Automation and Delegation to buy $500 million+ of real estate, with Rohun Jauhar of JT Capital

Jorgenson’s Soundbox Episode 43: Rohun Jauhar

Let’s talk about leverage. Today, building leverage to run a real estate private equity firm.

Today’s guest is someone I should have been friends with a long time ago. (We have very overlapping lives.) I’m psyched to be making up for lost time. Rohun Jauhar is the co-founder of JT Capital, a super-efficient real estate private equity firm. JT Capital has purchased over $500 million of real estate in the multifamily space.

Rohun talks a lot about how automating, eliminating, and delegating has led to a better business and a better life. Rohun talks about his use of EAs (executive assistants) and VAs (virtual assistants) in his business and personal life. Rohun also talks about lessons learned from his past work experience at Facebook, GE, and McDonalds.

Links to Platforms:

Here’s what I learned from the episode:

Rohun and I discuss a quote, something like “Real estate is where dumb people get rich.” Rohun says it’s… not innaccurate.
After working at GE and at Facebook, Rohun realized he didn’t like being told what to do. That is what led him to real estate.
To learn the business, Rohun underwrote 100 deals in 30 days. After showing his work to his uncle in the business, he did an apprenticeship with him until he was confident he could set out on his own.
Apprenticeships are (still) underrated.
While building his business, he learned how processes, systems, and SOPs build leverage.
Many (even most) of his firm’s tasks can be automated or delegated.
Rohun’s first experience using a VA was a complete failure. But he learned and persevered. Now VAs are an integral part of JT Capital.
Rohun learned to delegate things he doesn’t like doing. Like going to the DMV. Or breaking down Amazon boxes from packages.
His new test: Running his business from his phone. If he has to sit down at a computer… there’s something that could be delegated.
For good Midwesterners, It’s hard to not work. It takes a bit of a mindset shift to realize it is okay to sit back and enjoy life.

Learn more about Rohun Jauhar:

Additional episodes if you enjoyed:

Episode Transcript:

Rohun Jauhar: I wouldn't even say we put constraints on it. It was just like let's build this business, let's keep it simple, let's build these processes and systems. Over time, after I read kind of Naval’s like how to get rich without getting lucky tweet storm, I read your book, then I started realizing more of these different forms of leverage. I mean, that's probably one of the reasons I got active on Twitter. As we built these things into the business, I've realized like, oh, this is leverage. This isn't just processes and freeing up your time. Like this is leverage.

Eric Jorgenson: Hello again, my friends, and welcome. I'm Eric Jorgenson, and this is a podcast. This show explores technology, investing, entrepreneurship, and personal growth that will help you and the rest of humanity create a brighter, more abundant future. This is one of a few projects I work on. To read my book, blog, newsletter, or invest alongside us in early-stage tech companies, please visit ejorgenson.com. Today, my guest is Rohun Jauhar, the founder of JT Capital. This is a real estate private equity firm that has purchased over $500 million of apartment buildings, which is over 3000 units, mostly in Austin, Texas, and some in Florida as well. Prior to starting JT, Rohun worked in finance and strategy at Facebook as well as GE. And after a few years in tech, he explored what was next, apprenticed, adventure, and then started his own real estate private equity firm. We go real deep on the operations of that firm, how Rohun and his team –he had help – built an incredibly high leverage firm. They use EA delegation, virtual assistants, automation tools. They've all become integral to his business and his life and are a key piece of, I think, what makes his firm special, especially in real estate. He's got a bunch of great stories and tips for us about how to build leverage and apply it. And we learn a ton about the real estate industry and leverage in this interview. I had a great time. Rohan's a super nice guy. I hope you enjoy this conversation.

If you would like to put some more of your money to work, you can invest alongside me and my partners in today's great founders building early-stage tech companies. This year, I started an early-stage investment fund called Rolling Fun with two of my most talented and trusted friends. We've all been angel investing for years, started sharing deals, funded a few billion-dollar companies along the way. And this fund lets us invest your money alongside ours into some of these companies as well. We are seeking out the most promising founders of early-stage tech companies around the world. And if you love these ideas, these conversations, these lessons, you'll enjoy the companies that we invest in and I think enjoy being along for the ride and learning with us as we build a fund, learn more about these companies and technologies that we encounter in our Rolling Fun travels. We've got podcast episodes with Bo and Al. You can learn more about Rolling Fun and get a feel for the other partners of the fund there. I'm honored that many readers and listeners have already joined the fund as co-investors. And you can go to rolling.fun to learn more. It's linked in the show notes below. Accredited investors can invest with us through Angel List today. If you have questions or you'd like to hear more, please reach out.

As this conversation is all about leverage, I think it is worth mentioning again Athena. One of the biggest jumps of leverage in my life was working with an EA, an executive assistant. We talk a lot about them in this conversation. Virtual assistants or executive assistants are some of the best ways to buy back your time and your freedom and edge closer to the life that you want to live. Ivan is my executive assistant through Athena. We have a wonderful relationship. He helps me gracefully handle a very full life personally and professionally. He's contributed to managing rental properties, which is something we're going to talk about today. He's helped plan my wedding. He has run multiple businesses and a lot more. He publishes every single episode of this podcast. It could not exist without his help. And Athena made all of this possible. They hire, train, and match you with a full-time EA based in the Philippines. Then they provide guidance and accountability to both you and your EA to be sure that you are successful together. I love that the team at Athena obsesses over how to best create leverage for their clients. I think two pieces of the secret sauce that they have are they only do full-time dedicated EAs, 160 hours a month, one-on-one relationships, and all EAs are based in the Philippines. I recently went and spent a week in the Philippines with hundreds of EAs and the Athena executives. I saw training sessions for really high value skills, like data analysis, creative problem solving, their EAs sharing processes and playbooks for booking epic vacations or remotely managing kitchens. I even met EAs who were remote general managers of small businesses. You'll get a taste of this in the conversation today, just some of the incredible processes and systems that EAs and VAs are capable of. You know I love a good form of leverage. This is one I personally use, enjoy, and stand behind. Getting a dedicated full-time helper was easier than I ever thought it could be. So, open your browser, type in athenago.com and sign up. There's often a wait list to get matched with an EA. So, plan ahead, sign up now, today. There's no commitment required, and you will learn something just by going through their quick application. So, to learn more about how to use an EA, the playbooks the experts use, and investing in the corporation of you, my episode with Athena's CEO and COO is episode number 38. It is overflowing with valuable ideas. It's very similar to this episode in terms of focus on operations and really getting detail oriented about things that can get delegated, automated, and outsourced. Once more, athenago.com. I appreciate you listing me, Eric Jorgenson, as your refer. Now, let's get to the good stuff and see what Rohun can teach us about automation, delegation, and operations in multifamily real estate.

I'm very much looking forward to this conversation. I feel like I've followed you and enjoyed at least your Twitter self, which I know is not entirely a person, but your Twitter self for a very long time. And then we met at Capital Camp, and I realized, we both realized with incredible excitement that we went to Michigan State at the exact same time and I think also lived in San Francisco at the exact same time. What years were you in San Francisco?

Rohun Jauhar: I was there from 2014 to maybe 2020.

Eric Jorgenson: Oh yeah, okay. So, we definitely overlapped for a few years in there too.

Rohun Jauhar: Yeah. But that was crazy that we had realized the other week that we went to Michigan State at the same time. We pretty much lived in the same area and probably passed by each other like every week and did not know each other. And then, a decade later, here we are.

Eric Jorgenson: And you studied business too, right?

Rohun Jauhar: Yeah, I was a finance major.

Eric Jorgenson: Okay. We were probably in some of the same classes, honestly. That’s wild.

Rohun Jauhar: Yep, definitely. And that's like, we were talking about it, that's crazy. Like the power of Twitter is that you can meet your people, your tribe, regardless of wherever they're living around the world, then you meet up in person at an event or wherever it might be, and you like already know each other. And we didn't have that run in 10 years ago, but we probably would've been friends 10 years ago. It took a decade for that to be realized. And it came through Twitter, which is pretty phenomenal.

Eric Jorgenson: It's amazing. Yeah, I feel like I'm 10 years late in getting to know you, but we're making up for lost time. So, I'm looking forward to this. I feel like I have so much to learn from you because you are- this is interesting to me because we started in such similar places. We both grew up in Michigan. Where'd you grow up in Michigan?

Rohun Jauhar: Rochester.

Eric Jorgenson: Okay. It is a suburb of Detroit, right?

Rohun Jauhar: Yeah. Like 30 to 40 minutes outside of Detroit.

Eric Jorgenson: Yeah, basically same. We went to the same college. We both got into tech like circa, whatever, that timeframe, and then ended up kind of dovetailing into totally different directions but interested in a ton of the same stuff. So, I'm really excited to have you teach me everything about multifamily real estate. And I know you are very, very thoughtful about delegation, automation, and like how you guys run your business in an extremely high leverage way. So, I'm excited to get into both of those. But I want to start with my favorite opening question, which is who are your heroes?

Rohun Jauhar: Yeah, good question. I think for me, I kind of pick characteristics of certain people I like, and that's what I really admire about those people. So, there's some really well-known names of people that are changing the world today, but I don't get too much into those. I think my overall heroes, people I look at and I'm like I love the body of work of the life that they've created, I love what they're doing in business, in giving back, in growing and raising families and building strong relationships, it is really just the people that are closest to me that I admire, which is my dad, my brother, and my grandfather who passed away now. But those are the people really that I admire. My dad had made a lot of sacrifices to help raise me and my brother as kids, sacrificing certain things through his job and stuff like that and really just raised me very well as well as my brother. My grandfather, born in a village in India, and wasn't a very good student. Through a variety of things, he ultimately became like the CFO of a company in India. And then my brother, who's about six and a half years younger than me, has taken risks much earlier on in his life than when I did, when I was just more comfortable working a job and stuff, and is a very thoughtful person. And so, those are the kind of people that I truly admire because I see them up close every day, and those are kind of my personal heroes.

Eric Jorgenson: I don't think you're behind the curve at all on risk taking. I mean, there's not a lot of people running a real estate firm your size at your age, I wouldn't think. What does your brother do? Is he extra crazy?

Rohun Jauhar: Not crazy. He runs this business, it's called Jauhar Academy. Pretty much what he does is like Lambda School for people that want to get into sales, but he just doesn't do it at a venture backed scale. He does it more at a one-to-one basis and does the income sharing agreements. So, it's super interesting. When he was graduating from Michigan State, he went to- he did all these internships during college to try to go into Wall Street and stuff like that. Between his junior and senior year, he came out to San Francisco. It was me, my cousin, and my brother Samir, and we were talking, and my cousin, he's into startups. Now he runs a big podcast. He's sold a company and everything like that. And he was like, what do you want to do? And my brother's like, oh, I want to go to Wall Street, then go into VC, and all these things. And he was like, why don't you just like go into VC? Like, why are you trying to go about it in this roundabout way? And so, he was like yeah, I mean, I guess good point. And so, he was like, all right, well, I've wasted all this time trying to get these finance jobs and doing these internships, like what am I going to do now? He just applied that same framework of cold emailing and reaching out to people on Wall Street, he just applied that to tech. And he is like, I'm not technical, I'll get into sales. So, he just did cold outreach to all these people, ultimately connected with somebody at this company called Sift Science, like a series A at the time, I think, backed startup, series a venture backed startup, got in there as an SDR, did that kind of sales role, did it for a couple years, and then realized there's a lot of people like me that don't know how to do this. I should go help those people. And it's amazing what he's been able to do. Like there's examples of people that have went for making like 40K a year to like $120,000 a year. One of his friends that he got into sales at the time. When he was just working as an SDR, he helped his friend get into the company. After I think three or four years now, that guy is going to make a million dollars this year as an account executive. And my brother really, really cares about the people. Coincidentally, when we were at Capital Camp, I was talking with someone and their son got in through my brother at a company. So yeah, shout out to him. That's what he does. And people should check that out.

Eric Jorgenson: That's super cool. I mean, as soon as Lambda School kind of made it big, I don't know if it made it big, but at least became like mainstream, Twitter mainstream aware, I feel like everyone was just kind of like, oh my God, this is so obvious. Like ISAs for sales, ISAs for nurses, ISAs for like all of the sort of obvious high earning careers that you could be trained for relatively quickly that's not super credential based, and I'm kind of surprised we didn't see more of those pop up quickly. So it's interesting to hear about that. It's such a cool mechanism. It makes a ton of sense.

Rohun Jauhar: Totally. It's this whole process of learning never stops. It should always keep going and you can increase-

Eric Jorgenson: Being able to retool careers whenever you want. And especially for sales. People don't realize there's a lot of companies where the salespeople make more than the CEO, at least on a salary basis, equity aside. But yeah, there's some ridiculous situations out there for really good salespeople.

Rohun Jauhar: Yeah, 100%. Sales is the best career to go into if you want some relative safety, but you have, again, relatively, in most cases, uncapped upside. It's amazing.

Eric Jorgenson: Yeah. So, was that like a little squad, like you and your brother and your cousin, Sean, Sean Perry, right?

Rohun Jauhar: Yeah. Sean, he lived in San Francisco at the time, I guess kind of still does in the Bay Area. But yeah, I mean, it's just family. Like my cousin lived out in San Francisco. I had moved out there to go work at Facebook. And so yeah, we would hang out from time to time. We have a bunch of family in the Bay area.

Eric Jorgenson: Cool. I listen to his podcast sometimes and I really like what they do. I’ve got some buddies that used to work for him. And I don't remember the exact quote, but it was something about like real estate is where not-that-smart people go to get rich or get rich reliably. It was something like that. Did you guys fight over that? Was that like- did you inspire that quote?

Rohun Jauhar: I love that quote. I think it's so accurate. I think the exact quote is something along the lines of like real estate has the highest proportion amount of dumb people getting rich. Which is very true. Real estate, one of the reasons I got into it, I looked at like what was going on in a variety of industries. And I said, look, real estate, you have- it's super simple. It's a hard asset. It's been around for decades. It's not complex. You just have to put in a little bit of work and get your hands a little bit dirty. But I met this one guy in Florida who worked for one of my uncles running a Domino’s store at some point, and this guy had like 40 houses and he barely spoke any English. And this guy was making this great money, just buying house after house, renting it out to people. I think that real estate in some ways is the American dream for people owning cash flowing real estate because it's so simple and it's just a very sustainable type of business. It's been around forever. It's going to continue to be around forever. And I will say, there's a lot of sharks in real estate, especially when you get into the institutional space, so you have to be careful. But that quote, I think, is probably pretty fair.

Eric Jorgenson: What attracted you to it after-? Because you spent how long in tech? At like high levels of tech? I mean, I think you worked at Facebook for at least a few years.

Rohun Jauhar: Yeah. First, I started my career actually after Michigan State at GE. They had these entry level finance rotational programs. I did that. Then they had some more accelerated training programs to get you on the executive route. I did that. Then after that, I moved to Facebook. There were a couple inflection points, I would say, of specific things that happened while I was there, that we can get into if you want. But ultimately, what it was was that I didn't want to report to anybody anymore. I was like sick of being told what to do. I didn't like that someone could put a meeting on my calendar at like whatever time they wanted, and I pretty much had to be there. You can't say no; you’ve got to go. And so, it was those kinds of things. And there's a couple things that happened where I was like, yeah, this is not how I want my life to be. I want freedom over my time. I want to be- I didn't think this at the time, but now after reading the book, it's like I want to be a sovereign individual. And so, that's, ultimately, kind of the theme that had me make the leap into real estate.

Eric Jorgenson: Interesting. And you knew, you had sort of examples in that space, this guy that you met before. Did you see people in real estate kind of living the life that you wanted to?

Rohun Jauhar: Yeah, I think so. Look, I saw a lot of people making a lot of money, and I was like, that's great. I saw people having relative freedom over their time, so that was great. I tried a bunch of different things. Like I looked at- I thought about going to Hack Reactor to get technical skills to maybe go and be a software engineer. I thought maybe I could be a product manager. I went to go work in a Domino’s. So, I was like maybe I could just run these Dominos’ and build a franchise. That'd be great. I lasted like one day, and I was like, I can't do this, so I left that. So, I tried a bunch of paths, and then real estate was the one that just really resonated with me with how I think about the world, some of my strengths as it relates to financial modeling, operational expertise, building systems, and those kinds of things.

Eric Jorgenson: What was the experiment you did? When you were kind of dipping your toes into a bunch of different stuff here, what was the part that you did in real estate?

Rohun Jauhar: What I would do every morning is I would take the shuttle from Facebook from San Francisco to Menlo Park, which is about like a one-hour drive both ways. And so that's when I was running all my experiments. I was reading books, I was reading blogs, I was trying different things. Specifically in real estate what I did was I said I want to go buy houses in college towns. And so, I was like college is going to be around for probably the next decade, at least, I think. And so, parents sign on as co-signers onto these leases with students. Students sign 12-month leases, but they only live in it for 9 months. Like this sounds great. So, I was going to go do that. Then, I didn't know anybody in real estate. I had one uncle that I knew was in real estate, but I had no idea what he did. I brought my idea to him. He was like, yeah, you should not do this. I started with single family homes as well, and you make $200 a month. So, imagine how many you have to buy to recreate the lifestyle you want or something like that. And I was like, oh, okay. He's like, what you should look into is multifamily, that's what I do, which is like these larger apartment complexes – you get more economies of scale, you can have more people that work for you, so on and so forth. And so, I went down that path, started looking. I was like, all right, my uncle didn't work with anybody in the family. I was like this is the one person that I need to be working for though because I can trust them, they'll probably teach me really well, so on and so forth. And so, what I did was I underwrote a hundred deals in 30 days. I went to brokers’ websites like CBRE, JLL, so on and so forth, downloaded the OM, the offering memorandums of these properties from the websites, the financials, and then I would just put together basic financial models that any real estate acquisitions analyst would do. Did all that, kind of got a sense for how I should be doing these, showed my work to my uncle.

Eric Jorgenson: And you did that just like volunteer, like on spec? You just kind of were like, I want to learn how to do this, the information is public, I can just kind of like go put in reps on this high value task and show what I can do?

Rohun Jauhar: Exactly. Let me just go, like let me go to practice. That's what I'm doing every day. I'm going to practice for 30 days straight, and I'm just going to get practice reps in. And no one is telling me what to do. I'm allowed to do this. Like, anyone can go download these things. So, I did that, and then I showed him my work, and I was like, hey, I know you spend a lot of time on this, look, I can just do this for you. And he was like, this is great, let's do it. And so over the course of a year about, I pretty much did an apprenticeship for him where I did these underwritings, I did a little bit of asset management, some investor relations, and just progressively took on larger and larger responsibilities up until the point where I felt like, okay, I can probably go do this for myself.

Eric Jorgenson: And do you mind recapping some of what you learned in that process, like in doing all those reps of underwriting? I remember asking you at Capital Camp, what is the single most important decision in your business? And you were like, it is the buying decision. If you buy the right property, you can mess up a lot of other stuff, we don't, but you could mess up a lot of other stuff and still be in pretty good shape. And underwriting is kind of the- like, that is the core of that decision. That is like all the assumptions and ranges and balances. Can you take us through kind of everything that you learned in those reps?

Rohun Jauhar: Yeah, totally. So, there's a variety of factors of everything that you're looking at when you're underwriting a deal. So, you want to understand like, okay, what's been going on at this property? Who lives here? What do the demographics look like? How have the owners been running the property? What's going on in the surrounding neighborhood? Like, has there been more multifamily built? Has there been retail built? Have there been homes built? Is there crime in this area? Where's the path of progress? Are people continually building in this area and it's getting better here? Or has it been getting worse? Looking up certain zoning plans, like, what are they planning? What have they done in the past? What are they looking to do in the future? All of those kinds of things. Once you essentially have somewhat of a portfolio or at least a trusted property management partner, then you can kind of refine your actual P&L proforma expectations. So, for example, how much money should I be spending on repairs and maintenance for a building that was built in 2000 versus a building that was built in 1980? In the beginning, maybe I was just using rules of thumb for that. But then over time, as you have a portfolio in this area, you know the number; there's no guessing. How much money should I be spending on marketing, on payroll, on all of those kinds of things. On the top line, it's look, I have this property that I'm looking at, they're charging a $1,300 average effective rent. What are all the comparable properties in the area charging? What are the properties that are nicer than this one charging? What are the ones that are lower than this one charging? You’ve got to secret shop these properties to understand is one of the reasons that just the leasing agents are bad. They're not running a good sales process, therefore, they don't have high occupancy. So, it's so much of just like, yeah, I spent so many hours doing this and then so many hours on Zoom with my uncle learning. It's even hard for me to recap what are all those things. I think at one point I made like an underwriting checklist, and it was so long. But over time, then you begin to suss out, okay, what are the core things that matter. How can I evaluate a deal within like two minutes and then just put it in the two hard or pass pile versus, okay, it checks these boxes, let me start to go deeper.

Eric Jorgenson: How many, like if you want go look at a hundred deals or something, how many are, hey, this is a profitable deal, now we have to go to the opportunity cost test versus you can throw out 90 because they're just, they suck and the other ten are hard to tell if they're all big wins, but you're kind of like I feel pretty confident with these ten. How does that break down?

Rohun Jauhar: So, in total, we get all our deals from a variety of sources. So some are going to be off market. Some are going to be direct from brokers before it's actually been listed to the public. Some are just going to be public, like, hey, they've been listed, and anyone can go take a look at them. Let's say if we gather all of those sources and we look at a hundred deals of those, probably like 80 are going to be immediate passes where we don't even need to spend our time. I think that might be more of a subset over the past two- or more of a trend over the past two years, just given how high pricing for all types of different asset values have gotten, but that's generally what it looks like. And then of that, we're only, if we look at a hundred, we're buying 0.1. So last year, we looked at- or maybe 0.2. Last year, we looked at a thousand deals and we did two deals. One was a $29 million 129-unit property. And then the other one was a $84.7 million property for 336 units. So, a thousand deals to do too. So, you’ve got to look at a lot.

Eric Jorgenson: My only really analogy to this is like- well, I have a few different ones, but I imagine it's very different from both sort of private equity company investing and annual investing. How many of those thousand do you go after to like win those two? Or are you kind of like, if we're winning this, we're winning this? I imagine this is a somewhat efficient market. A lot of these are posted publicly. A lot of people are underwriting the same things. What is that kind of like, oh, we want this one to like, oh, we got this one look like?

Rohun Jauhar: Yeah, good question. I would say, okay, so let's say of those thousand last year, we probably made offers on maybe 8 to 10. It is a relatively efficient market. However, there's such variance in how people are underwriting as well as primarily what their cost of capital and strategy is. So, for example, if you're a life insurance company that's buying these real estate assets, all you're looking for is like 2 to 4% yield year one and you're good, and you know you're going to get some organic rent growth and stuff like that. And that's why they buy those luxury buildings that you see in downtowns, in downtown Austin, downtown Miami, wherever. Versus, us, I'm trying to get to like a 7% preferred rate of return as quickly as possible that I can pay to my investors. And then over and above that, we're trying to execute our business plan to raise rents, to typically hit somewhere in the range of on the very low end of 14% IRR, on a typical end, maybe 17 to 20% IRR. So yeah, it is efficient, but every buyer has a different lens that they're looking at these assets through.

Eric Jorgenson: That's super interesting. I hadn't thought really about the breadth of different owners that these things have and how they manage them and what they're optimizing for. So that's pretty interesting. I think there's also a lot of interesting stuff. Quite a few of the people that I've talked to who have bought small businesses or bought businesses at all are like my first lesson learned was that smaller is not easier. And in fact, it is probably worse. And I feel like you- it sounds like you learned that lesson by osmosis or your uncle. But I mean, to go do a, what did you say? Your two deals were both like north of 50 million. I think one was north of a hundred million. That sounds really scary and a huge sort of leap to make. Like, how did you- did you ladder up to that? Did you just sort of internalize immediately how important it is to just do larger scale deals? I feel like there's something really interesting in that. And I heard on your podcast with Chris Powers you sort of break down some of those, and I'd love to go into some of kind of the importance of scale to your model.

Rohun Jauhar: The one we did last year was a 29 million and then the 85 million, 84.7. And so, yeah, it's a good question. When I was doing this apprenticeship with my uncle, I think that eliminated the fear of doing large deals because I saw him doing a $50 million deal. And I was like, okay, that's just what you do. You don't do a 50 unit or a 70 unit or an 80 unit or something like that. Because we actually did look at those deals and just when you're underwriting it, I'm like, okay, we’ve got to pay the property management company like 8% for this 80 unit, and we're not getting as good economy of scale on marketing, on payroll, all of those kinds of things. And then I realized like, okay, so you need economies of scale, but like what is the challenge that most people aren't able to get there? So typically, it's, hey, I don't have that equity amount, and so I can't do this myself. I’ve got to go raise that money. So, it's not easy to- I think people on Twitter will make it like super easy to raise investor money. I don't think it is. I think it's tough. You have to put in the time to build the investor relationships. Even now for me, I get nervous on every deal we launch. Like, are we going to be able to raise? And we do. And it's relatively simple, but that's like years and years of effort that you put in to create these investor relationships, buy deals, execute on the business plan, get good returns for investors, all of those kinds of things. So that's one piece of it, which is just the equity that you need is the challenge. The second piece of it is just simply the net worth requirements that you need for the loan, given that this is, if you're buying a duplex or whatever versus buying these larger ones, it's just like a much different ballgame. You have institutional lenders that are looking at your track record, looking at your background, there's net worth and liquidity requirements, all of those kinds of things. But again, that can be solved by if you don't have it, you go find a wealthy person to partner with you. And then lastly, just to kind of wrap it up and answer your question, which was like I went after it because that's just how I thought. Like when I saw my uncle doing it, I was like this is just how you do it. This makes sense to me. In order to do it, you have to solve those number one and two problems. Let's go figure out how we solve those. On number one, we created the investor relationships. We executed on our deals. On number two, we have three partners that have all done relatively well. And so, we're able to go buy these deals.

Eric Jorgenson: And what is the like order of operations? If you commit to a deal, then go raise the equity, or do you get a period of time to say like let me go see how much I can raise if we can take down this 80 million deal, or do you just have to leap and hope you can raise the money on the way down?

Rohun Jauhar: Yeah, you’ve got to leap and hope. There's a caveat to that that we kind of know how much we're able to raise. Because now we've done this enough that when we launch a deal, we know how much we'll be able to get. And so, the way it works is we're always looking for deals. One of my partners Sapan, he leads our underwriting and acquisitions, he will be looking at deals every day, talking with brokers, reading market reports, all of that kind of stuff, and he'll find a deal. Ultimately, we like it. We'll go tour that property along with our property manager, our loan broker, as well as the real estate broker that has the listing, kind of take a look at some units, walk the property, see what the deferred maintenance is like, how much do we have to spend on this property to fix it up? What are we going to do on the interiors of these? Then we'll go do our, I would say, high level due diligence, kind of like underwriting the deal. Then we'll say, okay, here's what we can get to. We'll figure out is this purchase price going to work for the seller? Negotiate. The PSA, get it under contract. Right when we have it under contract, typically you have about 45 to 60 days to get all the financing done, get the equity, do our deep due diligence where we go walk every single unit, look at all the leases, look at all the bills, look at all the contracts that they have, all of that kind of stuff. And then meanwhile, we're also doing the equity raise. And then we close on the property. So, you get under first, under contract first, then you raise the equity. But we're all talking to our investors, so we know always typically how much we can raise.

Eric Jorgenson: And so, you just have a very crazy like six to eight weeks there. You're raising all the money and finding all the hairballs all at the same time.

Rohun Jauhar: Yeah, exactly. We've got a relatively efficient process kind of. So, right when we get it under contract, we send out- we've already talked with the seller early on of like, hey, we want to get on site right after we sign the contract. Right after we have it, what we'll do is we'll send a one pager that goes to the seller, which says like here's who's going to be on site. Here's how many people will be there. Here's the amount of people we need with us to escort us into each unit. Here's the roofs we need. We're going to be getting on all the roofs. Like where's the access? Is it through the building or over here? We're going to put cameras through pipes on this date. So, we lay it all out in a schedule, so it's super organized for sellers to be able to work with us. And then we get that, like unit walks and all of that stuff done within like the first three days after having it under contract typically. So, after that, I know like, okay, this property, it is given to us as presented, like great, no risks. And then after that, there'll be certain follow ups, like, hey, we saw that this lease does $1,100, but on the rent roll, it says $1,200. Can you help us explain the difference? Those little kinds of things. But yeah, that's pretty much how it works.

Eric Jorgenson: That's awesome. I feel like there's a- This is, I think, where I want to spend most of the meat of the time because I feel like the way you guys have built your company is- I don't know how unique it is in the real estate world, but it seems at least from the outside to be incredibly efficient and well run. But I think a good starting point is you've got two partners. And how did you guys come together? How did you find each other? And when did it start? And then I want to get into some of the operational stuff that you guys do, which is super cool.

Rohun Jauhar: Yeah, totally. I do think it is unique in the real estate world with how we operate. I don't think it's in a very traditional sense, at least how we run the kind of holding company. But yeah, my two partners are Sapan and Puja who are both brother and sister. So, Sapan leads our underwriting and acquisitions, and then Puja leads our asset management, which is really just overseeing the property management company, making sure our business plan is being executed on the property, so on and so forth. Both just really good people, have great values, have extremely high integrity. We have just very deep trust with each other. And so, we know things are going to get done. We know that they're going to get done at a very high level, super helpful. I met them when I was doing the apprenticeship for my uncle. I had met both of them because they were doing deals as well, and my uncle had done a deal with them. And so, then we started doing JV deals together, me alongside them. And then, over time, we just realized, hey, we should all just do this under one umbrella because we work really good together. We all seem to want to build the same type of company. We all have very shared kind of values. And then we each have very complementary strengths to each other that would allow us to run a really successful business. And so that's how we came together. And our strategy was the same from when we started individually, and it's been the same as we've come under one umbrella.

Eric Jorgenson: That's magic. I love those kind of organic stories of like we met, we did one thing together, then we started sort of serially doing stuff together and then it just kind of- it's easy to trust that. You don’t spend a lot of time losing sleep over those things. I remembered a few sort of small detail questions to go back to. Did your uncle pay you for your apprenticeship?

Rohun Jauhar: He gave me like a small amount for one of the deals that we closed. I told him though, at the very beginning, I don't want to make any money from this. Like I'm just here to learn. So, I don't need money. To his credit, he still gave me a little bit for helping to close the deal.

Eric Jorgenson: That's awesome. That's an underrated approach, I think, if people can do it, to spend a chapter of your career very intentionally apprenticing and absorbing and doing work in sort of a volunteer capacity but expecting or trying to earn your keep in knowledge, not being shy about demanding education in exchange for all your hard work.

Rohun Jauhar: Totally. That's a huge point, I think. Like, you can do anything- yeah, I don’t know, it's kind of cliche, but you can do anything you want. Like, no one's holding you back from anything. I used that as an opportunity because I had saved money before because I was like, hey, this working thing is not going to work out for me, so I have to save money. Like when I first went to work at Facebook, my now wife who was my girlfriend at the time, we were long distance. So, I just lived in East Palo Alto at first, which is not Palo Alto. Like it's not nice. And I had a house with like five roommates, and I ate all of my meals at Facebook. I used the gym at Facebook. I saved like everything I could all to be able to do an apprenticeship. And I've talked to people because I'm pretty vocal about the apprenticeship model, and a lot of people have said like, yeah, here's what I did to go get my foot in the door. And I think it's super underrated. And if people can put themselves in a position to do that, you can connect with virtually anyone that you want to connect with.

Eric Jorgenson: Especially I think in real estate where there's not always obvious entry level roles at these firms. And when we get into kind of how your company is constructed, I feel like that'll get a little more obvious. The other detailed question I think is interesting, you said it wouldn't work with an 8% to your property manager's expense ratio with some of the smaller properties that you looked at when you were underwriting. What do you get with some of those larger multifamily?

Rohun Jauhar: Yeah, it depends on the number of units and the revenue it's generating. But generally speaking, let's say, for something that's like 300 units, maybe you're paying about 2.5% of total revenue. And then, 200 units, maybe it's 3 to 3.5%, something like that. So, it's not that it doesn't work on the smaller properties. Like it works, but just your margins are much thinner because you have to hit an absolute value dollar amount to make it worth it for the property management company typically.

Eric Jorgenson: Yeah, I mean, I think I pay- I'm not sure what the effective rate is. So, I have just one single family rental, and I basically pay 10% plus first month for placement. So, the effective rate, depending on turnover, is probably 12 to 15%, depending on how long a tenant stays. So, I heard you talking about that. I was like, oh, that makes a ton of sense. And I don't think I'm getting like taken advantage of by the property manager by any means. It's just the cost structure for them is much worse to manage individual properties. So that makes a ton of sense. It's also – I've heard you talk about your property manager before – like really easy to get taken advantage of in that relationship. And then there's a lot of, especially on the smaller side, I think a lot of kind of shady practice in property managers. So, that is a healthy fear that I have of, especially in the single-family market, especially if you're not local to that neighborhood, just your underbelly is exposed.

Rohun Jauhar: Yeah, totally. There's a lot of just like stuff that can happen I think that can just- it's too tough to get caught. Regardless of size of property, there's just so many things that are happening that you don't know. Like it could be so easy for a property manager to be like- I'll be like, okay, we need landscaping. Let's get three bids, figure out who's the best. It could be super easy for a property manager to just get a kickback from a landscaper to be like, hey yeah, you come in at this price, you give me a little bit of this off the top and we'll go with you or something. And I'm sure that- I mean, I know these types of things have happened. However, with the property management company that we use, we made a very deliberate decision to be like we're not going to do property management. We're going to outsource this to the best because we believe our strengths are focused on these other areas. And so, we use this company called Bell Partners. They're one of the largest multifamily property managers in the nation. They've been around for 45 years. They manage about 70,000 units. And they're just like a top tier, best in class team, particularly in the markets that we play in which we have experience with them, just an amazing group of people. They've built great processes, great systems, and you can trust them. So, yeah, that's been amazing.

Eric Jorgenson: So, okay, let's talk about some of the structure of your firm. So, what were the things you were trying to or the vision for how you were going to build your company when you guys set out and first started? Has it changed over time? Like, how did you decide- It sounded like you were engineering for freedom, at least on a personal level. Because you knew what kind of deals you wanted to do. You knew who you wanted to work with. What are all the decisions that kind of followed on from that?

Rohun Jauhar: Yeah, so it's interesting. It's probably taken a couple different paths. So, when we first started, my intention was- our intention was like let's build the biggest real estate private equity firm that we can. And I think we were just a little bit naive, but we just started executing and winning deals and stuff like that. And then we started thinking about like, okay, if we want to do this and be one of those big ones, we have to go and primarily our investors cannot be the type of investors we have right now. It needs to be people that are like institutional capital, like Blackstone and Carlisle, those people need to be our investors where they're putting up like 9 to 10 figures with us and we're going to buy deals. However, after talking to enough people that went that route, what I realized is that if you do that, you have no freedom. All of your control is given up. A lot of the mandates come from them, buy sell decisions, budgets, refinancings, just really everything. And so, building that type of business is very different from the intention of what we wanted our lives to be like. And so, what we kind of- and so we didn't go down that path, and kind of what we realized is that, okay, it's best to have the types of investors that we do. You also don't have kind of like investor concentration risk because you have a lot more investors. It's a little bit more fun because you are able to connect with real people. I mean, the best thing about our investors is that I meet people that are well ahead of me in terms of career success, building large and amazing families and things like that and just knowing life much more than I do and just like teaching me a bunch. And that's the best thing about some of these investors. So, we went down that route, and then kind of we took inspiration from Berkshire, but particularly how they have their head office, which is just a handful of people like Charlie, Warren, Ted, Ajit Jain, and then I think Greg Abel, five main people and a couple of those running businesses and then everybody else is just like admin assistance pretty much. And so, we just took that same model to say we don't need a lot of people in the type of business that we're building. What we need is maybe three to five, maybe like three to four fulltime employees, and then besides that, just like assistants/VAs. And that's how we've went about building the business because it's a very process and systems-oriented business.

Eric Jorgenson: Was there a north star that you were looking for as far as like- we're dancing around leverage as the topic, which I think- and I never want to impose language. So, I want to kind of pull out of you how you were thinking about this at the time. Are you like, oh, scale isn't great, we'd rather go for efficiency, we'd rather go for scale per headcount, we'd rather-? Or just like set a hard cap on headcount and then scale to as much sort of AUM or portfolio size as you can. What was the new framework or set of constraints that you put on your growth once you realized you weren't just kind of nakedly pursuing scale?

Rohun Jauhar: I think the way that we- in the beginning, I wouldn't give us too much credit. Like when we first started, it was just like, hey, we need to buy properties and they need to be good properties. And we need to execute on these business plans. In the beginning, I understood financial leverage really well because I was like, oh, you take debt on these properties. And because of that, you're able to juice your equity and cash on cash return percentages. So that's great. And you have to be comfortable with leverage and doing certain things, like having mortgage reserves, buying interest rate caps, stuff like that, so you don't get blown out by leverage. So, I understood financial leverage very clearly. As we started building the business and implementing processes and systems and SOPs, what I didn't realize was that all of those things are building leverage where every time I'm going to go do something that I know either can be automated, is going to need to be repeated, or I don't like doing, that can be either automated, eliminated, or delegated, and you have to figure out which one is which. And so, that's kind of how over time then I just started pursuing that. I wouldn't say we necessarily put any constraints. We just said like here's the lane we want to play in, which is we want to make money for people that we like and that we admire. We want to go buy property, these multifamily properties 100 to 400 units, really only in like two markets, like one to two markets. And we want to just have a very simple business model. If we buy zero deals in a year, that's not a failure or a success because that's just what happened in the market. If we buy one deal a year, two deals a year, that's great. But we just want to be patient, buy these great deals, and stuff like that. So, I wouldn't even say we put constraints on it. It was just like let's build this business, let's keep it simple, let's build these processes and systems. Over time, after I read kind of Naval’s like how to get rich without getting lucky tweet storm, I read your book, then I started realizing more of these different forms of leverage. I mean, it's probably one of the reasons I got active on Twitter. As we built these things into the business, I've realized like, oh, this is leverage. This isn't just processes and freeing up your time. Like this is leverage. And so, it was just a different reframing for me over time after we did these things.

Eric Jorgenson: I keep hearing like different books and I feel like delegate, eliminate, automate, that's the Tim Ferriss thing, like The 4 Hour Work Week, which was just like OG. When did you read that? Do you remember?

Rohun Jauhar: I read it while I was at Facebook. And to my point earlier, people can put meetings on your calendar and you have to show up, that week, I just started declining meetings and like not showing up to things. And I realized like, oh yeah, this doesn't work if you're like typically a normal type of employee, even though he said it could work and you have to do it gradually and you can be a remote work employee. I think I went like from zero to a hundred, like way too quick. And people were like, what are you doing? This is not allowed.

Eric Jorgenson: Was there anything that you did bring from Facebook or your broader tech experience into the real estate industry?

Rohun Jauhar: Yeah. Okay, so first is from GE actually, which was like, when I first started, everything was just SOPs. Like, you're in this entry level rotational program, you're switching every six months. And so, when you go into a role, whoever was in the role before you, they have created like a hundred-page standard operating procedure, which is like here's all the Excel things you do. Here's where you click the button to do this, this, and this. And so, I remember that and I'm like, wow, that's a great way to just like train anybody. Like anyone can go do this. Like, I got a college degree, I don't need to be doing this. Like I should outsource this. But that's one piece of it. I think, broadly working in tech, I don't know if it was from Facebook in particular, but I think just working in tech, you get more exposure to different types of things like all these skills I learned like copywriting, writing online, how Facebook ads work, how virality works, all of those kinds of things. There was probably like habit stacking or talent stacking where I've applied those over time to our real estate business. An example is probably Twitter, where in the beginning, we just bought properties. Our investors were our Indian uncles and the word of mouth that would grow from their friends. And then I started writing on Twitter about real estate and what we do. When I joined or when I started getting active, rather, I think on real estate Twitter, there was like, I felt like there was five of us. And then it was fun. We were just talking about real estate. And then over time, I realized, oh wow, a lot of what I know people don't know, and they want to hear more about it and learn more about it. And a lot of the skills I probably learned, like writing online, virality, so on and so forth have been helpful on Twitter and meeting new people and things like that.

Eric Jorgenson: Yeah, you do a bunch of great threads about your acquisitions process, your VA process. The line you wrote stuck in my head, which I'm sure it was very designed to do – if you make over 100K a year, you should have a personal assistant. I don't know how arbitrary of a call that was, but it was a perfect way to- I think that was like the hook line on the big thread of like everything that you learned working with virtual assistants and EAs and stuff.

Rohun Jauhar: Yeah, totally. That thread, I feel like once a week or at least once every couple weeks or something like that, I'll get tagged by something random, which is like someone asks a question like, oh, how do you work with virtual assistants? And someone's like, oh, @Rohun has a good thread about this or something like this. And I'm like, oh wow, this is the leverage that you and Naval talked about that I'm now seeing here where it just continues to live on and live on, like a year later, whatever it was.

Eric Jorgenson: The benefit of that long tail of good content, especially if it's evergreen is really, really incredible. They just keep paying dividends. And it's not like tweets have royalties or anything, but they continue to accumulate or continue to be like signposts, I guess, towards sort of the rest of your work, which I'm sure for you guys helps bring in talent and deals and investors and stuff, all kinds of things. I forgot to tell you earlier, I'm having a Vernors in honor of our mutual Michigan roots.

Rohun Jauhar: Nice. I love it.

Eric Jorgenson: Get a theme going. When did you start bringing in virtual assistance and EAs into the business, and what are some of the things that you delegate or automate? I think the piece that I brought from tech that I'm sure you did too is like you just work close enough to developers and you see them have like pure hatred for any repetitive task and how they turn to like all kinds of SaaS tools more often than not, like they don't always code up a solution, but just being really handy with Zapier or web hooks or APIs and things. You're like, oh shit, that is easy. Or at least, it's easy for you. So yeah, all of those kind of things I think are a really helpful background, especially when you come into a real estate industry that's not nearly as tech savvy or tech native, I suppose.

Rohun Jauhar: Yeah, totally. I think that's a good point on Zapier. Like we use that so often with a lot of the processes that we have, whether it's with gathering investor commitments or other types of things where things just happen automatically. And that's an example where it's like, hey, we can go, instead of doing this process, we'll just automate it. It needs to be done, we'll automate it. It's better than delegating it because it can't be screwed up, I mean, unless it's something in like the code changes. But yeah, that's super helpful. That's one thing I learned from there. We implemented, started using VAs from day one because before, when I was at Facebook is when I started like using the VAs after I read 4-Hour Work Week. And it took me a while. Like at first, it was a complete failure. I wasn't good at giving directions. I don't think I was good at interviewing and finding the right VAs. Sometimes I felt like I was just making up work just for this VA where it's like I wouldn't do this normally. Like, why am I having this other person do this? But those are the mistakes and failures that you learn from. But when we did it for our business, we just used it from day one, and it goes with a bunch of the processes that we use. So, for example, we make distributions to our investors on a quarterly basis. Now we do that with a full-time employee that goes through and makes the distributions through the bank account. But the VA is the one who reflects that in the investor portal, where they'll put, hey, the distribution has been processed and so on and so forth. We write investor updates on a monthly basis. That's something that if you think about it, it's not just writing it. You can write it, you write it in Google Docs or whatever, but then after that, you have to format it. You have to put the nice pictures. You have to make sure the pictures align. You have to convert it to PDF. You have to go to the portal, click the buttons, upload it. The VA does all of that. We just write it. Here's the link. They take care of all of that. And you save yourself-

Eric Jorgenson: It’s on a per property basis, right, because you're syndicating all of these individually?

Rohun Jauhar: Exactly. Per property basis. So you save yourself, let's say, like five to seven minutes on each property that the VA does all of that stuff for you. And then it's done on a monthly basis. We'll do things like when we're doing a raise on a deal, and we confirm investment amounts and wires, a VA will have read-only access to like that specific account. They're able to email the person, hey, your wire has been confirmed. That would be so much work for me or someone to be doing on a daily basis. We check the bank account a couple times a day during the raise. And then over time, they just start getting more things, like they start handling your email inbox, they manage your calendar. They're kind of like a shield between you and what's the inbound that's coming at you. And so, it's super helpful. You just stop worrying about all of these little things that happen in life, even the personal stuff, like my umbrella insurance needed to be renewed. I didn't even know that. I didn't even know that it was renewed. I just know that my one VA, she did it, and then she told me after. And so, it's all of those things that just are off your plate. And you don't need to be thinking about these things because they're not strategic decisions, and you don't need to be doing these things because they're normally a waste of time.

Eric Jorgenson: Is there anything that you consider too small to be automated or to be delegated?

Rohun Jauhar: Let me start with this: So, I have a framework of how I think about what should be automated or delegated to save time. And it's like a formula. It's time of task times frequency that it occurs. So, if you're doing something that takes you one minute, and you do it on a yearly basis, okay, then like even I would consider actually delegating that, but maybe I don't need to. Just so, let's say it's something I don't like, just so I never have to worry about it again. So, for the rest of my life, until I'm whatever years old, I don't have to ever do this again. So, but yeah, I honestly do try to delegate like every single thing that is repeatable or that I don't like doing. And yeah, that's kind of how I think about it. I think more though important is like what types of things can be eliminated. I think a lot of things people do and I've done in the past, I’m trying to think of some examples, but I was just like, why are we doing this? Like, we should just stop doing this. This doesn't matter. Let's just eliminate it. We're only doing it because we've been doing it; like this should stop now. And so, we just eliminate it, and we don't waste anyone's time doing that.

Eric Jorgenson: Which is just the beauty of simplicity. You're like, ah, it is such a relief as soon as you- that is the best thing, which is just deleting shit off your calendar now that you can get away with it, it has to just feel like pure, pure bliss.

Rohun Jauhar: Totally. Sunday night ritual – go through and just delete things off the calendar.

Eric Jorgenson: Yes. Delete, delete, punt, reschedule. Oh yes, love this. Love those empty days. Is there anything else that's like out of the box that you have your EA do either personally or-? I love- I've done a few episodes. I just did one with some of the guys at Athena. And just I love how far they have pushed this into either insanely like minutia or insanely big projects that they have EAs have. Because I think some people a lot of times are surprised by what they can hand off or the new things that become possible. Like the complexity of system that you would never engineer for yourself, but you can delegate the creation of a system to the EA and sort of let the process improvement compound by making the improvement a delegation in itself.

Rohun Jauhar: Yeah, I just pulled up my list here. Like it's everything, dude. It's like downloading books for Rohun from Amazon to his Kindle. So, let's say there's a tweet and it's like here's my 10 favorite books and I just see it and I'm like, oh, this is awesome, I'll just click the link, share to her, and the VA will download all the books to my Kindle. So, it's something even as simple as that, where that thing probably happens once a week where I see a book on Twitter and I want to go do it. Like email hotels to get upgraded rooms.

Eric Jorgenson: Does that work?

Rohun Jauhar: Yeah, sometimes. It depends. It depends on the hotel. Yeah, just honestly, everything. Like everything that you- well, my friend Ayman said this thing-

Eric Jorgenson: Is that Ayman Al-Abdullah from AppSumo?

Rohun Jauhar: Yeah, yeah, yeah. He was the CEO of AppSumo. He grew it from like a crazy amount, like $3 million to like a hundred million dollars in lifetime revenue, I think, which is amazing. He's a great operator. He said this one thing, which was like, for certain types of businesses, kind of what you want out of life, you should think about how can I run this business from my phone. So now pretty much every time I- so now I try to do that as much as possible. And whenever I have to go to my computer to do something, I think about can I take a Loom video for this so this can be a process that gets delegated, or is this something I can automate? And if so, let me just take the additional 15 to 20 minutes or whatever right now to do that. And if you just keep doing that over time, it's going to compound over time. In the beginning, when you get the VA, I think it's tough. You spend a lot of time creating these systems, but over time, it really pays off.

Eric Jorgenson: Did you have to fight through that sort of like, ugh, this could be a 2-minute task or a 30 minute training session, but just beating yourself into making those or inspiring yourself, I suppose, probably more positively, into making those investments so that like training yourself to think in that delayed gratification sort of way?

Rohun Jauhar: Yeah, I've tried. I mean, yeah, it happens. It even happens now where I'm saying I should just take the 20 minutes to do it. And I'm like, I just don't want to do that at all. But you know it's good for you. And so, what I've realized is, when I do have the motivation then, to do it. When you see the video and the video’s at like 17 minutes or whatever it might be, you're like, okay, this wasn't that bad. Like, why am I complaining about this? I should just always do this. So, I don't have a secret other than you've just got to do it. And then once you're done with that, you're so happy.

Eric Jorgenson: Loom’s a great tool because it's like you're going to do it anyway. You may as well take a video of it and talk through it. And that's really the only difference. And also, I mean, you're at the point now- how many VAs work at your company?

Rohun Jauhar: We have three full-time VAs.

Eric Jorgenson: Three full-time VAs. And then, do you have local sort of help as well? I don’t know how you-

Rohun Jauhar: Yeah, but that's kind of on a part-time basis. So, some of it will be for work, but actually most of that stuff is personal. I'm going to sound super lazy right now-

Eric Jorgenson: Yes, the more embarrassing the delegation, the better of a story it is, and the more inspiring to the rest of us. So yes, please bring it on.

Rohun Jauhar: So yeah, this will sound ridiculous. But we get so many packages from Amazon, and we don't cut the boxes down after. We just throw it in the garage or something. And so, I'll have someone come to cut down all of those boxes and then put them in garbage bags, just get them ready for trash and stuff like that. So, that's something I probably- I'd never done before. And then, because I started getting into delegation, those kinds of things, and really taking it to like, there's certain things I never want to do and this is- and we should just cut these boxes down after, but we don't. And so, it's fine. Someone will come, they'll do it, we'll pay them. I’m giving someone a job and some money, so that's good. They'll like take my car to the car wash, which is great. They'll handle certain types of admin things like the DMV. We needed to get like a new license plate. So, they just went there. I never want to go to the DMV again. Like it's so, so terrible.

Eric Jorgenson: Can you outsource that?

Rohun Jauhar: Yeah. So what I did was I sent him, and I was like, hey, if there's any problems, just call me. There was a problem. They were like, sir, he can't just show up with your information, he has to sign a power of attorney form. And they're like, you have to sign it. And I was like, oh, okay. Again, I just put him back on the phone. So, he gets on the phone, and I was like, okay, just go in the parking lot, fill out the form, sign my name, and just go back in there. And he's like, all right, cool. And so, yeah, just like a power of attorney for this, not broad, but just for this one particular task, and then he was able to do that, to renew a license plate or get a new license plate or something.

Eric Jorgenson: I bought my first car at CarMax, and when you're checking out, they do limited power of attorney so that they can go to the DMV and just have your plate mailed to you. And it's such an awesome addition to the service, actually. It really makes it seem super easy. I totally forget that that's a thing that you can do or like send somebody to. So this is magic. Like that is a really, that is an awesome story. Who are these- like, is this like TaskRabbit? Are you going through like Airtasker platforms? Are you hiring each of these tasks individually? Or is this like one or a few people that you kind of come back to over time?

Rohun Jauhar: Yeah, so this particular person, he reached out to me on Twitter last summer, and he was like, hey, I want to work- Like I had an internship or it fell through, or maybe he was just late on getting one or something. He's like, I want to work for you. I was like, hey, we don't really have any work right now. But one of the things I wanted to do is build a course to teach people about real estate and help them buy their first property or whatever. And so, I was like, I can get into this, into Maven, which is like a course type of platform, and they'll teach you. Did you use Maven?

Eric Jorgenson: I’ve talked to Goggin about it when I was working on the leverage course. It wasn't a fit. His is a cohort based like prescheduled courses only, and ours is kind of evergreen, but I think it's a really cool platform. I’ve got some buddies that teach courses on Maven.

Rohun Jauhar: So yeah, we did that, and they had like a four week thing, which is like here's how you build a course. So I was like, why don't you come, you can just attend these sessions. I'll tell you like everything. We'll meet for like one hour each week, just come to my house, we'll talk through it. But you'll build the slides and everything like that. I'll just do the final review and make any changes and stuff like that. So, he did that. He did an excellent job. I forget what we had, we didn't have a lot of people, maybe like 10 to 20 people, something like that. And then we did the course. I paid him for it. He was happy. He got a good type of like scrappy internship experience, let's say. He got to learn a little bit of stuff about real estate. And then, now this year, he has an internship at Dell. But I was like, I need some help around the house and stuff. I'll just give you cash, like for beer money. He's like, yeah, sure, I'll come on over. I'll do whatever you want. And so now he comes over, handles stuff and everything like that.

Eric Jorgenson: Cool. So, it’s kind of like a trusted relationship kind of deal. And next summer, he'll be like underwriting real estate deals for you, and he'll be self-apprenticing.

Rohun Jauhar: Yeah, exactly. That's what he doesn't realize is I'm going to hire him after he graduates.

Eric Jorgenson: Is there anything in your business that cannot get automated or delegated that is either like precious to you or stubbornly resisting your attempts to eliminate, automate, or delegate?

Rohun Jauhar: Yeah. I mean, one of the biggest things for me, at least, and kind of how I think about what I focus on in the business is really like our investor inquiries. So, for example, if an investor emails and says like, hey, my distribution does not make sense in the portal or something like that, the VA can handle that because that's really just like back-office stuff. But if the investor says like, hey, I want to have a conversation, kind of just want to understand what's going on in the real estate market, so on, so forth, blah, blah, blah, whether it's an email or a call, I'm handling that. But what I've done is kind of like delegate my email inbox, where if it's a high priority person, one of our investors, one of our partners, something like that, I'll just get a message from the VA immediately, like, hey, this person emailed you, and I can email them back like within a minute. Versus needing to always have my email inbox up on a screen, seeing everything that comes through, and deleting, replying, whatever, that helps. So that's one piece of it. From an underwriting and acquisition standpoint, we could probably never- we can automate some of it, but actually getting into the details, doing the thorough underwriting, that needs to be done by someone who knows what they're doing. You couldn't really have a VA for that. And then from an asset management standpoint, again, you can automate, you can delegate some of the back-office things, some of the consolidation of reports, some of the presentation of data, so on and so forth, but really overseeing the property manager, make sure they're executing, that needs to be done by a person that has specific expertise in that. So, there's certain, I would say, core elements of our business, where we're the best at these certain things that we could not really automate or delegate. But we can automate or delegate certain parts of that stack.

Eric Jorgenson: Yeah, it's amazing how much, especially when you start from doing it all yourself, how much of modern white-collar work is just like moving information between portals or formats or units or media or PDFs or inboxes or whatever. And it's incredible how much value can be created in your own businesses by having people who do that kind of stuff, according to formulas and systems and in a timely way and how much time that really frees up. None of it's hard, but there's just so much of it and so much more of it that you can do when you have a system for doing it. Like there's just a bunch of extra value that can be created. I feel like the inbox delegation is an interesting example. So, instead of having email notifications- like you probably have email notifications on your phone off and you rarely open your inbox except that 4-Hour Work Week batching thing. But there are emergencies, and if there is one, you can rest easy because you know your VA is checking that and will text you. But it's screening the dopamine roller coaster of always looking at your email and always seeing some annoying new thing that comes in or triaging everything yourself. But I'm sure the value to your life of not having email notifications on, but like, that elimination of that sort of shitty stimulus that you've just turned into a little system. I imagine most people undervalue how much happiness is on the other side of that.

Rohun Jauhar: Yeah, totally. Some people would say, like one argument could be, hey, they're going to ping you that you got an email from someone anyways. So why don't you just keep the email inbox up and just look, and then when you do see it, but it's like, no, but then I'm looking at every one, every junk mail that comes in, every email from someone. And then, I'm constantly getting distracted. Another example of this is let's say that Amazon book thing. So let's say I wake up in the morning and I'm like, okay, let's say there's three things. I saw on Twitter this Amazon book I want to buy or this book or whatever I want to buy. I need to order some kind of vitamins from Amazon. And then I need to order, I get like a coffee subscription. I have to get this coffee. I have to reorder it. And then, I need to make a tee time to go golf or something like that. All of those things are like two to four different apps I need to go in, like five buttons each I need to click and stuff like that versus me literally just pulling up Slack, like knowing those things and being like, hey, order coffee, order this vitamin, book tee time for X time, add this book to Amazon. And then, I'm done and I just go on with my day. So, it's kind of like something where it's like, look, I just have to only use one app or one screen, which is just Slack, and I just put everything in here, and I don't have to go to all these multiple sources. It seems small, but over time, that adds up. You're not distracted by all these other areas. Your focus is really just on one thing, which is like this person is my kind of barrel that's allowing me to take my thoughts, get things done for me, and allowing me to move on to some of like the more high value things that are important for me.

Eric Jorgenson: Yeah, that's an interesting piece too. What do you fill your time with when you are able to offload some of these things? Something we talk about in the course all the time is do the things only you can do in a work context, but also being sure that you use that time well, whether for productivity or just enjoyment. So, what are some of the things that you've- or I guess how has your life maybe changed now that you've made such an investment in these?

Rohun Jauhar: Yeah, I think it depends based on the stage of the business that we're in as well as exactly what is the priorities of that time. So, what I mean by that is the stage of the business early on, when we had VAs, I would just spend all my other time kind of it would be looking at deals, we would be talking to new investors, making sure current investors understand what's going on, all of that kind of stuff. So, all of my focus was directed on other high value areas of the business, primarily around finding new deals along with Sapan and talking with investors. As time has went on, and let's say probably over the past 18 months, there's not a lot of deals out there. So, we're just like super patient. We have like a really strong base and large base of investors, so we don't really need to talk to too many new investors, although, we still make time for that. And so, a lot of my time now is just spent, honestly, just enjoying life. We have a 19-month-old daughter, so spending a lot of time with her, spending time with my wife. I'll read a lot. I probably read a lot more now than I've done previously in the early days of the business. Some of this is like some business books, but a lot of history, really just anything that catches my interest. I'll play a lot of golf, things like that. So yeah, I'll do things that just allow me to enjoy life and be happy. Because I felt like one piece of it was like, hey, don't create this business so you just like work all the time. You created this business because you wanted the freedom. So now it's tough to be like don't keep moving the goal posts and don't keep working when you like don't necessarily have to. Like take some time to sit back and just like enjoy life because you need to be happy. And so, I always try to do that.

Eric Jorgenson: Yeah. You don't want to make your own Facebook trap. And I'm sure we both have the same sort of scrappy Midwestern work ethic. And so, part of me doesn't allow myself to enjoy things unless I have done my 18 hours of work that day, and the other somewhat more enlightened part of me knows that that is an insane thing to say and feel and live.

Rohun Jauhar: Totally. Yeah, there's times where I'll go golfing and about like two hours in, maybe even one hour in, I'm just like, man, should I be doing this right now? Like, should I be working right now? I'll like check Slack and nothing's happening. I'll check my email, like nothing's happening. And I'm like, okay, but I should be doing something and not this. So, it's really weird to kind of have this mindset shift.

Eric Jorgenson: And how do you balance that with your partners? Like, I struggle with that even sort of being my own partner and owner and solo in most of the things that I do, the fund aside, but there's kind of an understanding that that's part-time. Like having partners in a full-time business here, I imagine that's even a little harder to navigate. Do you guys have- how does that work between you?

Rohun Jauhar: We each have kind of very structured roles and responsibilities. So, we're each pretty much responsible for one area of the business. And so, for example, let's say that we weren't able to raise money on deals or something like that. And I'm out golfing and stuff. Well then, it's like, Rohun, what are you doing? Like you're not spending your time appropriately. And then a very similar instance in the other two cases for where they live. So, we really do try to focus specifically on outcomes and getting things done. Hey, if you're getting your stuff done, if the outcomes are there, then I don't really care how you're managing it. All of us have kids. And so, we have like- We can empathize with each other. Like, you want to spend your evenings with your kids. You don't want to spend your evening on work and stuff like that. You don't want to spend your weekends working. You want to spend it with your kids. I would say before I had a kid, I would work a lot, and I don't know if I had the most empathy. But again, my partners, they always were executing well, they get stuff done at a high level. We were selling a deal the other week, and Puja was up until like midnight or 2:00 AM like two nights in a row trying to get stuff done. Now she didn't have to be, she could just be like, hey, it's okay, this will get delayed a little bit. But she was doing that because she's dedicated to the business. So, I think it all just comes down to having the right partners that you know they have their own personal responsibility, they have high standards, they're just going to get shit done, and you can kind of rely on them. And yeah, that's pretty much how I run the business. We haven't had any problems. And we do certain things; we'll implement things. We do a Monday partner meeting, go over the priorities for the week, how things are going, stuff like that. Two times a year max, maybe one time a year, we'll do 360 feedback. So, we'll sit down. Two of us will sit down, we'll do what the third partner's strengths are, their weaknesses, where they need to get better, things like that. And then we'll present it to that person. And we trust each other, so we know that we can be very direct with each other on what's going well, what's holding us back, where they need to improve. So, we've put in those kinds of mechanisms to help us be a high functioning team.

Eric Jorgenson: That's awesome. I want to kind of ask you to compare all of the places that you've worked in your career because I don't know too many people who have such a variety. Do I have it right that- I don’t know if it's your first job, but some early job, you worked at McDonald's?

Rohun Jauhar: Yeah, that was my first job.

Eric Jorgenson: Okay, first job at McDonald's, then GE, Facebook, and now starting your own company, like that is a massive sort of breadth of experiences and things. How do you compare the pressures and the strains and the stress and the work that you do now as an owner of your own business, but be able to- but in a very high leverage position versus sort of the workload or the stress or the strain of something that is like hectic but well organized like McDonald's or like super high pressure but open like Facebook? Just, that's a very interesting sort of set of things to contrast and I imagine are easy and challenging in very different ways.

Rohun Jauhar: Yeah, definitely. McDonald's was a very stressful job. I was so bad at the menu, at doing the screen, and people are like firing their order at you so quickly. And I'm like, hey, my fingers don't move that fast, so you got to slow down. So, I did a couple- like I worked at Max and Irma's, which was in Michigan. I don't know like how many other places that is. And I was a carry out boy. And they gave - I worked there for one week, and they gave like $250 in gift cards to people because I had messed up so many orders. And so, I think working in food is just like not for me. I don't deal well with that type of speed. So, that was definitely interesting. Those taught me though, like, hey, you got to take life seriously because like I don't want to work, I don't want to work here. So, when you go to college, you got to figure your shit out and you got to figure out how you can go work in an environment that you want to work at. GE was good. I think when I first started, I remember thinking to myself, okay, so I'm going to join as like an analyst and I'm going to be advising the CFO on how to make investment decisions. Like, how do I know how to do that? And then my first day, I realized, oh no, you're just in Excel all day and doing these like data entry and improving these Excel processes and data gathering and stuff like that. But really GE did teach me kind of like how to grow up, how to be an adult, how to communicate with all different levels of an organization, whether it's entry level, mid-level managers, and then as I went on, executives, CEOs, boards, things like that. So that was a really, really good experience that I had early on to understand how do you really operate at a very high level, understand details of things, anticipate questions, discuss things with people that are on a world leader type level. So that was a really good experience as well as be the person, like at some point, be the person who's making decisions for people that are like 30 to 40 years older than you. Like, why should they respect your opinion? So that was really good. Going to Facebook, I remember when I went to go interview, I went on the campus and I was like, I told my wife, this is the Disney world for adults, I think. Because I remember walking in and there's all these people that look like they're 20 years old, eating ice cream. And I was like, where am I?

Eric Jorgenson: A personal massager just walking behind them wherever they go.

Rohun Jauhar: Yeah, exactly. So, that was good. That was a high-pressure environment. I would say it was probably a more open culture, where GE where for most people, at GE, you needed to go through certain bureaucratic steps to talk to someone. Maybe at Facebook, it was like, oh no, the GM of this business or whatever sits like three desks down for me, so I can just go talk to them. But it was still very kind of like a professional organization. They moved really fast. It was like some of the smartest, very smart, some of the smartest people I've ever met. And then now at JT Capital, it was just like, when we first started, it was like we just have to make this thing work. I did the fear setting exercise by Tim Ferriss, so that I think helped really prepare me.

Eric Jorgenson: Imagining worst case scenarios and how you might mitigate them?

Rohun Jauhar: Yeah. It's like, yeah, exactly. Anyone who's thinking about, who's listening who is thinking about taking the leap or doing their own thing or something like that, do that, or making a major life decision, do that exercise because that is super impactful. And yeah, it's just like a different kind of pressure now. Like now your name is on the line. You are responsible for people's money. You're responsible for your own money in a way that you haven't been before. You don't get a paycheck every two weeks – not how it works. It's just been a- the work is so much different. Like at Facebook, at GE, whatever, you're executing, you're in the details of doing the work product and doing things versus now it's so much more like one decision or one action that you take for the year will have much more of an impact on everything else that you do in the year. If I look at the past few years, like two decisions I make each year are the ones that justify whether you're going to have a really good year or not a great year. And so, that's pretty much what I take away from kind of each type of job.

Eric Jorgenson: That's very interesting. Okay, a few closing questions for you, just to two here, and one you've segued into beautifully. What was the single biggest inflection point of your career?

Rohun Jauhar: So, when I was at Facebook, and there were a couple things that happened that ultimately made me want to go start my own thing, but we had to put this financial model together. And we had put it together one year, and we put it together in this way to show the impact of what something would be. And that's what we did the previous year. This year, I was like, hey, I found a quicker way to do it. And it's pretty much- it gets us to the same type of answer, and the logic is different, but we're getting there. And so, I did that and my boss at the time was like, I explained it to him, walked him through it. And he was like, yeah, that's great and everything, but we should just go do it back like the way we did before. And I was like, yeah, but I did that high level of the way we did before, and I'm telling you, it's the same answer. And he's like- And so, we're going back and forth for a little bit. And then he is like, okay, look like, are you just going to do it? And I was like, oh God. I was like, I really don't have a choice. I have to do this. And I remember we were like in a meeting, small meeting room. I remember walking back to my desk and being like, okay, fuck this, I'm out. Like, I'm not doing this. I got to go do my own thing. And so that was probably the largest inflection point of my career where I was like, that along with seeing Facebook ranked number one in HR or number one on Glassdoor for places to work, I was like, okay, like is this number one? I can't work anywhere else. But yeah, that was probably the biggest inflection point where I was like, okay, I got to go do my own thing and I need to figure out what that is.

Eric Jorgenson: Interesting. Was there a single, any single deal that JT Capital hinged on or that sort of enabled you to go and do your own thing? Or was that opportunity really set up by these years of sort of being diligent about saving and giving yourself cushion and working and learning where you had a really long, a longer period of time to make your own thing work?

Rohun Jauhar: Yeah, I think it was over a longer period of time. Like it was the saving money. It was getting comfortable with kind of having enough cushion. My wife worked, so at least with her job, we could pay all our expenses. So, without her, I couldn't have done any of this because I would've had that cushion, but I don't know if I would've taken the leap not knowing at that time that money's not coming in every week. Like now I'm totally comfortable with that because it's been happening for so long, and you just adjust to like, oh, okay, this is the way life works. You get paid on mostly like carry, carried interest from these deals, and that's fine. But that time, I don't know if my wife was not working, if I would've taken that leap. So it was really just kind of saving over time and being intelligent about it.

Eric Jorgenson: Interesting. Okay, last question. Take your time. What is the mental model or heuristic that you use most frequently? And multiple is also an interesting thing, but like the rules for decision making or the rules of thumb that you reference most often, personally or professionally?

Rohun Jauhar: Yeah, I think there's three. I think about it like this, and this is a lens for like all decisions probably relative to business, life, so on and so forth. So, the first is simplicity. So, whenever I hear of an idea or someone doing something, once a lot of buzzwords start entering the conversation and a lot of complexity of like we need to do this, and then if we get this right, it's going to lead to this. And then, if we get that one right, then we're going to get here. It's like, all right, we're creating a web of just complexity here. Like, can we even get to the first thing? Because if so, I don't know if I want to be a part of this. So, I think simplicity where that's one of the reasons I chose real estate, like you buy a building, people rent, they pay rent, and you get cash flow. Like, okay, super simple. Even with any other- like I've really been interested in software recently, even these software businesses where it is just like, hey, this is just a huge problem in a specific type of vertical. We're just going to go solve this one problem. Okay, great. That makes total sense to me, like super easy to get customers on that, so on and so forth. I think simplicity is one. The other one is compounding. So, if you could tell me that, hey, we're going to start a business this year and it's going to make 2 million bucks, but after that, it's done. Like nothing else will come from that. Like we're going to sell masks during COVID, we’ll make $2 million. I probably would not be interested in that because there's no type of compounding effect or no equity value or no enterprise value that can be created. And that one has come over time, where in the beginning of starting a business or before starting the business, it's just like, hey, I just need to make money and make cash flow. But then over time, you realize that's fine, that's good, but what you need to be focusing on is increasing the enterprise value of your business, which is what is the revenue you're generating? How sustainable is that revenue? What are the unit economics of the business? And what is the total value of this company such that you could potentially sell this thing and get an exit based on a multiple of the cash flows that it's generating and something that has a flywheel effect, so it continues to get stronger and better over time. That's what I'm most interested in when it comes to doing things. Compounding as it relates to relationships. All I have to do is spend lots of quality time with my daughter and just be there for her, and we're going to have an amazing time, but those relationships compound over the course of her life and my life and my wife's life. And then lastly, it's return on hassle. So whenever I do something, what is the amount of work that I need to do to go get this thing? Again, if you told me that, hey, we can make $10 million this year, but we're working seven days a week for a year, you can't really see your family. Maybe you can see them for like dinner a couple times a week or something like that. Besides that, we're going all in and we're going to make 10 million bucks. I'd be like, yeah, not interesting to me because we're going to have to put in so much work and effort. I can't do the things that matter most to me. That's a lot of hassle and a lot of just unnecessary burden that I don't want. So I think those are the three mental models that probably I use on a day to day basis, evaluating opportunities, thinking about how I'm spending my time, thinking about other relationships that I have, and stuff like that.

Eric Jorgenson: That's awesome. Simplicity, compounding, return on hassle. Sounds like the recipe for a very, very good life. I appreciate you sharing those with us and taking the time. And it's great to talk more. 40 seconds into hanging with you at Capital Camp, I was like, oh yes, yes, yes, yes. We have a lot to get into. I have a lot to learn from this dude, and I knew it would be fun to have you on here and I'd learn a lot doing it. So thank you for taking the time. I really appreciate it.

Rohun Jauhar: Yeah, man. Thanks so much for having me. I'm a big fan of your podcast. I love the book you've written, and I'm looking forward to everything that you're going to keep writing and doing in the future.

Eric Jorgenson: Thanks. I hope it hope it lives up. I hope it helps you accumulate even more Austin real estate and I come up with some money to put into it. It seems so obvious, 10 years ago, what Austin was going to become. And I'm glad you're in the right place at the right time with a big catcher’s mitt to get some of that growth. It's an exciting frontier.

Rohun Jauhar: Yeah. Austin is great. The growth has been crazy.

Eric Jorgenson: Yeah. Right place, man. You're in the right place.

I appreciate you hanging out with us today. Thank you for listening. If you liked this episode, you will also love my episodes with Chris Powers of FORT Capital. Chris is maybe a decade ahead of Rohun in his building of his real estate empire. So, if you liked this, definitely check that episode out. Further into the real estate world, Natalia Karayaneva is the CEO and founder of Proppy, which is bringing real estate onto the blockchain. And we talk a lot about the tech real estate intersection in that episode. Also, Thomas Smale, the founder of FE International, a business brokerage. We talk a lot about buying, valuations around cash flowing internet businesses. So definitely some parallels to what Rohun and I talked about here today. Once more, if you're interested in supporting the show, check out athenago.com, or you can invest with me and my partners with Rolling Fun. Links to both are in the show notes. And for a free way to support the show, please leave a quick review or text this episode to a friend or coworker you think would enjoy it. If you know anybody who works at Facebook or similar and isn't that happy with their job, this might be a good one to send them. Let's see if Rohun can inspire them to change their life story. Thank you for listening. Have a good one.

I really appreciate you hanging out with us. This is all about laughing and learning, building leverage, and compounding our faces off.

What our brains aren't evolved to comprehend is how much leverage is possible in modern society.

There's a revolution going on, man. Go pay attention to it. Get a part of it. Get exposed to it. You're going to make money along the way. You're going to have fun.

A call to adventure.

This is the new form of leverage.

Take a few quiet moments for yourself. Breathe deep and be well.

Leverage, InvestingEric JorgensonJuly 26, 2022Real Estate, LeverageComment

Automation and Delegation to buy $500 million+ of real estate, with Rohun Jauhar of JT Capital

Jorgenson’s Soundbox Episode 43: Rohun Jauhar

Learn more about Rohun Jauhar:

Additional episodes if you enjoyed:

Episode Transcript:

@EricJorgenson