Today, it can be quite easy to manage many big or small business even with a few staff or managing team on or off site. Kay Kay Singh, a Microsoft Certified System Engineer turned successful entrepreneur and multi-business owner, talks about his business adventures and how he ended up owning multiple and multifamily businesses. He shares how he has promoted growth to his ventures including the skill of delegating and what lessons he has learned on the path of delegation of authority. Kay Kay also touches on his own keys to success in asset and construction management, and shares how he has acquired his gas station business.

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From Gas Stations To Multifamily with Kay Kay Singh

I’m here with Kay Kay Singh. Kay Kay has a wealth of experience and has a variety of passive income modes, methods, modalities and everything you like. His resume is seriously impressive. He’s got a background around it owning 40 single family homes, multiple gas stations. As we talked, you just closed on one. 

Not close. We just made a deal on it. 

He made a deal on one. He’s got another one coming, a laundromat and he’s also been a general partner or limited partner in over 2,500 multifamily units in syndication. Kay Kay, you’ve got a ton of experience. Thank you for joining us. 

Thank you very much. It’s my pleasure to be on your show. 

The pleasure is all mine. Could you tell me your story on how you started on investing in gas stations and what your background was as a professional? Could you tell our readers about where you came from and how you got started on investment?  

I came from India in 2000 as a Microsoft Certified System Engineer and lost my job in 2001. I got an offer from my friend to come to the gas station business and I had no choice, but I moved on to the gas station business. I started as a cashier, grew up from there and built up my own portfolio of gas stations with my partners, mostly friends and family. 

Right now, the gas station that you have is eight. 

I have eight gas stations, a laundromat and a carwash. 

A laundromat, carwash and multifamily real estate. 

Correct, and single–family. 

You were telling me before your responsibilities as well with the gas station. You’ve gotten the point where you’re out of business because you’re the owner, and you’re not the employee essentially. You’re not a self-employed person there.  

I’m not involved in the day–to–day operating of the gas station business because I have partners. They have been my partners for the last many years. They do a pretty good job, I totally trust them and if they need any advice or help, I go and help them or have meetings. I go on the computer and log into their computers and do whatever they want me to do. That’s it. I am a full-time real estate professional right now. 

There are a lot of benefits of being a real estate professional, at least from the taxation standpoint. There’s a lot of upside there. In your multifamily syndication business, what are you doing there right now? I know you’re working with a lot of investors and doing a lot of deals. Can you give us a primer on what you’re doing there in the straight-up real estate business? 

When I started with the multifamily business, I started with trying to buy our own because we had these 40 single–families that we bought accidentally. I have told my story how I got into those 40 single–families by accident on several other shows so I’m not going to repeat here. Immediately after we bought these single–family houses, I realized we should go multifamily because we wanted to scale and I actually have the passion for the real estate, which I didn’t know until we bought these properties. We decided to move on to multifamily and started looking for multifamilies. We gave LOI on four properties in one year, but we didn’t get any of them because we were not doing things the right way. I didn’t learn the process before we were trying to buy so we were not underwriting it right. We didn’t know much about the multifamily and it was totally a different animal than single–family. I started learning about it and I invested in one of the syndications. From there we grew and started investing more. My partners started investing because I was doing this and they wanted to get into this as well, so I brought them on board. They invested in nine syndications so far as an LP and a GP. 

That’s added up to over 2,500 units. Would you say that there are a lot of lessons we can go through that you’ve learned over time? When you were first making offers, you made this four LOI’s and you lost, you didn’t win on those LOI’s. What were some of the biggest mistakes you were making there when you were submitting those letters of intent? 

The biggest mistake we were making was we were comparing those apartments to the single–family houses that we bought. We did the same mistake in all the four because we were comparing with the single–family and we were looking for the same return in multifamily but that was not the case because in single–family, we got a pretty good deal. It was a very sweet deal and the cashflow was good. We were trying to get the same cashflow. We were trying to put LOI’s way below the market price and at that time we didn’t know how to do research on CallStar or anything. We didn’t have enough knowledge to be honest. 

You were unintentionally low balling your offers. As you stepped into becoming a limited partner in syndications, what are some of the big lessons you’ve learned there? I don’t know whether you feel you’ve made any mistakes in that regard. I can’t speak to your track record or anything like that, but what have you learned?  

I did pretty well with the research before getting into syndication. I started with my research on BiggerPockets, followed several syndicators, searched their background, searched their posts on BiggerPockets and then followed them to their websites. I have investments with one of the best syndicators in the nation. I didn’t go and invest it with everyone. I have whoever has 24 apartment complexes, twelve apartment complexes and they’re great on doing this. They had done this, and they had a good record. I looked into everything and I invested my first deal in Dayton, Ohio and after that, I kept doing it all over the nation. Now I have them in several, I think five states and with five syndicators.  

You had a pretty extensive study period before you got started. 

I had written these 42 questions, which I have uploaded on Facebook as well on my Facebook group. These are the questions I ask a partner before because we don’t know each other. We are all following each other and then I do my research. I have taken several courses and attended several boot camps and I prepared these ten pages. I prepared my investment criteria, how do I select my markets, how do I select the properties, how I bet on those indicators. I do all that research, which I didn’t do before we started offering. Now, I’m pretty on it.  

From one engineer to another, you’ve done this in truly an engineering fashion. I tip my cap to you for systematizing and writing things down. Well done. You held up a few documents. First, there are 42 points, a couple of things. Can you give us a taste of them and then where the audience can get the full 42? 

I have a Facebook group, 10X Multifamily Investment Group. I am very generous in sharing my knowledge. I go there and we have over 1,500 members in that group in about three months. I’m very generous to share my knowledge and information and I have shared all of this. This is my 40 years of research and it goes very much in details. I keep it on Evernote. I am an Evernote consultant as well and I share this information with my friends, whoever asks from me. It has links to that, to all the articles outside and all the research I have done over those 40 years. From time to time, I keep loading all this information that I have in my Facebook group. 

Let me tell you this, I’m very thankful to all my members who trust me so much. I posted that I am updating my newsletter list because I’m going to be releasing my monthly newsletter, so I wanted to add more people to it. I got 62 email addresses on Facebook, not in my Messenger. People wrote it because they want my newsletter. They want all that information from me, and I have been doing this for a long time now, but I was doing this in other people’s groups. A couple of months ago, I created my own group because I wanted to be very specific. I share information and sometimes people don’t like it, so I created my own Facebook group. I share the information there. 

It’s definitely generous of you. I’m in the group as well. Let’s give them a taste of the 42 points.  

I can do some of them. First of all, I want to know who the actual controller of the syndication is. Sometimes there are several people in the deal, they have different roles, somebody is the source of the deal, somebody is the asset manager on the deal, and somebody is a money raiser of the deal. There are several people in the deal but I want to know who the controller of the deal is. What if something happens to that controller? How much experience do they have? How many deals have they done? I want to know what kind of returns they have provided to their previous investors. Have they gone through a full cycle? What size and what kind of properties have they done? I want to know all that before I can say yes to any part even investing passively and there are several others I can go on and on if you want. 

We don’t want to give away the farm here. We want to give people a reason to join the Facebook group. Folks might not be aware that they haven’t invested with who has control of the deal. If folks that have been limited partners or they’re thinking about investing in syndications, they might not know that general partnerships have delegations of responsibilities and roles and different people handle different things. Could you expand on that a little bit and maybe a little include some of your history when you’ve been involved with a good delegation of authority? What is your experience there? With investing passively and also as a general partner, what’s a good split? Who should be controlling what and some lessons you’ve learned along the way in terms of delegation of authority in syndications? 

The first investment I did was with a syndicator who had everything in–house. He had a KP in house. He’s their source on their own deals. They do the asset management themselves. They do property management themselves. They did everything, but soon after that I realized that it’s a teamwork. It’s not one person’s job, it’s teamwork whether you hire all these people or you partner with all these people. I realized that there are several pieces, different structures for different deals. A lot of syndicators have different fee structures. They have different split in the GP share of the portion of the deal. There are five main basics. Who sources the deal? Who puts the money at risk for the due diligence and earnest money? Who is bringing the money in? Who is the equity partner so they got a split, then who is bringing the balance sheet and the liquidity to the deal? Who does the asset management and construction of the deal? Everybody has their own split and every group has different structures and different partnerships, but these are the main basic pies that deal with the GP share. 

There’s that split and that delegation of authority and we’ve talked in previous shows with other guests about asset management, construction management. Specifically from your observation and experience, what are some of the keys to success in asset management and construction management and bringing a deal home, closing it out and knocking it out of the park? 

If one or two persons are doing everything, they can’t be good at everything. I believe in delegating the services who likes the best. For example, one of my partners like the numbers, but he’s not operational. Somebody who is operational, can do the construction, do the asset management from day–to–day, check with the property management and everything, put down the minutes. They can present it to all the general partner maybe once a week or every other week, whichever works for them, but everybody is not good at everything. I believe that somebody good at raising money may not be good at the numbers. Somebody good at the numbers may not be good at the operational level. I think delegating the duties works best for the syndication process. 

You’ve delegated a lot of duties in your gas station business as well. 

I learned all of that because I’m good at acquisition. Anytime we buy a gas station or required anything, they ask me to deal with it. They don’t deal with it, and after the acquisition, we have a proper system. On the closing day, I don’t go there anymore. They take it over and they know what to do and better than I do. I have done everything though, but I figured out over these years that I’m good at the evaluation of the business, valuation of the property, looking at the numbers, calculating the numbers, what the profit is going to be, what the expenses are going to be. I’m good at that and I’m good at negotiating skills. I know how to negotiate with the seller. That’s what I did and once it was signed, I had them sign the LOI right there and now my partner’s going to take over and she’s going to do the rest of the stuff. She’s going to apply for the licenses and all of those stuff for the closing and get ready for the closing. I’m going on the closing day and close everything, make sure everything is done right, and she takes over. 

What are some ways that you’ve applied that experience in acquiring and obviously running a gas station? How do you apply that experience to your multifamily business? Are you going and running numbers?  

The number one is the numbers. The numbers are the same whether it’s a gas station or NOI. Number two is teamwork. It’s the same thing. Somebody’s got to be good at something. I knew that I’m good at this so I applied to the same things and sometimes even my partners don’t know that I am making a deal. One time, I’m making a deal, I tell them, “This is your share and this is what you’re going to do and take it over.” I’ve done this before and I know how to delegate duties and have them work for them. Basically they’re the operating guys. I’m the acquisition guy.

There's a lot of benefits of being a real estate professional, at least from the taxation standpoint. Click To Tweet  

It takes time for everyone to learn what they’re good at. How do you learn that you’re the number’s guy? Is it a process of going through trying all the different roles and realizing, “This is what I’m good at,” or did you get there? What happened there in figuring out what you’re good at? 

When I started twenty years ago in the gas station business, everything was on the papers. With the company that I partnered first with my gas station, I had a 30% share in that gas station and everything was on paper and I was a computer guy. I started in Excel at that time. In 2001, I made a program actually in Excel that we have been using so far up until now. We are using the same program, but I keep updating it. We have been using the same program for the last twenty years and everybody else in our area is using that program and we gave it for free.  

You are straight–up a number’s guy. That’s what you’re good at. What is the best investment you’ve ever made? 

On the gas station or real estate? 

Anything. 

I think I have been lucky enough that whatever investment I have made so far, every one of them is better than the other one. We bought a gas station for $50,000 that makes $150,000 every year. 

How do you do that deal? 

The deal I did is in the same town, a mile away from that gas station. 

Is that business like an off-market type of businesses? Is that through brokers? 

Yes, it’s off-market. I got a call from what we call the jobber and I knew that once this deal goes on public, they will start calling. I got a call because I had a gas station in the same town and the other thing is that we are their best dealers. They consider us as good operators, so he called me. It’s like the multifamily, a broker calls somebody that can close on the deal. They don’t call everyone. They call on those people who can close on the deal. He called me on Friday. I made a deal on Monday at 10:00. I didn’t want it to come on to the market and lose that deal. Somebody might have offered way more money than I would have if it came to the market. The sellers started dragging feet when he saw that they are interested in this deal because in the same town, we have been very successful and we have been there for about twelve years. 

Is that a town where there’s not a lot of supply? Are they not building new gas stations? What’s the competitive advantage there? That’s a huge multiple that you’re getting on these properties.  

I live in Fort Wayne. I have only two gas stations in Fort Wayne. All of the gas stations are around Fort Wayne and the advantage we get is we are not very competitive as we are in Fort Wayne. The other thing is all our gas stations outside Fort Wayne have food and that’s a plus. That’s our advantage over being in a bigger city, being in a small town. The margins on food is a lot more than anything else. 

You have food in the gas station and they make more money on the food, at least margin on the food than on the gas?  

Correct, also about the laundromat, I did a one year research on laundromats before I built from the ground up. I can pull up all the numbers on my phone and it’s connected to my computers in the laundromat. I can stop all the machines from here. I can turn on any machine. I can put money on the card from here, from my phone. There’s a ton of automation. We built it in 2012 and we have been on that for several years. I can exactly tell what machine number made how much money in seven years. 

That’s a lot of automation and systems in the business as far as maintenance of those items and everything. How do you handle that? Obviously you probably have somebody who does it. Do you have a service provider? How does that work? 

You will be surprised to know that we have never called a maintenance guide to do any maintenance on it and it’s all plug and play. You can call them and they’ll tell you, “You need this part, we are going to send you this part, replace this part.” In several years, we have not paid a dollar for maintenance other than the parts. I used to do it myself and now my son-in-law, he does it himself. 

There’s some delegation for you. He’s not going to complain about doing that. On the other side of that, what is the worst investment you’ve ever made? 

The worst investment we made was we bought a house to flip without looking at it. We bought it at a sheriff sale and when we went to the house, we immediately realized that we made a mistake. We’re going to lose money on it. We made $20,000 on another house. I realized that we can put that $20,000 in here and we’re going to be even, and we’re going to get out of this business. We ended up making $5,000 on that one too. That was the worst deal we did. 

The flipping business is not a passive way to invest in real estate. It’s very much an operations type. You’re really doing it. 

It’s a business. It‘s not an investment. After we bought these gas stations and all the single–family houses, I had all the team in place. I thought, “Why not use them?” At that time, we were getting houses maybe $0.75 to a dollar and that way, we could keep those people put to work. That’s why we started doing that. We were buying in Fort Wayne, over $100,000, $150,000 houses with our own cash. We were thinking, “Let’s do this.” We soon realize that it’s not an investment, it’s a business, and we had to spend time doing that. We ended up paying all that money in taxes because it was considered as an ordinary income. After a year, we decided not to do it and we did three flips in a year. We made money on all of them, but we decided not to do it. 

That ordinary income thing, a lot of folks don’t realize that before they get into flipping. When they get into it, they don’t know that it’s taxed as ordinary income and they get really get whacked at end. 

We were on the top slab of the income tax. We gave money to the government after doing all that. We decided not to do it.  

My favorite question I ask at the end of all the shows is, what is the most important lesson you’ve learned in investing?  

It’s to invest in yourself before you invest in any property by learning, networking and talking to other people what they have done. There’s nothing new to invent. Somebody has done this before. Do that, research and learn the business before you invest any money. 

I like that answer a lot. It goes along the lines of things that a lot of successful people say. Have that study period, get to know what you’re doing. Don’t just jump in with the feet and do something stupid. Make learned and measured decisions before you take some rush action. 

I do research even if I am buying something on eBay. I do my research on what I am buying, which one is the best, and all that but I think investing is not something that you should do blindly. You should do research and learn. I always tell my investors, though they trust me and they say, “We are going to sign wherever you tell us and we’re going to invest wherever you tell us.” I always wanted them to learn because I don’t want them to come after me if the deal goes bad. They need to know the risk and everything, but they don’t want to learn. Learning is the best lesson I have learned. You must learn the business before you invest in any deal. 

I get to talk to a lot of folks who are thinking about investing in real estate syndication or whatever the thing might be. There is a lot of fear of missing out. They’re afraid of closing in a couple of weeks. They need the money now and was thinking about it. Take your time. Know what you are doing. Look at a bunch of deals before you invest. You’re not going to regret missing a deal more than you would regret investing in a wrong deal and losing money or partnering with somebody that ends up being a good partner. 

Play with the paper money before you play with the real money. 

What I’m very curious about while we’ve got you is you’re a successful guy, a successful business owner. My guess is you don’t need to be investing in these syndications. You don’t need to be doing these syndications. In this business, why do you keep growing and progressing? What keeps you going? 

Actually, after buying my single–family houses, I decided to retire. At that time I was 50 years old, but I didn’t know that I had so much passion for this business and I thought I’m going to do something for my son. I’m going to leave him a legacy. I don’t want him to get into the gas station business because it’s a hard business. My son came to the United States when he was six years old. I want him to become a syndicator. I know that youngsters don’t put too much time to learn. My kids, one of my daughter has been married, my other daughter is in medical school in Virginia. My son is working for a syndicator and also is in Kelley School of Business, so he’s my why. I want him to become a successful syndicator. I‘m trying to pave the way for him. 

Where can folks get in touch with you? You mentioned the Facebook group. We’ll have a map to that, but what are other good ways to get in touch? 

We have a website, www.GrowRichCapital.com or they can reach me at [email protected]. 

You’ve been on a number of interviews on Best Ever Podcast, with Whitney Sewell a couple of times and few other friends on the show. Those are on your website as well, so folks can know more about what you’re up. 

Yes. This is my fourth one. 

You’re out there. There’s a lot of great content and great information. I definitely recommend people to join the Facebook group. There’s great networking and great lessons to learn. For now, thanks to the audience for reading. Thank you for tuning in. Thank you for joining us. I have learned a lot. I hope you take action and learn before you jump in. Kay Kay, thanks for your time. Talk to you again soon. 

Thank you for having me on your show. It’s my pleasure. 

It’s my pleasure as well. Take care. 

Thank you.

Important Links:

• Kay Kay Singh 
• 10X Multifamily Investment Group 
• Evernote 
• www.GrowRichCapital.com  
• [email protected]

 About Kay Kay Singh

A Microsoft Certified System Engineer turned a successful entrepreneur and multi-business owner owning multiple Gas stations and convenience stores, a Laundromat, and 40 SFRs in Northeast Indiana and an investor in around 2572 units as LP/GP, Multifamily syndicated deals at various locations in the US. Own various agricultural, commercial and residential properties in India. Has 10+ years in India, 19+ years business experience in USA and always seeking expansion opportunities. Always interested in new investment opportunities, networking and partnering with like-minded entrepreneurs.

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