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Show Summary
In this conversation, Eliav Kling discusses his journey from the tech industry to real estate investing, focusing on the importance of discipline, education, and relationships in navigating the market. He emphasizes the current challenges and opportunities in real estate, particularly in the multifamily sector, and advocates for transparency and mentorship in the industry.
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Investor Fuel Show Transcript:
Eliav Kling (00:00)
we had a few difficult years between 2020 and 2023. We didn’t buy any assets during those years. The reason was that, again, we were disciplined. So when interest rates went down to their lowest point historically, we knew that it’s not gonna stay there. So when we underrode deals, in fact, we underrode deals at plus 2 % from what we could get. We could get rates between three and three and a half percent. We underrode the deals at five, five and a half percent. Most of the deals couldn’t sustain a loan at five or five and a half because capital got compressed. People asked more for their assets and that’s why we didn’t buy. So I think that the hardest part is, you know, be disciplined. Don’t look around because it was, listen, it was hard. People were buying left and right during that time. We didn’t and and we asked ourselves multiple times. Are we doing the right thing? Yeah, and looking back I’m very happy that we didn’t Because we see those those assets coming back to market right now distressed the ownership’sQuentin Edmonds (02:42)
Hello everyone. Welcome to the real estate pros podcast. I’m your host Q Edmonds and I’m excited to be here today. Have another fantastic guests. Want to let us know all about what he do within his business. And I love it because he says he’s a, he’s a small firm, but what that does is allow him to be agile. He doesn’t have to be pressured into buying. can just buy when things are right. So he can be laser focused on what he’s doing and not feel any type of pressure.And so I am happy to introduce you all to Mr. Eliav Kling Eliav, how we doing today,
Eliav Kling (03:17)
doing well. Thank you very much for having me. It’s a pleasure.Quentin Edmonds (03:20)
Absolutely. Thank you for being here. listen, I kind of want to get started and dive right in. I would love for you to tell us what your main focus is these days. If want to give us a little bit of an origin story, how you got into real estate, we’d love to hear that. And then tell them what part of the world you’re in, what markets you’re operating in. so Mr. Kling, sir, you have the floor.Eliav Kling (03:41)
Sure, thank you very much. So I’m based in Toronto, Canada. However, we’re only investing in US markets, multi-family properties, normally 20 to $50 million assets. My background is actually tech. I’ve been in the tech industry for over 20, 25 years and made the switch.to a full-time real estate investor back in 2016. Still utilize a lot of what I’ve learned in my tech years, mostly on the project management side. And yeah, that’s about it.
Quentin Edmonds (04:18)
Got you, got you. What made you get into real estate? When did you fall in love or when did the passion come for real estate?Eliav Kling (05:11)
So my wife and I started real estate back in 2004 while still working two full-time, very demanding jobs.The plan was, you know, have, that was basically our plan B. So have a safety net, something for retirement. And throughout the process, we, you know, we fell in love not only with, you know, with the returns and, you know, what it brought us financially, but also, you know, with the industry, with the people, with the challenges and, you know, people around us.
knew what we’re doing and wanted to invest with us along the way. And back in 2015, 16, we started to think about maybe, you know, just moving, you know, moving from the tech space into the real estate space, just, you know, quit out their jobs and start to operate our business. Wow.
Quentin Edmonds (06:08)
That’s awesome, man. So he was able to quit the day job, focused on the real estate, seems everything is working for you. I absolutely love it. Let me ask you, what systems do you have in place that is kind of helping that process, that is helping you grow? And I would love to know personal system and business systems that you use to actually grow and develop into who you are today.Eliav Kling (06:30)
Listen, real estate is a simple business. I mean, we’re not we’re not rocket scientists here, right? But you have to be disciplined.Quentin Edmonds (06:38)
Mmm.Eliav Kling (06:38)
You have to, you know, first you have to study the market that you’re operating in, making sure that you know what the market is and follow the changes in that market. And if this market is not producing the right numbers for you, just move on to another market or operating in multiple markets at the same time. Yeah. I think that, you know, going through the underwriting,is a very, very important building block.
you know, it comes with experience. But you can underwrite deals. As I said, mean, the Excel can take everything and you can manipulate the numbers and show very nice numbers on the Excel. The question is, can you operate the asset according to the numbers that you have projected? Yeah, I think that’s where most people fail. There are two optimistics in their in their underwriting.
too aggressive, it’s not aligned with reality. And after they close on the asset, they can’t operate the asset based on the budget or the performance that they’ve set up for themselves.
I think that’s where discipline comes to play and experience. And again, my role is to make money for my investors. If my investors will not be happy, I’m not gonna be in business. And I prefer to under promise and over deliver than the other way around.
Quentin Edmonds (08:03)
I love it. Now I love it. You know, you said a couple of times, you use like real estate is not difficult. It’s not, it’s not, you don’t have to be a rocket scientist. And I hear you. I do want to know though, have you faced any, any adversity as you was building, as you was growing to your success? Has that been any adversity as you faced as you was building?Eliav Kling (08:21)
Listen, any business owner or entrepreneur is going through different phases. And when they grow, I mean, sometimes you have to take a step back in order to take two steps forward. I can say thatwe had a few difficult years between 2020 and 2023. We didn’t buy any assets during those years.
The reason was that, again, we were disciplined. So when interest rates went down to their lowest point historically, we knew that it’s not gonna stay there. So when we underrode deals, in fact, we underrode deals at plus 2 % from what we could get. We could get rates between three and three and a half percent. We underrode the deals at five, five and a half percent.
most of the deals couldn’t sustain a loan at five or five and a half because capital got compressed. People asked more for their assets and that’s why we didn’t buy. So I think that the hardest part is, you know, be disciplined. Don’t look around because it was, listen, it was hard. People were buying left and right during that time.
We didn’t and and we asked ourselves multiple times. Are we doing the right thing? Yeah, and looking back I’m very happy that we didn’t Because we see those those assets coming back to market right now distressed the ownership’s
That will not be able to refinance their their loans Once the loan once the loan is due Yeah
Quentin Edmonds (09:54)
I love it. So let me ask you this. What’s the next real goal for you? What are you looking to solve a scale next?Eliav Kling (10:34)
We’re already seeing a lot of opportunities coming up. Again, as I said, distressed ownerships, not distressed assets, but distressed ownership.we had a few difficult years between 2020 and 2023. We didn’t buy any assets during those years.
The reason was that, again, we were disciplined. So when interest rates went down to their lowest point historically, we knew that it’s not gonna stay there. So when we underrode deals, in fact, we underrode deals at plus 2 % from what we could get. We could get rates between three and three and a half percent. We underrode the deals at five, five and a half percent.
most of the deals couldn’t sustain a loan at five or five and a half because capital got compressed. People asked more for their assets and that’s why we didn’t buy. So I think that the hardest part is, you know, be disciplined. Don’t look around because it was, listen, it was hard. People were buying left and right during that time.
We didn’t and and we asked ourselves multiple times. Are we doing the right thing? Yeah, and looking back I’m very happy that we didn’t Because we see those those assets coming back to market right now distressed the ownership’s That will not be able to refinance their their loans Once the loan once the loan is due Yeah
Quentin Edmonds (12:00)
I love it. So let me ask you this. What’s the next real goal for you? What are you looking to solve a scale next?Eliav Kling (12:06)
We’re already seeing a lot of opportunities coming up. Again, as I said, distressed ownerships, not distressed assets, but distressed ownership.And we’re, as I say, we’re agile, we’re opportunistic in our approach and we’re take over those assets as many as we can in the coming, I believe it’s 12 to 24 months.
Yeah, that’s where the it’s a short window, but I believe that we’ll see a lot of distressed distressed ownership’s during that time.
Quentin Edmonds (12:39)
Let me ask you this, let me get your perspective on relationship building within real estate. Is it something that you focused on? Is it something that you see as advantageous for you? Like what is your perspective when it comes to building relationships within real estate?Eliav Kling (12:54)
Like any other business, relationships are a key factor in any business success. You’re not operating in a vacuum. You’re dealing with people. the brokers that bring deals to us, on one hand, the lenders and brokers that we’re working on, on the otherlending side or investors and equity brokers that we’re dealing with on the equity side. So it’s, know, afterwards it’s a people’s business. Yes, we, you we, you need to know how to run the numbers and our underwriting deals and operate, you know, run the operations. But even running the operations, you’re dealing with the, you know, on-site management and they’re dealing with
with the tenants, are our clients. So after all, it’s definitely a people’s business. Relationships are extremely important. see that. Relationships are based on very basic foundations. It’s all about trust and just…
do what you say you’re gonna do. Sometimes it’s easier said than done. But again, I like to simplify things. So I think it’s simple, not always easy, but it’s simple.
Quentin Edmonds (14:07)
Yeah, yeah, I love it. So let me ask you this. Is there any topic that we have not talked about that you would like to talk about when it comes to real estate? Is there any kind of motivation, education, inspiration that you want to give listeners while we have you on the platform?Eliav Kling (15:04)
I truly believe in coaching and getting the knowledge that you need to be able to mitigate risk. So I think risk and knowledge are going in opposite directions. When you more knowledge, the risk is lower, vice versa.I really encourage people that are stepping into the real estate world to get educated, get coached, only then start their investing or investment career.
Quentin Edmonds (15:37)
Yeah, I love it. think you’re absolutely right. think, ⁓ what they say knowledge is power, right? So getting the knowledge that you need, getting the coaching that you need, being around somebody that knows a little bit better than you. I think that’s the way to go. And I, and I’m glad you built that awful relationships because connecting with people, building those healthy relationships, being connected with somebody where you want to go can actually take you, you know, to the stratosphere, to the moon and beyond and really explode things in your life. And so.Definitely understand that for sure. So Mr. Eliav I want to say thank you so much. If someone wanted to reach out to you, connect with you, learn more about what you’re doing, how can they get in contact with you,
Eliav Kling (16:16)
Normally the best way is LinkedIn. So find me on LinkedIn. Connect, reach out, don’t be shy, ask questions. Just ask questions. That’s how you learn.Quentin Edmonds (16:27)
Yeah, yeah, yeah, I love it. I want to say thank you, sir. Thank you so much for coming on. Thank you so much for your time. Thank you so much for your story. Thank you so much for your perspective. I am truly ⁓ just thankful that you became one today and was able to share with us on the platform. So thank you so much for being here.Eliav Kling (16:45)
It was a pleasure.Quentin Edmonds (16:46)
Absolutely. So listen, I’m sure you got the value from Mr. Kling. You can’t tell me you didn’t, so check him out. But definitely check out and make sure you are subscribed here because we want to make sure you come back and continue to get good information from these incredible people that we’re going to bring up. So I just want to say thank you again and listen to everyone else. You have a great day.
