Balancing a W2 Job and a $20M Side Hustle | Gaurang Gala | EP 52

Speaker 1 But you have to understand: if you don't have that monthly check or money coming in, it's very difficult to transition straight from investing and developing in real estate from your W-2 job.

Speaker 1 So, I tell everyone: always keep that.

Speaker 1 And with the ability to work remote in this environment, you have the opportunity if you're willing to put in 10, 12 hours a day, six to seven hours at your job, and another six to seven hours in your side business, you can be extremely successful.

Speaker 2 What is up, Entrepreneur DNA? This is going to be a fire episode. If you don't think you can have a W-2 job and be an incredible entrepreneur, my guest is going to show you, improve you.

Speaker 2 You are totally wrong. This guy has a W-2 job full-time and his part-time hustle has raised well over $20 million and has seven real estate projects.
Garangala is here.

Speaker 1 Justin, thank you for having me on the pot. I'm really excited to be here.
And yes, I think you can do both. I've taken a book out of the woman who started Spanks.

Speaker 1 She had a multi-million dollar company and still kept her W-2 job till the very end.

Speaker 1 And I think it can be done today because in order to do development where your timelines are extremely long, you've got to have a source of income coming in.

Speaker 1 We really talk about all the time about real estate investing, development, and these types of things, but you have to understand if you don't have that monthly check or money coming in, it's very difficult to transition straight from investing and developing in real estate from your W-2 jobs.

Speaker 1 So I tell everyone, always keep that. And with the ability to work remote in this environment, you have the opportunity.

Speaker 1 If you're willing to put in 10, 12 hours a day, six to seven hours at your job and another six to seven hours in your side business, you can be extremely successful.

Speaker 2 Yeah, you know, you and I met at what I would argue the best real estate mastermind out there, boardroom mastermind. Yes.

Speaker 2 And you impressed me right away because this story, right? This isn't your full-time gig. You go out there, there's, you know, we were just talking about private equity and raising capital.

Speaker 2 And a lot of people do that full-time. And you've been able to keep a very lucrative job position.
Yes. And still invest in building a business for yourself for your future.

Speaker 2 I want to talk about that because a lot of these listeners at Entrepreneur DNA, they feel like it's a either or. You can't do both.
Talk to about your story about that.

Speaker 1 My current W-2 job is in banking, where I'm a lender and I look at tax returns and PNLs all day.

Speaker 1 And basically, this is one of the great things when I first met Kent, he told me is it's, it is all about the math. If the math can math, then it works.

Speaker 1 And I look at every deal, not as a sticks and bricks guy. I look at it, does it pencil on an Excel spreadsheet? And I look at it in the mind of an underwriter at a bank and on the credit side first.

Speaker 1 Am I able to get a loan on this development project if I'm doing, let's say, 60 luxury townhome lots like we are in Kerry, North Carolina?

Speaker 1 Or am I buying a small business, whether it's a franchise daycare?

Speaker 1 By the way, as all the businesses I've looked at, franchise daycares have the highest NOI of any franchise business in the United States. Oh, yeah.
I've just thrown that out there.

Speaker 1 If you could get like a Goddard school franchise, those at full capacity,

Speaker 1 you're making a $700,000 NOI and they run themselves.

Speaker 2 That's incredible.

Speaker 1 And that is where being a banker, being a lender, it took me a decade of doing that and learning to be able to get into development because I built those relationships.

Speaker 1 I understood how to read PNLs and all of that. You don't become a millionaire overnight.
You cannot become a developer overnight. That's right.

Speaker 1 You've got to start at the beginning, whether you want to start in wholesaling, whether it's buying your first investment property, whether it's buying your first small business as an owner, understanding payroll, understanding when, hey, my employees didn't show up.

Speaker 1 I got to get my ass out of bed at 6 a.m. and go open that store.
I've got to go clean the bathrooms.

Speaker 1 You know, those are all things I learned at a very early age that set me up at 41 years old today to have the ability to even be successful.

Speaker 2 Yeah. And so you have raised how much money and how many real estate deals are you currently involved in right now?

Speaker 1 We have already raised across our seven projects for the first three, a little over $20 million.

Speaker 2 That's incredible. And you brought up something, you know, my book now is out called Flipping to Wealth.
Yes.

Speaker 2 And you brought up whether it's wholesaling or flipping, but ultimately what you are already in the middle of is creating this life of wealth, right? Which are these bigger projects.

Speaker 2 I call them profit projects, right? Because

Speaker 2 when you exit, you profit, right? It's not income producing. So I say all that to say,

Speaker 2 you know, being able to jump into that space. is not the easiest thing in the world, right?

Speaker 2 I mean, I think there's a progression here and you just happened to have a resume that allowed you to kind of understand the nuances of the finances. Exactly.

Speaker 2 Exactly.

Speaker 1 But, you know, having those relationships. Like, I know every lender in my metro because I am a lender.
Yeah. You know, those little things are extremely important.

Speaker 1 You've got to be in the rooms with the people.

Speaker 1 What do we always say? Your network is your net worth.

Speaker 2 That's right. Yeah.
I mean, listen, you were here for since Tuesday. Yes.

Speaker 1 At another group, you were at the Family Office Club Miami Super Summit.

Speaker 2 Right. And you were here a month ago or two months ago for a very similar thing.

Speaker 2 I mean, what I want to highlight for everybody is your success isn't because you are the smartest or you have the longest resume of real estate.

Speaker 2 Your success is you're putting in the work, you're finding the time, and you're surrounding yourself with the right people.

Speaker 1 Exactly. You always want to be in a room where you are the poorest person and the dumbest person in the room.
If you are the smartest person in the room, you need to get into a better room. Yeah.

Speaker 1 You know? I mean, yesterday I was around, like we were just talking about, ex-NFL, NBA players who have their own fund.

Speaker 1 There were multiple billionaires on stage yesterday that Richard Wilson had at the Family Office Club event talking about their funds, what they're looking at, whether it's in real estate, private equity, and other aspects, right?

Speaker 1 And

Speaker 1 at the end of the day, it is the math. You want to be successful.

Speaker 1 And what you realize is there are a million different ways to be successful in the United States. That's why, again, this is the greatest country in the history of the world.

Speaker 1 My father, as an immigrant, came to the United States in 1989 with $100.

Speaker 1 His first job was a Pizza Hut delivery boy, making $2.15 an hour. I remember he would pick me up from first grade with a little Pizza Hut pan pizza.
You know? Yeah.

Speaker 2 You know, listen, it's funny because I have this like,

Speaker 2 I wish everyone had work ethic like that these days, right? And I just think there's so much entitlement, especially in like middle America of just like not middle America, but like the,

Speaker 2 you know, the populations that really haven't had to work for everything they've ever had, right? Their grandparents or whoever has kind of built it to some extent for them.

Speaker 2 I wish we still had the work ethic because you have it. Yes.
I have it.

Speaker 2 And entrepreneurs watching this and listening to this, wherever they are, they need to understand that one little thing is: A, it doesn't happen overnight. Yes.

Speaker 2 Your success in having seven projects and being able to raise $20 million, this wasn't like you did this in a 90-day period, right? Not at all. Right.
But then I would also tell you.

Speaker 1 Years of culmination. That's right.
I mean, I couldn't have done this at 21. I probably could not have done this at 31.

Speaker 1 It took everything I learned, all the failures along the way. Yeah.
I do this with my children.

Speaker 1 What did you fail at today?

Speaker 1 Failure is the first attempt in learning. You have to fail.

Speaker 1 In my first project, when we raised our first 4 million, when I had gone to Kent four years ago, I knew nothing about real estate development, absolutely nothing, right?

Speaker 1 Background in finance, have owned companies, sold companies. Not much I've done in terms of real estate development.
And Kent's basically like, the math has to math. This is what you got to do.

Speaker 1 You got to take all of these steps. And we put them all together.

Speaker 1 And

Speaker 1 I failed at a lot of things. I hired a person who was supposed to help me with my rezoning.
She never did what she did.

Speaker 1 I get a call from one of the council members the day before the vote, and she's saying, You're not going to pass. You need to table it.
And I'm like, oh my God, why have I not been told this? Right.

Speaker 2 Day before.

Speaker 1 Day before. Classic.
So, what do I do? I, this is the spring and summer of 2022. I go door to door to every single neighbor and have them sign a petition to agree to my rezoning.

Speaker 1 And what you realize in the adjoining neighborhood, there's only two or three people that hate development. All the other people want to see more housing.

Speaker 1 And that's what we did. We put in the work.
I went in a suit in 90 plus degree weather in the heat, knocking on doors and talking to them about our project.

Speaker 1 But little things like that. And what happens on the day we finally have the vote? I have a unanimous approval.

Speaker 1 Even the mayor of Kerry said, we've never had this happen before where we were unanimously opposed to something. And within four months, our hearts were changed by the developer.

Speaker 1 And now we have unanimous approval.

Speaker 2 So I have a couple questions. A, I want to know what you're doing with your project.
But before i get there

Speaker 2 i'm i'm on a big my own world i'm really talking to people about the power of branding and branding isn't necessarily marketing although you a lot of people kind of get those confused how did you go raise your first money how did you and how much did you go raise for that first project for that first project we raised a little over four and a half million okay from who and you don't have to give names but like where did it come from we went through our south asian Indian community.

Speaker 1 Okay.

Speaker 1 It's like

Speaker 1 my friends, my parents' friends, my network.

Speaker 2 Okay, so I want to

Speaker 2 share for a second because what everyone listening to this needs to understand is what you did,

Speaker 2 in my argument, is the branding side of it. People know what you do.

Speaker 1 Exactly.

Speaker 2 They trust you because of it. They know what you're going to do.
And then they know what you're looking for. Yes.
And your first raise of capital was inherently within what I call your inner circle.

Speaker 2 That is normal. That's almost how everyone does it.

Speaker 1 Correct.

Speaker 2 But it's because people have inherent trust in the brand of Gerang. Now, it might sound funny when you're like, yeah, but my aunt gave it to me.
She's my aunt.

Speaker 2 But it's still the brand of what you've done. She wouldn't trust you if you were some idiot still in the club Thursday through Sunday popping bottles like I was.
She wouldn't have given me the money.

Speaker 2 She knows who you are, what you stand for, what you stand against, what you're trying to do. That's branding, even if it's your aunt, is branding.
Being on this podcast is branding.

Speaker 2 And there's a long tail to this stuff. Raising capital isn't, hey, guys, I'm out here and I have this project and I need $10 million and everyone just starts a flood.
They need to know you, right?

Speaker 2 And understanding what you do, your resume, your success, where your failures are at, right? And so I want people to hear that from you because it's not easy. I've raised a lot of money.

Speaker 2 It's not easy to raise $4.5 million. 100%.
You know, but it's because of you, it is because of who you are, what they know about you, your resume, what you've done.

Speaker 2 And that is a brand of gerang, especially when you don't have a track record.

Speaker 1 That's right. You know, that's why you have to create that.
And it comes from the people that you know in your circle.

Speaker 1 What I found, though, is that my friends and some of your family members that are the closest to you,

Speaker 1 they remember when you were that 21-year-old partying all the time. And so they are less likely to do it.
It's probably their friend, the person that's one

Speaker 1 person off in that chain of relation that will do it.

Speaker 2 There's no doubt. And

Speaker 2 what I want to, and I know you have a lot of projects that are in the works right now, and we want to get to these and what they are, what they actually are going to be done.

Speaker 2 What are your...

Speaker 2 What's your exit? What's the idea of your projects, the first project all the way to what you're doing now?

Speaker 2 what are you doing them for is it the long-term hold is it a turn is it a you know build and sell what is your intention with these projects

Speaker 1 my always philosophy has been to make more money you have to create velocity of money the faster your money turns and churns yeah the more money you can make

Speaker 1 and so I am not one of those long-term hold and create that type of

Speaker 1 mailbox money. I look at, let's say there's $100

Speaker 1 from raw dirt to a finished building, whether it's a single-family home, multifamily, industrial, flex, self-storage, whatever it is.

Speaker 1 In that $100,

Speaker 1 $40 of that money is made when you're acquiring the dirt, entitling the dirt, rezoning the dirt. The other $30

Speaker 1 of that is made in site work, infrastructure, utilities, stormwater, and all of that. So $70 of the $100 of profit is made

Speaker 1 on without the building even going vertical.

Speaker 1 So that is what our focus is on.

Speaker 1 And there's a lot less people doing that.

Speaker 1 We've got publicly traded multifamily REITs that are building massive multifamily projects, right? You've got the same in industrial self-storage.

Speaker 1 I know I'm not going to compete and put out a cheaper or better built product than a publicly traded company, whether it's Lennar, Poulty, D.R.

Speaker 1 Horton on the residential side or Blackstone, BlackRock, Cortland, Trammel Crow, Mill Creek, all of the multifamily developers,

Speaker 2 right?

Speaker 1 But what am I really good at?

Speaker 1 My ability is walking into those rooms with the city council members, walking in, meeting with my civil engineers, my designers, creating that public-private partnerships with the community and showing them what the opportunity is with this new apartment building, this mixed-use development, this luxury condo building, this new subdivision coming to your community.

Speaker 1 If I can do those things, I've made 70% of the profit. And then I can either contribute the land as a joint venture into a deal to go vertical at a higher price.

Speaker 1 So I'll give you a perfect example of a deal. We have a deal right now in Research Triangle Park of North Carolina, Raleigh, Durham.
I call it the new Austin, Texas.

Speaker 2 Raleigh's great. Yes.

Speaker 1 One of the hottest markets in the country, one of three markets in the whole United States where rents are still growing in 2024 today.

Speaker 1 We have a site, eight acres

Speaker 1 that we helped zone to high density residential up to seven stories multifamily.

Speaker 1 I have the land currently under contract for $4.6 million.

Speaker 1 I've had it under contract for about two years now. Wow.

Speaker 2 And we've put I can only imagine what that's worth through now.

Speaker 1 Exactly. So we have a contract with Wood Partners.
So Wood Partners is a spin-off of Trammell Crow,

Speaker 1 headquartered in Atlanta. They're a merchant builder, 26 offices across the U.S.

Speaker 1 Our managing director, Caitlin, she has built over a billion dollars in multifamily with Wood Partners. And

Speaker 1 they are acquiring the land from us.

Speaker 1 Their money has gone hard now, so I can say this.

Speaker 2 I was going to say, is it disclosable or not?

Speaker 1 The money went hard on Monday. Yeah.

Speaker 2 So we're good.

Speaker 1 Someone's buying lunch. Yes.

Speaker 1 For $8.5 million.

Speaker 2 I love that. Good feet.
Congratulations.

Speaker 1 And they're actually paying for the site planning and the civil.

Speaker 2 And you haven't gone vertical yet. No.

Speaker 2 All we're doing is creating the infrastructure, the planning. That's it.
And you got there before they did. You did the hard work for two years.
Exactly.

Speaker 2 And you give it to them and say, Here, you can take it for eight.

Speaker 1 And I'm selling paper lots. I'm not even putting a shovel in the ground.
And I'm going to make three and a half million dollars.

Speaker 2 I love that. Congratulations.
That's phenomenal. So, what do we

Speaker 2 moving forward? We're going to

Speaker 2 going into 2025. Yes.
What is your plans? What are you looking for? What do you see yourself, you know, full steam ahead for 2025?

Speaker 1 So let's talk about 5 million home shortage in the United States.

Speaker 1 As a percentage, like we were talking about, the math.

Speaker 1 The U.S. legally adds 1.5 million people to the U.S.
through H-1B visas, EB5 visas, student visas, work visas. A year.

Speaker 2 A year.

Speaker 1 And natural birth to death rate. Correct?

Speaker 1 We had a million to a million and a half people a year, every year.

Speaker 1 And all of those people need housing. We're already five to six million homes short.

Speaker 1 And the publicly traded builders, what are they good at? Widget in, widget out. They are really good at building a single family home or a town home extremely cheap and fast and efficient.

Speaker 1 What are they not good at?

Speaker 1 Land development, entitlements, holding the dirt for three years while you're going through rezoning, while you're going through civil engineering with the planning department of that municipality.

Speaker 2 So,

Speaker 1 what we have created is the new American Capital Fund. We are currently raising $20 million,

Speaker 1 and our goal is to develop and entitle 2,000 homes in the next five years

Speaker 1 to sell to your publicly traded builders from Lennar, D.R. Horton, Pulte, KB, Stanley Martin, MI, Dan Ryan.
I mean, I can go down. Yeah, yeah, yeah, yeah.

Speaker 1 So I know every single one of those companies, director of land acquisition for the Carolinas. And our goal right now is just with this $20 million,

Speaker 1 we want to go to every municipality in the research triangle, five-county radius, and entitle 2,000 homes because we want to bring the cost of housing down.

Speaker 1 It is way too expensive. I bought my first home in 2009.

Speaker 1 I was three years out of college, and it was because I lived at home with my parents for the first two years and I saved up $60,000 to buy

Speaker 2 2009. I was just talking about this on an episode.
I bought my first home in 2006,

Speaker 2 100% financing. Wow.
100%. They gave me, I didn't deserve a loan.
Flat out. I was a statistic like everyone else.
Like, if I had a heartbeat, you got it. If I fogged a mirror, you got a loan.
Yeah.

Speaker 2 100% financing, covered all the cost. I think at max, I came to the table with like three grand.
I bought a 500,000 home.

Speaker 2 No, conventional. Because it was two loans.

Speaker 1 That is amazing. Yeah.

Speaker 2 And so I say that to say

Speaker 2 everything you're doing right now is going to make sense over the next 60 months. Those next five years.

Speaker 2 And I couldn't be a bigger fan of yours and supportive of whatever venture you're going to go down because you're doing it the right way. And again, going back to who you are stands,

Speaker 2 it means a lot. The reason why raising capital for you, it's never easy, but the reason why you've had the success you've had is because think about the project you just told me about.
Yeah.

Speaker 2 You bought it, you entitled it, and flipped it in two years for double. There's not a lot of humans on this planet that can do what you do, bro.
So I'm excited. So you need $20 million.

Speaker 2 You're going to do it for, I don't know how many acres that would end up being, but 2,000 more doors. Yes.

Speaker 2 And you're going to go buy land, entitle land, and sell it off to the people that can go actually create the widget, which is the house or the apartments or whatever.

Speaker 1 Exactly. And all we're doing is we're creating a facility for these large publicly traded companies to build more.

Speaker 2 You're making it easier for them. Of course, they're going to pay for convenience.
I pay for convenience. You do too.
Exactly. Right.

Speaker 1 And that's why I really like what I'm doing in North Carolina.

Speaker 2 Yeah.

Speaker 1 Because it is not as much competition. Yeah.

Speaker 1 Since COVID, the number one state of growth in the U.S. was Florida.
Number two was Texas. Both added a million plus people.
You know what the number three state was? North Carolina. North Carolina.

Speaker 1 We added over a half a million people.

Speaker 2 Yeah, Charlotte exploded. Charlotte used to be like my favorite investing city because it was just like this almost about to bubble pop.
And then it did. And so now it's much, but I love Raleigh.

Speaker 2 Raleigh has that same trajectory right now. I love that whole state as an investor.
i'm more in the smaller apartment space and single-family home space but

Speaker 1 guys go follow gorang go follow him all over social media what's your instagram handle what's your facebook twitter all my handles across all social media instagram tick tock youtube twitter facebook the grand gala t-h-e-g-r-a-n-d-g-a-l-a

Speaker 2 at the grand gala dude it's been a pleasure thank you man thank you keep doing this because we need the houses man so we all got to work together to provide great housing for all these people that we have in the U.S.

Speaker 1 I really appreciate it. Thank you for having me on, of course.

Speaker 2 Guys, if this was interesting and you know a couple people that would probably like to talk to Gerang or just like this episode in general, make sure you share this with two people at least.

Speaker 2 We'll see you on the next episode. Peace.