Engineering Financial Freedom

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Instead of letting it sit in the bank Deepa Akula put her hard-earned money to work through real estate Now she is the founder of Vinside Capital and is a GP for over 1000 apartment units and an LP for over 1300 units She is grateful for the opportunity to be a full-time real investor which gives her the freedom to travel the world and spend time with family Today Deepa joins us to talk about her investing journey how she created passive cash flow to cover their daily expenses and how she is using her engineering background to her advantage 00 01 – 11 06 From Engineer to Investor Get to know Deepa She talks about the nitty-gritty of being an engineer Earning good money in her job and started to look for investments Being laid off gave her the chance to do real estate full time She learned about real estate by reading books and joining a bootcamp As an engineer numbers are her thing and she s able to do well in underwriting Do not trust proformas know your numbers 11 07 – 17 48 Building Meaningful Passive Income Stop hoarding cash and start investing How she transitioned from LP to GP Being a detail-oriented person has helped establish her credibility Deepa s goal in the future doings deals at her own pace 17 49 – 19 47 Closing Segment Reach out to Deepa Links Below Final Words Tweetable Quotes If you underwrite in a vacuum you really don t know if it s good or bad if you re just working and not having anybody check it it s a big no-no – Deepa Akula The number one thing is not to trust proformas when you receive them – Deepa Akula —————————————————————————– Connect with Deepa on the Vinside Capital website and follow her LinkedIn Resource Mentioned Barking Up the Wrong Tree by Eric Barker Connect with me I love helping others place money outside of traditional investments that both diversify a strategy and provide solid predictable returns Facebook LinkedIn Like subscribe and leave us a review on Apple Podcasts Spotify Google Podcasts or whatever platform you listen on Thank you for tuning in Email me sam brickeninvestmentgroup com Want to read the full show notes of the episode Check it out below 00 00 00 Deepa Akula I had learned about inflation just very reading books And I thought you know it s not a good thing that we are hoarding cash but we did not know We didn t want to hurry and invest in something that we didn t understand either So in in the time when I was doing the research and trying to get a proof of concept by investing as a limited partner we had built up some savings And once it looked like it was going to work we kind of invested fast 00 00 39 Sam Wilson Deepa Akula is an LP and GP in over a thousand apartment units in Texas Florida and Arizona She s also a former head of engineering turned full-time real estate investor Deepa welcome to the show 00 00 50 Deepa Akula Thank you I m so honored to be here Sam 00 00 52 Sam Wilson Absolutely Hey the pleasure is mine especially I don t normally get guests calling from I guess you re halfway around the world Where are you right now 00 01 02 Deepa Akula I m in India right now visiting my parents in Hyderabad 00 01 05 Sam Wilson That s awesome Very very cool It s 9 30 here in Memphis Tennessee So that puts you at roughly 8 30 there 00 01 12 Deepa Akula It s 8 06 yeah It s 8 06 PM 00 01 15 Sam Wilson Well soon enough soon enough you can tell me what tomorrow is like That ll be absolutely great I m looking forward to jumping in here today There are three questions I ask every guest who comes to the show in 90 seconds or less can you tell me where did you start Where are you now And how did you get there 00 01 27 Sam Wilson Yeah sure 00 01 28 Deepa Akula So I started as an LP I m a mechanical aerospace engineer by training And I was looking to place my capital and started as an LP And now I still do engineering on the side but I m a GP and an LP And once I invested I had proof of concept and once the worth proof of concept we started investing more and more And now we have enough passive income to just cover our daily bills So we are financially free and it gives me the freedom to travel the world and spend some time with family And also look for deals at the same time I m working This is not a vacation but freedom of place too So yeah 00 02 08 Sam Wilson That is fantastic I wonder there s so many things there I wanted to dig into What is a space engineer 00 02 17 Deepa Akula It s mechanical and aerospace engineering So Boeing paid for my masters and I worked on the materials for the outside for the skin of the aircraft on friction stir building So yeah Boeing was looking into using different alloys different element alloys and it was research So I was one of the research assistants and that s what I did I m a mechanical engineer got a bachelor s in mechanical engineering master s in mechanical engineer space engineering 00 02 46 Sam Wilson That s awesome I love it Even those words I probably couldn t even spell those words So you know I look at people like you and I m like oh my gosh she is way smarter than I am 00 02 55 Deepa Akula Oh you re too kind 00 02 57 Sam Wilson No no that s really really cool I absolutely love it I love to fly I m a pilot as well And so I m grateful for all the work for that you guys do And I oftentimes look at it and I m like I have no idea how this thing works 00 03 08 Deepa Akula A lot of work goes into it Every life s important So a lot of work goes into it 00 03 13 Sam Wilson A lot of work goes into it so I m grateful Thank you I think that s absolutely cool What was your tipping point What was the thing when you re like okay hey cool I am a mechanical engineer I m an aerospace engineer I got to do something else Was there a light bulb moment Tell me about that 00 03 29 Deepa Akula Yeah so it was pretty gradual And me and my husband we moved to Seattle and were making good money And so I was starting to think about investments So I just had to place our capital somewhere and I was looking into different investment vehicles and I m an avid reader So I stumbled onto syndications And I did not know anybody that was doing syndications at that time And looked into it and through a random connection found a general partner and invested in her deal And once I started to see the distributions come in quarterly distributions then I had proof of concept that oh well so this is real And it can work And we started to invest more and more and it was pretty gradual And the light bulb moment was really there was not one but I got laid off during the pandemic And I was like okay this is my chance to not have a W2 and work for myself And that s when I was a GP already but I chose not to get another job in engineering and do real estate full-time 00 04 35 Sam Wilson Wow That s a big big jump I mean tell me I guess so you said Hey you you figured out you know okay I became a GP What was the timeline between when you first heard about syndications until you put or excuse me an LP until you put your first money in a deal 00 04 48 Deepa Akula Oh when I first put up a single penny it was about three years I had analysis paralysis big time So I actually knew how how to underwrite a deal before I invested as an LP So that s the kind of work I did just because I did not know anybody that was doing it at that time and I did not want to lose 50 000 just by investing because I read in some book So I took a three-day course a bootcamp through RE Mentor And it was just a three-day bootcamp and that was all the education I got in person but everything else was just reading books I might have read hundreds of books in those three years and had enough confidence to put my first 50 000 in 2019 00 05 35 Sam Wilson That s wild So you felt like you had a full understanding of how to underwrite a deal before you ever put your money and how did you practice that 00 05 44 Deepa Akula So just on random deals on CoStar Just random deals So yeah and I had a loose mentor who was just looking at those numbers because you know if you underwrite in a vacuum you really don t know if it s good or bad you know If you really don t know how to estimate taxes or when the taxes are assessed and different states do it differently so if you re in a vacuum and just working and not having anybody check it it s a big no-no So I had a gentleman that was kind enough to kind of guide me and he s a loose mentor If you d ask him Hey were you Deepa s mentor He s like no But I really did not pay for mentorship I loosely have ties with people that I kind of come in contact with and just ping them and learn And I used to underwrite single-family homes too That s kind of how I got interested I really dislike shopping like any kind of shopping but real estate I m all about it So I m not in shopping about clothes or anything else but real estate I would just underwrite the deal of their deal So that s kind of how I was like you know I should really do what I like to decompress for a living then I would really not feel like I m working And even without knowing even when I was in school I would just randomly look at single-family house in the areas And I was like oh it s pretty simple the math is So yeah that s kind of how I started and learned And there s a little bit more to multifamily And you know just there s so much resources out there I would just attend multiple webinars to learn and practice 00 07 25 Sam Wilson When you say so many resources out there I mean either you re an Excel guru which wouldn t surprise me or you borrowed somebody else s model out of the gate because there are a lot of nuances to it How did you build your first or what did you use as a resource for your first underwriting model 00 07 42 Deepa Akula So the very first one was Michael Lang s model And I had bought it for fun years ago and I was modeling it And you know I am pretty good at Excel because I was when I was head of engineering I was building these templates for my engineers to work in So they re kind of like sandboxes and to make it foolproof because if something goes wrong these structures are out there We are driving under it their houses under it so let me take a step back I was designing overhead structures there maybe about 10 000 structures that me or my team designed are in service right now in the US and Canada So I was designing the spreadsheets in which my engineers would design the structures So I love tinkering with Excel and I saw Michael s model and then made some additions to it to just make it my own 00 08 38 Sam Wilson You made some additions you mean you poured gasoline on a fire It was like oh okay Yeah this is okay But I m an aerospace engineer and I can do a lot better than this So you know if I can push I d love to see your model but I m sure it would make all the rest of us jealous That s really really cool And you said something here that I don t think I ve ever heard on this show which is you said that I did it for fun Like underwriting is work for most of us you realize that right 00 09 06 Deepa Akula I understand I understand But you know as engineers numbers is our thing and you know you feel like you have more control You change one number and you have control to like change all the numbers on the sheet So just playing with different numbers is more fun And more than that I used to code in VBA So coding in VBA was more fun So I would just code and create buttons and everything and try to make it more fun and easy and I m trying to hide the code behind it and make it easy So building it was more fun And the more formulas I write and debugging is a lot more fun to me So that s what I all my formula would like have to wrap and then debugging would be like oh where where did it go wrong Why is it not working So yeah That s what I did to de-stress 00 09 54 Sam Wilson That s amazing Wow Some of us go to the gym Some of us do yoga Some of us have bad habits You on the other hand underwrite multifamily deals That s a unique skillset What would you say is the number one thing that you learned when doing that 00 10 10 Deepa Akula Number one thing while creating the model or underwriting 00 10 13 Sam Wilson Underwriting 00 10 14 Deepa Akula Underwriting the number one thing is not to trust proformas when you receive them The seller might have expenses that they re putting on a corporate level that we are not seeing on the property level So just knowing the numbers and at least having an idea of what it s going to cost per door And that just comes from practice You know it s catch-22 you just do it learn it and then keep doing it and get to learn more 00 10 42 Sam Wilson Absolutely Yeah at times I wonder why commercial brokers which I mean I have my real estate license Do I do commercial brokerage Not necessarily but why do they even put the proformas out there Because most of us are just like I m not even like paying 00 10 58 Deepa Akula Yeah We just have to underwrite from scratch 00 11 00 Sam Wilson It really is true So yeah That s really really interesting Yeah I like that Don t trust the proforma Let s talk a little bit about passive income to cover your bills I thought that was an interesting statement you had made it takes a lot of investments This is my thesis It takes a lot of investments to create any sort of meaningful passive income I think passive income is great but even if let s suggest say that we re you know we put 50 grand in a deal and it s whatever a eight cap I don t know I m making up numbers here but let s say it throws off you know 700 bucks every quarter I mean that doesn t really put a dent in the income to cover bills category Now how did you do that Like what did it take to get that income stream built up You know we ve all hit the equity multiple I believe most of us have hit an equity multiple in a deal we ve passively invested at some point and those are great pay days But not until the exit do we normally catch enough money to go okay this is meaningful 00 11 55 Deepa Akula Right Right So me as head of engineering I m a licensed professional civil structural engineer I m a self-taught civil structural engineer And as head of engineering I was making meaningful money And my husband is in information technology He s in it works for wild Disney and pretty simple like I said I do not enjoy shopping So we had good good savings And we were hoarding cash Like I said as we were starting to earn money through our W2s it was just sitting in the bank and we didn t spend it anywhere We re just trying to look for a meaningful vehicle for us to invest in And by the time I did all my research and started to invest It was about three years of research went from 2016 to 2019 There was a lot of research and studying and talking to people And that s when we started investing as an LP But once we saw the distributions coming in we kind of really escalated and put in big amounts big chunks enough to cover our like and I m not even counting the exits This is just quarterly distributions that I m talking about It s enough to cover our expenses 00 13 05 Sam Wilson That s really cool I love I love that and yeah it does take some capital upfront I think in order to attract that initial you know nut where you re like oh okay this is now doing something that that I appreciate 00 13 17 Deepa Akula Right And it was out of necessity I had learned about inflation just by reading books And I thought you know it s not a good thing that we are hoarding cash but we did not know We didn t want to hurry and invest in something that we didn t understand either So in the time when I was doing the research and trying to get a proof of concept by investing as a limited partner we had built up some savings and once it looked like it was going to work we kind of invested fast 00 13 46 Sam Wilson That s awesome 00 13 47 Deepa Akula With multiple deals 00 13 48 Sam Wilson You ve moved into the code GP space What s that transition been like and how did that happen 00 13 54 Deepa Akula Right Yeah no no I love it Thank you for the question So I was an LP in a couple of deals before I got a call to be a co-GP And as an LP I would read the PPM the whole way Some of them were 80 pages the other one was 200 pages And I would read the whole thing a few times and catch some mistakes in it and call the GP and say Hey you need to get a better lawyer or the legal person need to like they re calling a something two different things in two different places And I was like is it the same thing And they were like you read the whole thing I m like yeah And that you know inadvertently it told them that I m a details person And I would just ask a lot of questions and just from my questions and the fact that they knew I was catching their lawyer s mistakes in the PPM they were like okay so she knows And when the time came for them just me and my husband both are engineers And most of her friends were like Hey how are you guys getting this distributions And we were doing 506B deal and I wanted to introduce my friends to the GPS but they couldn t really take their investments because they did not know them So they were like okay Deepa do you want to raise capital and be on this deal I was like really well I was like when and they go right now So it was just out of the blue call saying Hey we have a deal on the contract And I trust this person I had invested my money with them So I didn t really have to do any due diligence on the person on the group I did some due diligence on the project itself and it looked pretty good And that s how I got my foot in the door for a co-GP position 00 15 41 Sam Wilson That is really cool I love the fact that you said you read the documents you know end to end I know in my first limited partner s deals I did the same thing If it was a repeat investment with the same sponsor maybe I wasn t as meticulous but certainly read line for line And it s a laborious process I think it took me like four hours to get through the 200 pages cause you re just like I need this to be on like napkin sized this just need this is what you re going to do this is what I m going to do And this is how we wrap this up Okay except 200 pages later because that s the world we live in And so yeah it kind of shocked the sponsor as well They re like wow Like this is a really detailed question I have a public confession here to make in that I just recently didn t read through the entire stack of my deal deck or of my documents And it was probably the most embarrassing thing as a general partner I ve ever done in that I got the documents back I read through them high level It was a new attorney group for us And I said man everything seems to be in order And I was the receiving call of the investor like you going Hey there s some conflicting pieces of information here I turned inward like oh no like I m hot now just like my body temperature goes up thinking about it I m like I have done this so many times and I have never had that call from an investor I wanted to crawl on a hole 00 17 02 Sam Wilson So note to self one read all the documents if you re an LP and two read all the documents if you re a GP That s the rule I think that Deepa is teaching us here and that s yeah that s just a you know that s a hard lesson learned both ways So you know thank you certainly for sharing that what does the future look like for you 00 17 19 Deepa Akula Thank you for that question because I am actively trying to not build myself another high-stress job So it s tough It s tough to not work as much now that this is my first summer without a job I am trying to say no to more deals than I say yes to And I d like to do at least one deal every quarter and that would be a good pace for me And want to do that for the foreseeable future 00 17 48 Sam Wilson That s awesome Very very cool Deepa I loved your journey here in real estate I loved how you started off just learning for three years I think one of the fun facts you gave me was that you read a book What was it The barking up the wrong tree or barking up the right tree I can t remember You said you read it five times 00 18 05 Deepa Akula Barking Up the Wrong Tree by Eric Barker 00 18 08 Sam Wilson Yeah you said you read that over and over and over until you finally graphed it in detail As an engineer I m not shocked knowing that you re an engineer I m not shocked that your attention to detail is the way it is but the really cool story on how you ve transitioned from an aerospace engineer into now full-time real estate clearly taking a measured approach to life and getting what you want out of it which is why you re out of the country doing this podcast at you know late in the evening now the other side of the world with me So certainly appreciate that And love your story of coming in as an LP first and doing a lot of deals as an LP and then joined the general partnership side So very very cool If our listeners want to get in touch with you or learn more about you what is the best way to do that 00 18 49 Deepa Akula LinkedIn would be the best place to reach out to me My LinkedIn profile has my full name so it s Deepa Reddy Akula And another place is vinsidecapital com is my website So those are the two places to get a hold of me 00 19 05 Sam Wilson And what what s the name of the website again 00 19 08 Deepa Akula Vinside V I N S I D E vinsidecapital com 00 19 13 Sam Wilson Got it We ll absolutely make sure we put that all in the show notes Deepa thank you so much for coming on today I certainly appreciate it 00 19 19 Deepa Akula Thank you so much It was such a pleasure Thanks Sam Click here to visit this podcast episode