How does one become a real estate developer?
Jan 24, 2023
How does one become a real estate developer? Here is my path:
My name is Artem Tepler, and this is my journey in developing multi-family real estate.
There are many paths. Here is mine.
I clearly had a hustler's spirit in me from a young age. I'm not sure if it's genetic or if my parents not being able to buy me things that I wanted when we came to the US, forced me to earn them.
I was born in Siberia (communist Russia) and I was BLESSED to be able to come as a refugee with my family to America at the age of 9.
My business progress timelines:
6 years old: Selling fish and crabs at the market that I caught myself in Russia.
10-11 years old: Selling Pixie sticks in middle school at a 300% markup in Highland Park, New Jersey.
11-13 years old: Shoveling snow and cutting grass, selling my services door-to-door.
13-18 years old: East Brunswick NJ, I was raised by a single mother who worked for $10 an hour as a salesperson in Nordstroms. I worked blue-collar jobs: I watered plants and loaded cars at a nursery, pumped gas, worked as a janitor at a water park, unloaded trucks at night during high school until 1-2am, I was a host at a restaurant, and a terrible waiter. Side hustles included selling mix CDs, shoveling snow, and others.
18 years old: Year 2000, I went to Rutgers College on financial aid with a goal of going into Finance and becoming rich.
21 years old: Started reading about real estate (read lots of real estate, sales, marketing, and negotiating books, lots of personal development stuff), never stopped reading and growing mentally.
22 years old: Graduated from Rutgers Business School with a degree in Finance.
22 years old: Registered my first LLC to become a real estate entrepreneur. All I wanted was to be a landlord in my college town. Collecting checks from college kids seemed like the best career choice, flipping houses was the path that I saw to get there.
22 years old: Left my friends and bad influences behind and moved to Miami by myself to focus on becoming successful in real estate "investing" with no actual capital. I thought of myself as an investor, but, I was a real estate entrepreneur.
22 years old: I got my real estate and mortgage broker's licenses.
23 years old (2005): Negotiated and completed my first Joint Venture (JV) for what turned out to be an SFR development site on a double lot in Coral Gables, FL. Purchased for $300k, sold two months later for $530k.
-I sourced it by targeting people with postcards I printed on my computer that were on the Lis Pendens (notice of foreclosure) list. Made close to $100k net to me on my first deal.
-I broke down and cried, thanking G-d. It felt like I won the lottery and that I could do it repeatedly. I KNEW at this point; I was going to wealthy and be able to provide the life I wanted for my future family. The life I didn’t have.
23-25 years old: Sourced about 50 residential deals off-market, directly from sellers (roughly 50/50 wholesales/rehabs). Grossed close to $1m with my business partner at the time.
Sometime at this point, I saw a 200-unit building being built and realized that if they were making as much per unit as I was making per house flip, the math told me that building big projects was something I needed to do. This is when I learned about "Real Estate Developers” I’ve never met one or heard of that as a profession. I did not want to spend my life driving all over the NJ flipping old beat-up houses (New Brunswick, Newark, Irvington, Rahway were our stomping grounds).
26-27 years old (2007-2008): I decided to get really “aggressive in business” in probably the worst time to get aggressive since the great depression. I got punched in the face by life, subprime collapsed. I gave back all the money I made and then some. I didn’t hit zero, I whistled right past zero. I learned firsthand what a real estate recession was. My SFRs got crushed, rentals did ok. I never lost a dollar for any of our investors/lenders. I took the debt on personally.
I ended up having to move from my fancy apartment overlooking the Manhattan skyline in Hoboken, NJ, into an attic of one of my rentals in my college town. (Realization: A nice place is nice, but a free place was nicer at that point, I was #househacking as they say now.)
At that point, I was just living in the attic for free while I rented the house out by the room, and I had a realization that I should have been more specific about my goals.
This low point is the point when I understood why my father moved back to Russia and had to leave me behind when his business fell apart. I was grateful for not having a family at this time, and only had to worry about supporting myself. I put myself in my father’s shoes, and I could not imagine trying to make it in a country where I could not speak the language. Spending nights drinking Jack Daniels in an attic alone, I understood why people would try to kill themselves. I also understood that it was never going to be an option for me because I could not do that to my mother or my little sister who was born in 2008. I had a premonition that I'd one day be responsible for her.
2008-2009: I doubled down and got into NYU getting my Master's in Real Estate Development. Did one SFR JV with my good friend Chris, while in school, earned back some of the lost confidence. I thought NYU master’s in real estate was going to be like a “trade school” to learn real estate development. It wasn’t. Again, borrowing lots of loans (between credit cards and school loans, I got comfortable being uncomfortable with lots of debt).
@ArtemTepler
May 2009: I move to Los Angeles. I figured if I was going to be broke, I wanted to be broke in warm weather. My net worth was negative $400k at the age of 28.
I had 1 friend in Los Angeles, and 2 months after I moved here, he moved away. I tried to get a job in real estate, failed. I decided to get my broker's license and start hustling foreclosures again. I got a bill from the IRS for $700,000. My buddy said “Congratulations, you’re a negative millionaire”. It was not amusing at the time. Running/long walks at night with positive mindset stuff helped destress & motivate.
2009 – I met my current business partner Paul Schon, one of the biggest blessings in my life has been to share my business journey with him. He's an absolute mensch, a killer in business, and on the matts (we both train BJJ/MMA, and he's been consistently whooping my ass for over a decade, but I keep coming at him and I keep telling him, one day I'll get him).
2009-2012: We rehabbed and built roughly 50 properties, from Compton and Inglewood all the way up to building spec homes in West Hollywood & Hancock Park. We did rehabs, additions, gut rehabs, built duplexes, and lost $500k building $6m worth of custom spec homes (timing, inexperience in value engineering/design, expensive cost of capital)
2011-We get screwed again by a GC that was recommended by a Rabbi, blessing in disguise. I decide to become a GC myself. How hard could it be? I thought “If the type of people I met in this industry could do it, I could def figure it out”
2012: I saw a guy build a 10,000 sq ft 12-unit building, and sell it for $1m profit, and I thought “we can do that”. I asked him for advice, and even pay him for his time, he rejected me. That year, I found the first 3 apartment development sites that would change the course of our business. We made millions, more than made up for the $500k we lost building custom homes.
2013: We completed our first apartment building as GC/Developer using only debt (life changed, I had steady cash flow for the first time in my life).
2013: We started the next 2 buildings with no outside equity (just debt), we did great again, more steady cashflow.
2014: Our first "Real Estate Syndication" for a development deal – 13 unit, $1m raise.
2018: We exited a 21-unit building that we built, and I was able to pay off all my "non-income producing" debt: school loans, credit cards, family.
2012-2021: We developed roughly $250m of apartments across close to 30 projects, reusing our exact formula from the first building, applying lessons from each project to the next one.
We raised money by telling people what we did and asking people "Hey, this probably isn't for you, but do you know anyone who might be interested in investing in ground-up apartments?" We asked people for money probably more than the homeless people in Hollywood. Networking events, conferences, lawyers, CPAs, business managers, direct mail, if you encountered us, you knew what we did and we probably asked you for money. Now I view it as we were providing them with great opportunities, that majority missed.
2022: We closed on 20 acres in Austin to build a 400-unit $100m community, sourced off-market, direct to from sellers. Purchase price $4m; cost to entitle $1.8m. Appraisal once entitled is $14m.
Next Decade: We plan on doing 20-30 institutional deals via JVs with institutional capital partners / family offices in Texas and Co-GPs to help us scale.
Some institutional investors have asked, how are you going to do that? You're not from Texas?
I'm not from Los Angeles, or America either.
Watch us!
My Business Mentors: Jim Rohn, Anthony Robbins, Og Madino, Brian Tracy, Robert Kiyosaki, Earl Nightingale, Dale Carnegie, Zig Ziglar
"If you work hard on your job, you'll make a living, if you work hard on yourself, you’ll make a fortune" - Jim Rohn
Hobbies: Personal Development, Martial Arts, More Real Estate
I’m engaged to an incredible fiancé. Father to an incredible 3-year-old daughter. I have an amazing 14-year-old sister. Amazing mother. Have a great stepmom who is like an older sister.
I think about and miss my father every single day. In 2019 he died of brain cancer after a 2-year battle. One of the hardest things I’ve ever had to go through was watch my childhood hero go through what he did. I would not wish this on my worst enemy.
I wouldn’t be who I am without my father being a great example of how to act, and a great example of how NOT to act.
I hope I can be a great example for my kid(s), add value to others trying to figure their way out in life and business.
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