Outrunning Failures

Intellectual Sport: Why Real Estate is More Than Just Numbers with Saket Wakharkar

• Vish Muni • Episode 25

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Today's guest is Saket Wakharkar.

Saket is a seasoned professional with a diverse background in entrepreneurship, real estate, and information technology.

With 10 years of experience running a real estate business and over a decade in IT, he has successfully contributed to multiple startups, including Leazzer.

His extensive SAP expertise includes participation in 7 Go-Lives and proficiency in full lifecycle implementations.

Known for strong leadership and excellent communication skills, Saket excels in driving workshops, gathering requirements, and managing project execution.

Saket combines entrepreneurial acumen with technical proficiency to deliver innovative solutions and drive business growth in diverse environments.

Contact Saket via DM on LinkedIn:

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Creator/Main Host: Vish Muni

Show Advisor/Editing: DBT Marketing

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>> Vish:

Welcome to another episode of Outrunning Failures. I'm super, excited to have my good friend and an awesome investor on this show. His name is Saket. both of us belong to the same mastermind group re mentor and we both have a similar background. It background. And he's not only a real estate investor, he's an entrepreneur. He's invested in a lot of startups. And with that, without further ado, welcome Saket to the show and tell us a little bit about your background and what got you into real estate.

>> Saket:

thank you Vish, for that kind, kind introduction. so what, I have a background. So in 2016 I quit my job and my background in real estate was far before that. in 2006 I started studying about real estate and around that, ah, around that area, I always had a strong belief that I didn't want to do a job, because it's just efficient not to do a job. And it's much more tax efficient and life efficient in general. So that's why I had this dream, to somehow get out of the job and start my own venture. I'm an entrepreneur at heart. how I got started in real estate, well, it was it was mostly because of Mr. Obama. So Mr. Obama in 2008, was giving out, was paying people buy their first home. And it just made mathematical sense. I mean I was completely flat broke back then. I, you know, but Mr. Obama was very nice and kind to give out tax credit for buying a home. That's how I got into real estate really because it made mathematical sense to buy a home. Even when I was flat broke. my credit score was good, but I was flat broke. and Mr. Obama, President Obama, was, was giving out tax credit. That's how we bought our first home. And I still live in that home. and that's how I got started in real estate. But, but the start of real estate, the thinking behind financial freedom and why real estate and all that stuff, tax advantages, the corporate structure, what corporate structure put in all that started way back in 2006, 2007, all the way. I was looking for my first home since 2008 and I ended up buying actually in 2010. So that's how I got started in real estate. Yes sir.

>> Vish:

All right, thanks for that introduction, Saket. And with that, you at least you took advantage of the opportunities which are presented to you and not Only you taking advantage. It's it changed their whole career. In other words, it's listening to you with your IT background, it feels like you're more, you want to be more productive rather than being busy. You want the time and you want to buy back time at every point. Because you, at one point you did tell us about the time efficiency, which, most of us think that is, unlimited and we tend to waste a lot of time. So it doesn't look like you are one of them.

>> Saket:

No, but, no, my, my, my friend has a saying. Busy rhymes with lazy.

>> Vish:

Right, Right.

>> Saket:

So, so busy is. And lazy have some kind of a correlation to each other. So really when, when somebody says I am busy, what they are saying is I am too lazy to think.

>> Vish:

Right?

>> Saket:

Too lazy to think towards my goal. Because getting any financial goal is anything. Finance is an intellectual sport. If you are thinking about, you know, having a home somewhere or praying every day and going to temple, church or synagogue or whatever it is that you believe in, and it's going to have happened to fall in your lap, wake up. Trust me, wake up. It's not going to work that. It doesn't work that way. It's intellectual, intellectual, intellectual. You got to do mathematical stuff. I am not against affirmations, but affirmations are good. But as my, one of my teachers says, hope is for the hopeless. You got to have a plan, you got to have a system. You got to have exact planning done. The plan doesn't work all the time, but it gives you different options just in case things don't go in your way. On your way.

>> Vish:

Well, that's why, well, that is interesting. So not only are more you work on time efficiency also looks like you're a, you're a planner. You like to plan. And with that, what it, what I could, what I could analyze is your IT background is being used in every, in every way. Your time efficiency, your planning. And I also realized that you have a similar SAP background.

>> Saket:

Yes, I do.

>> Vish:

Right. So it's good to know that. and you also pay a lot of attention to education. So whatever intellectual, you don't lose it. You only get better as an investor, as a programmer, in any way. So it's all in how you use it. Because me and you could go to the same, get the same degree. Both of us would be using it in different ways. So it comes down to us. So. But apart from that. So tell me you got started with buying a single family home and did it stop there or did you become a full time investor?

>> Saket:

No, it didn't stop there. So again, I was flat broke in 2010, right? You know, my wife and I, we got married in 2007, 2010. I, I was flat broke, I bought this home and then the market had crashed in 2008, right. So there was fire sale everywhere. So I was, I was, till here with credit cards. But I was making minimum payments and somehow scraping together money for down payment. And between 2011 and 2013 I bought three properties. Four properties rather four. the first one was extremely intimidating. first one was as a, was a condo. But I was thinking, you know, if I can pay. And it costed me $95,000 the first condo. And the thinking behind that was if I can make a 600 payment to credit card, then I can make $600 payment for a condo because that's what it came out to be. So I was very, very afraid. The first condo I bought, it was facing the lake and everything. It was, I knew it would be rented very easily and on paper it was cash flowing period was, I knew it would cash flow. So it made sense. And once I bought that, that's it, then it was like, then all of that made sense. So I, but I had mentally rehearsed this several times in 2007, 2008 by playing Cash Flow 101 game. this is if, if, if some of your listeners don't know what that game is, I highly recommend if you have played monopoly. Cash Flow 101 is, is one step ahead of Monopoly because it teaches you financial statements and how the cash flow thing works and everything. It's a very tedious game. It took us six hours when my wife and I played for the first time. But then it has paid us in spades. That MBA education by that playing the game has paid us in speeds.

>> Vish:

So in other words, education alone is not just good enough. Applied knowledge is more efficient what you learn, right?

>> Saket:

I mean the thing is the idea is applied knowledge is enough. But you know, there are some people who just jump and do the work. I mean, no, I did that mistake more than anybody else I guess, after I quit my job. But the point is going outside and doing if you are prepared well then A, you are not afraid as much and B, you are prepared for all the, all the things that can go wrong. See, all of us who are whoever are getting into this kind of situations, we are very good at being positive. You want Someone to tell how the investment cannot work. So for example, in a private equity situation, if you go in a private equity company, they make two teams, okay. One team, they only talks about what is positive about the deal. The other team's job is to shoot down everything that's positive about the deal and then they make a consensus whether to go for the deal or not. See this is the hard part. All the mistakes are made because of over optimism. As Warren Buffett also says, optimism is enemy of a rational investor.

>> Vish:

So tell us where are you based? Are you based in Texas or where are you based?

>> Saket:

Correct. so I am based in Dallas area. It's called Rock Wall. That's where I based out of. when we came here everything was cheap 14 years ago. And I didn't stop, I bought. You know in the book I had read I was going to go for three, two, two which is three bedroom, two bath house and a two car garage. That's what I was going for. That's what was taught me. But then I had read, I read, I had read so many books. It it in the books they told like you know the. I could see, so I could see that the value of Rock Wall is going to go only up because it made sense because it had a lake, it had all the good stuff that would make it go up. So I ended up buying first I bought three bedroom, two bath. Then it made more sense to buy four bedroom and five bedroom because there was a fire sale, market has dropped, there were foreclosures everywhere. And I bought for the property in such low price that now it has doubled or tripled in doubled at least not tripled doubled. that's what has happened. and my investment, the cash on cash return has used to be as much as 20%. Now it is way beyond that. That's how good deal there was in 2011, 2012, 2013. So.

>> Vish:

That's a great achievement and doing a. I mean do you work as a team or do you all by yourselves?

>> Saket:

Well, my wife is a ca. Cpa, mba.

>> Vish:

Wife is a. Your. Your wife the numbers person or you on the deals?

>> Saket:

So like I told you in private equity they have positive people and there are negative people. So my job is to be optimistic. My wife's job is to shoot it down.

>> Vish:

Okay. I mean, that's. So in other words, that's a good team to have many nows and then. Yes, so that's good. So tell us a little more that the podcast is all about, outrunning failures. I mean, failures in the sense. We don't want to use that word loosely, but we call it feedback. Now tell us a little more about if any of your deals have gone bad and what is the feedback you received and how that failure is how that feedback has made you a better investor.

>> Saket:

Well, good question. failure or fail? One of my teachers says fail is first attempt in learning.

>> Vish:

Okay.

>> Saket:

So I have failed so many times. There's. There's no limit to that. And I'm. And that's why I see it as a university price that you pay to become successful. I've learned a lot, and I'm still learning. It's not, it's not done yet. I mean, I think I'll learn for the rest of my life. But, the point is, as far as specific failure is concerned, I, you know, I started, I started a startup that failed. I bought in real estate. I bought, an apartment complex. And Covid hit. Now Covid hit and I couldn't, I had no control over what I could do. I could, you know, I was at the mercy of the management company. But because of the COVID the management company also couldn't, manage properly. And all kinds of homeless people got in, gang lords got in. People started dealing drugs out of my apartment complex. It was horrible. And, you know, the administration, local administration was blaming me for running the drug show. I was like, I mean, it was horrible. And I had never seen this kind of failure before. I mean, and I mean, it was financially devastating what to do, you know, And I used to wake up

early, you know, 3:

00 in the night with cold sweat for two years almost. And that. And I somehow pushed through and made this, made it happen that now the apartment complex is cash flowing very, very well. I bought it. Right. I did, you know, don't get me wrong, I studied very, very well and I bought it right? But I didn't know how to manage it very well. And Covid hit and was. It was horrible, horrible time.

>> Vish:

So, but before, well, that, so there are two lessons you learned from that. You got to act in spite of fear. Ah. And, there's no looking back. But that comes at, you're losing, having sleepless nights and a lot of stress. But overall it looks like since you bought the deal, right, so you were able to withstand that shocks for a little while. And so that is a big lesson learned. So whatever you learned, you have played in your own deals. But, there are things beyond our control every day that happens. me and you can talk about taxes, interest rates and politics all day long, but they're beyond our control. They're beyond our control. We just need to make sure at least to be buy it, right? So that way it makes sense in the current situation. Right? So that being said, so how do you manage your properties? Do you have a property management company or do you self manage or what do you. Because you pay a lot of attention to your time. I'm sure you worked it out.

>> Saket:

Yes. So before I answer that, you brought up a very good point that we can talk about taxes and interest rate all day long, but that's something beyond our control. And most people are talking about something that's beyond their control. So as one of my teachers says, there's a difference between predicament and a problem. So these are two different things. A predicament is something like whether you cannot change that it's a predicament. A problem is something, let's say you're doing management of your, of your of your property and you are messing up. That's a problem. That is something you can fix. So these are two. This is a very, very important point. And I had to learn this the hard way. And once my teacher told me it was like my bulb, you know, the light bulb went on because I could blame all day long. You know, the taxes are more. The weather is bad, it's snowing too much. You know, the, you know, the gang lords got in. But the moment I took responsibility, that's it. It changed everything, you know. Okay, okay. It's my. At the end of the day, it's me, it m. It's my property and it's my job to do the stuff. And that's where everything changed. It's not so much about how you manage the property, it's about taking responsibility first. The moment you say it's my problem. So I'll tell you a story about one story I had heard there was a quadriplegic. Okay. You know what a quadriplegic is, right? He could only move his finger. he got into a football accident So he, he kept blaming everyone else. Like, you know, I'm a quadripletic because of that football accident. Because that guy came and banged into me and this happened, or, that happened and this happened. And then one of my teachers talked to him and he said, you know, in some way, if you can take responsibility about your action, then things will, things will start making sense. But he said, no, no, no, it's not my problem. It's somebody did it to me. He said, I agree, but the moment you take responsibility that it was because of you, you have control over the situation. And that's what he did. He was quadriplegic, so he, he, you know, he want. He couldn't do, you know, it was hard for him to do daily tasks. So he got a dog. The dog was smart. He could get beer from the, from the fridge and everything. So suddenly he had a new world open up because now he had dog who was doing his stuff. Because the moment he took control over his, took responsibility for his accident, things started, You know, he started finding solutions. So that's, that's the, you know, if a quadriplegic can do it, then I can do it. That's how I, that's how I came up with my thing. Because everything was gone. I mean, literally everything was gone. For me. The windows were smashed, the countertops were gone, doors were broken, boilers with all the copper was stolen, boilers were gone. I had three buildings. All, everything was gone. And from scratch. For two years I struggled with limited budget. Nobody would give me any money. So it's like the banker, you know, the banker gives you umbrella when you don't need it. Right. It's. Yeah.

>> Vish:

So, well, that all these, all these challenges only makes you a better investor.

>> Saket:

Yes.

>> Vish:

End of the day. And, how you get past that pain, because it's like if you involved in any team sports or any sports, the pain comes first, the results come later. Right?

>> Saket:

Yes, yes. As one of my teachers says, success is a poor teacher. It punishes you first, then gives you a lesson.

>> Vish:

Right. So we all need to get past that pain because even if you're training for a marathon, you're undergoing pain, torture, pure torture, till you finish that marathon. Right. And if you stop at the first sight of your knee pain or a leg pain, you're not going to do that marathon nowhere. So. So I feel investing also is a. Similar to that.

>> Saket:

Yes.

>> Vish:

So that, with that, so what, what is your, I mean, I Know you're an entrepreneur, you're a serial entrepreneur. What are the things, have you invested in or do you have any startup ideas or. So can you share a little about, what you do outside of real estate to our audience?

>> Saket:

So, I, like I said, I'm not just bound to real estate. The idea is, the first thing I wanted was, you know, wanted was financial freedom so that I can think at least think clearly, you know, at least have enough money. So what is financial freedom in simplicity is, you know, if you need $1,000 to survive every month and that $1,000 comes to you without you having to actually go and show up at work, then you're financially free. So, you know, that's, that's the key. That was the key for me first. And then I, and simultaneously I want to do, you know. So I told somebody that I'm a serial entrepreneur. And the guy corrected me. One of the guys, he said, you're not a serial entrepreneur, you're a parallel entrepreneur. Because you're parallel. You're starting, you know, it's not like you have one venture going which gets over and then you go, no, you have two, three ventures going on at the same time. I said, yeah, well, you win.

>> Vish:

I haven't heard that word, parallel entrepreneur. I only heard about serial entrepreneur. But that is the thing which I'm going to take it from you.

>> Saket:

Yeah. So whatever. The point is, I wanted to, you know, I have a startup which, I'm in the process of starting. I had, I ran it for about one year, one and a half year. The idea is, idea of the startup is or was currently is free, alcohol delivery in one hour or less. Before that I had a startup as well. A couple of startups, you know, ideas which I was not good enough. That's why the startup didn't do well. Because, you know, my financial education was not, not at the level as I wanted it to be. Now it is getting better. It has, it is at a level where I can read financial statements very well. Now. reading financial statements is a completely different ballgame. And business is harder. Real estate is much easier. Business is way harder. Much more complex. So. But I like doing complex stuff. That's okay. You know, I have engineering background, I have masters in computer science and I have, I'm proud thinker, so most people are proud doers. I fancy myself as a proud thinker. I like to think a lot.

My typical day starts at 3:

00am, 3 to

5:

30, I think almost every day, either

I'm studying or thinking. Three to 5:

30, that's my job, that's my think time. If I think, I make better decisions. You know, if I think, oh, you know. Right. You know, if I'm, if I shoot from the hip, I've always lost. Right.

>> Vish:

So that's so interesting. So tell us one thing. if tomorrow, if you get your financial freedom number, what would your life look like? Would you stop doing what you're doing? Or do you have a non profit or what will you do with.

>> Saket:

So technically, I mean my wife doesn't agree, but technically I technically not. I'm fairly financially free. what will I do? the thing is, it's not what I do. The doing part is the last. It's who you are. That's the key. It's be, do and have so you first be something. So at the core, I am an entrepreneur. Even if I AM Today, tomorrow 120 years old, I'll still be an entrepreneur at heart. I may not actually go and do the work, but, but I will still be an entrepreneur. An entrepreneur is always an entrepreneur, period. As far as nonprofit is concerned, my time is more important for me. So what I do is where my body can't go. I give my money where my body cannot go. That's as far as charity is concerned, which I fairly do and I'm very proud of that. But that's the idea is what will I, what will change if even if I become a billionaire tomorrow, I will still do what I'm doing today Because I love it. It's not because I do it because I am interested in it. I absolutely love what I do. It's like asking Warren Buffett. I mean, what would you change? He will not change anything. He loves what he does. Right?

>> Vish:

Right.

>> Saket:

Asking. Ask Tiger woods what will he do when he's, when he is, you know, he makes millions of dollars or whatever he wants to achieve, he achieves. He's gonna play golf. What will Superman do? He's gonna fly. That's it, you know.

>> Vish:

Well, the key is some people are doing this only to get to X destination. So that is it. After that, they want to do something else. Like, like if you ask me, I would say I would, I would, I wouldn't change anything. I might travel a little more and that's all. I might go to the gym a little more. That's all. Other than that, nothing else is going to change. The same eating habits, the same travel. I would still look for deals. I would still negotiate. I would still fight, with people for better deals. And, I would do all that because me and you, I've seen the good days and the bad days. So we don't want the good days taking over the lessons learned. And we don't want to take anything for granted at the same time. Right?

>> Saket:

It's not granted. I mean, for me, my lessons are, is, what will a dentist do, right, in the morning, he wakes up tomorrow, decides to retire. What will he do? It's like toothbrush for him. He's got a brush, right? He's going to do the dental work anyway. For me, I'm going to analyze balance sheets anyway. Analyze deals anyway. I don't, I don't know anything else to do. You know, it's like Picasso. I mean, what will you do? Cut hair? no, he's going to draw. He's going to paint, right? That's, that's what he is. That's what a being. That's the key.

>> Vish:

So what, what's your, what's your passion outside of real estate? Do you travel? do you network or what do you do outside of real estate?

>> Saket:

No, my, my. This is the passion. It's not real estate, just being an entrepreneur. Best, Best entrepreneur that I can be is my passion.

>> Vish:

So it's your lifestyle, in other words?

>> Saket:

It is the lifestyle, yes. It's the lifestyle, yes. Yes, absolutely. I cannot think of anything else. So, 24 by 7, 365 days. I only think about one thing. How can I get better? And there's no such thing as best to get better. Yes, get better. Best version of yourself. That's the idea.

>> Vish:

That is fantastic. Yeah, that's the best thing I've heard in a long time. do you have anything you want to achieve by the end of the year? you are more of a visual person. I see that you visualize before you get to anything. So do you have anything which you're still working on as getting to a strong finish?

>> Saket:

Okay, so, you know that. So couple of things, right? There's no such thing as finish. It's a lifestyle. So. And I don't have goals. I have standards. These are two different things. Okay. People have goals. People say, okay, I know I want to lose 10 pounds, or, I want to achieve financial freedom, or, you know, as if after that, life doesn't exist. You know, that's not, that's not what I, you know, I have standards. My standards are I want to be the best entrepreneur I can be and get into the best deals I can be in. And if that happens in six months, it happens. I'm not going, you know, my goal is not to do in 10, you know, coming three months because it's the last quarter. I run and get, get into a bad day. No, that's not how it works. I have standards. The standards are such where if the deal happens to be in a certain way, then I will buy. Or I have a standards for, let's say buying a car wash, let's say buying multifamily, let's say buying self storage, let's say buying RV park. I don't like RV park so much, but, you know, multifamily, self storage, car wash, laundromat, whatever those standards, those minimum standards, if they are met, then I will get into the deal. Else I'm not getting into the deal. I will go without a deal. That's okay. I will study more and get better and better and better so that I can get better, you know, get better at looking at more deals and find a good deal. I would rather say yes to once in four years, then say yes four times in, you know, one year.

>> Vish:

Well, and then pay for it. And then pay for it.

>> Saket:

And pay for it.

>> Vish:

Yeah, so that's. I'm with you on that front. So it might as well spend more time before doing the deal than trying to analyze. Like you were telling you, if you buy it right, you can weather any storm. Right. And buying right won't happen overnight. You need to do a lot of, due diligence. And, I don't believe in resolutions. I change resolutions to goals. And now after listening to you, you changed goals to standards.

>> Saket:

Once the goal is achieved, you are, like, deflated. Now what do I do?

>> Vish:

Right? So, it's like a finish line. So there's no finish line.

>> Saket:

No finish line. The only people who. My, as my teacher says, the only people who have finish line are people in the cemetery.

>> Vish:

Right?

>> Saket:

So, I mean, life is a, dynamic process. How can you have a finish line? That's why 401ks are the funniest thing that has been sold to the people because they have a finish line. I mean, how can you have a finish line? There's inflation that's eating you. There's taxes that are going to eat you. How can you save money that's Funny.

>> Vish:

Everybody thinks differently when it comes to investing, so.

>> Saket:

That's true.

>> Vish:

Everybody, everybody's got a plan. So with that being in mind. is there anything, you want to promote or you want to tell our audience? How can they reach you and what is.

>> Saket:

I haven't started, you know, I started a YouTube channel. I'm, not posting right now, but, I don't have a product to promote. All I will say is, get connected with me on LinkedIn. I always get into good deals or I don't get into deals at all. I buy, right? My first apartment complex was, has a DSCR. when I bought it, the DSCR was 2. Now most people are happy with DSCR of 1.2 with the bank. Now people who don't know what DSCR is. So if $100 was the total expense, mortgage expense on the property, my Property was making$200. That means two times the mortgage expense after PITI, principal, interest, tax, insurance, whatever the number was. My property was making twice that in rents. So it was a good deal to begin with. That's what is called as buying. Right? Like Vish, you are saying. So I get into those kind of deals or I don't get into deals. So there is no. That's why I don't have resolutions or goals. I mean, I'm always looking for deals, but I have standards. Certain standards have to be met. If they are not met, that's fine. I lose a lot of deals because of that, but that's okay. I will. You know, I. That's called saving your gun, saving your powder. I keep my powder dry until I see a good deal. If I don't see a good deal, that's it. I don't. So if you want to, you want to get connected with me, you can connect with me on LinkedIn. Message me if you're interested in information. If you have any questions in investing. I'm not a 401k investor. I'm a cash flow investor. I'm not a capital gains investor. These are two different things, cash flow and capital gain. If you want more insight into that, go ahead, message me, talk to me. I'll be very happy to help you out, especially if you are a 401k person. You know, be ready. I mean, there's not, you know, if You're. If you are beyond 45, I suggest you start. You better message me or get with. Get in with financial planner or talk to me. I talk to different people. Don't just talk to me. Talk. Talk to a lot of people and make up your mind. You know, not one guru, not everybody is meant for you. And I can give you free advice in many ways. many gurus will charge you 40, 30, $40,000, which is okay, but, you know, that doesn't mean you should not listen to free advice right now. I'm not. Haven't started any course, but I, can help you. Absolutely help you with all my heart. No problem.

>> Vish:

All right. Thank you. Thank you. Saket. And with that, I really appreciate you taking time and, sharing your experience and your knowledge. And, definitely our audience are going to be happy about. About listening to you, how you did your. How you overcame all the challenges and you outran all your failures. And, with that, thank you once again for your time,

>> Saket:

It was a pleasure. Wish, Thank you very much for having me.