Why Data Beats Gut Feel, Hunches, and Emotions in Real Estate with Neal Bawa

Oct 8, 2020

Neal Bawa
This podcast guesting of Neal Bawa is hosted by Taylor Loht of Passive Wealth Strategy Show – Real Estate for Busy Pros
Today we are talking about data-driven real estate investing with one of the premier experts in this topic, Neal Bawa, from Multifamily University. You're going to learn what data is important, why data is important, and why data beats gut feel, hunches, and emotions. It is not a matter of being emotionless. It's more of acknowledging dealing with and keeping your emotions out of play and staying data-driven and data-focused.

Neal Bawa is a technologist who is universally known in real estate circles as the Mad Scientist of Multifamily. Besides being one of the most in-demand speakers in commercial real estate, Neal is a data guru, a process freak, and an outsourcing expert.

[00:01 – 03:29] Opening Segment

    • I talk briefly about great values that await you in this episode
    • I introduce the guest, Neal Bawa
    • Neal gives a little bit of background about himself
        • Had a successful tech career
        • Stumbled upon real estate by accident

[03:30 – 13:11] Data-Driven Real Estate Investing

    • What it means to be data-driven
      • It’s a culture where you manage and measure everything.
    • The Two Mantras of a data-driven company
      • You can’t manage what you can’t measure
      • Data beats gut feel
    • How do you know what pieces of data to look at?

      [13:12 – 26:19] The Future of Financial Systems

        • Neal talks about Cap Rates.
          • His projection of the flow of cap rates in the next few years 
          • How it will affect real estate
        •  Multifamily will receive the biggest blow when cap rates fall.
        • Long-term implications of cap rates, interest rates, and other factors on the financial systems
            • “The current financial system at most has 10 years left.”

        [26:20 – 33:19] Closing Segment

          • A quick word from our sponsors
          • What is the best investment you’ve ever made other than your education?
            •  I hired a person to watch the cameras at one of my properties to look at people with pets and follow them to ask if pet rent was mentioned.
          • What is the worst investment you ever made?
            • South Shore, Chicago. I bet on that neighborhood turning around.
          • What is the most important lesson that you’ve learned in business and investing?
            • Pick your partners carefully.
          •  Connect with Neal online! See the links below.
          • Final thoughts

        Tweetable Quotes:

        “The truth is that human beings are very unusual in the way that they remember their failures and successes. Some of us only remember our successes – and then there’s this other group of people that is probably the majority that only remembers their failures. And if you’re not good at remembering both in the right proportion, you can’t have a really good gut feel.” – Neal Bawa

        “The lesson I learned is that in this kind of big project, sometimes they go, and sometimes they don’t. And when they don’t, the bet that you made you can’t even breakeven.” – Neal Bawa

        “I find that we spend so much time looking at properties. So much time looking at cities but then the people that we work with, we don’t invest enough time on that.” – Neal Bawa