Henry Manoucheri
Until you get a no, you don't stop
January 30, 2026 · 1 hr 2 min
He Went From Del Taco to a $1.5B Empire (Here's How) | Henry Manoucheri
With Henry Manoucheri — Chairman & CEO, Universe Holdings
Listen to the full episode1 hr 2 min
The episode in one minute
What this conversation gets into
He Went From Del Taco to a $1.5B Empire (Here's How) | Henry ManoucheriHenry Manoucheri, Chairman and CEO of Universe Holdings, sits down for an in-depth conversation on building one of the largest…
Watch the full episodePublisher notes
Episode show notes
He Went From Del Taco to a $1.5B Empire (Here's How) | Henry ManoucheriHenry Manoucheri, Chairman and CEO of Universe Holdings, sits down for an in-depth conversation on building one of the largest privately held multifamily portfolios in the U.S. From his arrival in America as a teenage immigrant fleeing the Iranian Revolution to scaling a national real estate operation, Henry breaks down the mindset, strategies, and relentless work ethic that fueled his 42-year career in commercial real estate. This episode covers the power of persistent cold calling, transitioning from brokerage to principal investing, deal evaluation in today’s multifamily market, Los Angeles real estate dynamics, and timeless lessons for investors and entrepreneurs. Whether you're into multifamily syndication, value-add strategies, sales mindset, or long-term wealth building, this is packed with practical insights from a true industry leader. Chapters: 0:00 – Intro: The Vision Behind a $1.5B Multifamily Empire Chapters: 1:09 – Immigrant Roots: Iran to Orange County & First Job at Del Taco Chapters: 7:45 – Early Hustle: Retail Sales to Real Estate Brokerage Chapters: 14:20 – Joining Marcus & Millichap & Mastering Cold Calling Chapters: 21:30 – Why Persistence Wins: 100,000+ Calls and Overcoming Rejection Chapters: 29:10 – Becoming a Top Producer and Transitioning to Principal Chapters: 36:40 – Building Universe Holdings: Family Office Strategy & Scaling Deals Chapters: 44:15 – Current Market Outlook: Los Angeles, Rent Control, and Opportunity Chapters: 52:30 – Deal Criteria: The Right Story, Motivated Sellers, and Value-Add Plays Chapters: 1:00:00 – New Construction vs. Value-Add: Wealth Preservation Strategies Chapters: 1:07:20 – Biggest Mistakes Investors Make & Lessons from Past Cycles Chapters: 1:14:50 – Leverage, Interest Rates, and Why Fixed-Rate Debt Matters Chapters: 1:22:00 – The Bottom of the Market? Cap Rates, Volume, and Future Predictions Chapters: 1:30:00 – Faith, Family, Legacy, and Final ThoughtsPerfect for anyone interested in multifamily real estate investing, commercial real estate brokerage, sales techniques, cold calling strategies, Los Angeles multifamily market, or immigrant entrepreneur success stories. 🔔 Subscribe for weekly interviews with top real estate investors and operators👍 Like if you're inspired by Henry's journey💬 Comment below: What's ONE sales or investing lesson you'll take from this episode? Follow Henry Manoucheri and Universe Holdings for more insights.#MultifamilyInvesting #RealEstateInvesting #CommercialRealEstate #Multifamily #ColdCalling #RealEstatePodcast #LosAngelesRealEstate #ValueAddInvesting #RealEstateEmpire #ImmigrantSuccess #UniverseHoldings #HenryManoucheri #RealEstateSyndication #ApartmentInvesting Subscribe and Stay Ahead! Stay informed and empowered in the multifamily real estate market. Subscribe to the channel for exclusive insights, rental updates, and expert analyses on the Los Angeles market. 🔔 Don’t miss out on the latest trends and tips to maximize your property's potential: https://www.youtube.com/c/TaylorAvakian 📈 Connect with me: Website: https://www.thegroupcre.com/ Email: taylor@thegroupcre.com X: https://x.com/TAYVAY_ LinkedIn: https://www.linkedin.com/in/tayloravakian/
Read the full conversation
Episode transcript
This 12,753-word transcript is matched to English (Original) automatic captions. Timestamps seek the episode player to the matching passage.
0:00–10:00
Taylor Avakian
calling. I've probably cold called over a 100,000 people in my
Henry Manoucheri
career. I've had investors and even my brokerage base, buyers and sellers, who I called once, nothing happened for 7 years, or 10 years, and all of a sudden, boom, boom,
Taylor Avakian
boom. Henry Minutuchi is a visionary who turned local investments into a $1.5 billion real estate empire. He's the chairman and CEO of Universe Holdings, a national leader in the multif family space. People who succeed just don't quit.
Henry Manoucheri
You just kind of don't stop. If you're a pessimistic person, if you're down and out and you're depressed, you don't belong in the sales business. Get the hell out. You're wasting your time. And I want the young guys out there listening, don't get discouraged. It took 13 months before I had a first paycheck. The more you have, the more worries you have. More money, more problems. You can't take any of it with you anyways. At the end of the day, who would even remember? Are they going to come to your funeral and say, "Oh, he was such a big guy. He owned a 100,000 units and he had 50,000 employees.
Taylor Avakian
They're not going to remember you for that. What do you think gives you an edge versus other people?
Henry Manoucheri
The superpower is
Taylor Avakian
Henry, welcome to the show.
Henry Manoucheri
Appreciate you having me. Thank you.
Taylor Avakian
Thanks for having me. For those who don't know who you are, would you please explain what you do and currently Universe Holdings?
Henry Manoucheri
Sure. I'm the chairman and CEO of Universe Holdings. We are a pure multif family owner of apartment buildings across southern California from San Diego to Santa Barbara hopefully soon in Northern California. We also are involved in the state of Florida, West Coast, East Coast. We also have a presence in New Jersey and parts of New York. I'm looking at Pennsylvania. We also do business internationally for personal portfolio for the family office portfolio in Israel, market that we love. We've doubled down on since October 7th. Wow. and we have roughly 18,000 residents today in our portfolio across the country and we're constantly looking to grow it. We're constantly looking to make it bigger and better. It's non-stop.
Taylor Avakian
So, we talked to your son and he mentioned I have to bring up the Del Taco story. So, can you tell me about Del Taco?
Henry Manoucheri
Yeah, sure. I was born and raised in Iran. I moved here in 1978 at the age of 15. Live in Orange County with my family in Anaheim actually and we I lived there for two years at the lower high school. My father told me being raised in a family with you know comfortable means and having moved to the US you know the revolution happened like 6 months after we moved here and uh all of a sudden most of what my father had was gone I mean almost like 90% of it like you know evaporated overnight. Wow. And it was a pretty scary feeling. We just had some money in the bank. My dad had two houses, couple cars and that was like about it. And he he got really depressed after that and he said you know he should go get a job and to be busy.
Henry Manoucheri
So, I think when I was 16, I went and got my first job. I applied at a Del Taco. You can still count today or not at 250 an hour. That was the minimum wage. Wow. And uh started to cook, you know, scrub floors and, you know, earn these stripes on different stations and sweat behind the grill, you know, do all that stuff. That was it. I was I was driving to work in a Chevrolet Capri my father owned. The man said, "You drive a nicer car than I do." I said, "But that's not my dad's car." But that was a truly humbling experience, you know, to be behind the counter, to be a cashier, to wait on people, you know, to sculpt floors, you know, to cook hamburgers and do all this crazy stuff.
Henry Manoucheri
And one of my brothers also, so my second brother, he also in the summertime, he worked at McDonald's, you know, when he was in high school. And then from there, my second job was working in Robinson's maybe became a salesman in a men's department. I love fashion. I still do. And uh started to became like a number one salesman and Robinson made in the summer. And then I continued that job from high school to college and I spent one year in college at Cal Fullerton and then later on joined my family living with an Armenian family actually for one year. The father with a mother and son we were very close and have fun memories of living in Stanton and driving Cal Fut with this crazy guy every day and uh you know really making ends meet pay him some rent this and the other and the
Henry Manoucheri
other and then I joined a family in North Asia continued working in retail. I worked for my uncle and then I my dad said you should really go into real estate and I was first a poly sci major. I love politics. I still do. I probably involve more politics than I've ever been stage of my life now going back you know going forward today and started to study finance real estate Northridge and uh I still worked during college you know doing work with my uncle in fashion industry and then I started brokerage uh my junior year in college before I became a senior. I work at a little company called Griven Von Dial. I would go there, you know, a few hours a day, go on weekends and I started to try
Taylor Avakian
to sell apartment buildings, you know. So, you did commercial real estate.
Henry Manoucheri
That was the first Yeah, I was like, I think my first sale was like a four-unit building on Ker and Sherman Oaks. Wow. You know, some guy you had floor time back then that you had to man the phones. People would call in and say, you know, I'm buying this. You wouldn't add in the LA Times. People would call in the in the LA Times and you had to close it for a meeting. That's how you sold. So, I sold this Mr. Dietrich a four-unit building in Vanise. I still remember 50,000 a door for $200,000. Was a nice guy and you know and that led to another another and then basically getting out before I got to college. I said you know this is not the the place to be. I started to look for the best the very best company that was around back then with the best reputation.
Henry Manoucheri
And they said there's a place called Marcus Milichap. It's like you know the elite forces of the Marines you know they really the Navy Seals the commercial they send me to boot camp I said ah that's what I want they say yeah but they're very tough they don't take anybody so I called them up and I got in had an interview and after meeting with several people they hired me and I just started after taking like couple weeks going to Jamaica after graduating graduating college which was a disaster that that trip like what am I doing here? So I just came back to work and and just started banging on the phones you know. Yeah. and still cold calling today. He's still cold call today as well. Still cold call today. I know one of your other interviews said the same thing, but you know, we have today 300 investors,
Henry Manoucheri
the individual family office side, high net worth, seven or eight billionaires, etc. But uh you know, we're always getting referrals and I go to a lot of conferences. I speak on average once at least twice. This I think this week I spoke four different times. It was it was a very busy week. You're running around and you meet people and then you know you follow up etc. And I always challenge myself to be fresh. You know, one of the fundamentals of brokerage is that you never want to rely on the same contacts you have because your clients or in our case our investors, not everybody's active all the time. And uh some people are inactive, others are still active. So you have to constantly grow your base so you don't just keep calling the same people. But nowadays, we take larger positions in our own deals.
Henry Manoucheri
a family office which is composed of me, my wife and our kids, you know, and putting the money forward. We take up to 50% of our deals, in some cases 80%. And then bring in larger check writers along the way. But it still comes with that cold calling and then calling again and then calling again and being fearless, you know. You you have to be you have to have no fear. I I call it almost being shameless, you
Taylor Avakian
know.
Henry Manoucheri
Yeah. You almost have to.
Taylor Avakian
You get thick skin from doing it enough times. And you know, I mean, I've probably cold called and this is crazy to think about, but over a 100,000 people in my career, right? And so that level of volume, it's almost impossible not to just like when when the things happen, you just
Henry Manoucheri
brush it off and keep going and moving. Yeah. I think I think also what happens in the cold calling process and I want why am I saying this? Because I I speak for young people all the time. Uh I still think I'm 22, got the same drive, vigor, energy, thank God. Good. And uh I speak with young I relate to him and I tell him, you know, until you get a no, you don't stop calling. Mhm. You call, you're very polite, you're very persistent, and you got to get that person on the phone. And don't take it personally. You got it takes sometimes three, four, five, six, seven day calls to get somebody on the phone. But once you get them on the phone, you engage and you get into conversation. And even if you hear no, you want to hear you want
Henry Manoucheri
to find out why not overcome the objection. Of course, and then if it doesn't happen from now, I've I've had investors and even my brokers, you know, buyers and sellers who I called once, nothing happened for seven years, for 10 years, and all of a sudden, boom, boom, boom. Like it started like, you know, they became like Yeah. You know, lifetime clients. Yeah. It's it's unbelievable. It is.
Taylor Avakian
It's that persistency and I think it's um we were talking about this earlier. It's just the people who succeed just don't quit. They just kind of don't stop. They keep on moving. They keep on pushing to the next one. And you learn that I think which is I've talked about this before too. There's a lot of successful owners who started in brokerage. And I think brokerage teaches you that discipline, that consistency, that overcoming objections, things
Henry Manoucheri
like that.
Taylor Avakian
Were you always a natural salesperson? Were you always a natural entrepreneur? or was that something you had to learn?
Henry Manoucheri
Yeah, I think anybody who is an executive today is a CEO or a founder of a company and running a company is a salesperson. They don't want to say, "Oh, I'm not a broker, you know, I'm not a salesman, you know." No, you are. We have cuz you have to believe in what you're doing. And you have to basically transfer that conviction to the next person that you trying to do business with.
Taylor Avakian
Is that what a good salesperson is?
Henry Manoucheri
Conviction. Yes. Most good salespeople are optimistic. If you're a pessimistic person, if you're down and out and you're depressed, you don't belong in the sales business. Get the hell out. You're wasting your time. Yeah. You know, you have to be optimistic and uh you have to believe in yourself. You have to have confidence. And you know, when we buy buildings, I always sip my sib analysts and the director of acquisition. We have a fantastic team.
10:00–20:00
Henry Manoucheri
I mean, it took years to put this together. Wonderful guys, wonderful ladies. Mhm. Uh I tell him, you know, I don't believe in the story, you know, like I just this is just not a good story. Yeah, but the numbers are right. This I said, no, if I'm going to take a property down, I'm going to put my money in the deal and I'm going to put other people's money in the deal. I have a tremendous almost a, you know, a holy responsibility to make sure they don't get hurt. They don't we don't do a bad deal. But I got to be convinced that it's the right deal. It's the right story. And you know, most people become like deal junkies. They just can't let go and they do deal after deal after deal and then when the cycle turns, it gets really ugly. What's a good story?
Taylor Avakian
Like what are you are there specific things you're looking for in a deal that you know is going to be are you offmarket kind of guy?
Henry Manoucheri
Like give me what would what's the story that you need to hear? I think ideally all of us want to be off market. You know, who doesn't want to buy stuff off market? But is that realistic? No. But what I do try, you know, the the best deals I've bought are deals that weren't marketed widely. They they fell apart because one of the first guy, the second guy couldn't close. You're the last one to to go in. And by then, the seller's motivation has become realistic. He's been through a hard time after if they're motivated, they would sell. And one of my my first questions when I was a brokerage, which goes back to 25 years ago, and for the last 25 years, we've been a pure principle in the game of 42 years.
Taylor Avakian
is that the first question is, is the seller motivated?
Henry Manoucheri
If you're dealing with a seller who's not motivated, you're wasting your time. So, uh, the offmarket deals, the deals that have fallen out, people have given up on, those have been the best deals we ever bought cuz you already forgotten about them. You don't have much competition. And, uh, sometimes, you know, a deal that is widely marketed, you could still make an attractive deal if you offer very good
Taylor Avakian
terms. Yeah, terms always end up surprising me. I think people, um, they don't put enough weight behind terms. they can be very attractive to certain people. It's not always the price that matters to a lot of these owners. So, if you can come in quick close, non-contingent, you know, hard ball, right? Right.
Henry Manoucheri
You can win a lot of deals at attractive prices. And it's interesting when when I when we were initially when I started the business, I think my the first building I I bought was 31 years ago. You would the building would come on the market, you'd make offers, counter offer, counter to counter, counter to counter, back and forth, and you make a deal. And sometimes there was multiple offers, they get multiple counter offers. Today that's gone. I don't really see that anymore. Yeah, it's uh everybody's on this. First of all, most larger deals, that's really our arena that we play in the sandbox we play in. There is no asking price. There is a whisper price, okay? And then, you know, we're trying to get $110 million. And that's that's put that out there. So, you start your underwriting with that. Then you use your own standards and
Henry Manoucheri
what kind of irra your investors want what kind of cash on cash you want you know where do you see the deal then you try to come up with your own number and then you make an offer and then and they wait a long time a 30 days marketing process then you submit your offer and then there's a best and final then there's a best time and final or something the market is really hard there's a best and best and best final and then people like you know go at each other like cats and dogs and at the end of the race there's like three people left maybe five people left maybe two people left and then they to get on the phone, you will interview the seller, you have to fill out a questionnaire. We didn't have any of this before. Do you think that's better?
Taylor Avakian
Do you think that's a better outcome for an owner? Like would you want that process run if you were selling an asset? Do you like that?
Henry Manoucheri
You know, uh I really believe that if you are a seller and you want to get the best price, you don't have to sell the building, but if you could get XYZ for the property, you should definitely put the property on the market. I believe in an exclusive listing process. I believe in in a whole marketing process. Absolutely. But if you have a building we don't like and uh you just want to get out etc. Someone comes with the right offer offmarket you would sell it. We want proviso. Most of the time the brokers that sell for us on our behalf are people we like and people we trust. That trust is very important.
Taylor Avakian
Is that what is that how you determine who you want to work with? because it's interesting from your position being uh a broker for 15 years and then going in the principal side cuz you know how we think, right? You can see from both sides what we care about. Um I'm the person of belief that most multif family is kind of I I'll scratch your back, you'll scratch mine kind of situation. It's very relationship driven. Um and so I'm curious for you in terms of who you want to work with, right? Sure. Because are we commodities? Are we good at negotiating? What's that process look like?
Henry Manoucheri
How do you determine in in our in our fundamental training going back way back when I still remember these principles? Number one was what do most principles want when they hire a broker? The number one thing is uh that you can trust that you can perform you can get the job done. And number two is trust that you're not some schllocky salesperson, you know, just telling people what they want to hear. And you have to be genuine, sincere. And uh basically the way I look at it is people who are serious, you know, especially young divid brokers. I guess with a Rocky movie, do you have the eye of the tiger? You got to have like the eye of the tiger, you know. You know, you got to be like a guy who's a commando or or a special forces.
Henry Manoucheri
You're crawling on your belly, you got the knife, you know, between your teeth and you're going under the bar buyer, etc. And and you know, I call these guys killers. And you know when we hire people to sell our properties, we want the killers, the guys who close, the guys who get it done and then they have a commanding presence cuz you know if they I want them to do what they do to a buyer what they do to me when I'm a buyer, you know, just put you through it. But after you get to know each other, you know, basically relationships matter. Relationships are really really important. Reputation is everything. Yeah. So, you know, when you're buying and selling to a guy, it's it's it's nice. It's just really comfortable to have relationships with multiple people. And and you shouldn't just rely on having one or five relationship.
Henry Manoucheri
You have should have a relationship with everybody. Yeah. But the other thing is also most people who do business with each other, whether it's buyers and sellers or principles and brokers or even finance brokers you hire, there's a chemistry. They got to like you and you got to like them. If you don't get along with somebody, you're not going to do business. It's not worth doing business. You can't get everybody. Yeah. Yeah.
Taylor Avakian
And I think too people get caught up in having everyone like them. I think that's a bad way to approach it too. Um I think being who you are and if you're generally good at what you
Henry Manoucheri
do, you're going to find the right people who you who do you want to work with.
Taylor Avakian
Um and I think there's enough business to go around for everyone. Some of my best friends are other brokers who I compete with. But it's because there's plenty of business and if we ever get in a situation where we need to make a deal happen like there's an understanding of I trust you on the other side of the table, right?
Henry Manoucheri
Can walk me back.
Taylor Avakian
I want to start when you were at Marcus and then you started buying your own deals because I think a lot of brokers want to eventually become a principal, right? They want to they want to get on the principal side. They start in the brokerage business. It's a it's a path to lead to ownership. What did that look like for you? Did you know when you got in brokerage, hey, this is a path, a stepping stone for me to get into ownership?
Henry Manoucheri
And then after that, what was those per what do those individual first deals look like? When I started the business, the idea was to really be an owner one day. You know, cuz I watched it growing up as a kid. And when I got into the business, some of the clients were wonderful to work with, others were jerks. They were just really difficult guys. But I had a tremendous stamina. I would just like like go in the boxing ring, you know, doing, you know, 12 rounds, 15 rounds, you come out bloody, but it just stay the course. Some of these guys I close, you know, nine or 10 deals with, but I would watch them.
Taylor Avakian
What is it that they did right? What is it that they did wrong?
Henry Manoucheri
And I would learn from their wins and I and from their mistakes. So the nice part of it was first few years didn't buy anything, waited for the down cycle to come. And when the down cycle came, which was in my lifetime, I think when I start before I started the business, the first down was in the 80s. Interest rates were like 18, 19, 20%. Jeez. People were still buying buying deals and Yeah. I I remember my my my uncle went and bought a house in Pacific Palisades up in the hills with a great view. This is 19 I think 80 or 81. And he paid like $450,000. He put 100 grand down and he financed the rest. I said, "Uncle Paris," I said, "What's he interested?" He goes, "Oh, pay 18%." I'm like, "What?" You know, 18% interest. You know that he still has a that house today.
Henry Manoucheri
Thank God didn't burn the fire. Wow. And uh that house is worth $4.5 million today. Yeah. So, wow. So, we learned from that that uh location, location, location, long-term view, Southern California, you'll be you'll be you'll be just fine. But the idea back to your question about uh how to get out is you know when I saw uh in the '9s after the SNL crisis there was like a window like a drive up window if you had a relationship with lenders as a broker you get these listings. Mhm. 20,000 a unit, 30,000 a unit, 40 a door, great buildings for 50 a door, you know, brand new construction and they were just giving these things away cuz the RTC came in and said forclose on everything, take it all back. It's a mess. Let's clean it up. There'd be like blind bids.
Henry Manoucheri
There'd be multiple bids and they would finance everything. You could get 80% financing from back then home savings or co- savings or Washington Mutual. So, it was just like churning and burning and just turning and burning. And you know, basically you could get a great cash on cash out of the gate, you know, 20%. That's gone now. Wo. And uh that was actually 1994 if I could buy deals all day long. And that's when you started buying or that was Yeah. 94 was the first building.
Taylor Avakian
What was your first building?
Henry Manoucheri
I bought a 16 unit building on Sycamore
20:00–30:00
Henry Manoucheri
60. 16. Okay. Was an ARO multiple biders I think 10 offers. Bought it for like 30,000 a door. Corner fountain library. fantastic. We still own it been refinanced, I don't know, 10 or 15 times unlimited IR and uh the family just me and my brothers and my my mom own it you know that was like 120 grand down back then and we have a rule from the Talmud that we don't sell the first building ever. Ah so we've kept it you know that's us and then that created a whole presence where we organically grew you know in the Hollywood market we still have a bunch of assets down there I think about 350 units or so. Okay. Hollywood was feedless. We didn't sell many of those buildings and they've done really well over the
Taylor Avakian
years. Were you making good money when you were a broker? Like was there a period in the beginning where it was you were struggling and then you succeeded and and were making you know like a good income?
Henry Manoucheri
I think the first year and I want the young guys out listening don't get discouraged. It took 13 months before I had a first paycheck. Mine was 12. 12 months. Yeah. So uh and after that it got better and got better and better every year and I got married at 26 years of age. My wife actually was my assistant which work with me. We still married thank god 30 almost uh more than 36 and a2 years man raised a beautiful family and we had kids back then we start having kid rides kids right away. So I had an overhead to service. So I sat down on weekends and I said okay here's my overhead bond. Let's say I'm spending back then 10,000 a month. Yeah. Whatever the number was. Okay. I got to be at have at least $10,000 of income from buildings I already own before I can exit.
Henry Manoucheri
So I started accumulating properties. I would do on weekends. I would do it at night. I would sometimes during the day I do the brokerage and the buying. And then once I had about 400 units under my belt at the beginning of 2000, I said, "Okay, I can now survive my management fees, the cash flow after paying the two employees. That's all we had. Today we have 150." But wow. So, you know, I said, you know, that that basically services my my the family over. I think when I left, I had four kids and uh I rented a an office literally two doors down from my house. My dad said, "Why are you all this crazy driving?" you know, just be home, be with your family is the best advice you ever gave me. And and then I left and you started to build it up.
Taylor Avakian
And were those first deals family and friends money? Was it mostly your friends? Family and friends.
Henry Manoucheri
Okay. So, you were doing you syndication was like what an idea that you had is what you wanted to do. I learned from my clients. Yeah. You know, in this very building where we were having this talk today, uh, one of my clients had an office here actually and he tried to buy this building. Really? Yeah. He said, "Go and talk to Jack Spound. you know, maybe he'll sell the building to me. It's like, so if I remember coming here for a meeting, I almost walked out bloody because the guys were so tough. Oh my goodness. You know, you get into all confrontation with him. But those were great. That was great training.
Taylor Avakian
Henry, what do you think your superpower is? What do you think you're you're inclined towards or what do you think gives you an edge versus other people?
Henry Manoucheri
The superpower is uh my drive uh ambition and uh still, you know, I'm thinking that in my lifetime, and I said this on a podcast with my son a month and a half ago, I want the company to be 10 times bigger. I want this to be one of the premier real estate companies in the US. That that's still alive and burning.
Taylor Avakian
Can I stop right now and not do anything?
Henry Manoucheri
Absolutely. You know
Taylor Avakian
what?
Henry Manoucheri
But but but but it it's just that drive and that that drive that comes and and because I can do so much good in the world, you know. I'm involved heavily with my grandkids uh foundation. I mean many many synagogues and day schools and yeshivas here in Israel in South America other places in the world where we are building communities and uh you know helping people of all walks of life to get on their feet and uh we are basically helping a lot of people sit and learn Torah all day long you know full-time which is a very necessary thing to make the better the world a better place so that drive is there and my and the strength comes from my face you know But what we all do is not easy. You know, it's it just doesn't happen by itself.
Henry Manoucheri
You you need to have a lot of faith and uh you know, faith in God and and my religious practice and orthodox Jew, you know, praying every day, learning every day, the Talmud, you know, in the morning, at night, you know, getting up to crack it down every day, six days a week. For me, like luxury is sleeping till 7:00 p.m. That only happens on Shabbat. Yeah. Wow. If I get up at 7:00 a.m., it's like, "Oh, wow. I made it." You know, this never happens. That's success to me is sleeping in. And right now it's like uh you know when we're high holidays right now so we have extra prayers and like we have the hot supplication so I'm I'm up at 410 6 days a week that that that's like a 40day run and uh you have to get to get to bed
Taylor Avakian
early. Has your has your faith stayed strong or was there ever moments when when you questioned it or was it just ingrained in you?
Henry Manoucheri
I think uh the concept that took me for a while to understand is we as mortal human beings believe that everything that we do all the success we have comes from great planning. It comes from working right. It comes from working long hours and sacrificing. You have to make a sacrifice for all that stuff. Certainly you need to have a plan. You need to work hard. you need to uh be efficient and you know do things. But what I learned from Judaism and from the Torah is that the ultimate reward, the ultimate decision of your success is done in your hands. It comes from God. So you have to have what what we call effort. In Hebrews it's called and then there's there's blessing that comes from God and it it it I would call my rabbitical advisors who admire and review to this day.
Henry Manoucheri
I have four advisers. I call them all the time. All on all kinds of life questions. I say, you know what? If I uh didn't go to Sak in the morning and I just paid at home, I saved an hour a day. All this driving back and forth and I I want to work 12 hours a day. I want to work 14 hours a day. And uh you know, should I do that for 10 years? Should I stop going in the afternoons? Should I, you know, not see the family as much and and and work hard this? They told me no. And uh you know should I be in the office 8:30 in the morning? I still ask that question. You know then what am I going to work out? Because most guys who are not religious they don't have to go to services in the morning.
Henry Manoucheri
They don't have to learn. They don't go they don't have to go back at night at at you know in the afternoon. They have three and a half hours more time than I do every day. Yeah. And they work on Saturdays. They work on Sundays. And uh it's interesting. I was in uh Sun Valley, Idaho at a Walker Dunlap event which is fantastic. You know, I love Willie Walker. I've talked about him before. They do a fabulous job. And there's some really high accomplished large owners there. And one of them was sitting behind me on the plane with his wife. Massive portfolio. I don't know 55 60,000 units across the US. Whoa. Probably 5 years older than me. Still going at it. Phone call. I'm like, "How did you do this?" And uh he says, "You know, Henry, I used to see you uh on Saturdays."
Henry Manoucheri
He's Jewish, by the way. I would see you on Saturdays on Pico. Like these all these kids we had, you know, I saw you one time with five of them. You're holding their hands. It's like a uh chicken or or rooster walking a bunch of chicks. And you're going to synagogue very happy. You're smiling. The kids are happy, all dressed up nicely, beautiful. And I'm in my car. And where am I going? I'm going to go look at buildings. And I said, "Okay, maybe that's how you accumulated this cuz you you you're at non-stop." He goes, "It took about 10,000 Saturdays to to get here." 10,000 Saturdays. So my wife and I look at each other and uh like, "Wow, that's crazy." I said, "That is not something I would ever do." Yeah. It's not worth it. Not going to sell out.
Henry Manoucheri
You know, you can't take any of it with you anyways. It's like at the end of the day, who would even remember? Yeah. No one. Are they going to come to your funeral and say, "Oh, he was such a big guy. He owned a 100,000 units and he had 50,000 employees." They're not going to remember you for that. They're going to remember how you made them feel exactly inside.
Taylor Avakian
It's so I um It's actually very I've thought about this a lot because I'm not Jewish and a lot of my clients are, right? And I work basically 7
Henry Manoucheri
days a week. And but I've noticed that most of
Taylor Avakian
Not a good idea even even for Nanju.
Henry Manoucheri
No, I know. And most of my like a Charlie Kirk today is his uh as we speak is is his funeral. Yeah. And I watched a lot of it today.
Taylor Avakian
Yeah. He um I mean most of the Jewish clients and people I know, they're very successful and yet they take time off. Do you think that there's something or what do you think is what's behind that? What's what's behind the break, the separation, the like why is it true that you can take time off but yet be more successful? Why do you think that is a thing?
Henry Manoucheri
Because I think a person is has many parts or dimensions to his life or to his personality and you have to have externalities. Number one, let's talk about marriage. Uh I have a dear investor, wonderful, fantastic human being, successful doctor, multiple clinics. He's 62, not married. Millions of dollars in the bank. Every time I need big money, a deal.
Taylor Avakian
Can you come in with a million to this deal?
Henry Manoucheri
No problem. This a very particular individual, extremely honest, you know, true to his word. And uh I never forget this. He were sitting talking
30:00–40:00
Henry Manoucheri
about him exiting a deal. And we're having this conversation. I said, you know, why don't I find you a wife? You should start dating. He goes, no, I'm done. It's too late. I said, what do you mean? You're a Jew. You're a doctor. You were like, you're a great catch. Yeah. you know, just go walk on uh in Beverly Hills, you know, Rodeo Rodeo. All these girls running around in Alo pants, you know, go to Chipriani on whatever just, you know, looking for a rich husband. I mean, you're a great catch, you know, even even go to Jewish events like, "No, I'm done." And it's really sad. Yeah. And and he and and what he said to me shook me to my core. He says, "Mr. Mar Cherry, you have eight kids. You have a great wife. You've been in the same house for 31 years." Which is true.
Henry Manoucheri
And I watched you grow over the years. You never went and bought that giant house north of Wilshshire or north of Sunset and throw wild parties. You stayed under your means. And uh he says when you go home at night, listen to this. You walk into a home with a wife with kids and nowadays grandkids. And he says when I go home at night, it's really dreadful. There's nobody there. And for that I say that people should prioritize, you know, setting time aside. It doesn't matter whether you're Jewish, you're not Jewish or observing, not observant. People should get married as a young age and have children, be fruitful and multiply has a lot of kids. We have a huge problem within this country. People stop having kids. So we have to go back to the fundamentals and uh you know
Henry Manoucheri
truly be a wholesome person where we have a balanced portfolio in our life. Number one, we have God. We have country. We have our family. We have our kids. We have our community. We have our health. We have our exercise. We have enough sleep. We live a clean life. And we contribute to society to make to make the world a better place. It's not about just about making money. You don't have to go take 10,000 Saturdays and not keep the Shabbat because you want to How can you have fun? Mhm. There's this uh verse in the ethics of our forefathers. It says that the one the more you have the more worries you have. Okay. More money, more problems. It's glorious to you have a you know for your portfolio to be 10 times bigger. I wouldn't mind having it. Sure. I'd be first to say it but be ready.
Henry Manoucheri
It's going to come with a price. I know you're uh you're working with your kids a lot and and we've
Taylor Avakian
talked about how you again you still are motivated. You still are driven. There's a lot of vertical integration which I've heard you
Henry Manoucheri
say. Yes.
Taylor Avakian
What what path are your kids on? And are they wanting to follow in your footsteps? Are they wanting to trailblaze their own path? Like what's what has that been like for you working with family?
Henry Manoucheri
It's a it's a great question. It's quite loaded and uh I do still support all the kids. Uh seven or eight are married. Most of them are working and uh couple are in the business. Two of them on their own, but I still back them and they worked with me. the two that are on their own fully and one brother is with the other two that's three boys. Uh I still support them. I back them. They call me for advice etc. Each one of them worked with me between 2 to 7 years but they wanted to go on their own. They wanted to one went to New York which has been a great thing. The other one moved to Florida. Two other sons actually moved to Florida. One married to Florida. The other one married again from Europeets. And and they're doing their own deals today.
Henry Manoucheri
But I think there was two paths for them to go. they could have gone and gotten a job and become a broker like you, let's say in Miami, uh, and really learned a lot or B, go get it, you know, go get a job at Blackstone, for example, be an analyst or acquisition person. And C is have that back them and go do their own thing, 100% on their own, their own balance sheet, their own investors, their own management, do all that stuff. And, uh, they've learned a lot doing it that way. And I think uh, once once I slow down, they're waiting for me to slow down. who said, you know, he can't just be the boss of everything. You know, we want to have some rights, too. I said, I'll give you you guys rights, you know. But there I think that they're ready to come back.
Henry Manoucheri
And the experience that they've gotten, you know, especially in the last 3, four years, coming into this vicious cycle that we went to high interest rates has been quite a lesson, but they've learned how to survive. So, one of my sons, uh, Abby went and studied at night despite working full-time during the day and doing a lot of other things. got an insurance license in two or three states. So he's created insurance company with my son Aaron. It's got manageary brothers insurance besides manage trade brothers property company and you know we are looking to do insurance with other owners particularly our own portfolio and we got sick and tired of these escalating rates have gone up 57%. So in order for the for him to create an additional income stream he come with this idea
Henry Manoucheri
of creating an insurance company and okay what else can we do to make some extra money they started a management platform. So in Florida right now they're managing properties for other people. We're going to do the same thing. They started cold calling owners and people like them they're nice likable guys. So they have that same discipline. So the idea is to have a con you know and then my my third son Ysef started a construction company in Florida. Now they're now doing management and construction for other people. So I think we got to bring all those verticals into uh you know our our firm and like a holding company. Yeah. Like a holding company do do it nationally and save money our own portfolio. You know why why give it away to other people? Do uh hasn't it it will happen. It's just a matter of time.
Taylor Avakian
Have you always been vertically integrated in mind? Like is that always the way you think about business?
Henry Manoucheri
All of our properties uh across 60 assets today and uh all the all the stuff that we hadn't owned before. We never hired third party managers. We have had a co-manager in New Jersey for one asset because we were new to the market 4 and a half years ago, but we've done away or about to do away with that. And we believe we're we're hard unh hard believer in hands-on approach. Micromanagement is not a bad term. It's a good term. You know, knowing everything about your buildings is really important. Yeah. So, uh we were working, you know, integrate before. So, now it's going to be even more. How do you become an expert?
Taylor Avakian
How do you become a I know in brokers we talk about market expertise, right? Specificity. How do you become if you want to go buy in New Jersey or you want to be the best insurance broker like how do you think about building expertise?
Henry Manoucheri
Expertise comes with specialty. You can't be a generalist. I've said this before to to people. There are some guys who we do business with in the city here. They do sell office buildings, even retail and shopping centers. You know, I I dabbled in all those asset classes, but I learned quickly that the people who were the most successful and had the biggest portfolios were the ones who were highly specialized in one maybe two or three disciplines, you know, not really more than that. So, uh you know, we chose apartments and then the businesses that we are created now, we also have a new media company we created that we're going to do my my my son Joseph runs it with me. We're going to grow it much more because the new language of this generation, it's extremely powerful these podcasts like what you're doing and getting your
Henry Manoucheri
name out out there and you know your your brand works for you. Brand is everything. Look at Trump. He's built a the most powerful brand in the world. Whether people like him or not doesn't make a difference. You cannot argue with the brand. Mhm. And that brand will last for generations. So that that's how marketing and it's you know tremendous engine that people should really capitalize on today.
Taylor Avakian
What is your idea for the the media company? What are what is Ysef what what is he envisioning? What do you envision that company being?
Henry Manoucheri
Uh what we envision doing is having uh which has happened with him now and I'm going to take it to the next level is God willing having at least one podcast a week with a business leader whether they're in real estate or another field with some with great people and then having um on top of that a second podcast where me and two other guys who are observing Jews will sit around and analyze what's happening in the world from a spiritual perspective. You know what does all this mean the great plan of God for creation cuz there's so much happening around us right now and especially last couple years we are on a fast accelerator and where where the world is headed there's just so much happening so we have people need guidance there's a lot of people out there who are uncertain they're really afraid they're looking
Henry Manoucheri
for assurance looking for guidance and I think this would be a tremendous force let's switch gears a little bit and talk about Los Angeles sure so LA it's where you started
Taylor Avakian
wow we're covering so many topics this is exciting we Yeah, it's been great. I I I like when we take it to different angles. I wasn't expecting to talk about we did, but it's it it feels right.
Henry Manoucheri
It felt right for for me.
Taylor Avakian
Um Los Angeles, right? Yes. This is where I started in the business. This is where I became my apartment broker career began. It's where your apartment broker career sort of began.
Henry Manoucheri
Orange County, LA.
Taylor Avakian
LA has changed a lot. It has become unfortunately a very competitive market, a very
Henry Manoucheri
highly regulated market. Every owner I talk to is It's not competitive anymore. Well,
Taylor Avakian
it used to be. Yeah, it's it's it's competitive for the good deals. I guess there's a lot of deals out there, but the good ones, they're hard to they're hard to come by. What has happened to LA? Why are we in this position?
Henry Manoucheri
I love that question. What's happened to LA is LA has gone completely on the abbby on the left with uh what I call uh liberal politics, complete lunacy. and uh in a sense it's become a you know socialistic hotbed. So we have today on the LA city council three members and I learned this during the draconian co measures the moratoriums destroyed the business for 4 and 1/2 years you stopped a lot of progress you couldn't raise rents for 4 and 1/2 years you didn't have to pay rent and there was government assistance and sometimes there wasn't and people just got a license to steal money I call like that this is license to steal money why can you go to a hotel to a store Well, the stores was it was illegal to sell until until a year ago
40:00–50:00
Henry Manoucheri
and and or go go anywhere and just say, "Okay, uh you know, thank you very much. I don't feel like paying. Catch me if you can." Yeah, that's what happened. This is lunacy. It's craziness. So, what's happened is you have Mitar Ramon, a social democrat. You have this other guy, Fernando Martinez, and you have another guy, Nazarian, who I think also is a leftwing guy on on the LA city council. And then you have the EDC county board of supervisors, Janice Han, Lindseay Horvath, Riverolovski, all basically trying to cater to the masses and mixing politics, leftist socialist ideology and basically painting landlords into evil people. I mean, look at what Weinstein tried to do. Weinstein 1.0, 2.0. Hopefully, he's done. Mhm. It basically damped the the apartment business on the rent control side
Henry Manoucheri
for the last 5 years. You know, people couldn't decide etc. But despite all this, so we redlined LA as a firm currently. We'll get to that. Okay. For the last 3 years, we were done. And we didn't buy anything. I think the last LA building I bought the last rent control building was 3 years ago. And then you look at what's happened to San Francisco. They destroyed San Francisco. But some guys got in and people get fed up. See that this lunacy is not sustainable. It's not working. Big firms left. Retail stores closed. Hotels closed. Office buildings got devastated. Crime rampant. Homeless people on the street. Drugs everywhere. Urine fees. It's disgusting. Like I said, and it's here today in LA. Our homeless problem hasn't gotten better. It's gotten worse. What happened to the $28 billion that he was going to spend on, you know,
Henry Manoucheri
Gavin Newsen on where's all that money? Where'd that go?
Taylor Avakian
Why is this not better?
Henry Manoucheri
So, in San Francisco, some guys I saw, we do business with them. Actually, the brokers we do, we we do we work with them at uh one of the large firms. He started buying apartments, contrarian theory, and I I've been watching him last two years. They bought some fantastic deals and they're doing well. So, San Francisco now is now cleaned up. People got fed up. Sanity sunk in. This is not working. There's a new mayor. People like him very much. They're getting away from the lunacy. They're coming, they're becoming more conservative and they're waking up and they're looking for safety. This and that, the other. So, I think that bit will come up. So, now LA is no longer a red line for us. We are very much back in LA. Now, at this time, we are bidding. We have an escro a good size large core deal in
Henry Manoucheri
the valley that is not rent control. We haven't yet dared to buy go back into rent control. But I know two groups I know in the city, young guys, you know, Orthodoxy was very bright. I don't want to mention the name. They have a thesis. And the thesis is that they're going to go buy these older character buildings, rent control in LA, really cheap. You could buy these deals for 250 a 2017 18. They could buy for 147 of those, 6 and a2 cap, maybe close to a seven cap, and go ahead and fix up the uh concrete nonductile issue, deal with that and and take out some bridge debt, take some per equity, you know, they're accumulating hundreds of units, probably soon a thousand. So, uh, if this bet pays off, it's a great bet. But what I learned also from investing in other
Henry Manoucheri
markets like in Jersey and Florida, in Jersey not so much is very it's very similar to LA. It's very supply constraint most of the markets there. Florida we saw really quickly and then some of my friends went to Arizona uh because they got afraid of uh the legislation in the last 3 years, four years they sold control properties. They traded into brand new core classic uh new construction in Phoenix and in Austin markets have we not gone into because we felt having that Marxist military training and uh that thinking that we want to be in supply constraint markets you know they cut the falling knife which is the rents falling 30 35%. M that hasn't happened here and that's that's why we're back because we believe that Southern California still the best weather in the world hands down you know uh I was in Florida week
Henry Manoucheri
before last got caught in two rainstorms lightning a car I thought we're going to get hit in a windshield it took to go from Palm Beach to Miami 2 and 1/2 hours I'm like I don't need this you know and you arrive at for the airport let me tell you the energy is Great. You're going to get to Florida. The Miami is a fabulous positive energy and it's growing and and I think we are going to do well. Others are going to do well there. But the weather sucks. It's like you know my wife says, "Oh, we drive for this is a free sauna." You know,
Taylor Avakian
it's beautiful here.
Henry Manoucheri
Equinox.
Taylor Avakian
You just go outside. Yeah. So, you believe in LA.
Henry Manoucheri
Your your your thesis. It's a risky strategy. Not not everybody may agree with it, but I think, you know, especially after the fire is here, another governor's race coming up now. I think Caruso is running. I like him very much. I bought a building from him 25 years ago that I've done very well with be a big fan of his and God help become a governor and god help he comes.
Taylor Avakian
Huh? I said god help that he comes on the podcast as well.
Henry Manoucheri
But continue. Sorry. I can call him up. I like him a lot. And then you know when we have a new mayor in the city. I mean these people it's amazing they're still in power they have destroyed this state this city what why do we have to get up every morning I I go to Shabbat right on Pico I live in Beverly Hills I go to Pico every Shabbat morning I see people sleeping next to the synagogue on the floor like what is this you know why is that acceptable and there's people like on LSD fentinel running around the streets like like zombies downtown is a disaster downtown disaster parts of West LA, West LA when I was a younger guy, I'm still young, brokerage, you know, in in the 1990s, early 2000s, in the 80s. Boy, if you had a building in Brentwood, you
Henry Manoucheri
had a building in Santa Monica, we had a building in Westwood, it was like platinum. Yeah. Wow. Brentwood, that's gone now. You know, it's really a shame. Yeah. It's crazy. It It
Taylor Avakian
How did that happen?
Henry Manoucheri
But still, the prices didn't go down.
Taylor Avakian
Yeah. Is that amazing?
Henry Manoucheri
It is amazing.
Taylor Avakian
It is. There's still people want to own in prime areas. I still think LA is driven a lot by locations and feeling safe and wanting to have a storage of wealth, which which begs the question, I guess, for you, like when you're looking at a deal to purchase, right? What are the numbers, the metrics that you're trying to determine that make sense for you to actually put your money in and you want to invest in it? How do you how do you buy or look at a deal to buy?
Henry Manoucheri
The number one thing we look for is a story.
Taylor Avakian
What is a story?
Henry Manoucheri
like to buy from a seller ideally who is had a property for 30, 20, 40, 50 years or it's in a family office. The kids are selling it. They've been sleep behind the wheel. They own the asset free and clear. They haven't put much money into it and uh it's time for a new owner to come and pump cash into a building and basically take the asset next level. The next thing is buy from developers. We likely we buy a lot of core and new stuff. We want to buy from developers who motivated. We want to make sure that we buy that asset. By the way, when I'm buying in LA today, number one formula is we have to buy from a seller who is selling it below what they bought it for 2017 18 or even 2021 22 23 that you can get those deals today.
Henry Manoucheri
You want to buy at a discount from what they bought it for. Or B, you want to buy from a developer even though not losing money but to build that building today. I want to buy it 30 to 40% cheaper than what cost to build it today. Yeah, that's the matrix I I use. And then and then today you have a lot of trapped upside in non-brand control newer assets because the developer was in a hurry to lease up the property. So they gave away a lot of concessions and the market's gotten better. Hopefully there's less supply and those rents can go up. We didn't have insur several times. Yeah. bought by one new building and uh that rents for brand new building was leased up during co we didn't renovate anything we used our renovate
Henry Manoucheri
anything we used our management team we have an extra excellent team there rents went up three four $500 everybody moved out because of concession was gone and the building was stabilized and then we bought a couple of assets there from that same story long-term owners they had a 30 years $1,000 upside in rents that's what I look for I don't really care so much you know what the cap rate is today I I look at the future cap I look at the market GRM. I look at price per pound and uh what is my cash flow for the first 5 10 years. Do you want to be in the money today we buy? You want to be in the money that So you make your money on the purchase is just how you think about it.
Taylor Avakian
Is how you buy. Is that how most successful people you've seen and including yourself, do they make their money on the purchase or is it in the execution?
Henry Manoucheri
The money is made on the purchase and the money is also made on a careful execution of your business plan. You can't just take on a building and and go to Europe and celebrate that. I just took, you know, close a $200 million deal. You know, you got to right away hold your people accountable, your management team, your asset management team, your property maintenance team, and renovation team that to execute on a business plan and to monitor the
Taylor Avakian
assets. What was it like purchasing your first new building like new construction? Because as someone who started as a value ad guy, right? Right. I'm I would consider myself if I if I bought a building, I would want to do value ad just because it's in my nature. I I see the path to build wealth, right? It's hard for me to see the path to build wealth when you're buying new construction because typically it's stabilized. Now, there's situations like you said where they rented it below the market rate rents and naturally you're going to go there, but more likely than not it's not going to be as big of an opportunity, right? Is there something that are you diversifying? Like why why do you feel like that is a good investment
50:00–1:00:00
Taylor Avakian
for you given your expertise in doing so much value ad? Why is that class A real estate? Why does that make sense to you?
Henry Manoucheri
It makes sense because today some of our investors who made a lot of money in their lifetime, whether it's from their business or investing with us or other people, they want to preserve the wealth. These are great wealth preservation deals. And if you want to hold an asset longterm, 10 years, 10 years plus, they're much easier to market. They're much easier to attract capital because the buildings are very nice. They're very beautiful. But there has to be a fundamental story where you see upside even in those rents. So, you know, we we can't we just walked away from a deal that we loved couple days ago here in LA, 16 unit property, etc. because the seller said it's, you know, you you got to close fast and got to pay more money. And then we sat down before we committed. Okay, we can maybe close faster.
Henry Manoucheri
We can probably pay a little more, but let's see if you can do that. We started to dig into the numbers and I went and brought in my two regional managers and our CEO and I said, "Okay, the rents today on average, let's say 4,000. The broker say you can get 6,000. We're not buying that." I said, "Okay, we took the Miller Road for example, 5,000, 450 a foot. Miracle mile, my location, great this and the other." But my operating team went ahead quickly. They pulled comps like we had. Then we talked about the configuration of the units. Some of the units, for example, they're all very large, very nice, but they had some bedrooms that had no windows. And they had a second bedroom that a quarter of the wall on the upper part of it was cut. So, this tenant has no privacy, you know. Oh, wow.
Henry Manoucheri
When he's in his bedroom with his wife or god knows who. And there I said, you know, you can't really push this. And my my people said, "No, you cannot push." So, we just back away. So, you know, this is our price. We're not moving. You know, if you have a higher offer, go with it.
Taylor Avakian
What do you think the biggest mistake syndicators make or or new investors or or even old investors?
Henry Manoucheri
What do you think the biggest mistake that they make when buying a deal, working on a deal, valuing a deal? The biggest mistake is number one, overpaying. Number B is two is getting caught in these bidding wars where you you just have to have the asset. You have to pay more than the next guy. selling yourself on a self-fulfilling prophecy of you know endless rent appreciation or lends don't appreciate indefinitely you have to be ready for the cycles and uh the lessons I've learned over the few last following a few last cycles number one in the 2008 9 10 great recession what we learned is that leverage is a bad idea so today for the last 15 years we have put big down payments as high as 55% % sometimes 60 trying to study low leverage because you can always refinance out. Number two, what we learned also 95% of
Henry Manoucheri
portfolio had fixed financing but we had three deals in this last down cycle that had valuable rate loans which wasn't my choosing. My institutional partners in their great Harvard educated wisdom came on and say oh rates will never go up and you know we need to have an exit strategy and boy that was a big mistake. Yeah, because thank god we had rate caps and uh secondarily the assets we managed them really well. They were great locations. They performed really well despite the last few years the rents continue to go up. We had great team members but you know some of those uh even on the rate caps the rate cap reserves went up 10 times. We had a building that you know that was 8,000 a month became 80,000 a month. Wow. Another one was went to 300k a month that took all the cash flow.
Henry Manoucheri
So all of a sudden you have this Fanny Freddy holding $5.5 million of your money that you can't even reach. Yeah. You get zero interest on it. That so what's happened now is those reserves have gone back to zero because the forward curve the yield curve is that interest is going to go down. Yeah. So we learned in this cycle we don't want to borrow money on a value. Thank you very much. Fixed. Don't even fixed. Yeah. Yeah. Fixed. Borrow fixed. Pick a good rate. Lock it. Put the keys away for 10 years. M 10 year timeline that's typically 10 years I mean I mean we I did I we did two refies uh this year we have another one god willing closing in November December especially another one after that in December and uh we went with
Henry Manoucheri
a five to sevenyear fix because the rates on the last one we closed was right around five with a big with a buy down and we knew rates were going to go down even lower and I think I predicted that the the Fed would cut the rates last week. I said this in the last podcast and it did go down 25 base points. I think there's going to be two more rate cuts. Okay. So, we knew going forward the rates will be lower. So, uh you know, I think pretty soon you got to borrow money at 4 and a half%. And I think you're going to have uh this time next year, let's predict that three and a half treasury. Really? Yeah. Three and a half 10 year I think is coming our way.
Taylor Avakian
What do you think that means for the market?
Henry Manoucheri
Cuz when I when I hear that, I think about hallelujah. my my job is going to be so much easier than it is now. You're going to see a nice pick up in volume. Yeah. Yeah. I think that proverbial four and a half cap rate is coming back. Wow. You know, I mean, right now you can buy buy at five and five and a quarter. I mean, you know, some LA rent control, let's just pertain to LA, you know, some of these contian guys buying rent control stuff, you know, they're buying at six, six and a half caps.
Taylor Avakian
That's going to look really great.
Henry Manoucheri
I think so, too.
Taylor Avakian
I keep telling people, too. But I don't think they have more than a year to buy uh at these
Henry Manoucheri
these I think I think right now this is not good for me to say cuz I feel competition but I'll be honest I was a straightup guy. We're the bottom of the market. Yeah. This is the bottom. I agree. Yeah I agree. I mean I think people are just waiting for some guy dressed in a white suit with a black tie to walk into the room and say ding ding ding ding ding ding. This is the bottom. Let's go.
Taylor Avakian
They're all going to run. But it's always you you start seeing other people. You start see them picking this stuff up.
Henry Manoucheri
You get a little antsy. You want to get you want to get involved, right?
Taylor Avakian
You got some dry powder you've been waiting for and that one deal comes that just the stars align and you just start paying and then the
Henry Manoucheri
next guy pays a little bit more. Yeah. I think I think anybody who bought in the past uh two years, three years, they're going to be very happy. Yeah. Yeah. You know, we bought a few things. We should have bought more. We couldn't because there wasn't that much to buy. Sure. That volume, you know, 2022 was three. That was all of a sudden as soon as rates went up, LA came down 90% because of the stupid
Taylor Avakian
U.
Henry Manoucheri
I know. And ULA is just that's really destroyed the business. Yeah. I think this I mean it it killed volume. Yeah. If that gets if that gets repealed or taken away, LA will be on a tear. Oh, we'll fly. It'll just go. I think there's a legislation now. I heard it from uh one of the brokers at a Chase conference two weeks ago that they're trying to pass something the state level where you can't charge more than one and a half%. Is that
Taylor Avakian
Yeah, the for I think it's vintage. They're going to try to do it for buildings built within 15 years are not going to be subject to it or reduced. There's also a bill that they're trying to propose that would potentially roll back any votes that were less than like 66 or se, you know, twothirds votes basically because ULA passed it 54 or 55%. So there's a couple different angles people are looking at.
Henry Manoucheri
Um, we'll see.
Taylor Avakian
But I think I agree with you.
Henry Manoucheri
I think we're at the bottom.
Taylor Avakian
I think that there's massive opportunity for anyone who can see the future of where these six, seven, eight cap buildings are selling. Like there's upside there. And I I believe there'll be a lot of money
Henry Manoucheri
made. Yeah. I mean, we were uh we had a property last year. We listed 53 rooms in Van Eis, gave it to IPA. We had a maturing loan and we priced it and uh to get a take out loan that the brokers tell told us that you had to write a check. Yeah. To refinance. I said, "Okay, so let's just put on a market to see if we can sell it." We're on a market. We thought we thought it was worth 16, which I think it wasn't. the rates went down, offers start coming around 1442 and uh I went back to the debt brokers. I said, "Are you guys sure that you can't, you know, get us a cash neutral takeout lease?" They said, "Oh, no, no, it can't be done." I said, "Okay." So, we said, "Okay, we're going to sell to this buyer."
Henry Manoucheri
So, I sat in with Noah, my right-hand guy, who does our director of acquisition and finance. He's wonderful to work with. I said, "No, I run the numbers. How much should it be ULA tax?" $750,000. I said, "I am never going to pay this kind of money to the city.
Taylor Avakian
Are you crazy?
Henry Manoucheri
That's like murder." You know, that's highway robbery.
Taylor Avakian
Why would I give a city?
Henry Manoucheri
So, uh, I I called the brokers. Thank god they're honest. That's why we work with them. Yeah. I said, "Tell me, you guys are getting financing for this guy." Yes, we are. Okay, great. Through uh your finance firm? Yes. I said, "Okay, what kind of loan is he getting?" He gives me a number. It's a million dollars higher than what I owe. So, I said, "This is this is not right." So we went to another brokerage shop, Greg Reed, my good friend, uh, who's, uh, formed a new company after he got a Capital One. He's part of Lumen, uh, Arcus Capital. I said, Greg, something wrong with this underwriting. Help me out over here. So he looked at it. He says, you know what, some of your expenses are too high. You know, we could underwrite it cuz these are cover expenses, not recurring.
Henry Manoucheri
And number two, Fanny had Freddy has a new program, 35-y year ambort. The first group didn't think of this, so they came out with a loan with a $1.6 $60 million cash out. Wa. And I was like, you know, I like the building. The building is built in 1985. We renovated it. It's cash beautifully.
Taylor Avakian
Why am I going to sell this?
Henry Manoucheri
Yeah. So, we went ahead, we executed, locked in a loan, 5% 7-year fix. Wow. And we are very happy.
Taylor Avakian
I was going That's a great outcome. That's a great But it shows you, too, cuz I'm sure the the loan guys you had went to first, they're probably pretty good. They're probably pretty experienced, but even even the best guys have bad days
1:00:00–1:10:00
Taylor Avakian
or not aware of everything, which I think was what makes real estate so special is that it's
Henry Manoucheri
an information arbitrage business, right?
Taylor Avakian
There's always you have to continuously keep learning because things change all the time. It's dynamic with the markets. It's macro, it's micro, it's street by street. It's such a unique industry that you can always continue to improve and learn, right?
Henry Manoucheri
which I think makes it special. I want to say to that also uh creativity is very important. Think of that example I said when we started first talking this podcast about the commando with a knife in his between his feet are crawling on the floor and going on the barb wire. You know, if you're a special forces guy, you got to think fast on your feet. You can't just surrender. So, never surrender. Never surrender. There's got to be another way. Never surrender.
Taylor Avakian
Henry, um this has been incredible. I really appreciate it. Where can uh I know you're creating some media companies, stuff like that.
Henry Manoucheri
Like where can people check out what you're doing right now? You can go on YouTube or Spotify or Apple Plus or Apple TV. It's uh right now under the YM show. Okay. Two podcast with Joseph Manerry. We did part one a year and a half ago. We did part two about a month and a half ago. And he has another 15 14 other podcasts that uh you can watch. Uh, and uh, it there's going to be more, you know, there's going to be much more coming out and and it's great, you know, I'm very a lot of fun doing this and thank you for, of course, taking the time, you know, to come out here on a special day, you know, on the eve of Rashashana. Yeah.
Taylor Avakian
And this is this was a long time in the making. I uh, we I think I told you when I first met you, I probably tried reaching you for since I started 2018, right? And the stars didn't align. It didn't make sense. And look at look you should have called me directly.
Henry Manoucheri
I know which is crazy to me because I'm I'm pretty I'll call I'll tell you mo most of the best deals we have bought guess where they came from? It was from a phone call to this day. I'm old school. It didn't come from an email. Everybody can send an email or you know send a text. It's from that relationship and from the cold call from from hey this is why it's a deal. Yeah.
Taylor Avakian
Well now we have that relationship now.
Henry Manoucheri
Now I'll be calling you with a couple LA deals now. I wish you much success. God bless you and should have a fantastic year. Henry, thank you very much. Thank you. All the best.