0

How This Immigrant Entrepreneur Turned $300,000 Into $2 Billion In 6 Years

Swapnil Agarwal immigrated to the U.S. with his parents when he was 15 years old.  As many immigration stories go, his parents seized the chance to provide Agarwal with better opportunities than he might have had back in Agra, India–so they moved their lives to Houston, Texas.

Though his parents were educated, their degrees didn’t mean much in the U.S., so his mother worked at a daycare and his father bought a liquor store. They lived in the type of apartment complex where robberies were frequent and the feeling of safety was scarce–his father was once held at gunpoint. His family couldn’t afford a car, so they took the metro bus everywhere, turning what should have been simple drives into unnecessarily prolonged voyages. Agarwal got a job spreading pizza flyers around similar Houston area apartments and attended the local public school. Unsure of pretty much everything, Agarwal’s first few years in America had exposed him to what it felt like to enter the unknown.

Fast forward ten years, and Agarwal is a corporate man. After college, he took a job in investment banking, and another in Hong Kong as one of the first employees at a PE fund. He started in finance because he knew that was where the money was–but it was never his end goal. Agarwal always knew he wanted to start a company, so he used his corporate career as a means to earn and save as much as possible.

Once he had saved up $300,000, Agarwal moved back to Houston so he could finally start his own venture. He knew it was a huge risk, and he and his wife were expecting their first child–but the possibility of failure didn’t deter him.

So in 2013, he founded a real estate investment firm and named it Nitya Capital. Because he had gained experience in real estate during his stint in Hong Kong, he knew where he needed to focus his attention: on the same type of affordable apartment complexes he lived in as a teenager. He planned to buy a neglected multi-family complex with poor management and turn it into a place people wanted to live (without changing the rent).

But before he could do that, he needed more money. After getting denied from the bank on his own, he was able to convince a friend to cosign for a loan as a favor, and eventually receive $2.7 million. With the help of another friend, one of the first he made in America, he was able to gain access to the contacts he needed to raise money. His next move was to call everyone he knew and anyone who would listen to convince them to invest. His strategy was to offer investors the most favorable terms possible. He made an offer that couldn’t be turned down, with an abnormally high hurdle for investors and especially low carry for himself. After combining what he was able to raise with his net worth of $300,000, Agarwal made his first acquisition for $4.5 million. His strong relationships were key to being able to secure the capital he needed to start out.

Once the money closed, the hard part started. The occupancy rate of the complex he bought was only 65%. Many of the tenants inhabiting the apartments were the kind of people who brought in crime and defaulted on rent, and they were scaring others away. He knew his first step was to evict them, but he was uneasy about being back in such a familiar yet unsafe situation. He had just spent the last ten years flying business class around Asia-Pacific, and he had become accustomed to the perks of corporate life. At this point he had a fleeting moment of doubt–he thought he might have made the worst mistake of his life.

But because this was the place he had come from, he knew he could face it again. He reminded himself of what he had been able to achieve thus far–he used to be some kid that passed out pizza flyers in these apartments, and now he was investing in them. 

So he knocked on their doors, pretended to be tough and eventually evicted them from the building. His tough-guy act served its purpose of scaring away criminals, but the occupancy rate plummeted.

He started cleaning the place up. He repainted, fixed up the basics and installed security cameras. He changed the french sounding name of the complex to one that would resonate with the primarily hispanic community living there. Since all Houston area apartments have pools and drowning is a common cause of death for children in America, he decided to offer free swimming lessons. Agarwal had once been an immigrant living in this type of complex himself, so he was privy to what the tenants really cared about. Rather than trying to buff the complex by offering shiny, superfluous amenities, Agarwal focused on the things that really counted: the safety and health of their families.

Six months later, the occupancy rate shot up to 90%. He was able to sell the complex for $6 million, effectively doubling his equity investment.

After his first success, he was able to scale and replicate his model to produce greater and greater returns, with more and more benefits for the tenants. He continued to buy neglected properties and turn them into clean, safe places to live. He added perks like free health care clinics, immigration assistance, and meals for kids during the summertime. Today, Agarwal owns a full fledged real-estate investment platform with $2 billion in assets and 600 employees.

While the first success of Nitya Capital seemed like it happened overnight, in reality it took half a lifetime. Without the money and strong relationships Agarwal had built up from his corporate career and his personal life, he wouldn’t have been able to make the first acquisition. Without the insight he gained from being a tenant in such housing himself, he wouldn’t have known what changes really needed to be made.

The real key to Agarwal’s success was his ability to harbor two perspectives in his mind simultaneously: that of an investor, and that of a tenant living in the complex. His diverse set of experiences led to a diverse set of perspectives–and at the end of the day, this is what really differentiates the strongest entrepreneurs.

admin

Leave a Reply

Your email address will not be published. Required fields are marked *