Start now before it’s too late

  • Ahmed Seirafi is a real estate investor with over 20 years of experience and a portfolio of 178 units.
  • Seirafi believes the next six months offer more opportunities than ever for investors.
  • He shared his top 4 tips for novice investors to maximize long-term profits.

Ahmed Seirafi wants to go against the grain — in fact, that’s one of the cardinal rules of real estate investing that has helped him succeed.

An industry veteran, Seirafi has accumulated these rules in his 20 years of real estate experience, starting with his first job out of college as a junior broker at CBRE specializing in industrial and office space in southern California. In 2007, Seirafi and his father sold the family business – a gas station – and bought their first apartment building in Arizona. Shortly thereafter, he began pursuing real estate investing full-time.

Today, 48-year-old Seirafi has amassed a real estate portfolio spanning from his home state of California to Texas, consisting of more than 178 units across three properties — an apartment building and two retail office buildings, the latter of which is worth nearly $5.5 million combined, according to documents seen by Insider.

He also has several real estate development projects in the works on land he owns, which he estimates could be worth between $400 million and $450 million once completed. These projects include a proposed 300-unit development in Anna, Texas, in which Seirafi will hold a 60% equity interest.

Now is the time to start investing in real estate

For those interested in investing in real estate, Seirafi believes it is critical to start sooner rather than later. “People can definitely invest, especially in the next six months,” he told Insider in a recent interview.

Seirafi says there are more opportunities available right now than there have been in the last 10 years. He believes sellers are still clinging to the high prices they were getting six months ago – but as the deals end, those prices will soon fall.

“They’re going to have to give up that selling price and lower the price on what they’re selling because as interest rates go up, the price has to come down to get the kind of return that would justify the higher interest rate,” he explained. “So people are holding onto the high price, but they’re going to have to loosen that grip very soon.”

For investors looking for long-term success, Seirafi is the first to admit that it took him a long time to lock down a winning strategy. For example, he is actively trying to sell the two southern California retail office buildings he owns, as they no longer fit his approach to real estate.

“As we were starting the business — we were starting to develop and develop real estate — we weren’t focused on a specific niche, we were focused on opportunities,” Seirafi explained. “Now that things have grown and scaled, it’s time to focus on something I’m either good at or passionate about, and that’s multifamily and industrial buildings.”

But with more opportunities for real estate investors come more potential pitfalls. After two decades of investing in real estate, Seirafi has drawn from his own experiences and compiled 4 important tips for any new real estate investor that will help them not only seize short-term opportunities, but remain successful in the long term.

Chase the steak, not the sizzle

Seirafi’s first piece of advice to novice investors is to pick a specific real estate product and stick with it — an especially important message these days.

Investors jumped into real estate in 2020, when a combination of pandemic stimulus and low interest rates sparked a housing frenzy. However, Seirafi says new investors shouldn’t just blindly chase the latest trend, whether it’s a specific area or property type, as these trends often have no validity.

“You get a lot of people with money right now who aren’t traditional real estate investors and they’re spending way too much on their real estate, going over their heads,” he said. “They don’t really understand the fundamentals of real estate itself.”

“Don’t chase the sizzle, because most people do — they want the cool thing, the hot thing, and that’s what gets people into trouble,” Seirafi continued. “They’re after the sizzle, not the steak.”

On the other hand, because real estate is so big, Seirafi believes that everyone has a chance to be successful as long as they find their niche and stick to it.

“There’s a million different ways to make money in real estate — there really is, and everybody makes money in real estate when they focus and stay in one lane,” he said, explaining that’s why he’s offloading his office retail buildings in favor more multifamily and industrial developments.

Don’t buy the narrative

Seirafi also believes that investors need to learn not to just accept the narrative if they want to extract every bit of value in a property.

It’s normal for investors to think they need to create growth to make money in order to maximize profits, Seirafi said. But when he approaches an investment, he wonders how he can go beyond the best use case — though that often requires extra time and money.

Seirafi is able to extract the most value from his acquisitions by thinking outside the box — whether that means rezoning a property from low-density to high-density residential multifamily or converting an industrial building to individual apartments, as he is currently doing in southern California.

“Instead of just renting or leasing it as a building, I’m cutting it into four pieces and will sell them as apartments, which increases my price per square foot,” he explained.

Invest in a fund or syndicate

Anyone just starting out in real estate can find it especially helpful to work with experienced investors. Seirafi believes that one of the best ways to learn the ropes of the business is to invest in a syndicate or fund, particularly one that has a long history of success and transparency.

If an investor chooses to work with another individual investor, then their pool of knowledge will be limited to one person’s experiences. But by investing in a mutual fund, an investor can immediately broaden their scope and expertise.

“The syndicates are very strategic in what they do, whether it’s the location or the type of product – meaning they stick to exactly what has worked for them and don’t deviate from it,” said Seirafi. “And by following them and investing with them, you’ll learn exactly what they do, how they do it and why they do it – and become an expert yourself.”

Don’t overstock your portfolio

Finally, Seirafi stressed the importance of monitoring your leverage and making sure it doesn’t get too far out of whack.

It maintains a very low debt-to-equity ratio, estimating that it is currently leveraged around 30% at maximum, as some of its properties have not been refinanced for some time. That multiple, which he considers low, has risen recently thanks to the economic slowdown caused by the pandemic. But going forward, Seirafi plans to keep leverage as low as possible and advises other investors to do the same.

“If you’re 80% or 90% leveraged and if there’s even the slightest sneeze in the economy, you lose everything because you have no margin,” he said.

Seirafi finds it interesting that some of the biggest syndicates, like Cardone Capital, are still buying up real estate like crazy and paying top market prices for their acquisitions – especially since the economy is expected to slow down soon.

“Where are you going to make those adjustments to maintain profitability? Because if you’re buying something without meat and the economy changes, there’s still not going to be meat on the bone to work with,” he said. .

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