Agents Building Cashflow

EP120: Navigating Investment Hotspots in the San Francisco Market with Malin Kansal, MBA

• Malin Kansal

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Delve into the heartbeat of San Francisco's real estate scene as Malin Kansal, MBA, unravels the nuances, trends, and strategies for achieving global recognition in this dynamic market. From the soaring skyline to the pulse of home prices, join in to navigate the city's unique path to prominence in real estate.



Key takeaways to listen to 

  • Key insights on the San Francisco real estate market
  • How to initiate global recognition in the real estate arena
  • San Francisco residential housing prices and trends
  • Why now might be a great time to buy multi-unit properties
  • An overview of Malin’s current investment portfolio



Resources mentioned in this episode
Pacaso



About Malin Kansal, MBA
Malin Kansal, MBA, is the leader of Malin Group, with over 25 years of real estate expertise. He is also a REALTORS® who specializes in luxury properties from San Francisco to Silicon Valley. His impressive educational background, including an MBA and bachelor’s degrees in legal studies and fashion, equips him to serve a diverse clientele, from home buyers and sellers to developers and investors.


Malin’s remarkable composure, respectfulness, and ability to connect with individuals from various backgrounds distinguishes him from other REALTORS®. Additionally, his passion for interior design further sets him apart, ensuring clients' homes are presented immaculately, creating sanctuaries for potential buyers.



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To connect with Randal and learn more about passive investing, visit www.ridgelineig.com and follow our social media pages below!

[00:00:00] Malin Kansal, MBA: Stocks overall have gone upward trend. So once again, from a buyer perspective, that sentiment is very high, honestly, on all levels, because if you're at the high end, you're seeing that 10 million home that would have been 15 

[00:00:14] Randal McLeaird: a residential real estate agent earning 200, 000 a year, and you want to grow your passive income, this show's for you.

[00:00:21] Randal McLeaird: Learn the secrets other agents use and hear from experts in our field in order to guide you along your journey to investing in assets like apartment communities so that you can turn your commissions into cashflow. I'm Randall DeCleared. Let's go, baby. So yeah, I mean, I was taking a look, like I said, that you're out in San Francisco and I follow a number of.

[00:00:40] Randal McLeaird: Podcasts and like startup guys, the Jay Calacanis of the world, you know, some of those guys on the all in podcast. So I hear them talking about San Francisco, like David Sachs, I think. And then they're like, it's just been wild here as far as real estate goes, pricing and all that thing. So I just want you to jump in, kind of tell me how the market's going.

[00:00:57] Randal McLeaird: And if that is an echo chamber, just like a [00:01:00] silo, just because that's the only thing I've really heard about. I've never even been out there. So. Just kind of curious how the market is right now out there in your area. Sure. 

[00:01:07] Malin Kansal, MBA: Definitely. Like you said, Randall, very correctly, the market in San Francisco has been a rollercoaster.

[00:01:15] Malin Kansal, MBA: And I want to say it's been a rollercoaster since COVID because we were coming off such of a high prior to COVID of course, rewinding all the way back to 2008 and I'm To 2020. So it took, you know, a bit to get everything in order in general for this region. After 2008, essentially when 2012 rolled around the market really started to skyrocket, I would say.

[00:01:40] Malin Kansal, MBA: And it has to do with a couple of things. Very, very strong tech sector, of course here in San Francisco and the beer in general. I focus, me and my team on San Francisco luxury high rises. And all of San Francisco, and then we do jump South. We go to the peninsula and then we go to Silicon Valley. [00:02:00] So the great thing is we have the pulse on 3 different marketplaces.

[00:02:04] Malin Kansal, MBA: Um, a lot of them rely on 1 another. Of course, geographically, it's all straight line from San Francisco South. So that's pretty easy. We don't have to cross any bridges. Luckily, because there's a big area. But if you imagine if you once again, turn back the clocks, what was happening in the tech sucker? In 2012, social media, right?

[00:02:23] Malin Kansal, MBA: And where was social media? A lot of it was headed and located was, of course, in Silicon Valley. And then, of course, you have Twitter in San Francisco. So between the polarity of having Twitter in San Francisco and, of course, Facebook, Google and Silicon Valley. San Francisco just became such a gem, a hot commodity.

[00:02:43] Malin Kansal, MBA: The mayor at that point in time was very development pro. So there was so many great projects that came into play. I mean, the Twitter building is honestly one of them because it was a dilapidated, you could say almost warehouse for furniture. It was a furniture Mart and [00:03:00] lo and behold, Twitter comes in and makes it into this.

[00:03:04] Malin Kansal, MBA: Shining piece on market street, which is the main street in San Francisco, making it the hub of social media, you could say in theory, and they just brought so much synergy with them because the company was growing extremely rapidly. There was housing demand that was needed because of course, when you have a large company like most small at that time, but you know, fast growing companies.

[00:03:27] Malin Kansal, MBA: Like Twitter and then, you know, of course, once you have a big company, you have all the other small startups that decide, do you want to be in San Francisco or do you want to be in Silicon Valley? Everyone said San Francisco. So, lo and behold, you have a big demand base of. You know, high income earners in general, very educated clientele, and either they're leasing at a high rate, or once again, they start to buy and infiltrate the buying market, then you run into the quantum.

[00:03:55] Malin Kansal, MBA: Is there enough housing at that point in time? There was not enough housing. The city. [00:04:00] Got really rapid in terms of expanding housing and a lot of developers jumped the gun and started to develop luxury high rises, some nice home communities. So it was a time of expansion from 2012 till 2020, eight years, right?

[00:04:15] Malin Kansal, MBA: That's a good amount of time, less than a decade. But if you imagine every single year was almost a decade, that's how fast this marketplace runs and the energy marketplace is just. That fast, because it's all technology. We do have a little biotech, of course, that infiltrates our area. But for all intents and purposes, tech is what dominates our world.

[00:04:37] Malin Kansal, MBA: Like it does now where you are in Texas. Yeah. 

[00:04:39] Randal McLeaird: I mean, Austin's booming right now. Right. Yeah. Austin's definitely becoming that tech hub of Texas. 

[00:04:44] Malin Kansal, MBA: Yeah. No, it really is. I mean, we have a lot of transplants who are going to Texas and, you know, particular Austin, of course. And then we have your guy in the Twitter guy.

[00:04:54] Malin Kansal, MBA: Yeah, that guy, you know, in Austin, right? So you can see how the tables have turned in a way [00:05:00] we want to say the tables have turned. So, you know, once again, what truly has happened, you had eight years of massive appreciation, large rent increases, a city changed the landscape overnight. We had the tallest tower that was built Salesforce tower in San Francisco that Trump, the, the trans America building.

[00:05:17] Malin Kansal, MBA: So that became The new epicenter, you could say of San Francisco downtown living many, many companies came into San Francisco. Everyone from Apple to Google all had satellite offices in San Francisco. Everyone had tech buses. Sorry going from. San Francisco down to Silicon Valley, so if you could kind of reimagine what that time period looked like, it was high demand in San Francisco for housing, high demand in San Francisco for office space, high demand for everything, for all your services, from restaurants to entertaining, everything was in such high demand.

[00:05:55] Malin Kansal, MBA: Then you have 2020, COVID hits, offices close, [00:06:00] people not necessarily add that into living in smaller spaces. The tech companies start coming out and say, okay, you can work at home. You can work anywhere in the world. So then lo and behold, once again, bright individuals, entrepreneurs, innovators. So they go throughout the world and say, if we can live anywhere, let's live out our fantasy.

[00:06:20] Malin Kansal, MBA: Let's do what we really want to do in our life. And San Francisco was mainly a place to thrive and be very entrepreneurial. Of course, walk to work, bike to work. But when your office is no longer necessary, you have to be in that San Francisco office. Once again, the world opens. So, you know, a lot of people state that there was Exodus out of San Francisco.

[00:06:43] Malin Kansal, MBA: And in theory, I don't think so. There was, but at the heart was, so the heart of the city. Exited not necessarily population wise or otherwise, because people imagine very high income earners. They could still keep their residents in San Francisco. They [00:07:00] can even carry leases in San Francisco. A lot of renegotiation was going on for leasing.

[00:07:05] Malin Kansal, MBA: So, okay, I'm going to be out in Europe for 6 months. I want to still have my nice Noe Valley condo. I don't want to lose that. Maybe it's on rent control. Maybe the tenant wants the tenant to stay there. Maybe the tenant savvy and they renegotiate the lease on the sales and you didn't see a lot of people all of a sudden massively flooding the market and all of these homes coming on the market for sale.

[00:07:29] Malin Kansal, MBA: But of course, homes did come on the sale and on the market for sale. And, you know, some of them did sell and some of them didn't sell. The most compromised area, of course, was downtown and it still is. Maybe it's around down 30, 40 percent pre pandemic level still to this day. So great deal. So come to San Francisco, buy a luxury high rise and you'll do good and you'll have good appreciation because I officially think.

[00:07:55] Malin Kansal, MBA: San Francisco has bottomed out. We had a very large conference, the APEC [00:08:00] conference that showcased San Francisco and the city did a wonderful job. No large incidents, high level security. So showcase that this is not a doom loop city. People have come back, companies are coming back, and now we have the next big thing, AI.

[00:08:16] Malin Kansal, MBA: So, social media, snoozer, but AI, wow, look at that, look at that industry. And, lo and behold, the infrastructure and everyone who is in the know of AI. are in San Francisco. They've entered a new corridor San Francisco called Hayes Valley and that's where they want to be. Why that area? It's out of downtown for lack of a better kind of sentiment.

[00:08:42] Malin Kansal, MBA: It's much more smaller. It's a much more intimate, more quaint, it's more hip, that's for sure. So it's at a crossroads of a lot of great neighborhoods that always do well when the tech is doing well, the mission corridor, Hayes Valley is a newer neighborhood, and then [00:09:00] you have lower Pacific heights in that area.

[00:09:02] Malin Kansal, MBA: So once again, it's. Positioned where a lot of people in all honesty wanted to live, even during the social media frenzy, but they were forced more into downtown because that's where a lot of the large high rises were for housing. And it's also where a lot of the companies were located. So, once again, people do still want to, if they need to go into office, they want to at least have the option of walking and riding their bike at a comfortable distance to the office.

[00:09:30] Malin Kansal, MBA: So that's. I don't mean San Francisco 7 by 7, so you can be anywhere in San Francisco and have a comfortable community. But, you know, once again, I foresee them since the positioning of the city has kind of moved a little out of downtown that area will recover, of course, much more quickly than downtown downtown now has more of a challenge in terms of some social issues.

[00:09:55] Malin Kansal, MBA: Of course, everyone knows. Homelessness in San Francisco and what that [00:10:00] means. Crime in San Francisco and what that means. But in all honesty, my father was in San Francisco in the 70s and it was the same thing. So it's not something new that San Francisco. My wife and I, we lived in luxury high rises for 15 years in San Francisco.

[00:10:14] Malin Kansal, MBA: And it's always in the back of your mind, so the media has come down hard on San Francisco, and they've created a story of these large 10 cities. And so I see, but that's not the reality. That's a small section of the city and great media news and great things to get on social media and get frenzied about.

[00:10:33] Malin Kansal, MBA: CNN 60 minutes, great. But you know, in all reality, that's not really what's the problem in downtown. The problem is we need more commercial reconstruction and reconfiguration because you have great luxury buildings that are vacant. I have a tenant in one of my properties that I own in San Francisco, and she said, The building used to have about 200 people walking in and out of that building, and now it's only 10.

[00:10:57] Malin Kansal, MBA: So that's a problem. So once [00:11:00] again, what it alludes to is opportunity for real estate really to be reconfigured. Is it housing? Is it more entertainment in the sector? Is it more services? Is it more education? Is it grand hospitals? Is it research institutions? So the opportunity is there. So it's a restructuring that needs to happen because once we have a little more life that's in that area, it'll once again start to make everyone know that that's the place to be.

[00:11:27] Malin Kansal, MBA: And, you know, once again, the city then automatically becomes cleaned up because everyone eyes is on there. You have the buildings that are being maintained and you have all the infrastructure that happens. And then someone can't place a tent right in front of the building. Right? Because people are going in and out.

[00:11:42] Malin Kansal, MBA: So 

[00:11:42] Randal McLeaird: you have a unit and it's down to what? 10 percent occupancy if it's 10, no, 5 percent occupancy. If there's 10 people in a 200 unit, I want to touch on that just briefly, but you were just talking 

[00:11:53] Malin Kansal, MBA: commercial. Okay. Well, uh. And then of mine who works in that building, they're stating that it's almost like the mini ghost towns in some of [00:12:00] these high places.

[00:12:00] Malin Kansal, MBA: And some of them literally spent millions of dollars to redo their lobbies and now sitting vacant. Some AI leases, big leases are being signed as we speak, which is great. So some of that inventory will be sucked up, but there is quite a few to go around because if you imagine doing the whole social media time.

[00:12:19] Malin Kansal, MBA: When tech was in a different state, a lot of venture capitalists, many people were occupying these buildings and the need was there for a lot of companies to be there. I mean, Facebook has a new building that was just being occupied as the pandemic was coming on. Once again, not all those individuals are coming into the office.

[00:12:38] Malin Kansal, MBA: So it's probably 40 percent occupied in the hybrid scenario. But once again, the real story is, of course, the AI piece for San Francisco, what's that really going to bring and do for the city? Because speaking in all reality, the rest of the city has pretty much opposed to the pandemic. But once you're hitting downtown, that's what I'm talking home value wise, obviously [00:13:00] commercial real estate wise, you're down 40%, you're down 30%, down 50%.

[00:13:04] Malin Kansal, MBA: So some large numbers that need. Kind of some big commercial component and big economic event to occur in order to regain steam where you were prior to the pandemic. Do you 

[00:13:18] Randal McLeaird: attend or do you follow local politics and government? And is there any initiative to kind of tackle that issue? Obviously somebody's talking about it.

[00:13:27] Randal McLeaird: It's a thing we hear about it in Texas. It's like office space, people aren't working, they're not going in San Francisco, all the things you just listed out. So what's the Not silver bullet, but I guess, like, what is the discussed plan amongst locals there like, Oh, this is going to help tremendously if we do X, Y, and Z.

[00:13:45] Randal McLeaird: Well, 

[00:13:45] Malin Kansal, MBA: the word on the street, quite honestly, is everyone's sick and tired of the media and downplay doom loop and all of any single story about services. So none of it's been good. Yeah, we were the best city in the world in [00:14:00] the pandemic because nothing really happened quite honestly. And no one ever really talked about that.

[00:14:04] Malin Kansal, MBA: So I think that's kind of where the problem occurred because all major cities in the world that are on the world stage with San Francisco is and definitely wants to be has good PR, but San Francisco, for whatever reason, never really had a good PR agency. To manage it during the pandemic and post the pandemic, you know, San Francisco is a very casual environment.

[00:14:28] Malin Kansal, MBA: If you imagine Northern California versus Southern California, it's a complete different scenario. We don't like to boast and brag. I'm a native. It's a very understated world. You don't state you have 20 billion in your account. You don't show that ever in the way you dress and the way you talk. But in the world stage, that's what you need.

[00:14:47] Malin Kansal, MBA: If you imagine Paris, Hong Kong, London. I mean, these are flashy places, Miami. So the world hasn't really moved into the phase of being more casual and being [00:15:00] understated. It's still where money talks where that show luxury talks. So obviously that's not really San Francisco and that's honestly not really Northern California.

[00:15:11] Malin Kansal, MBA: But if you want to play in the world states, that's kind of how you have to read or be. So there is a lot of grassroots efforts that only honestly started this year, where I see people kind of joining forces and saying, we're sick and tired of San Francisco being at the bottom of the barrel. We're a world stage city.

[00:15:30] Malin Kansal, MBA: We have such a great economy. We're innovative. We have beautiful vistas. We have beautiful views. We have so much to offer, but no one ever talks about that. And no one acknowledges that a lot of blame is honestly put on the mayor. There is an election coming up. So that could bring a change. I mean, I'm not want to say if someone did a good job or bad job, but the writing is on the wall of maybe.

[00:15:54] Malin Kansal, MBA: There could be some change in city hall, but I honestly don't think that's where the problem [00:16:00] is. It's just in regards to not showcasing yourself enough, not selling yourself enough. I mean, we've entered into a world where you have to constantly sell yourself. And if you sell yourself, you get to the bottom of the barrel.

[00:16:14] Malin Kansal, MBA: And if you aren't, you know, counteracts, CNN news, bad social media posts, you're at the bottom of the barrel and no one has really done that. So you just dig your own grave. Because the world is not really looking at maybe some of the facts of what they know, they're just looking for the instant sensationalism and you can't counteract that.

[00:16:34] Malin Kansal, MBA: It just becomes harder to make everyone feel that you're okay. I mean, I've had friends, colleagues. I don't live in San Francisco anymore, but they get a lot of phone calls. Are you okay? Is everything fine? And they say, Oh, yes, yeah, we're fine. But you know, once again, people got so many of those calls that they got sick and tired and said, we have to do something about it.

[00:16:53] Malin Kansal, MBA: It's definitely more grassroots as very Northern California and San Francisco would be. It's not some [00:17:00] big cohort of people who are demonstrating or an upheaval or doing anything big. A lot of grassroots efforts. are being done. And, you know, let's see if that really does things to bring up the sentiment of San Francisco.

[00:17:15] Malin Kansal, MBA: Like I say, I think, honestly, we have bottomed out. So value wise, I don't think so. We're going to see a lot of big kind of deals in terms of low, low deals of a commercial property being sold. For pennies on the dollar, something of that nature, or even luxury condos. Because once you start going out of the luxury high rises, I mean, that market is pretty much recovered and that trade very well in a way.

[00:17:39] Malin Kansal, MBA: Yeah. 

[00:17:39] Randal McLeaird: Let's talk about real estate then specifically. Let's dive into some of that just because, I mean, we could talk. San Francisco politics and like what's happening, but at the end of the day, let's figure out. So do you focus on commercial and sound like you had a commercial tenant? So do you do commercial and residential or where's your focus?

[00:17:55] Randal McLeaird: And what do 

[00:17:55] Malin Kansal, MBA: you do mainly residential? You know, I do show too, but a [00:18:00] large portion of our team. I mean, of course we've transitioned, right? Because there's been so many people who are in commercial now they're in residential. So it's kind of the sign. So, yes, predominantly at this point in time, more residential, but, you know, we have to keep a hawk eye on commercial too.

[00:18:16] Randal McLeaird: But you've invested in commercial sounding like you have a commercial tenant. Is that correct? Yes. Correct. Okay. So then we'll talk about that in just a second. Let's first talk about the residential side. So the price point that you typically focus on, like, where are you and where is that in relation to median home prices in the areas that you serve?

[00:18:31] Malin Kansal, MBA: Well, we start at the medium and then go up. Okay, so when you're talking price range, 1. 5 to upwards of 10 million, so obviously a big range, but there's going to be that range when you're dealing with even luxury condos and single family homes, because again, you have a different appetite of people who are.

[00:18:51] Malin Kansal, MBA: Just starting out and those who are moving on to their second, third, fourth home. Yep. 

[00:18:55] Randal McLeaird: So one five gets me. What is that a median? Is that a three, two or [00:19:00] is that a high rise condo? What am I getting there? I have a 

[00:19:02] Malin Kansal, MBA: two bedroom, two bedroom home, two bedroom, one bath, two bedroom, two bath. That could be a condo.

[00:19:09] Malin Kansal, MBA: It would be a little tough for a single family when you're looking at single family. That would definitely be the entry point for a single family. 

[00:19:16] Randal McLeaird: Okay. And so then you go up from there. So I can speak to Texas and kind of what's happened in Texas, but curious about, again, your area, because. Have you guys seen a slowdown in the transaction volume because sellers didn't want to sell or are they rate sensitive buyers in your area?

[00:19:32] Randal McLeaird: Or is there a lot of cash transactions? And so the price points haven't really come down. I know you said that they are back to pre pandemic levels. So what do they drop to? Like, what was the low, I guess, on a price point? Did you guys have a 20 percent decrease in pricing in all the areas outside of downtown?

[00:19:46] Malin Kansal, MBA: Yeah, I mean, easily, the 20 percent range across San Francisco. And then you have your pockets who, on average, say maybe they were down 10%. And then the hardest hit are the luxury high rises in downtown South. So that's 40%. Yeah, [00:20:00] yeah. I have a pretty 

[00:20:01] Randal McLeaird: So, it was a contributing factor, the fact that sellers didn't want to sell again, because rates were going up or like, what was happening?

[00:20:08] Randal McLeaird: That was driving, like, obviously, the pandemic and the work from home was driving the decrease in demand, but simultaneously in the last 6 months or 12 months with the rates increasing. And sellers not wanting to sell because they can't get the price point. I mean, is that happening in your market? Or again, is it more of a cash driven market when you're dealing with some of the luxury properties that you're dealing with?

[00:20:30] Randal McLeaird: And so rates aren't a 

[00:20:31] Malin Kansal, MBA: factor. No rates are definitely a factor because everyone did get used to, even if you were a high income earner, or even if you had a lot of cash, the interest rates were so fabulous that people took out a smaller loan if they didn't want to do a 20 percent down, you know, like you said, free money, right?

[00:20:45] Malin Kansal, MBA: So, you know, we have so many financial savvy individuals here. They could definitely pay all cash for the home, but why not hedge it a little bit and take the benefit of those lower interest rates? So that obviously did bring the sales and the dollar volume [00:21:00] of transactions up from 2021, even 22. And then, you know, when we are in 22, the transaction volume, just.

[00:21:08] Malin Kansal, MBA: Went down and we do have a lot of individuals who are first time homebuyers too. And even if they're a first time homebuyer, they may be purchasing home for 2 million, but this is the first time they're purchasing a home. And the effect honestly was more of the stock market, because when you have a lot of people who are in the tech industry who are buying homes.

[00:21:29] Malin Kansal, MBA: A lot of the valuations of the portfolios, it did fall. So in theory, they had less buying power of what they really probably wanted to buy. And also, like you said, the interest rates were high, so it wasn't a good scenario. And then quite honestly, at Transparency, there was a good amount of layoffs and you were never kind of sure where you're going to be the next layoff, right?

[00:21:51] Malin Kansal, MBA: So that was all part of the 2023 marketplace. Layoffs in the tech sector were going on rampantly at the start of the [00:22:00] year, the interest rates were starting to increase and the stock market wasn't doing that. Well, so you started portfolio fall. Yeah, so it didn't give a lot of confidence to the buyers to kind of jump in and buy something.

[00:22:11] Malin Kansal, MBA: If there's a screaming deal out there. Yes, there was that. Group of people, but general enthusiasm was low on the seller side. You know, same thing. Their stock portfolios weren't doing as well. So maybe they're a 2 million home. They want a 5 million home. So they have less cash to put down. Then they go for a loan.

[00:22:30] Malin Kansal, MBA: The interest rates are higher. So, you know, they're buying power. I can't buy five million, I have to buy four million. And then slowly and slowly the inventory started to decrease, so there wasn't really as many options there. So it doesn't kind of bring an enthusiastic audience from a seller's side or a buyer's side.

[00:22:48] Malin Kansal, MBA: The main people who were playing were the people who probably, who did really want, they just wanted to get 

[00:22:53] Randal McLeaird: out. What do you see now then? I mean, where are you guys right now? Like what's transacting the most? What's keeping you busy? So right 

[00:22:59] Malin Kansal, MBA: [00:23:00] now, you know, still the entry points are coming back because everyone's saying, okay, interest rates are falling.

[00:23:05] Malin Kansal, MBA: Interest rates are dropping. That's the word on the street. Interest rates have held and interest rates are dropping. So the entry level buyer is back in full force. That's for sure. They took a snooze last year, but they want to buy. Leasing rates did fluctuate a little bit. But not enough to say that they're due to lease another year.

[00:23:23] Malin Kansal, MBA: Still, you're leasing at a premium in general. So they do want to buy. So that market and that marketplace is very, very active right now. Everyone's strategizing. We're just kind of waiting till more inventory to pop up. Everyone's kind of course correcting now because you never knew that. All of a sudden kind of that rate story was going to change relatively quickly and the sentiment would be much higher.

[00:23:47] Malin Kansal, MBA: The layoffs have trended down. So that confidence level has come back. No one's worrying in 2024 saying I may be the next person. They're not really not worried anymore in that. And, you know, stocks overall have [00:24:00] gone upward trend. So once again, it brings from a buyer perspective, that sentiment is very high, honestly, on all levels, because if you're at the high end, you're seeing that 10 million home, that would have been 15 million.

[00:24:12] Malin Kansal, MBA: And you're saying, okay, I have to grab that. So they're swooping in and they're sweeping up those homes, the entry side, now's the time because the fear on the entry side, quite honestly, is interest rates are Steady and they're going to drop. I'm not going to get into competitive situations and I'm not going to get my home.

[00:24:30] Malin Kansal, MBA: So everyone's trying to rush to the table to not enter a situation where the buying side, they're in bidding wards again. They were, it's back. Yeah. 

[00:24:37] Randal McLeaird: Get in, get the deal. So are you like 50, 50 list to buyer rep or are you all lists? Where do you 

[00:24:42] Malin Kansal, MBA: live in that? About 60 percent listing and 40 percent buyers.

[00:24:46] Randal McLeaird: Okay. And so what are you doing now? I guess if a buyer comes to you and you're like, there's no inventory, we can't. I'll send it to you whenever it comes out. But like, what is the, I guess the turnaround time, what on the list side, like what's your days on market once you guys hit [00:25:00] the market and then on the buy side, how long has it taken you guys to find a house or 

[00:25:03] Malin Kansal, MBA: find a unit on the list side prediction wise, because you know, here we're sitting in January and the market really does start opening after the super bowl.

[00:25:11] Malin Kansal, MBA: But in theory, if you bring a listing on right now, since the inventory is low, if you're a hot listing sharply priced, sharply presented. right price, you're not expecting 2021 pricing, then you are going to be selling in two weeks, two weeks. Okay. Yeah. On the buy side, get your ducks in order and write non contingent.

[00:25:32] Malin Kansal, MBA: And if you're realistic, you know, the market, you study the market, you know, what the budget should be, what a house should be selling for. And you're not undercutting each and every offer you're writing. I say two months. Two months, 

[00:25:45] Randal McLeaird: so what's a non contingent in earnest money? Like, what are you putting up for a 1.

[00:25:49] Randal McLeaird: 5 

[00:25:50] Malin Kansal, MBA: starter home? So 3 percent is the deposit. And then your down payment is really based upon your lender. On average, we're seeing 20 percent down. No, no, no, [00:26:00] not down 

[00:26:00] Randal McLeaird: payment. But so like, how much money is going hard day one when you are writing that contract? If you're saying, hey, it's not contingent on inspections on financing on anything else.

[00:26:10] Randal McLeaird: And it's a, say, 2 million dollar property. Are you putting up 10 percent for earnest money at the title company? 3%. Oh, it is 3%. Okay. So 

[00:26:17] Malin Kansal, MBA: that's, yeah. It's a standard 3 percent deposit. Okay. 

[00:26:19] Randal McLeaird: Yes. Yeah. Yeah. Because like in the commercial world and apartments and that sort of thing, 2018 to 22 or 21. It was like, you're going hard.

[00:26:28] Randal McLeaird: Yes, of course. Yeah. Yeah. Yeah. Just didn't know if there was something that you were coaching your buyers on in order to be prepared to put 10 percent down hard day one to get a deal if it was that tight of a market, you know? Yeah. Lucky 

[00:26:39] Malin Kansal, MBA: 2 percent is fine. Yeah. Yeah. 

[00:26:42] Randal McLeaird: We're proud to be sponsored by Ridgeline Investment Group.

[00:26:45] Randal McLeaird: Ridgeline has a track record of transacting more than 53 million in assets throughout Texas. Ridgeline is currently looking to acquire 100 to 200 unit class B multifamily communities between Five and 20 million in San [00:27:00] Antonio, Temple, Waco, Tyler, and other Texas secondary markets. To learn more about Ridgeline Investment Group, visit www.

[00:27:09] Randal McLeaird: ridgelineig. com. Okay. I want to talk about two things before we jump off. One, your TV show that you're on. I watched a couple of those episodes. Very cool to see you out there, you know, highlighting the local businesses. It's very cool. I love the way the show is set up. American Dream. Where you are walking the neighborhood, introducing potential buyers and sellers to the area, and then you present your listing.

[00:27:32] Randal McLeaird: So I really like the way they have that produced again, the show is all about how other agents can learn from you and what you're doing to win business and what you're doing to, I guess, convert leads that come through something like this. Just walk me through, how did the show even come about? Is that something you apply for?

[00:27:48] Randal McLeaird: Or is that something that they reach out to you and say, you're just such a stud? Come on, check it out. You know, like 

[00:27:53] Malin Kansal, MBA: what's the story? Thanks for the compliment, but they reached out to me and then they did have a panel kind of interview, I would say in a [00:28:00] way, because there was competing. Individuals in that room and then whoever expressed good interest, obviously answered the questions and in the correct way, you know, it's all about who is going to show up and who's going to show well.

[00:28:13] Malin Kansal, MBA: So selections were made at that point in time. And then the production is done. What happens is the production is done about a month and a half before it's going to air. So we get to choose the location. We get to choose the listing. And like you said, Randall, we do want to highlight a lot of the local businesses or, you know, maybe even a luminary of that area.

[00:28:34] Malin Kansal, MBA: It could be the mayor. It could be a tech innovator. And then what I like to do is I like to match that whole portion of my particular segment with the home. So it's seamless. So if it's a luxury boutique that I'm. Showcasing on the show. I want to have a luxury home. 1 of our listings that I'm bringing on.

[00:28:54] Malin Kansal, MBA: If it's a cafe, I want to make sure that the house that I'm showing has a great kitchen. So I really try to [00:29:00] make it a seamless kind of integration. Yeah, that makes sense, which has been fun because it shows. A lot about the lifestyle aspect of real estate, which sometimes is underplayed to overplayed.

[00:29:11] Malin Kansal, MBA: Yeah. So this way, it really does integrate both aspects. 

[00:29:15] Randal McLeaird: I just didn't know how much of a say, so that's interesting that you can pick a location and it's not 100 percent produced by somebody where they're like, you're going to show up here. This is your lines is what you're going to do. So yeah, that's interesting that you have the, I guess, a hand in the creative development 

[00:29:28] Malin Kansal, MBA: of that.

[00:29:28] Malin Kansal, MBA: You do a lot of creativity, which is great. And we really can make it our own personality, our own style, which we're writing the entire script or ad libbing it, whatever you want to do. So, you know, it's great. The main thing, of course, is they're bringing in a top end videographer. To get everything done lighting, obviously making sure wherever your shots is that it's going to be something that's really going to showcase well, which we both want.

[00:29:55] Malin Kansal, MBA: So yeah, so it's a partnership. So, 

[00:29:57] Randal McLeaird: all right, then walk me through it. How [00:30:00] or like a better word, I guess, well, no, where you prior to this type of thing and has it helped you? Either drive more leads, drive more traffic. Like what's been the result of it? Is it just your friends are like, Hey man, it's got to see you out there.

[00:30:11] Randal McLeaird: It's good to see you on TV. Or is it generating leads for you and actual trackable noticeable ROI? I would 

[00:30:17] Malin Kansal, MBA: say definitely trackable noticeable ROI. What it forces me to do as a team leader of our team is to definitely be out there front and center with the community, which is part of our mission statement to be extremely integrated with the community.

[00:30:30] Malin Kansal, MBA: So that's when I plan out and say, okay. This community, who do I want to focus is the business and the person, or is it the environment? So it gives that kind of creative leeway to bring an aspect of the community into the segment. And it, once again, it shows that I know what I'm talking about, that I've chosen something and curate something that is.

[00:30:54] Malin Kansal, MBA: I've done that. It's not someone who's come in and chosen the location. So it really does force me to [00:31:00] showcase that aspect of real estate. And it's not just about the listing or the home. And then it gives an opportunity for me in a listing presentation to say that. Okay. Your home could be the next home on national television.

[00:31:12] Malin Kansal, MBA: So I think that was intriguing to a seller to have that option. So it is a win win. The visibility is great. Of course, on social media, on national TV, having it on my LinkedIn, I've gotten inquiries, which is really nice too. So once again, I could see the benefit and what it's done for a business and a lot of exposure overall and videos that they named by the game and it's all video.

[00:31:37] Malin Kansal, MBA: Right. So. Yeah, it is 

[00:31:39] Randal McLeaird: again, I popped on, looked at it and anybody who's been on the show that I've had another post on that's posted on American dream and watch some of theirs was like, man, this is great again. I love the way it's produced the way it's set up and structured. So let me see. Yeah, the process on that.

[00:31:53] Randal McLeaird: The lead. So, yeah, I was just kind of curious. So if anybody again, they reached out to you. I'm just thinking if anybody wanted to apply, they could, I guess, [00:32:00] go on there and apply, or they are only just reaching out to like top producers in the areas that they're 

[00:32:04] Malin Kansal, MBA: focusing on. Definitely reach out to me.

[00:32:07] Malin Kansal, MBA: They could reach out to anyone on the show, want to go with someone local, and then they could, you know, refer them. They could suggest that, okay, why don't you give this individual a chance? And there's that screening process. So once again, it's not a guarantee. Sure. You'd have to be screened. And then okay.

[00:32:23] Malin Kansal, MBA: So reach 

[00:32:23] Randal McLeaird: out to them all. And if you want to get on TV, you guys. There you go. Yeah. Casting couches. Yeah. My 

[00:32:27] Malin Kansal, MBA: pleasure. Yeah. 

[00:32:28] Randal McLeaird: Yeah. So, all right. And the other thing I want to talk about before we jump off is about investing. You mentioned that you have a commercial lease just in general, investing in the San Francisco area.

[00:32:39] Randal McLeaird: If I'm an investor and I'm trying to buy something, What's the sales pitch for an investor coming in looking for a property? Like, what is it that you would point me to and say, Hey, you should look at this type of asset because it's going to three X or is there even a story like that right now in the 

[00:32:54] Malin Kansal, MBA: market?

[00:32:54] Malin Kansal, MBA: There's definitely a story Randall here in San Francisco. It's opportunity time. It's buyer's time. [00:33:00] I keep telling everybody that everyone wants a buyer's market, but everyone cries doing a buyer's market because what is a buyer's market? It's a recession. The economy is not doing good. So You have to be pretty billish to buy in a buyer's market as a buyer or as an investor and kudos to Warren Buffett.

[00:33:17] Malin Kansal, MBA: That's when he buys, right? Yeah. We constantly preach that to the world, but only the smart people do it. That's why Warren Buffett is Warren Buffett, right? Yeah. So multi unit. This is the time. I mean, there's never going to be. A chance like this to buy a trophy property in San Francisco for 30, 40, who knows 50 percent below value.

[00:33:37] Malin Kansal, MBA: San Francisco is not falling off a cliff. Yes, we can have another earthquake, but luckily we're pretty solid. We are a rock. Um, you've heard of the other rock Alcatraz. Yeah. Yeah. There's a rock. So we're not going to fall off the planet, but being serious multi unit, it is the opportunity time. 

[00:33:54] Randal McLeaird: I met a guy at a conference a while back and his family was in the business and he was very.

[00:33:59] Randal McLeaird: In tune with [00:34:00] the condo conversion. So they were taking either condos and converting to apartments or the reverse. They were taking apartments and converting, putting a condo regime onto the whole thing and then selling those off. So do you see that coming or is that just kind of like a very small niche and that's not really the play that you're talking 

[00:34:15] Malin Kansal, MBA: about?

[00:34:15] Malin Kansal, MBA: Well, you know, the city is one to reckon with because they have, of course, a lot of rules and regulations and processes. But once you work with Congress and realtor who knows that space, it's a cakewalk. But when you don't, that's when honestly the issue happens. So you're talking about condo conversion.

[00:34:34] Malin Kansal, MBA: Yes, that's an opportunity because we do have TICs in San Francisco, tenancy in common, and those you can trade and sell as imagine trading and selling a single almost the same thing, except a different category. TIC lending is available in San Francisco. So no brainer. That's an avenue. If you want to do true condo.

[00:34:53] Malin Kansal, MBA: It takes a little more time, but once again, a possibility. So, like you said, Randall, yes, I mean, that's one avenue. Once [00:35:00] you buy your multi unit, keep it as a multi unit for a couple of years. If you want to trade it and start selling it off, it can become an opportunity to do that. That's why it's a very valuable piece of real estate to have because there are options.

[00:35:13] Randal McLeaird: My biggest thought would be what are the vacancy rates currently like across board and what's the thought process on those coming back? I know you're saying you got to be bullish on the city in order to buy right now. So with the, I guess, population trends, we don't have to dig too deep and I know we're getting short on time, but I'm just curious myself.

[00:35:30] Randal McLeaird: I'm like, those are 2 of the things that I heavily focus on. If you want to. Touch on that just briefly. 

[00:35:35] Malin Kansal, MBA: Yeah. If you imagine, you know, once again, when, once you're a savvy investor, a lot of it is you are doing some of the things that what a savvy investor would do, you are probably not going to be one of those individuals who's going to hold a property for 20 years.

[00:35:49] Malin Kansal, MBA: You're probably going to attend 31 exchange out of it, or you're going to condor convert it, or you're going to just cash out and sell. Right. So the kind of crust, but [00:36:00] this particular conversation in this particular point is What are you going to do and how are you going to make your money if you don't have tenants coming to you, what you're going to do?

[00:36:09] Malin Kansal, MBA: The thing is that tenants are coming to San Francisco because right now with AI coming in with leasing rates adjusted down, it's made the city more affordable. You could say quote unquote, and I have to say that apartments are renting at a bargain. They're renting at healthy rates where you can carry a property.

[00:36:29] Malin Kansal, MBA: Once we reach those times in San Francisco where. Rental rates are off the hook. That's where you're kind of getting a lot of cash flow overall. But yes, you can carry your properties right now. There is demand. I mean, there's people are still living in San Francisco. Good thing. It's not a place that's overdeveloped.

[00:36:46] Malin Kansal, MBA: So that kind of keeps the inventory tight. So I don't foresee. A large vacancy factor. I think in 2020 and 2021, that was probably maybe some of the lower [00:37:00] vacancy on the residential side, but since then, 2022, 2023 going, now it's only been on an uptrend. I guess the 

[00:37:08] Randal McLeaird: question would be, so on those apartments, do you think that it'd be low cash flow for the next three to five years, and then you're making your money on the exit because.

[00:37:16] Randal McLeaird: Once you have the place stabilized or rented out, then obviously the value of the property is going up and hopefully rates have come down so that now you can trade at a higher or lower cap rate. So is that the play? Like you're not buying these things for cashflow, you're buying them for appreciation.

[00:37:30] Randal McLeaird: And 

[00:37:30] Malin Kansal, MBA: honestly, Randall, that is true, but I think it's just one year. You just have to last one year because 2024, the tables are already turned. So you just have to write it out for one year. And maybe just might be even six months because Moves very, very quickly. And like I said, we've been through the worst.

[00:37:49] Malin Kansal, MBA: So imagine turn back the clock again, the beginning of my conversation, what happened here in 2012 social media, what's happening now AI. So you're going to start [00:38:00] riding that wave. So you're only going to go better from here on end. This is the hot you're kind of increasing now, month by month, your appreciation is month by month.

[00:38:10] Malin Kansal, MBA: So you're going to buy low sell even a year from now, you're going to do well. I mean, everyone's talking about 2025 being this magic year. When from 2025 to 2030, real estate is going to go bonkers. So now's the time to buy buy your bargain right now, and you're going to be a king. A lot 

[00:38:27] Randal McLeaird: of guys that I know that bought up a bunch of properties in 18, The war cry is currently survive to 25.

[00:38:35] Randal McLeaird: So it's like, once you get to 25, it's great. Sell your property. Yeah, that sort of thing. So yeah, I've heard that. I am. Are you a hard stop right now? You got another? No, I'm good. Okay. So I just want to ask you about your deal in your commercial property and kind of figure out what that is and what that looks like.

[00:38:50] Randal McLeaird: Just if you want to touch on that a little bit. 

[00:38:51] Malin Kansal, MBA: Yes. In 

[00:38:52] Randal McLeaird: terms of investing wise, is that the only investment that you have or do you have other? No, no, no. 

[00:38:59] Malin Kansal, MBA: Um, [00:39:00] luxury condo is what I have at Cisco. And then also I do have two short term rentals. And they're out of state. One is in Tennessee, in the Smokies, and one is in Pennsylvania, in the Poconos.

[00:39:11] Randal McLeaird: Okay. And how did those come about? Like, why Tennessee? Is that somewhere you like 

[00:39:15] Malin Kansal, MBA: to travel? No, I've never been to both of those properties, but I do follow a lot of trends. And when you were looking back in 2021, 2020, the Poconos and the Smokies were the place to buy a short term rental. So since then, very transparently, I would say it's changed quite a bit.

[00:39:35] Malin Kansal, MBA: So I guess the short term, Rental trends move very, very quickly versus the multifamily or commercial trends. That would be my kind of caveat in learning, but the reason why I did buy in those areas were truly because when you're looking at the map for short term rentals, of course, there's places to be, but those were definitely within the top five.

[00:39:54] Malin Kansal, MBA: Yeah. So 

[00:39:55] Randal McLeaird: what's your argument on those on an annual basis? Is it still hitting some numbers that's floating [00:40:00] the debt? Or did you put debt on it? Or do you own free and clear? Like, how'd you? 

[00:40:03] Malin Kansal, MBA: Yes. I mean, thank you for asking. Pennsylvania is doing well. Poconos for that particular home, that was a single family home.

[00:40:11] Malin Kansal, MBA: And the acquisition price wasn't as high as the Smokies. The Smokies is a much larger cabin, sleeps up to 20. So if you imagine. Once again, trends do change and maybe people don't want to travel as much with a larger family anymore. So I'd be cautious on maybe some of the larger homes and see who your true audience is.

[00:40:34] Malin Kansal, MBA: Because once again, if you buy something that's maybe more smaller or midsize, that should always have almost 100 percent occupancy in theory, because Once again, the audience is so much larger, but when you have something that can sleep 20 and above, you really have to have a committed group and committed people to kind of constantly rent your home.

[00:40:54] Malin Kansal, MBA: So that would be my kind of words of caution and advice is always buy something that's [00:41:00] a little more evergreen and can really meet the scope of the general audience. Once you kind of go a little narrow. When the economy turns, those are the properties that are really going to unsmokey, take a little bit of a dive.

[00:41:13] Malin Kansal, MBA: Sure. 

[00:41:14] Randal McLeaird: So what's your plan with those now? We're just holding on to them, riding the wave 

[00:41:17] Malin Kansal, MBA: or what's the When you take a, um, hold on the Poconos, the smokey is conversation this year. We are running the numbers to see from a sales perspective. We wanna make sure, of course we have enough appreciation, which we do, which is great.

[00:41:30] Malin Kansal, MBA: Mm-Hmm. , we bought a relatively good price. And then of course we want a 10 31 exchange out. So we have to make sure that we find something or find the right asset class that we wanna exchange into. I wanna go more multi-unit. I don't necessarily say what would wanna buy another short-term rental. Yep. I think the multi unit environment still has a lot of legs to it.

[00:41:52] Malin Kansal, MBA: And once again, it's a wide audience, right? And honestly, people do have to live somewhere. So more of those entry level multi unit [00:42:00] categories. That's where my enthusiasm currently lies. Yeah. And that's what I do. The luxury condo in San Francisco. I tried to sell it during the pandemic in 2020. Did not sell.

[00:42:11] Malin Kansal, MBA: I tried to sell it in two thousand and twenty two. It did not sell, so I'm holding it. I have a good tenant in there. I wish the rent was higher, but it's not a low rent. It's an average rent, but it's just, I see the numbers and it's such a dramatic decrease from where we were at the height. It's a thousand dollars less.

[00:42:33] Malin Kansal, MBA: Yeah. So that's a variance to talk about, right? Yeah, yeah. Commercialize with our commercial endeavors, it's almost a little of a wait and see. We've gotten, you know, inquiries off market and otherwise, but nothing really that excites us in general. What excites us more is creating new usage. There's a trend here in San Francisco of new usage, quite honestly.

[00:42:57] Malin Kansal, MBA: There's some very high end restaurants that have [00:43:00] come here recently. And they're taking up space and there's also talk, of course, of rezoning. So having commercial and making a residential. So there is opportunity to relook at it and hold it longer. There's no need to have a fire. Sale of any nature. And that's what a lot of the offers are about.

[00:43:21] Malin Kansal, MBA: But honestly, once you're getting a lot of these off market offers, they're really trying to get that individual who is in that arena that would say yes to a fire sale. But honestly, and very transparently for San Francisco, I've spoken to a lot of owners in the commercial space, and a lot of them do have good pockets.

[00:43:39] Malin Kansal, MBA: So you can, of course, have a few of those fire sales, but there's not going to be a lot of them to be had at this point in time, because there's much more enthusiasm. There's much more, I think, congruency between us and say, city planning to do something creative and different with your property. Yeah, well, 

[00:43:59] Randal McLeaird: on the [00:44:00] short term rental that you have, the 20 sleeps 20.

[00:44:02] Randal McLeaird: I don't know what state it's in or if what I'm about to say would apply, but there's a company called Picasso. You ever heard of them? Yes. Yes. Yeah, so there's some PE firms that are going out and buying up single family properties and their models a little bit different. You know, they sell it to a group of eight people.

[00:44:18] Randal McLeaird: They own it. And like, it's almost like a modern timeshare model. Absolutely. Yes. And so, yeah, you may reach out to them and see if they would be buying if you're in the market. And I'm sure there are a number of those that exist as well, because they were buying up luxury. It was like the best properties.

[00:44:33] Randal McLeaird: You get to own 1 8th of this awesome property in this market. So again, it's just an idea. Anybody out there listening, if you're trying to sell something that's similar to that, you might reach out to some of these guys that have that type of capability. Cause they're like the old school open door and what's happening with open door.

[00:44:48] Randal McLeaird: They still kicking out their open door close or what happened? 

[00:44:51] Malin Kansal, MBA: I think they closed. Okay. Yeah. It's been a minute. 

[00:44:54] Randal McLeaird: A buddy of mine, it works there here in San Antonio or used to work there. And he like ran up there, their whole San Antonio to division. [00:45:00] And I just played pickleball with him two days ago and didn't even ask.

[00:45:03] Randal McLeaird: I haven't seen him in ages, but yeah, another story for another day. Well, Hey, I really appreciate you jumping on sharing your information, your knowledge. And I love learning about other cities and like what's going on in those, in those markets. So wealth of knowledge there. If you guys have any questions, reach out to Mullen.

[00:45:18] Randal McLeaird: Looking for a property out there. Definitely. I'm going to put a link to your show because I want people to look at you and, you know, and then, yeah, if you guys have any questions, I'm going to put all your contact info in the show notes as well. So again, thanks for jumping on and sharing your information.

[00:45:31] Randal McLeaird: Yes. 

[00:45:31] Malin Kansal, MBA: And you do need to come to San Francisco. You're missing out. Hey, 

[00:45:35] Randal McLeaird: I have never been, honestly, my wife, I think she lived in Santa Monica for a while. I'm sure she's been up to San Francisco, but. Now that we've got two kids, it's like a trip that we should take for sure. So 

[00:45:45] Malin Kansal, MBA: that's how much kids activities in the city.

[00:45:48] Malin Kansal, MBA: It's not like New York city. It's much more kid friendly. I would say. Yeah. Yeah. She 

[00:45:53] Randal McLeaird: lived in New York for a while as well. And when we go up, her sister lives up in, she wasn't Brooklyn now in Jersey, but. When we go up to [00:46:00] visit, she's like, I can't imagine raising kids here, right? Yes. In the city. So yeah, a little bit more space here in Texas to spread out into our thing.

[00:46:07] Randal McLeaird: Of course. But yeah, I mean, San Francisco sounds like an awesome place and we definitely need to get out and take a visit. Yes. 

[00:46:14] Malin Kansal, MBA: So we hope to see you. Yeah, soon. Yeah. 

[00:46:16] Randal McLeaird: Well, I mean, I'll reach out to you. Yeah. You show me the sites. Yes. All right. Well, have a good one. Take care. Good catching up. Thank 

[00:46:22] Malin Kansal, MBA: you. See you later.

[00:46:23] Malin Kansal, MBA: Surprisingly, most of the agents we speak with got into real estate, hoping to gain passive income and become work optional. However, only one in five ever start investing. Most are simply too afraid to start. Once you get educated by listening to this show, you'll be able to overcome that fear and become the one in five who are finding financial freedom.

[00:46:45] Malin Kansal, MBA: Don't miss a single episode. If you want to stay up to date, the best way is to make sure you're subscribed. So if you haven't done that, go ahead and do it now. And we'll catch you on the next episode. 

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