Momentum Begets More Growth

 

Today’s guest is 26-year-old Allon Avigi. He started a Real Estate acquisitions company when in 2017. Since that day, he has become a developer, fund manager, landlord, flipper, and art collector! Now, he’s focusing on growing his companies and creating quality content around what he has done and continues to do. He founded AVGI, a real estate investment firm that purchases opportunistic assets in New York as well as secondary and tertiary markets throughout the United States. The firm currently has $70 million of real estate holdings across Houston, Arkansas St. Louis, Binghamton, New York City, and Long Island.

 

Highlights:

 

 [00:00] – [11:19] Learning the Trade at A Young Age

• Allon shares how he got started in Real Estate Business and how his parent’s hustle was a school for him when he was a kid.
• Allon discusses why learning how to talk and approach people was the greatest lesson of his experience with his parent’s business.
• Allon shares how started in the Real Estate Business and how got his first deal

 

[11:19] – [18:24] Dedication Makes Things Move Forward

• Allon talks of his passion of making deals and his insight on how to get great deals.
• Allon explains why a team with negative-minded people could be detrimental to your business.

 

[18:24] – [19:39] Closing Segment

• Reach out to Allon
  • See links below
• Final words

 

Tweetable Quote

 

“The market, at the end of the day, dictates how well your product’s going to do if you do everything else correctly. If you do everything else incorrectly, there’s no question you’re going to fail”. – Allon Avgi

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Connect with Allon through his Instagram and LinkedIn.

 

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Email me → sam@brickeninvestmentgroup.com

 

 

 

Want to read the full show notes of the episode? Check it out below:

 

[00:00] Allon Avgi: As long as the deal is good, the money’s out there. The market dictates whether you’re going to do well or not with your deal, right? You can handle everything. You can handle to the best of your ability. Leasing, renovations, all that good stuff, right? Financing. But the market at the end of the day, dictates how well your product’s going to do if you do everything else correctly. If you do everything else incorrectly, there’s no question you’re going to fail, right? That’s not even a discussion. But if you do it all right, the market’s going to tell you your feedback.

[00:29] Intro: Welcome to the How to Scale Commercial Real Estate Show. Whether you are an active or passive investor, we’ll teach you how to scale your real estate investing business into something big.

[00:41] Sam Wilson: Allon Avgi is a 26-year-old entrepreneur buying and repositioning properties across the country. They currently have over 70 million in assets under management. Allon, welcome to the show.

[00:52] Allon Avgi: Hey, man. Thanks for having me.

[00:54] Sam Wilson: Absolutely. Allon, there’s three questions I ask every question. Who comes to the show in 90 seconds or less? Can you tell me where did you start? Where are you now, and how did you get there?

[01:02] Allon Avgi: I started at 21 years old. I was a student at Hofstra University in Long Island, New York. I started with a dollar and a dream, bought a house in Westbury hard money loan, 12% interest, two points going in. I just got started with that house started rolling from there.

[01:19] Learned how seller financing worked. Ended up getting a couple owners to hold mortgages for me. Thereafter, I learned about syndications and raising. That was my like, big ticket item for my first bigger deal. I began getting into new developments, building the teams one brick at a time, baby. And now I’ve got 70 million AUM.

[01:37] I’ve got a solid, fantastic team, 25 full-time people, and we’re scaling rapid fire. It’s a lot of people for the light amount of AUM we have. So I have the infrastructure to go to a billion dollars as we speak.

[01:49] Sam Wilson: Wow, that’s a lot of moving pieces. Did you grow up in an entrepreneurial family? Was there a mentor along the way that just kind of showed you the ropes? Or is this just something that just comes to you naturally?

[02:00] Allon Avgi: So very entrepreneurial family is a great question because naturally that’s what everyone would expect, right? It’s you don’t just roll like that. My parents came to America about twenty, twenty and eight years ago when I was a little boy, and my father didn’t speak any English.

[02:16] So when he got off the boat, he was just learning the trades. He started working as a construction guy. They used to pick him up daily and he would do day labor stuff. He used to deliver mattresses. My mom used to sell mattresses at a local furniture store. And one thing led to the next, they ended up saving up enough money to buy a van.

[02:36] The van turned into a moving business. The moving business turned into a furniture store. And then my parents had a furniture store that I grew up watching them work and sell and be part of retail got crushed in ’08 . And as Wayfair, Amazon, overstock got stronger and my parents wanted out. So when I built my real estate business, they ended up leaving and they both came to join me.

[03:00] Sam Wilson: Wow. That’s that’s really cool. I love the hustle there. There’s no, I mean, for, I guess for some people there’s probably the golden ticket. But for anybody that, that’s building something ground up, there’s just no easy way to do it besides just grind it out. I mean, and you watched your parents do it. What were some of the things you felt like you learned growing up, watching them work a furniture store?

[03:21] Allon Avgi: Well, I, I learned how to talk to people. That was a big one. Many people in this new era have a challenge talking to people and getting to the point or closing the deal. You know, it’s like, what do you want from me?

[03:32] Right? When people start talking to me and they’re like I’m a New Yorker at this point, I’m a tough New Yorker. I love Memphis. But when I go to these places and people start talking to me and like trying to figure something out, I’m like, what do you want? Just tell me what you want and then we could see if we can get there, you know?

[03:48] Sam Wilson: I like that. I like the learning to talk to people. Yeah. It’s funny, man. The tough New Yorker you get in the south, you know, here in Memphis. And that is something that even for me, having a lot of family from the south when we moved down here, took me a little bit to get used to. Cause it will take eight to 10 minutes of… even when family calls me, they talk for 10 minutes before they actually tell you what they called you about. And I’m like, come on, what’d you call me for? But still figuring those nuances out, working in the furniture store is, I mean, you learn from an early age, like you said, how to close the deal.

[04:17] That’s a skill set that you now have ingrained. Just naturally that you know, , you’ll never lose that. So that’s really awesome. You bought a house, hard money loan, 12 points or 12%? Two, two points upfront. How did you convince the hard money lender that you were capable of making the deal happen?

[04:37] Allon Avgi: Well, you know what? But before we go into that, back to the furniture store, there were a lot of nuances and tiny little things that I didn’t realize back then that were so impactful today.

[04:47] Sam Wilson: Please.

[04:47] Allon Avgi: And for example, when I was a kid, my parents were like, you wanna make money? Sell furniture. That’s the only way you’re gonna make money, you know, through here cuz we don’t have money to give you and we’re not going to give you money, even if we did. So I used to go to the store, I used to talk to people as a 12, 13, 14 year old and try and pitch them on a bed frame, a mattress, a headboard. You know, a dresser and if I closed a deal, I would get 5% commission. So those are good times. And then I ended up figuring out, I’m a kid. It’s tough to sell as a young guy because people don’t take you as seriously so I built websites around furniture and I used to bring in the furniture from different manufacturers. Nobody knew how old I was back then. Right? Cause nobody knows how old you are behind a computer screen. And this was before the Wayfair era, so I used to bring in this furniture. I would repackage it at the store. I would end up putting it on a FedEx truck, a UPS truck. This was all hand delivered type of thing. Back then, I would call UPS, I’d order it online. Get the truck in the dimensions and everything. Now everything’s much more streamlined. Back then it wasn’t. And I would drop ship furniture across the country and the things I would learn is like, price better than your competition if you’re offering the same product, right? So today, and I’m buying an apartment complex wherever, right? Let’s say I bought 67 units in in Cabo, Arkansas. Right next door is an apartment complex. They’re charging $850 for a mid grade product. I’m putting in higher end finishes, I’m charging $875. Small bump, almost irrelevant to the average renter, but $25 more than justifies high end finishes.

[06:24] So it’s like those were things I learned back then If something’s much better quality you can force the appreciation. Right now in Long Island, there’s major players here, like Fairfield Heatherwood. These guys that I can’t compete with right this second. So what I do is when I buy complexes near theirs, I I put in the same, if not greater finishes, and I’m charging less, right? Even a hundred, $200 less, it draws people in. So I stay at full occupancy, regularly.

[06:52] Sam Wilson: Wow, that’s cool. What great lessons to learn early on. And I like the idea of no one knows how old you are behind a computer screen, so it’s like, you know what if I can’t sell it to you in person, I’ll sell it to you over the internet. And like you said, it just doesn’t matter at that point. They’re not gonna judge you based on your age. So that’s really cool. Do you wanna jump then into the conversation, talking about your first deal, how you got that done, and then kind of how you transition to bigger assets?

[07:18] Allon Avgi: Yes that first deal, it was found through a friend of mine at Hofstra at the time. He found the deal. He wanted to be a broker. I I went out and looked for money and looked for money. I couldn’t find money anywhere. And then I knew this guy. He saw what I was posting on social media. He found credibility through that and my history. He spoke to my parents. He knew my parents, and he ended up saying, you know what? I’ll give this kid a chance. And he ended up lending me money. And and that was it, and it was history from there.

[07:47] Sam Wilson: What did you do with that property?

[07:50] Allon Avgi: I rented it out. I still have it till this day. I didn’t know about the birth strategy back then, so I didn’t refinance it right away. I just sat on it and I just paid down the loan as fast as possible through the income of the property and side hustles. That’s why when people gimme excuses today “Oh, but I’m busy between this and this”. I’m like: “So you don’t wanna do what I do?” You know, cause when I was in your shoes, when I started, I found every mode of income possible. I dropped ship furniture, I knocked on people’s doors, I managed their social media accounts. I ended up. I mean, God, I was babysitting dogs, you know, like I was dogsitting. I did everything under the sun to make a couple bucks to pay off this high interest loan. So I could take that and I could go into the next deal and do something else.

[08:34] Sam Wilson: Right. Oh, that’s cool. That’s very cool. When did you decide to start doing bigger assets?

[08:41] Allon Avgi: Well, I always wanted to do bigger deals. I just didn’t know how. You know, looking back today, people asked me, what would you do differently? And what I would do differently is I’d start bigger. . You know, so that’s probably the only thing I’d do differently if I went back. Start much bigger.

[09:00] Sam Wilson: Start much bigger. No, that’s great advice. I think people often struggle overcoming the mental hurdle of like, okay, we’re going bigger, but how are we gonna find the money to do it? How did you do that?

[09:11] Allon Avgi: Well, you find it, right? It starts with a deal. So as long as the deal is good, the money’s out there. The market dictates whether you’re going to do well or not with your deal, right? You can handle everything. You can handle to the best of your ability. Leasing, renovations, all that good stuff, right? Financing. But the market at the end of the day, dictates how well your product’s going to do if you do everything else correctly. If you do everything else incorrectly, there’s no question you’re going to fail, right? That’s not even a discussion. But if you do it all right, the market’s going to tell you your feedback.

[09:45] Sam Wilson: How did you go out and raise capital maybe for the first deal? Tell us about that and maybe how that’s changed and how you guys handle capital raising now.

[09:53] Allon Avgi: The first deal I already did five projects with hard money and seller financing, and now I’m sitting with this higher net worth guy, awesome guy. Shout out Mike, investor ’till this day and good friend of mine. And I’m sitting with him and he’s like: “Show me what you’re doing now, kid”. And I’m like: “Here, I bought five houses. This is what I’m doing. This is how it looks”. And he’s like: “You’re paying 14% interest. 12 and 2! What are you out of your mind?” And I’m like: “What do I know? You know, like this is a good deal to me. I thought this was a good deal”. And he’s like: “How about I give you a million dollars and we do a couple properties with no interest, just cash, and do your thing”. If you could carry a 14% interest rate, you can definitely yield me much more. If you’re still making money on 14% interest, how much can you make if we’re partners?” And that’s what we did. And that’s how I raised my first round.

[10:45] Sam Wilson: Wow, a million dollar check on your first raise. That’s really an exceptional story. I know that’s probably not the case for many people to have that type of investor, but I mean, what a cool thing for him to see the potential in you. ” Hey, man, you know, here’s an open checkbook. Let’s go do this”.

[11:03] Allon Avgi: Well, one he’s also… How do I put this in nice terms so I don’t offend too many people, but I’m no bitch and he’s no bitch, you know? And we’re talking and he’s like: “How much do you wanna start? You know, what do you want? And I’m like: “Well, I’m already doing these houses. I’ve got a couple million in real estate through hard money. Like, I wanna start with a mil, you know? And let’s start with a million dollars. And he’s like: “A million dollars I can do. That’s a good start. Let’s do it”. You know? And..

[11:30] Sam Wilson: What’d you go buy?

[11:32] Allon Avgi: Easiest that a couple houses all cash. Renovated. Refinanced in a year. Got him back all his money, rolled it into another deal.

[11:40] That’s awesome.

[11:42] Sam Wilson: Tell me, I wanna talk about two things. How you guys are finding or where you’re finding opportunity right now? I know you’ve graduated to a few different asset classes. It sounds like, multi-family some warehousing and things like that. But how are you finding opportunity in today’s environment? I mean, 2022 has changed a lot of things for a lot of investors. What’s your strategy now?

[12:04] Allon Avgi: I mean, I am an aggressive deal junkie. I love doing deals, you know, and I love doing great deals. So the strategies transition to no floating rate debt, nothing with short term projections anymore. We’re working strictly on five year projections, no liquidity events in the near term. And we’re still doing just fantastic deals. I mean, we’re retrading everybody that we’re under contract with. And it’s working of course, because everybody understands the economic climate. If they don’t, we back out. Right? There was one deal that somebody didn’t, we backed out. It was all right. We parted ways. So fantastic deals. No floating rate debt and no short term projections.

[12:45] Sam Wilson: I like that. That sounds really good. And you say short term projections. Five years is… Five years tends to come around quick. Are you underwriting an exit in five years? Are you underwriting holding it in perpetuity? How does your exit strategy change?

[13:00] Allon Avgi: It’s looking like a five year liquidity event, whether it’s a refi or a hold standard. Right. But we’re going on a seven year, plus one it’s called, so a seven year term plus one. If we have to extend plus one if we have to extend.

[13:13] Sam Wilson: Got it. Got it. That’s that’s exceptional. What about team? That’s something I want to hear about. You know, it sounds like you’ve figured out pretty fast. You’re a fast learner. You certainly learn a lot faster than I do. You figured out pretty fast how to grow your assets,. How to, you know, partner and find money. But then talk about team building. What was that process like for you? Who were some of the first people you brought on? And then of course, having a 25 person team for a 70 million in assets under management. It’s a lot of people. You know, I know you said you guys are poised, you’re kind of positioning your team before you buy the assets. So give us kind of that full breakdown. When I say team, what does that mean to you?

[13:48] Allon Avgi: Okay, well, I’m all about the team. Everybody says that. Everybody knows that. You know, but what I think that they don’t really grasp is that you have to be quick to let people go. It takes me a while to bring somebody on. I’m very picky with my people. I’m very picky. Oh, it’s almost crazy. It’s almost insulting how picky I am with people that come around and I’m so fast to cut them off, and what’s the word I’m looking for? Unapologetic. You know, so I’ve swapped maybe 10 people in my office like that. On the drop of a dime. You say something outta place, you act outta place. I feel a little bit of negativity out. Don’t want it. I need positive. I need positive people around me. I need good energy. We’re building a billion dollar company at the moment, multi-billion down the line. I need that kind of energy in the door and intelligent.

[14:41] How do you go about vetting? You say you’re super picky. What’s your process for acquiring talent? I look for track record, I look for connections. I look for intelligence, right? I run disc tests on people, and then I run basically excel modeling tests on people. Now I have a really good infrastructure of people with me that are also absolutely brilliant. So they gauge who we bring through the door as well, and that’s been instrumental in picking who we’re taking on next because there’s an environment and energy that we need to sustain.

[15:14] Sam Wilson: What about positioning your team for growth? I know you said you’re shooting to have a billion under assets under management by the time you’re 30. Bringing on that team and positioning your team ahead of the growth curve, how do you hire for that?

[15:30] Allon Avgi: Sam, that’s probably the best question you’ve asked me.

[15:32] Sam Wilson: Well, I’m sorry if all the rest of them sucked, but…

[15:35] Allon Avgi: No, they weren’t bad. But that is a great question and let me tell you why. Because as the operator, as the person that did it, it’s hard for you to put in other people’s eyes, right? For them to see your vision. It’s hard for you to explain to them your vision and have them execute to go big, right? Cause a lot of people are scared of going big.

[15:59] Sam Wilson: Sure.

[16:01] Allon Avgi: How do you enable them to go big? And I can’t answer that question. I’m still trying to figure that out. That’s been one of my biggest struggles. My biggest pain points right now is we’re at 70 million, we’re about to put another 25 million under contract as we speak. How do we double that in the next quarter? And that’s scary to other people cuz they’re thinking, you know, it took you five years to get to 70. I have you know, zero. So, how are we gonna get to a hundred in, you know, one 15th of the timeframe?

[16:34] Sam Wilson: Yeah. But momentum, momentum begets more momentum. It’s like a snowball. It’s like, you know, it takes a while to get the initial ball going. And then after that, it seems to go a lot faster. And it seems to happen suddenly, like, oh my gosh, this thing got really big, really fast. But that’s part of the process, I think. But my question more was strategic in the sense that, hey, we’re gonna go big. How do you know who to bring on the team ahead of that going big?

[17:02] Allon Avgi: I mean, it’s pretty easy, right? You want people that have been part of those environments before. So I’ve been poaching people and I don’t know a better way to answer that question. You kind of gotta be rough around the edges. You gotta take people from places that have done it so they can do it with you.

[17:19] Sam Wilson: Well, and there’s nothing wrong with that. It’s there’s, we’re launching a business right now and not that I poached them, but they were employees at another company. And it’s a non-real estate related business, but I saw ’em and it said: “You guys are awesome at what you do. You’re just employees here. Why don’t you go start your own thing. I’ll help you launch it”. You know, and they’re like: “Hey, cool, let’s go do it”. Nobody got poached. But at the same time, they’re employees and it’s like, you know, there’s not a lifelong contract to work at a particular location. It’s just, you’re talented and the grass is greener over here. Come with us and join our team and let’s go do something.

[17:52] Allon Avgi: So how many people do you have on your team?

[17:54] Sam Wilson: That’s a great question. I don’t even know cuz we’re involved in so many different asset classes and different projects. I mean, every team is a little bit different. You know, we can get into that later though. Let’s see, what else do I wanna ask you here? If I missed anything here, Alon that I should have asked you? Things that you say “Hey, you know, this is something really relevant that we’re working on right now. That’s cool, that’s fun that I’d really love your listeners to”.

[18:18] Allon Avgi: I think you did great. I think you’re awesome. I’m just doing deals, baby. I’m just rocking.

[18:23] Sam Wilson: Rocking and rolling. I love it. Allon, thank you for taking the time to come on the show today. I certainly appreciate it. Learn so much from you. I love the hustle. I mean, learning the hustle at an early age speaks to my heart. It’s something that I like you grew up with and I think learning the hustle at an early age is just an invaluable skill set that you’ll carry the rest of your life. I love the momentum you develop. I mean, you’re 26, obviously, you know, you’ve done great things and you’ve made it a lot further than a lot of other people have. And I just love the vision that you’re carrying for with your company. So well done. Certainly appreciate coming on today, sharing your insights with us.

[18:54] If our listeners wanna get in touch with you or learn more about you, what is the best way to do that?

[18:59] Allon Avgi: Social media at Allon Avgi. I’m there. I always answer.

[19:03] Sam Wilson: Fantastic. And for those of you who are listening, if you’re curious, that’s A L O N. A V G I. So @Allon Avgi. Alon, thank you again for coming on today. Certainly appreciate it.

[19:14] Allon Avgi: Thank you, my friend.

[19:15] Outro: Hey, thanks for listening to the How to Scale Commercial Real Estate Podcast. If you can, do me a favor and subscribe and leave us a review on Apple Podcast, Spotify, Google Podcast, whatever platform it is you use to listen. If you can do that for us, that would be a fantastic help to the show. It helps us both attract new listeners as well as rank hire on those directories.

[19:36] So appreciate you listening. Thanks so much and hope to catch you on the next episode.