ohio market, Cleveland area. Then I looked into like Birmingham, Alabama, and also then like Memphis, Tennessee. These are the three markets I typically focus on where actually I can get like good price to rent actually. Nice. And you already have your property management set up for those. Yes. you stay in cases where your company is prepared. That’s important,
Micah Johnson (16:56)
Nice. And you already have your property management set up for those. So like you’re, staying in the spaces where you’re, you’re keeping it prepared. And I think that’s important. Like one thingI’ve appreciated about your story so far is the discipline to it. You’re not out, you’re not chasing things. Like there’s a quote, I like that. We’re not deal manufacturers. We’re deal finders. Like it’s going to pencil or it’s not going to pencil. you, and you have your exact formula for what you’re looking for. And what that really does is protect you. It keeps.
Emran Chowdhury (17:06)
That’s when you’re actually investing and you’re not gambling. There’s a strategy that directs you.Micah Johnson (17:24)
That’s where you’re actually investing and you’re not gambling. There’s a strategy that you’re executing.Emran Chowdhury (17:30)
Yeah, I really like that type of investment approach where actually you can find the deal.⁓ And then have them like give them long run away to make it work as long as you buy it, right? You don’t need to think about I need to sell it like next year or next five years then you don’t need to care about the Market noise right? So will the housing market crash in next five years? I don’t need to worry about that one as long as I’m buying it right So that is the main goal like each of peace of mind which gives me and which helps me to like on my financial independence in like less than 40 years
Micah Johnson (18:05)
Right. And peace of mind’s a lot. Entrepreneurs already go through stress. There’s already just a natural built in stress due to how much uncertainty you deal with. Right. Like there’s a level of like, ⁓ to that. So keeping as much at peace as you can by utilizing your process. It’s everything. It really is the difference between being successful or not.Emran Chowdhury (18:05)
Sure. Yep. So, ⁓ yep. Focus on these things. And then, ⁓ I think real estate investment.it’s easier if you know what you are looking for. So finding that right balance actually how much time you want to spend on and what is the main focus area. And if you enough put your focused effort in one thing, I’m certain actually everybody can get out of what they want.
Micah Johnson (18:49)
Nailed it, man. And it lines up with this idea I hear time and time again, especially in real estate investing is work back for work backward from where you’re trying to get to. If you know what you’re trying to do, take the time to determine it. Look up different asset classes. Look up what you’re trying to do. Like talk to people, spend time preparing for what you’re about to do and your chances of pulling it off.Emran Chowdhury (18:50)
They exponentially increase because you know you’re trying to go and you can work backwards.Micah Johnson (19:12)
They, they exponentially increase because you, know, you’re trying to go and you can work backwards. And then allof a sudden the rush goes away. That’s what I experienced when I shifted to that method in my own life is I’m not in a hurry to get anywhere. know where I’m supposed to be. I’m doing exactly what I should be doing today based on the plan, because I know where I’m trying to get to. I’m working backwards from it. And that’s where that peace of mind really comes in. And then the, day to day noise of real estate, it just gets softer and softer.
Emran Chowdhury (19:17)
And then all of sudden the rust goes away. That’s what I experienced when I shifted to that next day of my life. I’m not in a hurry to get anywhere. I know where I’m supposed to be. I’m doing exactly what I should be doing today based on the plan because I know where I’m trying to get to. I’m working backwards from it. And that’s where that peace of mind really comes in. And then the day-to-day noise of real estate, it just gets softer
and softer. Yeah, absolutely, Agni.Micah Johnson (19:41)
Let me ask you this, if someone wanted to connect, collaborate, or learn more about what you’re doing, what’s the best way to find you? Do you have any information they can learn more about your strategy and, you know, where could they get a hold of you at?Emran Chowdhury (19:41)
Absolutely. So I write a financial freedom newsletter. So in Substack, can find me there in the Emran Chowdhury. So I wrote a of newsletter posts last year to focus on what type of deal I’m looking for, what type of investment strategy I used.So you can read about those things and that will really help you to accelerate anyone’s real estate carrier and also reach out to me there if you are interested.
Micah Johnson (20:18)
Excellent, man. We’ll make sure we have those linksfor everybody in our show notes. So you’ll be able to find Emran Hey, Emran, it’s been a pleasure having you on, man. I appreciate your time and your story. I think more folks need to be out there doing it like you’re doing it, being intentional, know what you’re trying to do, work backwards and pull that dream off. It’s possible. really is. So if you got value from this episode today, please like this episode, share it, subscribe to our podcast.
Micah Johnson (20:43)
We got more conversations coming up with operators just like Emran who are out there building a real business that’s leading to the generational wealth that they’re after. Thanks for joining us. We’ll see youin the next episode.
