James: Hi, audience. This is James Kandasamy. You're listening to Achieve Wealth Podcast through Value at Real Estate Investing. Today, we have an awesome guest. His name is Nikolaï Ray. He's who's the founder and CEO of MREX, which is an acronym for Multifamily Real Estate Exchange; is considered by many of his peers in North America as the leading expert in apartment investing with over $1 billion analysis, underwriting and transactions. He's also a pioneer in mid-cap, multifamily financial engineering, which is, you know, he's regarded as the teacher, advisor and also the keynote speaker. He's also a real estate tech innovator to his current work on the multifamily real estate big data, artificial intelligence and property tokenization using blockchain technology. Hey, Nikolaï, welcome to the show. Nikolaï: Hi, James. Thanks for having me. James: Okay, so do you want to mention anything that I missed out about your credibility? Nikolaï: No, that sounded like a mouthful. James: It's going to be ready technology-centric discussion today, right? Nikolaï: Yeah, the full story is that it should probably a lot longer, but I mean, that could be for, that could be for a whole other episode of the origin story of how, how'd you get to, you know, how you get to where we get in life, and professionally and personally, but yeah, that's, that's the gist of it, you know, everything that's underwriting and, you know, acquisitions, dispositions, refinancing, obviously, portfolio management, whether it be the small market, small cap market, you know, between 500 units, all the way up to the mid-market, you know, market cycles, and obviously, have a very strong penchant for data and for technology. So, so that's, that's pretty much what I've done over the last, I guess, over the last seven or eight years, is focused on, you know, for the most part, I focused mostly on acquisitions. So I was in charge of an investment banking firm, we worked, you know, on both sides of the transaction advisory side of things, for investors and we also work with a lot of ultra high net worth investors, that's kind of where I built my speciality. Eventually, ultra high net worth investors and private equity firms and family offices, you know, by doing all that I kept on, kept on getting annoyed with the fact that the multifamily market is so fragmented, and the data is so packed, I just kept on thinking to myself, you know, this, this market this, which is an important market, I mean, the apartment building investment market is a almost a $10 trillion market worldwide. It's a, quite, house is a primary need of human beings, which is to have somewhere to live. And yet, you know, we're kind of in the dark ages as multifamily investors, because number one, we don't have access to any centralized marketplace. If you compare us to a stock investor who can go on the NASDAQ and trade every type of tech stock or stock market investing world, the New York Stock Exchange, and we don't have access to any data, the data is very raw, it's very, it's kind of, you know, what I call legacy data, as you look at like Costar and, and all these various data providers who provide this very raw and inert data, without any actual, you know, context around the data, and without any helps with regards to making decisions business intelligence wise, as a multifamily real estate investor. So that's kind of how that's how my career has gone so far. That's why I went from transactions and more towards data technologies because I felt like there was so much work to be done to help investors just you know, be better investors for once. James: Okay, so let me understand MREX because I think it's important since you have a lot of passion we need right now. Right? So -- Nikolaï: Yeah. James: Multifamily Real Estate Exchange, if I understand it correctly, so what you're saying is right now, the data is so fragmented, and a lot of times when, you know, people like me underwrite deals, we have to do so much work, I did too. I mean, I really learn to write [inaudible 04:05] for four hours because I did all the property management financial, that there are so much of mistakes in the property management financials, you have to do T-3, T-12, you had to do expense ratio, you have to do market comps, and all that. So what you're saying is, you are going to summarize all that, and make it so easy to look at so that it can be treated as a commodity, commodity, is that right? Nikolaï: Not necessarily. So, so the idea is taking you as an example or any of your listeners, right now, who are multifamily real estate investors actually acquiring properties, let's say you have the capital ready, or your investors have the capital ready to allocate to an acquisition, you know, just actually finding that first property to buy or the next property to buy is a very time intensive and energy intensive job, right. You have to go on, you have to go on all the different MLS, you have to go on the loop that's of this world, the [inaudible 00:05:00] and the [inaudible :00:05:01] and, you know, just -- James: [inaudible00:05:02] Nikolaï: Right, and then you have all the brokers, and then you have all the broker websites, then you have all the pocket listings and you have not even really touched the majority of the market, you're actually still missing probably, you know, anywhere between 25% and 50%, of actual transactional inventory, depending which metro area you're in. So it's a lot of work, even just looking at the stuff that's on websites. That's a lot of work because you have to go on between five and fifteen websites, each website has a different user interface, this different user experience, and actually shows different information. On one site, maybe on [inaudible 00:05:42] you might have a cap rate, maybe on the MLS, you won't have cap rate, you'll just have gross revenue. So then you have to figure out your own cap rate off of that. It's a lot of work, you know, and for me, I just never thought it made sense, to not be able to say, hey, I want to buy a multifamily property, whether it be a five unit, whether it be a 50 unit or 500 units, I want to go on to one marketplace, we're all properties are centralized in a unified, and normalized manner. Because that's the second point of it, is you have to be able to normalize expenses, if you want to start comparing apples with apples, and oranges with oranges. So that's the second phase. So what we're doing with MREX is we're building a unified, standardized marketplace for multifamily investors, where they will be able to see every single property that exists, that is for sale, despite on the way it's being sold or listed or marketed. We're going to be working with brokers obviously, the goal is not to get rid of brokers or anything like that, that's not, that's not what our goal is. Our goal is to help brokers, help investors just make the whole transaction process much quicker and more time efficient. And that way, you know, we're making the market more, you know, just a more efficient market. James: Okay, okay. Got it. Got it. So you are basically streaming lining the whole selling and buying process, I guess, just to make --? Nikolaï: Absolutely. Absolutely. James: Okay, got it. Nikolaï: And the analysis process as you said too, right, because it's one, it's one thing finding the properties and having them all in one marketplace. Okay, let's say, let's say you have the NASDAQ, let's say I wanted Lesson TechStars rather than multifamily properties. I go the NASDAQ and I can see every single company, I could have access to inventory, now that's the first step. Now the second step is, once you have access to inventory, and the information provided on all that inventory is normalized and standardize, well, I still have to be able to start comparing and start, you know, building my own models to say, well, if I'm a cash flow investor, which stocks are generating the most cash flow relative to the other, to the rest of the inventory. So that's where you know, context and alternative data comes into play with our platform, is that we want to be able to, to offer data and tools to you as a multifamily investor, to help you streamline your underwriting of the inventory that you've seen. So that's really the two things we're focused on at the moment. James: Okay, got it. Got it. So interesting. So that'll be, that'll make a lot of, I mean, for investors or for buyers, they would be able to see what kind of deals that they want to buy,-- Nikolaï: Right. James: Not just what they want to get the yield out of -- Nikolaï: Exactly and instead of going on fifteen websites, well, they've only one website, instead of having to, you know, start normalizing expense ratios and sifting through, through T-12 and T-3, and doing all that, it already kind of be all chewed up and kind of built up already. So you can actually focus, focus on analyzing, focus on comparing and establish, okay, I want to buy this property using this strategy. And why would I do that versus the other property that I see over there? That's ultimately what's the most important thing. James: Okay, okay. So could it then be a good idea to match this with a crowdfunding platform, because during the crowdfunding, they can choose what deal they want, right? Nikolaï: Right. So crowdfunding is an interesting thing. The problem is crowdfunding, obviously, crowdfunding, crowdfunding has tried to kind of attack two things. Number one is liquidity, right? Because, as a multifamily investor, the more properties that you acquire, you increase your net value, right, you're a richer person. But the problem with that, is that you have to leave equity in every single deal, right. The banks won't finance you 100%. So you always have to leave equity. So as you get richer and richer, value wise, you are actually cash poor, because you're leaving so much equity in each property that you acquire. And there's always a part of the equity that has to stay in those properties. But the probl
