From Architecture School to STR Design Operator: How Visa Constraints, a Failed Fourplex, and a Work Permit Delay Built a Real Business | Ishita Nagda Lalan | Part 1

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Transcript

From Architecture School To The U.S.

Ishita Nagda 0:00

Design has been something that I have studied with my childhood. I chose architecture because I was mesmerized with the process of it. When I got married, achieving that fire movement was very important. Like any other W2 couple, we need financial freedom, we want to come back. Uh spend time with family, travel, work. Real estate was definitely one of the things that we both resonated with, and that's how it ventured into real estate.

Reshma Vadlamudi 0:27

What came first for you? The real estate or the design side?

Ishita Nagda 0:31

Well, design has been something that I have studied, right? It has been something that has been with my childhood. I chose architecture as my field because I was mesmerized with the process of it. So design has always been with me for the longest time. But as I never thought the way it panned out for me in my life. But when I when I got married to Harshad and we were talking about life and what our life goals were, where we wanted to go, achieving that fire movement was very important. Like any other W-2 couple, uh, you know, dual income generating couple would think like we need financial freedom, we want to come back, uh, spend time with family, travel world, because travel is one of our biggest passions. Real estate was definitely one of the things that we both resonated with, and that's how it ventured into real estate. So design definitely came before real estate in my life.

What Came First: Design Or Real Estate?

Reshma Vadlamudi 1:22

Yeah. Okay, so when you started, so then let's put it this way I know you went to the design school and eventually real estate came into it. But then in the business, what happened first?

Ishita Nagda 1:33

Oh, yeah. In the business world, real estate came first to us because I was back then working in architecture firm. Recently, like I I it's not even been a decade of me moving into the United States. So I moved here in 2018, and then I come from an entrepreneurial background. For me, my life always I always wanted to have a business of my own. I've never wanted to have a nine to five. I I think I thrive when I am in control, and it's something of my own, be it failures or successes. I've seen that all my life. So I had put that in front of the table to my husband, and he was like, Yeah, absolutely, we should get into something. Even though my husband comes from an entrepreneurial background, his mindset was a complete nine to five job. But he was pretty flexible and sweet to literally take my goals and make it his dream as well. And um, and then that's when real estate came into picture, and we ventured into various things like multifamily, you know, long-term rentals, but that did not interest us as much. And travel was, as I said, like our biggest passion. And we at that time we did something that was house hacking because we were literally trying to, you know, save money. How do we get more income from? So house hacking was a no-brainer at that time. It was just the two of us, and it was an aha moment, and we were seeing how people were house hacking while doing Airbnbs in one of the rooms. So that's how the whole short-term rental came in picture, and that's how we got into investing in. And that trans transformed into us going, investing in real estate in terms of us achieving lifestyle investments for ourselves. There was never a goal that we want to make it like a full-fledged business. Literally, it was like, I want to achieve X amount of passive income a month, and what would it take for us to get there? And as since we love to travel, we were like, should we should have, you know, our aspirations were we should have a ski chalet, we should have a lake house, we should have a beach home. Literally, lifestyle investments that we wanted to get because of my background in design. And I would enter a home and I would like good homes to live. And we were bootstrapped at that time, and we would do all the work ourselves and we would transform the home just for our own projects in 2019. When people were not paying attention to design as much, literally, donkey projects were the way to go. Uh, and every property was cash-flowing so very well. And at that time, I think we were just posting online on uh you know, industry was so small in 2019 that it fought attention, and that's when people started asking for if I give design services, and that's how it transpired into a whole design business and literally came into fruition as a word of mouth, and it was not like we had a business goal in mind, it literally was organic as it can be.

House Hacking, Visa Constraints, And Early Savings

Reshma Vadlamudi 4:19

Yeah, yeah. Okay, so first you guys started with house hacking and then doing the STRs.

Ishita Nagda 4:27

Yes, okay.

Reshma Vadlamudi 4:28

I know you mentioned the multifamily along too. So did you guys think about it as an investment, or did you guys were uh because we own long-term rentals before we came into the short-term rentals? That's why I'm asking. Like, so you guys househacked and then immediately jumped onto the STRs, or were there other investments before STRs?

The Fourplex That Backfired

Ishita Nagda 4:48

So I moved in this country in 2018. At that time, I was figuring out my career because I was starting from scratch, right? Like I was figuring out do I need to go the master's route and get two years? Because that's what you hear, right? You have to get two-year master's degree and then get a job for yourself. So I was getting prerequisite classes. So there was a whole process and visa waiting for your work permits and whatnot. And at that time, uh Harshad already owned his primary home, which had three bedrooms. And, you know, coming back from where I used to be financially independent, where I used to own my own money, and coming here and being dependent was was something that doesn't sit well with me, being super driven as a person that I am. So I was just literally brainstorming how are the ways that I can help Harsha that it doesn't, I do not, it's not gonna be like that. He's a spouse, you know, he loves me. But just like for my mental peace, I just wanted not to be burdened on him. And whatever I could do, so that's the reason house hacking came. Like we had the other two spare rooms, and we were like, why don't we just rent it out? And our location was very close proximity to Raytheon Industries, so there were very corporates that were looking for rentals, and that really helped us pay for our entire mortgage of our house. That was a huge saving, which would literally allow us to travel and every month wherever we wanted to go. And later, you know, I literally got a job before I even had to apply for my master's, which was again, um, I don't know, luck or just just fate, which I'll started, I started bringing in some income home. And by the end of the year, we had a substantial amount of savings that we were like, okay, what do we do? And that's how the research of the real estate began. And at that time, there was a conference happening in our city for multifamily from Tim Bratz, right? So uh Harshad got into it, we got into the mastermind of uh Tim Bratz, started learning about it because we had a couple of friends who were into long-term rental play and multifamily, so we were intrigued and we thought that's how the wealth generation was. And again, we were literally self-taught, we were learning, we were taking risks, got into multifamily, invested in a fourplex. At that time, very new to the industry, very naive. Literally, at a point we were like, oh, you know, we we actually know this person because the the deal was not someone that we knew directly, but it was a friend's friend. So there was like, we were just wanting to trust him, and we did not do due diligence, we didn't do anything, and that actually backbit us a little bit because there was a lot of issues with the foundation of the building and whatnot. So I think what we did not do is like our our own due diligence of buying right. So we bought it in C class, did not know what kind of renters we were gonna deal with, went in with all the aspirations that we, you know, we'll take this one unit, uplift it, you know, cosmetic upgrades and whatnot, and probably raise the rents, which we did. But the renters that we were getting were leaving the place so bad that it was discouraging at a point, and then unfortunately, COVID hit. So, you know, the whole rental long-term rentals were going for a toss, you know, they were not paying the rents, and we were taking the brunt of it, and then there was a lot of maintenance. So that process I did not enjoy as much. We were doing it for wealth generation, but if you're not enjoying the process, then what's the point? And that's when we came across, like I came across an advertisement or just like a course on short-term rentals. It was an arbitrage model that someone was teaching, and then at that time it was like it was a light bulb moment. Like, what I are you seriously saying after arbitrage, you're making cash flow of like 1200, 2500, which was unheard of in multifamily, right? And I was like, my you do like 50 of 50 doors in multifamily, you might as well just do one or two arbitrage models. So that's when I was like, okay, this is what I would love. But because culturally, you know, where we come from, uh, hospitality and hosting is a huge deal for us, right? And I love hosting. Uh, so that mixed with travel was something that I was like, okay, I'm in for it. Let's let's try it. And going in with like a lesser investment in terms of arbitrage model, it was like, okay, I at that point in time where we were, we didn't have like a big sum of money to invest. So we were pretty much uh at a point where arbitrage made sense. So that's how my learning started in arbitrage model, and I we ventured into our first short-term rental deal.

Discovering Arbitrage - And Why It Clicked

Reshma Vadlamudi 9:12

Oh my gosh, when you talk, it's almost me hearing to myself. Do you know that?

Ishita Nagda 9:16

Like, yeah.

Reshma Vadlamudi 9:18

Yes. Because that's exactly how the only thing is, I know maybe Harshad trusted his friend a little too much. That did not happen for me. Uh, that's the only thing that did not happen along the way. But uh the the thing is, like, that's exactly my mindset of getting into short-term rentals, like where we I went through the whole thing, like learned about A, B, C, D classes, and then I heard about why multifamily in C class is the way to start. And then I was also, I can only work with people that I can understand. Right. And I can't understand the C class and the D class neighborhoods. Yeah, I can understand B plus neighborhoods and I can understand A neighborhoods. Right. But then if you were to, because I know my husband will be hands-off, I am the one who will be managing it at first. And then if I have to go in and ask them for rent, there is no way. I wouldn't even step in that neighborhood. That was my thought process. And then we actually started with arbitrage too, because we we were into long-term rentals, we heard about the short-term rental thing. It's just it sounded too good to be true, and it was like, how can something be too good to be true? And then do you really act upon it? Do you just buy a property and then hope it will work as a short-term rental? Yeah, and then Chris was encouraging enough. Why don't you that's when he introduced me to Airbnb Automatic actually? And then he said, This guy does this something called arbitrage. And then that's how we introduced, and then I went and looked that guy up, and then I started reaching out to a bunch of landlords, and then because we already had long-term rentals, I have my network in the long-term rentals, and I know so many landlords who were actually willing to partner with me because they know they can trust me, because we have our own properties, and I'm not someone who is going to trash their property.

Ishita Nagda 11:09

Correct.

Reshma Vadlamudi 11:10

That was there, as well. Oh gosh, it's exactly like my mindset unfolding in front of me, whatever you just thought.

Ishita Nagda 11:17

It's a relatable story, right? And it is so true. And I've seen and I have heard so many stories which are so similar to ours, too. And yes, that's the beauty of it, from where we started to where we are now, and it's been amazing.

When Design Became A Competitive Advantage

Reshma Vadlamudi 11:29

Yes, exactly. Yeah. So, at what point did you realize your eye for design was going to be a real competitive advantage?

Ishita Nagda 11:37

I think I would just go back to our first STR that we invested in. Uh, at that time, you know, it was just like a wooden log cabin that we bought. It was a two-bed, two bath during COVID. I mean, we bought it pre-COVID and then COVID hit in March. And we were like, okay, we are bootstrapped now. What do we do? We don't, we are not finding laborers, we are not finding anyone. We went in and at that time, uh believe me, there were there are times that I was doubting myself. I didn't know, but I was just going with the flow. I think what I believed in was my eye of design. I know that is one strength that I have, and I can definitely transform a place beautifully than what I was seeing things that were going around. What really gave me the confidence is when we completed the project and when you hear people talk about it, right? That's a sense of validation that you get when you're we we had a housewarming party, and then the friends were, you know, appreciating the space so much. Harshad posted it on Facebook group, and that's when I started getting clients. Like them reaching out, like, hey, I have this one room. Can you please help me do this one room? Or I have this much budget. Can you help me? What should I do? So that was a sense of validation that okay, I am doing something right that people are loving. Yes, you know, it was not something that people can think that I I could do it by myself. So I was like, okay, that was that was probably the switch where I was like, okay, I think I got this.

Reshma Vadlamudi 12:57

Yes, yes, okay. What were some early milestone moments that made you realize STR design could become a business and not just a side passion?

How A Work Permit Delay Built A Business

Ishita Nagda 13:07

Right. I mean, you know, initially our first few projects that I did were were our own investments, and we had our my full-time job on this side, right? So it was not like I was looking for a business. Again, as I said, my business was very organic. The milestone that happened was again, life happened, COVID hit. I was waiting on my, you know, my work permit did not renew on time, and I had to literally terminate my job overnight. And my lawyers told me I have three months for my work permit to come in. I was like, great, vacation time. I literally got out of this one SDR renovation project. COVID was exhausting. Uh, I mean, overall, the whole process of staying home and whatnot. So I was like, okay, let me just take a breather for three months. Three months passed away. I was literally enjoying and we were we were traveling and whatnot. But then after three months, what? Like Harsha literally had to like okay, now what? Your renewal has not come in time. While we were getting, you know, messages, I was not taking them seriously, but then I started taking them seriously. I started replying to them, I started taking calls slowly, gradually, that work permit took eight months to come in. But in that eight months, I had almost five to six projects that I was working on, which was almost replacing my W-2 income. And that is when it was like again, like an aha moment where we were like, okay, now I don't think I want to give myself another year because if I can almost replace, I'm almost at a verge of replacing my W-2 income. I'm definitely I'm positive this is in building into something fruitful. So we took a year, and that year I probably over overpassed like my W-2 income, and that was like, okay, this is turning into a business now. And then I started higher, I hired one VA under me because the amount of inquiries I was getting, I you know, me myself, I was not able to keep up with it. So then that was those were the milestones where you're like, okay, now it is literally turning into a business, and now it's not just a side uh human side fashion anymore.

Replacing W2 Income Without Trying To

Reshma Vadlamudi 14:59

Yes, yeah. So, how do you think the architectural background influenced the STR design process differently than a traditional interior designer?

Ishita Nagda 15:08

Interesting question. So, my background being in architecture, and I also have a background where I have worked in set designing in in an industry which is not very structured. You know, Bollywood uh is not very structured, you don't have schedules. You might have schedules, but things can move around.

Reshma Vadlamudi 15:25

Nothing can like nothing can get done in those schedules.

Ishita Nagda 15:28

Exactly. And if you have an outdoor and the weather dependent and whatnot, right? A lot of things can go wrong, and a lot of production, post-production, pre-production can go wrong, and that can delay. So there's no structure to the whole game. Whereas architecture, it has very streamlined structure. You have these drawings, you have these, you know, uh outsource vendors of MEPs and whatnot.

Reshma Vadlamudi 15:49

And I would so you have so many systems within the architecture, and then when coming to Bollywood, there are no systems in place. Even if there are systems in place, no one is implementing them.

Architecture Vs. Bollywood Vs. STR Design

Ishita Nagda 15:59

Yeah, it is very tricky because there are so many heads in that game, right? It is just not too many people. Too many people. There's director, cinematographer, then there are lighting team, there is the set designing team, then there are actors, there's like too much coordination. There's too much coordination. And on on the other hand, you are your architecture is building permanent structures versus set designing is temporary structures. So, in the budgeting of temporary structures, you're also budgeting about dissembling everything, taking it, putting it back where it needs to go. We've rented some of the props. So a lot that goes in. I have high respect for both the industries, right? Because it takes a it takes a whole lot of effort to even make in an advertisement. Forget about a movie, a full-fledged movie. I can't even tell you how much time it takes. But yeah, if you're you're building permanent structures, the other side, you're temporary structures. I feel like the short-term rental, it is a great amalgamation of the two. Where, you know, I have tried to create systems, but it is, I would say that it is feasible, not possible to always have that system going throughout the project. It's literally a chaos management most of the time, rather than systems and processes.

Reshma Vadlamudi 17:15

Yes.

Ishita Nagda 17:15

Uh, every project is different, every scope is different. Again, we are trying to get these massive 5,000, 7,000 square feet homes done anywhere from three to seven months, depending on the scope of work. We are into high renovation projects, value add projects. So we take longer time. I know there's a whole talk in the industry of getting these projects done in a month, within a month, installation within a week. You know, I respect who is able to do that. We have not been able to achieve that because again, it's not that we are not able to achieve it, it's just a lot that goes into it. And plus, as the industry is evolving, as the guest experience and the guest expectations are evolving, and now it's just not going in and looking at the walls and slapping wallpapers and a paint on the wall, right? Now we are literally designing how do you integrate indirect lighting in your light? How do you integrate some different materials or all of that takes not only takes time on your drawing board, but on the execution team as well. So there is no structure where I can say that okay, I'm I'm done with the drawing board phase. Now it goes to the bidding process and then it goes to execution. I don't have that liberty of time. Yes. So literally, when the drawings get done, it gets sent to the site, they start executing it. I have my team who I believe in and I know how they work, like how they build me. So that works out, and there's a whole lot of trust that goes between me and the clients as well. And tension too. I would not lie. It is not always a smooth sailing process at all because again, clients' expectations are different. What we are dealing with the site and execution is a whole lot different. So I would just answer like there is no process, it's literally chaos management. What we try to achieve is give the premium product to our clients as per their expectations, making sure that this will be the top-performing property. That's our goal, and that is what we stick with.

Walking Into A Property: What Her Brain Actually Sees

Reshma Vadlamudi 19:01

Yes, yes. I know you mentioned about the Bollywood uh thing. So first tell me, like after the school, how did you get into it? Is it right after school? Did you get into Bollywood or how how did that happen?

Ishita Nagda 19:13

Yeah, I mean, I got out of school, I got out of my internship of a year, and then again, I was taking a sabbatical for uh a month or two, and I think I was just exhausted by the process of architecture. My school was pretty tedious in terms of architecture as a field is very highly demanding of you, especially when you come from a college or a school in India. It's it's it's a rat race, right? Like it's super cutthroat competition that you have to deal with. And I was just exhausted, and I I all these houses that were taking, you know, three to five years because back in India you're dealing with brick and concrete work, you're not stick bills, right? So they take much longer to build.

Reshma Vadlamudi 19:50

Yes.

Ishita Nagda 19:51

And my personality is such that I get bored of monotony very quick. So I I wanted something, I wanted to go to a probably a bigger city, I wanted to go to a fast-paced environment. And I just told my mom that mom, I'm not feeling architecture. What should I do? And my mom is a you know, verocious reader and she reads magazines, and she literally came across an advertisement or an article of a set designer, and she was like, Hey, she was an interior designer, an architect, you can do the same thing. Why don't you apply for this job? So it was my mom's push, and I was like, Oh, yeah, let's see. This sounds interesting. And I probably take a plunge. I'm a pretty risk taker and I like you know trying new things. So I was like, Let's do that. And that's how I started applying to various jobs, and then I got a call from a firm in Bombay, uh Mumbai, and they were going to start working with a movie with Yashrad Studios, and I was like, Yeah, they loved my portfolio. And next day, again, if you want to talk about how non-structured it is, no offer letter. They were like, join me from this particular date. I was like, okay, just one phone call. I literally pack my bags and leave for Mumbai, like two big bags and leave for Mumbai. Told my entire family I'm coming, I was gonna live with my relative for like first month to figure out Bombay. And I'm calling my, you know, uh, the person who hired me who was the the owner of the company. They never answered. Did not answer. Did not answer. Yes, and I'm like, do I have the job? I'm here in Bombay. I was supposed to start tomorrow, but today I do not even know if I have the job. And then I get a reply that they were busy on a shoot. Why don't you come to this address? And that's how your job. So it was very fishy in the beginning, but then slowly it just became a full-fledged job.

Reshma Vadlamudi 21:38

Okay, so you still got at the same place. Yeah, okay. The first one was with Ashraj.

Ishita Nagda 21:44

Like that's the So that's how they hired me. Think, but again, you know, the these processes they take long, right? They probably have a contract with Yashraj that yeah, they are the art direction uh team associate. But that movie might take long because of probably you know, they have some financial issues. Or the pre-production is taking longer. So in that time, the art direction team is not going to just wait on it. They have to make their money too. So what they do is they do a lot of advertisements that are shorter span and they, you know, they're lucrative as well. But yeah, so I plunged in and I signed up as an Yashraj of film, but I think I got to work in a lot of advertisements and I got to work with like celebrities which I'd never even thought I would be next to, which are Mita Button being one of them. So it was it was a phenomenal experience for like that one and a half years, I think. Very stressful. It is not as glamorous as it sounds, but um very rewarding in the end.

Reshma Vadlamudi 22:38

Yeah. So and then uh you mentioned how architecture was uh very solid, and this one you have to take off and make sure the pieces go back in into its place and all that, and then you tied that into the SDR space and how demanding the space is getting nowadays, and how you have to rethink about the design um in so many aspects. When you walk into a property for the first time, what are you instinctively looking for? A layout, a feeling, or a story, or all of them together? How does your brain go?

Ishita Nagda 23:13

I think when I just walk into the space, it's just my brain, the way it works is like I I look at the location first, the architecture of the house first. Like how what are the materials that are used in the house? What is the structure that is do that? Does it have a cathedral ceiling? Does it have flat roof? How where's the natural light coming from? And then my my brain is like it operates in floor plan manner, and I start seeing the layout very organically, and I start feeling the layout, and that's how I operate, and that's how I come up with the theme as well. So if a house is looking like a castle, right? Like then we would go in that route. We'll probably use materials and the amount of natural light coming in, my color palette shifts accordingly. So it's it's a mix of everything. And sometimes, you know, you you you're in an STR world, so there are clients, you you're divided, you know. There are clients who are strictly looking at it as a business and want to be like, hey, you know, make me the top-performing property. I just wanted a high cash flow property. And there's not a whole lot of sentimental value. It is literally just a financial number. And at that time, we are trying our best to give the product that we can, looking at whatever we feel. But then we had, like just recently, we had a client who came in with uh, she had not even seen the house, you know. She had probably put in an offer, closed on the house, sitting in West Coast in Asheville. And she was like, Ishita, I there is this story. My my son had cured curated uh this album when he was 18 year old, uh, right after high school. That is called Fly Me to the Moon. And we are a family who loves to listen to music. Can you please incorporate this in your design?