The Key to Unlocking Profitable Real Estate Deals

Noam Shpalter (00:00)
real estate It’s really easy once you understand what you’re doing. I mean if you learn and you understand the the mythology

and you understand basically the algorithm it’s really easy

I mean it’s like that you’ll get on a basketball court and not knowing the rules it’s kind of the same once you know the rules it’s easier for you to understand and if you’re very high and you’re very athletic

It’s really easier for

Erika (02:02)
Hey everyone, welcome to the Real Estate Pro Show. I’m your host, Erika. And today I’m thrilled to be joined by Noam Spelter, a powerhouse in real estate and investing. Noam, it’s so awesome to have you on the show today.

Noam Shpalter (02:15)
being here.

Erika (02:17)
So let’s dive on in. Noam, for those who may not know your story, can you give us the rundown? How did you get started in real estate and investing?

Noam Shpalter (02:28)
I always say that I got into real estate by mistake because I’m a tech guy. My background is tech. I had several startups and tech companies and after I sold a company, the first or second company, way back in 2006, 2007, I was looking to invest something. So someone told me, I had a cousin that told me you need to invest in real estate.

So I did just bought something, lost money on it and after I lost money I decided that it was the first time I invested in something that I didn’t understand it. So I started studying real estate and just fell in love with it because it was really like the tech world I came from because you need to understand the data, you need to understand…

To analyze everything you need to see the product you need to understand the product and after starting ⁓ studying it I started investing it and I saw that basically I know that some of the viewers will not like it, but

real estate It’s really easy once you understand what you’re doing. I mean if you learn and you understand the the mythology

and you understand basically the algorithm it’s really easy

the only thing you need to do is to get money because once you know how to do it and you have money it’s really easy Erika as you must know once you understand any game

I mean it’s like that you’ll get on a basketball court and not knowing the rules it’s kind of the same once you know the rules it’s easier for you to understand and if you’re very high and you’re very athletic

It’s really easier for

So if you learn real estate and you start doing the things right with the right methodology and the right algorithm, it becoming really easy. And this is what I did. I just took my tech background ⁓ to analyze things and things like that and just started to invest. And from there, we just grew up. I connected to

joined forces with a good friend of mine for 25 years who came from the real estate field and just started investing

started to grow and happily today we’re in 2025 and we just passed the 700 million assets under management all across this coast and I can say that we’re still using the same methodology and the same

algorithms as we started with single family homes in Florida. Just the same thing but with a large quantity.

Erika (06:15)
That’s exciting. Let’s talk a little bit more about what you’re doing. Can you share all the different markets that you’re operating in and how do you decide where you want to strike deals?

Noam Shpalter (06:27)
Well, I think that’s one of the main things that every real estate investor should start with, with the question of where and why. Because many beginner investors are starting to invest next to their homes or to areas they love. I I met a fresh investor a few weeks ago in a seminar and told him,

I live in St. Augustine, Florida and it’s an amazing area I’m going to invest there because people will always come there and I just asked him, what is the number? What are the numbers? What’s the crime rate? What are the immigration rate? What are the current rates for rent? For buying houses? Are they going up? Are they going down? Are people joining the city or leaving the city? And he was like, I don’t know.

And I told him, listen, I know you love the area, but you need to understand the numbers. So every time we go to invest, we check all those things. When we go into a new city, a new area, we check those things and we check the inner immigration. We check what’s going on with the commercial side. We check what’s going on with the crime rate, what’s going on with other ⁓ real estate investors.

or big companies, are they coming to this area or they’re leaving? For example, if we’re looking at Southwest Florida, most of the large constructors are leaving the area. And if you understand the macro understanding of the things, you understand what’s coming up because when you see all the large companies leaving an area and you see the numbers that this area is still strong, still have

great employment numbers, still have great salaries and still have immigration for people coming in the area, you understand that, okay, now they’re leaving because a specific reason. If we’re talking about Southwest Florida, for example, they had the worst two years of the decade in the Southwest Florida. Prices are going down, you have a lot of inventory. But if you look at the details, you have inventory for

depends on the city between 4 and 7 months which is a lot but if the builders stop building in 4 to 7 months you’re going to have a different problem because you’re going to finish buying all the houses that you have but no one is building new houses so in a year or two you’re going to have a different problem because you’re not going to have new homes

for those who are coming and still coming to the area. So this is one of the things you need to look at, like the numbers. And when we go into new cities, we first check all the numbers without even looking at the deal. I mean, I want to understand the city before I know if I want to build or buy there and what. For example, there are cities in Ohio.

that I would never build or buy homes to rent because the rent is not going up and the houses are old

and it’s very expensive to build there but I look at immigration and I see that more and more people are coming to the city and I know that the average salary is much above the average for the city is much above the

National and in areas like that. I will buy a shopping center because I know that people have money they’re coming there and If it’s not a big city and we already have a lot of statistics and numbers about that People are buying less online and more in stores. So this is a good place to buy a shopping center Because people need places to buy they will not drive an hour for things that they need so you need

local shopping centers. On the other hand, if we’re looking in cities that have a huge immigration into the city or specific areas in the city, but they don’t have any new homes there and you see that the average salary is just going up and up every year, you know two things. First, lack of homes. Second, people with money are going there, so they want good houses, nice houses, and above average houses.

It’s not affordable housing. So this is, for example, an area that we bought a land to buy 19 homes, luxury homes, because we understood that, okay, this is a huge neighborhood for luxury homes, but you don’t have even one home for sale, and you hardly have any homes for rent in this area. But people want to live there because it’s a luxury area and people have the money. So these are some of the things that we’re looking at.

when we go into new places. I’ll give you one last example. We just bought a huge land in Washington DC. 10 minutes walking to the White House, right across the Union Square. It’s an amazing area. People at the beginning told us that we’re crazy because Dodge is going to cancel a lot of employments and they’re going to fire a lot of people in Washington.

You remember the news about three weeks, three months ago. People are going to be fired. I went and looked at the numbers. You hardly have any home to rent in this area. The rents are only going up and that all the offices, the government offices are telling people, okay, you need to come back to work from the office. And if all the young professionals needs to come to work from their office.

they don’t have cars they’re using the subway or the public transportation so they want to close to where they work just like Manhattan for example they want to be close to the subway the same thing in Washington DC they want to be close to their work so when we look at that piece of land to build 470 apartments this is the thing that we look for and people thought we’re crazy but the bank

again has numbers, analysts and checking all the numbers Gave us an appraisal of three times of the number we bought the land three times and Again, it’s all about the numbers. You need to understand the area you’re investing it

Erika (14:08)
Yeah, that is a great approach with these examples that you shared. How do you assess whether a deal has enough upside to justify the capital and effort? I know you talk about the numbers, but let’s get into that further.

Noam Shpalter (14:25)
Well, we look at it as we have several go-no-go items. First, we never buy a real estate for the asking price or the appraisal price. There is enough work for everyone. There are enough deals for everyone. And if we buy a deal, we want to know that we have a profit when we purchase the deal. That means that if we buy a building,

I want to know that I bought it under market. If I buy a shopping center, I want to know I bought it under market.

And this is the reason that I told you earlier, we’re buying from a distressed owners. Because a distressed owner needs to cut the numbers, he needs to do a fast sale and things like that. we just closed, last week we closed another shopping center ⁓ in North Carolina and the seller said that

at beginning of the negotiation I don’t need the money I’m not giving you a dime less than what I asked for and we gave him a counter offer and he said no way said okay but we can close it in less than a month okay let me think about it and once he said let me think about that we knew we’re just now talking about the the deal and not about the number and after we closed the number

We got the updated appraisal. We told him okay. This is the number but we wanted to buy it 5 % under market I put it on the table from the first second I’m not going to buy market 5 % and the appraisal was lower than the number he asked for So I told her okay. I told him okay. I want to do 5 % below the appraisal. No, we already closed the deal. Okay, so we don’t need to close it. It’s okay

I told you I’m looking for a 5 % below appraisal and because he was distressed and we knew that if someone is selling a 12 % yielding asset something is wrong with the owner and not with the asset because if the asset is yielding 12 % every year he has no reason to sell it unless he needs money and again that’s information

That’s the numbers, that’s the details, that’s the analysis that you need to do. So we knew he’s going to, also the broker told us, listen, he needs the money, he prefers a fast sale. So we gave him an offer, okay, we can close tomorrow, but 5 % below the present. And we closed. And this is an example of how you go and find the profit from day one.

If I don’t see the profit when I purchase that asset, it’s not relevant for me. Second, I want to know the upside. I want to know the upside. Are the cap rates in this area ⁓ lower than what we bought? Are the average rent is higher than what we bought? And things like that. For example, there was a deal that we did years ago. We bought a multifamily, 88.

88 apartments and we came to the area and we talked to the asset manager and she said yeah, it’s an amazing Amazing property Everyone loves it. We only have two apartments open that means we can’t some more and we can’t get some higher NOI because everything is rented and At the first site I said, okay it’s not interesting because

The seller is not going to give us a big discount. We don’t have any upside to rent out to lease any more, any more apartments, only two. And they’re paying average rate, average rent for the area. Some more, some less, but it’s not enough. And then we said, okay, let’s build up a pool and then we can charge. And she said, no, we have a pool. And I was like, damn, that’s not good. So what else can we do?

And after talking to the asset manager and going into some of the apartments, I saw that all of the apartments are single persons, one bedroom or studios. And I asked her, okay, who are the tenants? And she told me most of them are divorces or singles or there are no kids in the area. And most of them are singles, not couples. And I was like, okay, what are the…

Two main things that single people for 30 to 40 years old are looking for. What do you think Erika? The main two things they’re looking for.

Erika (20:13)
we’re talking about in an apartment.

Noam Shpalter (20:16)
in life.

Erika (20:18)
In life, I would say a partner.

Noam Shpalter (20:21)
Okay, a partner, whether it for a short term or long term, right? And they want to look good to that partner. So the next question to that asset manager was, where is the nearest gym?

Erika (20:26)
Yeah

Noam Shpalter (20:36)
and she was like, ah yeah, it’s around three miles from here. And I was like, okay, what’s the monthly payment they’re paying? And she said it’s around $150. And to make a long story short, we use a free space that we had there to build them a gym inside the property. We just built a gym. The gym cost us around 20…

7000 something like that with everything inside with a small bar and things like that because they need to be together you had 60 % male 40 % female in the apartment again numbers details you need to know the details and we ask her listen how much rent are they willing to pay more if we’re going to give them a free gym in the

in the asset and she said I don’t know they are paying 150 maybe 100 you said okay let’s do 100 every tenant that want to get a chip to get into the to the I almost said the bar to the gym slash I don’t know party area because we did some things that they can see let’s say that only half of them will pay let’s say 40 apartments

40 apartments are $4,000 more per month in rent, right? $140,000. That’s almost $50,000 a year. $50,000 a year, remember, it only cost me $27,000. So I’m already winning, already getting more money. And when I will sell the asset with an NOI of 50 % higher,

that’s more than half a million dollars in profit. At the end, almost 60 apartments were willing to pay 100 to get into the gym. So that’s another way of value add for an asset. You just make another income stream to the asset.

And it only cost us 27,000. mean, the break even was after, I know, four months, three months, five months. It’s nothing. When you look at the asset and that’s not, that’s even not taking into consideration that we sold it. This specific NOI gave us another 600 and something thousand.

Erika (23:20)
Noam, I was thinking about what you were telling me earlier that you’re a creative outside of the box thinker. that was the that was the perfect example for that. think next I would like to know what do you see next on the horizon, Noam? Are you buying bigger deals, new markets or something else entirely?

Noam Shpalter (23:44)
You mean for us or the market? Because I can answer for both of them. Well…

Erika (23:47)
haha

say more more for you but you can be more general if you want to.

Noam Shpalter (23:56)
So we’ll start in the general, then I’ll talk about us because it’s connected. I think that after six months of a lot of question marks about the US market that a lot, most of the people have mostly question marks about the market. I see the market very clearly. I think that the tariffs contracts are going to be very good to the market. We see the numbers.

of the tariff income, the highest one since they started checking and again I’m a numbers guy so I don’t care about what all the anchors are telling or the reporters are writing I look at the numbers and although I’m still a bit afraid of the upcoming inflation but on the long run I see that the market is very very tough ⁓ on the good side yeah it’s

It’s very viable. We see the numbers. We see the new ⁓ The unemployment rate still very low historically. We see that people have money the wages are going up and We see that a lot of countries all across the world are coming to invest in the US and only if you look at the of the the Gulf countries

the Emirates and the UAE and Qatar and all the contracts that Trump came I think it was a month ago or two months ago it’s going to bring around 200,000 new jobs to the US to the Midwest and that’s amazing for the market and yes you have the inflation on the other side but if you look at the market you want people to earn money because when they earn money they

spend money and when they spend money it’s good for the economy to the taxpayers and everything and I think that the market is going to a very good direction but we need the interest rates going down I understand the Fed from their side that we don’t have the numbers for the inflation yet but it’s a different world we’re not living in a world that we lived in 20 years ago in economics they always checking what’s coming up based on the history

But the history is not relevant. The history didn’t have AI. The history didn’t have ⁓ a lot of money in the cycle that they printed. 65 % of the dollars were printed in the past five years. It was never been like that in the history. We have countries all around the world signing tariff contracts with the US. mean, you can’t look at the history as a base for the future at this time.

The future is changing. Just look at the AI things. What’s going on with AI? Everything is going to change. So you can’t base all your decisions on the past. Having said that, if you’re going from the macro to the micro, I think that the interest rates are going to be lower. I still believe that we’re going to see two drops this year. We still have to see what the Fed is going to say today, but I think that September…

we’re going to have the first cut and right after that another cut. And I think that we’re going to close the 2026 with 1.5 % down at least. And I reminding you in the end of 2021, I said we’re going to get to 5 % in the US. So I think that we’re on a verge of interest rate cuts and it’s going to be

amazing thing to the economy to the US economy because the main thing that businesses needs now is more financing to grow to open new stores to get to more locations and you need finance for that and again real estate real estate people needs financing and the American people need more homes they need more

affordable homes, need more shopping centers, need everything in order to grow and you know in medical if you’re not growing you are dead if your vitals are not growing or not moving you’re dead and this is the same thing and it’s a nature rule it’s a nature rule if you’re not growing you’re dying it’s one of those things

You can’t be static in nature. If you look at trees on anything you look at, you’re either growing or dying. So I think that the American economy is growing and is going to be bigger and greater in the next two years. And again, for those who are telling that, yeah, and I’m not putting politics inside. It’s not relevant whether you’re on the left wing or right wing. If you look at 2026,

It’s an election year. It’s the midterms elections. You can’t do crazy things during midterm elections. And again, it doesn’t matter if you’re a Republican or a Democrat. No one ever did crazy things during the midterm elections. So you need to get the economy steady. And for that, need to businesses to grow. And for that, you need lower interest rates. So

Doesn’t matter how you look at it, you’re going to have lower interest rates next year and once you’re going to get those interest rates lower, the real estate is going to boom up because in the past two years, a lot of young people didn’t buy their first homes because it was very expensive. All the families that were growing and having more kids didn’t go to a different house, to a bigger house because they were saying, ⁓ I have a mortgage with

2.5 % why would I change that to a 7 % so I’m not changing my house until the interest rates are going down there again another group of people which are huge that are just sitting on the fence and not buying anything and investors and basically everyone were sitting on the fence in the past two years and once the interest rates are going to be lower and I think that the 4 % is going to be the verge of change

you’re going to see the real estate going up and I want to be there when it happens and I want to be with a lot of assets when it happens. So this is what I think and this is why we’re raising money all across the world. We just got approved by the Reg D registration to raise money here in the US and this is why we’re buying as many assets and as we can to be ready for the next boom, which I think going to be in the second.

second half of 2026.

Erika (31:14)
Yeah, that’s exciting to know. Hey, before we let you go, if someone wants to reach out, connect or learn more about what you’re doing, what’s the best way for them to reach you?

Noam Shpalter (31:27)
We’re all over social. I mean we’re on Facebook, we’re on ⁓ Twitter Yes, we’re on Twitter. We are on Instagram of course ⁓ Anyone can email me that’s easy I have an easy email Noam at Spalter.com if they need to or Noam at Investo.com Investo-capital.com or just No, just reach out DM us and the main thing that

I want our listeners and viewers to understand is that you need to understand what you don’t understand. That means that most of the investors doesn’t know what they don’t know. You don’t know that that’s one of my mentors lines. You don’t know what you don’t know until you do know. And this is the reason that you always need to learn new things to read more, to understand more, to watch.

in amazing podcasts like yours to learn as much as you can. I’m still learning. mean, I have been working with Grand Cordon for the past six years and every day I’m still learning and I’ve done deals with 700 million dollars and I’m still going to real estate seminars to learn to study new things because as we said, if you’re not growing, you’re dying and I want to grow more and more.

And this is the best ⁓ thing you can do if you want to invest. Just keep on studying all the time. And if anyone have any questions, we’re happy to help. We’re happy to answer any question. mean, at least once a day, I get an email about, listen, you don’t know me, but I heard you in one of the podcasts or I know streams or…

posts on things like that and I have to ask you a question about a deal that I’m looking at. Bring them on. I mean, we will help you. I mean, I sleep very fast. I have time to answer all the emails or communication. If anyone have any questions, we’ll be very happy to help you and to give you from our knowledge and the same knowledge gave us for the past seven years of ⁓ an average

annual return of 16 to 18 % to our investors. I mean, that’s amazing. Even when the interest rates went up, down, because when you base your investments on knowledge, data, analyze it, basic, basic guidelines, and you’re not falling in love with the asset,

Most likely you will profit. Most likely you will do it very good and you will prosper. But you need to work on it and you need to study on it.

Erika (34:38)
Noam, thanks so much for sharing all of your insights, experience, strategy. I think there’s so many listeners that are going to benefit from this today.

Noam Shpalter (34:47)
It’s my pleasure, Erika.

Erika (34:50)
For everyone tuning in, if you got value from this episode, make sure you’re subscribed to the Real Estate Pro Show. We’ve got more conversations lined up with operators like Noam who are building incredible real estate empires. We’ll see you on the next episode.

Noam Shpalter (35:05)
Thank you Erika,