Alex Hemani of Ninety9 Capital On Five Things You Need To Know To Succeed In The Real Estate Industry

Get yourself a mentor or hire a consultant who know the real estate industry inside out. Yes, you can learn from your mistakes, but they’re often costly. I believe you can teach yourself about 80% of the business by reading books and listening to podcasts. But the other 20% — the important part — requires direct experience

As a part of my series about the ‘Five Things You Need To Know To Succeed In The Real Estate Industry,’ I had the pleasure of interviewing Alex Hemani.

Alex Hemani, the founder and CEO of Ninety9 Capital, is a visionary real estate entrepreneur and a pioneer in the single-family rental (SFR) market. Nearly two decades ago, Hemani recognized the tremendous income and wealth-building potential that could be achieved by amassing and efficiently managing a large portfolio of single-family rentals. Today, with over 18 years of experience and management of a portfolio of transactions valued at over $1 billion, he has built a vertically integrated SFR business that covers the spectrum of investor, seller, and buyer related services.

Thank you so much for doing this with us! Can you tell us the “backstory” about what brought you to the Real Estate industry?

This might sound like a cliché, but I literally got into real estate by accident. My wife is from Dallas and after owning and operating a small business in Orlando, I moved back to join her. Quite honestly — I was just looking for something to do. One of my friends back in Orlando was in real estate and we were comparing the price per square foot for housing there versus here in Dallas, which was considerably cheaper at the time. I decided to buy a rental property of my own, just to see how it went. And that was it — that was the beginning of my real estate career.

Can you share with our readers the most interesting or amusing story that has occurred to you in your career so far? Can you share the lesson or takeaway you took out of that story?

One of the more interesting moments in my career so far was a stroke of luck that ended up saving my real estate business. It happened after the Great Recession had hit back in 2009 and at the time, I had grown my holdings to about 25 or so homes. It was a scary time in the residential real estate market because nobody really had an idea of what would happen next. Meanwhile, many of my loans were maturing and coming due and I had to do something. Keep in mind, this is at a time when banks weren’t lending money or financing anything — the housing market had completely collapsed. To save my portfolio, I probably went to 150 or so lenders, knocking on door after door. Not only was it not working, but they were figuratively laughing me out of the building. But remarkably, there was one bank that didn’t end up turning me down. After hearing my pitch, they stepped up, refinanced my entire portfolio, and gave me a new line of credit. This was in 2010. Over the next four years, my company experienced phenomenal growth. I think the lesson here is a simple one — don’t give up. The next call, the next appointment, the next pitch could be the one that answers your prayers.

Do you have a favorite “life lesson quote”? Can you share a story or example of how that was relevant to you in your life?

I think one of the life lesson quotes I live by — that my company lives by — is ‘Just Keep Going.’ Since I started in the real estate business, we’ve faced not one, but two dire crises. The housing market collapse of 2008 and then the massive interest rate hikes post-Covid. Both times, we had a lot of our equity wiped out and a lot of imbalances in our books, but we’re cleaning it up now. Rates have begun to drop again, so it’s all pretty cyclical. Whatever happens, our motto is ‘Just Keep Going.’

Are you working on any exciting new projects now? How do you think that will help people?

We are putting some plans and strategies together right now that I’m personally excited about that I believe will have a positive impact on affordable housing. We’re beginning to place an emphasis on the multi-family space, which right now is an oversaturated market. The available stock is too expensive, it’s got bad debt-to-income ratios, and we’re beginning to see foreclosures increase. This could be a great opportunity to enter the multi-family market and gives us a chance to benefit lower and middle-class tenants. Current multi-family owners have kept rents artificially high, just to stay profitable, and many of their units are deteriorating and in bad need of rejuvenation. We have plans to enter this market and bring the costs down to reasonable rates where rents will be more stable. That, in turn, should create a lot more affordable housing space.

What do you think makes your company stand out? Can you share a story?

The biggest differentiator for our company is that we’re vertically integrated and it’s been the key to our success. What do I mean by that? Simply put, we handle every aspect of the business — we do everything ourselves. That makes us a turnkey operation. We do the acquisitions, we do the marketing, we do the sales, we collect the rent, and we manage the properties. Whenever we build or renovate, we also handle all the construction, which allows us to negotiate much better terms. In each of these cases, we’re avoiding markup after markup after markup. We don’t rely on third party outsourcing for anything we do. It’s why we’re capable of putting better tenants in our units and can take better care of the properties we own and manage.

None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story about that?

First and foremost, I am grateful to God for everything I have. I’m a very religious person and believe in blessings, of which I have many. This higher power has been there for me from day one and deserves all of the credit. Of course, there have been others along the way, and some have even been mentors to me. But I want to give credit where credit is due. I don’t believe that we meet anyone by accident.

Ok. Thank you for all that. Let’s now jump to the main core of our interview. Can you share 3 things that most excite you about the Real Estate industry? If you can please share a story or example.

I’d say the three things that excite me the most about the real estate industry are fairly common. But I still get very excited when I see discounted real estate coming online in the marketplace. The top end of pricing always leaves me a little bit wary. But if you look back at the period of recovery from the big recession — we’re talking 2010 to 2014, I was able to secure some amazing deals. And I think you’re starting to see this happen again right now. Another thing that excites me is the opportunity to work on a bigger deal or asset class, ones I’m not typically used to handling. We’ve always traditionally been in the single-family space, but we have some strategic plans to enter the multi-family marketplace that I’m greatly looking forward to. Lastly, I’d have to say the third thing that excites me about the real estate market it technology. It’s why I pay attention to what’s coming out of the Silicon Valley. Any time that something innovative enters the marketplace, it’s an opportunity to gain a competitive edge. I do my best to keep up with it — at least as much as I can.

Can you share 3 things that most concern you about the industry? If you had the ability to implement 3 ways to reform or improve the industry, what would you suggest? Please share stories or examples if possible.

Yes, just the same there are things that concern me about the real estate market. First, I’m concerned about the commercial real estate market, which is only a tangential factor for us but there are a lot of excess properties floating around. New rules, regulations, and requirements also concern me, as they often have an adverse effect on our business model. A third thing that’s concerning is that costs continue to go up, regardless of the asset class. When operating expenses increase, that has a negative effect on your bottom line. And these costs are increasing across the board — insurance, utilities, everything. Lastly, I’ve always got my eye on interest rates. I think a lot of banks and lending institutions are more or less kicking the can down the road to avoid the specter of foreclosures, but that’s never a good long-term strategy. At some point, they’ll have to deal with the problem they’re facing.

What advice would you give to other real estate leaders to help their teams to thrive and to create a really fantastic work culture?

Building a strong company culture is very important to me and I have a lot of experience in this area. The first thing other real estate leaders should know to help their teams thrive and experience a fantastic work culture is simple — it’s all about the quality of people that you hire. Your employees are the strongest commodity your company has to offer. You have to hire the “A-level” players, the ones who are ambitious and don’t sit around waiting for success. The A players always want to move forward, to advance, to stay ahead of the game. This is why I’ve always handled the hiring of employees myself. I look for people who don’t need to be micromanaged, and we have programs and initiatives designed to provide professional development opportunities so we can retain them, giving us a competitive edge over other companies.

Ok, here is the main question of our interview. You are a “Real Estate Insider.” If you had to advise someone about 5 non-intuitive things one should know to succeed in the Real Estate industry, what would you say? Can you please give a story or an example for each?

These are the five non-intuitive things you need to know to success in the real estate industry:

Get yourself a mentor or hire a consultant who know the real estate industry inside out. Yes, you can learn from your mistakes, but they’re often costly. I believe you can teach yourself about 80% of the business by reading books and listening to podcasts. But the other 20% — the important part — requires direct experience

Make sure you have a contingency plan. Always assume that your carefully plotted strategic plans will not work out as you think or intend. Nobody sets out intending to fail, but you will be challenged. In general terms, assume that almost nothing will work out exactly how you planned

Prepare to stay the course with your holdings. Don’t make decisions based on adverse market conditions, as these fluctuate — often wildly. Always remember that just like the stock market, real estate always appreciates over time

Concentrate your efforts on property management. This is the operational side of the business and it’s very important to your ROI

Be a good judge of character and surround yourself with like-minded people who have your best interests at heart. I believe honesty and integrity are paramount and who you choose to do business with matters a great deal. I guess I’m old school like that.

Because of your position, you are a person of enormous influence. If you could inspire a movement that would bring the most amount of good to the greatest amount of people, what would that be? You never know what your idea can trigger. :-)

I’m already working on a movement that is special and deeply personal to me. As a devout member of the global Ismaili community, I’m currently developing strategic plans and initiatives to expose the western world to the beauty, majesty, and value of Islamic art. My company is in the early stage of developing an Islamic art fund to generate the revenue to make this happen, but it’s just a stepping stone at this point. I envision an exhibit by the name of ‘Light Upon Light,’ which will be a traveling show, featured in art galleries all over the western hemisphere. I am a big patron of the arts, as I believe it has the capability to unite us and become a conversation starter for people of diverse backgrounds, races, and religions. There is a passage in the Holy Quran — verse 49.10 — that speaks to the purpose of pluralism among society.

How can our readers further follow your work online?

Best way is my LinkedIn profile: https://www.linkedin.com/in/alexhemani/

Thank you for your time, and your excellent insights! We wish you continued success.