Why Market Downturns Create Massive Real Estate Opportunities with Divya Smith

Divya Smith (00:00)
Hopefully you’re not in the space of needing to sell at this time because this is a tough space or market to be in selling. But identifying what are the areas of growth opportunities that will come back because end of the day, the economy has taken a downturn for a little while. I think we all are waiting for it to uptake. ⁓

is also when it creates the opportunity space. So we are in that beautiful opportunity space right now. The investment, for example, we are working on right now. I would not have access to this three years ago at the price we are getting, in the location we are getting, with the ability to really turn it around and make it a great opportunity for our investors.

Scott Bursey (02:08)
Welcome back to the Real Estate Pros podcast powered by Investor Fuel. I’m your host, Scott Bursey. And today, Pros, we are injecting pure executive fuel into your strategy. Our guest Divya Smith of Ascending Avenue Investments is a corporate titan who transformed her 20 years of Fortune 500 leadership

into a massive 300 million commercial portfolio. She is bringing the high octane fuel of systematic scalable execution that only true corporate excellence can deliver. If you are ready to move from a single deal to building an empire, buckle up. Divya’s in the house. Divya, welcome to the show.

Divya Smith (02:47)
Thank you so much for having me, Scott. It’s great to be here.

Scott Bursey (02:49)
It is just wonderful having you here and for our listeners who may not be familiar with your journey, please give us the front row seat. How did your career become one and where are you putting your fuel now?

Divya Smith (03:01)
Yes, thank you. So I started out my career like many others started in very much technology, started a corporate career. I was in a lot of technology fields, went through ⁓ up the chain leadership chains, have done many leadership roles at large companies like Target Corporation, Hilton, United Health Group, and US Bank, and decided that I wanted to take my impact more on a personal level and ⁓

decided that real estate investing was the way to go because end of the day we all are looking for ways to bring more income and have another income stream and that is where my passion led me to start my own real estate investing company. So I started that about four years ago. In addition to that, I still do some executive consulting on the side. So I know quite a few execs in different space and they

will ask me to come and help them ⁓ part-time. So as I spend majority of my time in the real estate portfolio side of things, I also do a little bit of technology consulting as well.

Scott Bursey (04:49)
That is such an incredible journey, Divya. You know, what really caught my attention about you was the way that you’ve been able to successfully transition decades of high impact corporate executive expertise at companies like Target and Hilton Hotels directly into building and operating a $300 million commercial real estate portfolio. That’s not easy.

Divya Smith (05:10)
It’s definitely not easy, but I think one of the things that great companies like Target and some of the other big companies teach you is how to have a better way of structured thinking. And that mindset, that rigor that you go through, because any project, you still have to identify what the project is. You have to identify its value. So you have a structure and a rigor you’re going through.

In real estate, when I’m identifying some of these investment opportunities, it’s very similar. There’s a structure. There’s a method to the madness. So there’s a structure in place to identify if this is a good investment opportunity, the right due diligence, the right questions to ask and kind of taking that structure and that rigor that is taught in corporate as you move up through the chain, especially ⁓ kind of bringing that along to ⁓ in real estate has been very helpful. So keeping that rigor in place has been

the reason why I’ve been able to continue to bring these investment opportunities to investors and they come along with me. I have over 500 investors at this time and it’s been exciting to share this knowledge with them, to educate them, to bring them along with me as I’ve learned through things in the last four to five years.

Scott Bursey (06:17)
Divya, given your corporate background in transformation, what is ascending Avenue Investments greatest operational advantage when scaling across multiple states?

Divya Smith (06:28)
Yes, that’s a great question. for a long time, we did focus on Texas, which is where I live, kind of in this market specifically, because I…

I love being able to go and look at the properties in person before I bring it to investors. Because once you kind of bring the investment opportunity, that’s where you’re truly identifying if this is the right location. If it fits all the checkboxes that I would look for an investment. So before I do that, we did stick with Texas. Now, North Carolina was a really good hot market and we ended up ⁓ kind of going into that space. So I did a lot of research there. Our latest newest project is actually in Waco, Texas. So I was traveling there.

about six weeks ago trying to identify that. ⁓ So we started with locally, but the thing we realized very quickly is no matter where the location is, it is all about the right operational excellence. So I partner with many other operational partners along the way, and we identify if this is the right investment opportunity to bring to our investors. And from there, we allocate the right capital to each of these investments.

Scott Bursey (07:32)
That focus on systems and efficiency is everything. What are some of your long range vision, you and your partners?

Divya Smith (07:40)
So the long-range vision is to truly come up with a diversified portfolio. So we started out with primarily real estate. We have done a technology investment that we brought to our investors. We have also done some new development now. So truly the focus now is, can we bring the right opportunities with different levels of returns, but also different levels of timelines and risks so that we are diversified truly all in all, besides just in real estate, besides just being in multifamily.

Scott Bursey (08:07)
Divya, if you could walk us through what is the biggest friction point when translating large scale corporate strategy into, you know, day to day execution of real estate operations.

Divya Smith (08:52)
I think the biggest difference is when you’re in corporate America, the structure is defined for you. ⁓ You’re going into a team and everybody has a role and responsibility and they know what they’re working on and they have certain accountabilities in place. So all of that is identified. When you move over into an entrepreneurship and you start out being a solopreneur,

The hardest thing is you’re doing everything from an analyst role to the CEO role. So, and you’re doing, so that’s just the top to bottom. But then not only are you doing operations technology, thinking about hiring people as I have, and any kind of accounting work, taxation, working with attorneys, all of that starts falling on you before you start building up your team. So I think that is the hardest part. And it is a lot of effort to kind of get to a point where you can interact and have the right contacts and people that

work well with you and you work well with them. So that has taken a lot of effort. I would say that’s been the journey for the last four or five years, but it’s also been the joy because I’ve gotten to now identify the right people and partner who I work well with and they work well with me and we want to continue to build together.

Scott Bursey (09:57)
It sounds like the pace of the decisions is different and the focus shifts from managing people to managing assets.

Divya Smith (10:04)
Absolutely.

So we’re not only looking at the assets themselves, but identifying who are the right operational partners, who are going to make sure that the asset itself is working at the level it should be at and identifying if they have ⁓ the right background, they have the right experience, they have actually had a full cycle investment opportunities that have gone through. So truly end to end and not just in the good time market. I think that’s another very interesting space we are in. ⁓

right

now, there are a lot of operators who saw really good returns, say 2021, if they got to sell in that. But anybody who purchased in 2022 and beyond, they’re hurting at this time. And that is a tough space to be. So really seeing partners who have not only been through the up cycle, but also through the down cycle and come out of it, you know, learning a lot, but then also being able to survive it and be able to come back and have learnings.

Scott Bursey (11:01)
Given those pain points, what’s some short-term strategy?

Divya Smith (11:04)
That’s a great question. think the short-term strategies are to identify from those pain points. ⁓ Hopefully you’re not in the space of needing to sell at this time because this is a tough space or market to be in selling. But identifying what are the areas of growth opportunities that will come back because end of the day, the economy has taken a downturn for a little while. I think we all are waiting for it to uptake. ⁓

is also when it creates the opportunity space. So we are in that beautiful opportunity space right now. The investment, for example, we are working on right now. I would not have access to this three years ago at the price we are getting, in the location we are getting, with the ability to really turn it around and make it a great opportunity for our investors. We would not have had that if it wasn’t for this downturn. So it all depends where you are in the cycle. ideally, you have somebody you can work with who has been through the cycle to help you through it.

Scott Bursey (11:57)
Thank you for highlighting that. And given your strategy, what you just so very nicely explained, what’s the biggest opportunity out there?

Divya Smith (12:49)
The biggest opportunity I would say right now is start to identify ⁓ assets that are in great location. think the, I feel like it’s the long, long time, ⁓ you know, phrase that all the realtors have used, but my gosh, like, is it so true? Like location, location, location, right? Like it really does matter being in the right location, in the right space. And once you’re in good location, the only other thing that tops that is the right management. And between those two,

You have like 80 to 90 % of things covered when it comes to being able to own real estate investments, assets, and then if you wanted to manage it or you work with the right property managers to manage it, know, between those two, most of the things are taken care of.

Scott Bursey (13:31)
With your expertise in high impact e-commerce and digital initiatives, what is the single biggest technological advantage you use today to manage more than 1,400 units?

Divya Smith (13:45)
That is a great question. I would say from a technology standpoint, this is where I lean a little bit more on the partners to have the right systems and ⁓ property management tools that they have used in place. ⁓ And there’s quite a few out there, but end of the day, if you don’t have the right person running the property, ⁓ you’re really handing them this multimillion dollar property. So if you don’t have the right property manager with right attitude, I think that is where things fall apart. So really making sure that is absolutely correct.

From a technology standpoint, end of the day technology is a supportive tool to anybody kind of being in forefront. ⁓ I know we are talking a lot about AI and technology thesis. End of the day, it’s still a support system. It is not the reason why people do business. People do business with other people and technology supports those decisions.

Scott Bursey (14:36)
That is exactly the fuel that our pros were looking for. Thank you so much for that. And you’ve given us so much valuable insight here today. But is there any golden nuggets or any additional advice you can leave with our listeners?

Divya Smith (14:49)
Yes, I would say one main thing to kind of like lean forward with is ⁓ don’t be afraid. know, reach out, ask questions. If you don’t know enough at this point in time, you know, find somebody who you admire, who you respect and who you’d want to learn from.

Scott Bursey (15:04)
This has been an incredible masterclass. And for those of our listeners, our pros that would like to follow your journey or collaborate with you, what’s the best way for them to reach you?

Divya Smith (15:15)
The best way would be to, you can email me at divya at ascendingavenue.com or find me on LinkedIn. I promise you I’m one of the, probably the only Divya Smith on there. So ⁓ I think I’ve Googled myself. I think only three hits have come so far for Divya Smith. So, but on LinkedIn, I think there’s only one. So LinkedIn would be the best way.

Scott Bursey (15:35)
Thank you so much for joining us today.

Divya Smith (15:37)
Absolutely glad to be here and pleasure talking to you Scott.

Scott Bursey (15:41)
And to our listeners, we appreciate each and every one of you. If you got value from today’s episode, please subscribe. We’ve got a lineup of exceptional guests, just like Divya, who are making huge moves in the market. Until next time, keep your standards high and your vision clear. We’ll see you in the next episode, everyone.