From Home Builder to Real Estate Private Equity With August Biniaz

In this episode of The Same Day Podcast, host Mat Zalk talks with August Biniaz, Co-founder and CIO of CPI Capital, about moving from home building into real estate private equity. August covers syndication, shifting from operator to sponsor, and disciplined underwriting. He also shares lessons on investor trust, cross-border investing, and managing risk through market cycles.

From Home Builder to Real Estate Private Equity With August Biniaz

August Biniaz is the Co-founder and CIO of CPI Capital, a real estate investment firm with offices in Vancouver and Florida that acquires and manages US multifamily and build-to-rent assets through private equity and syndication structures. August leads investment strategy, market analysis, underwriting, acquisitions, and asset management. With over 15 years in real estate and more than $225 million in investments closed, he shares his insights by hosting Real Estate Investing Demystified.

Here’s a glimpse of what you’ll learn:

• [3:44] August Biniaz’s journey from home building to larger-scale real estate investing
• [10:15] How August adapted from managing projects directly to leading investment strategy
• [13:42] Navigating unexpected challenges and protecting investor relationships during difficult deals
• [18:56] Why disciplined underwriting matters across different market cycles
• [22:54] Investor psychology, emotional decision-making, and the importance of building trust
• [26:44] August explains the complexities of investing across the US and Canadian markets
• [34:11] What investors look for beyond returns, including diversification and access to alternative investments
• [39:42] Balancing investor interests, deal timing, and long-term decision-making
• [43:15] August’s approach to evaluating investment opportunities, risk, and income-producing assets
• [46:58] August’s lessons from investment mistakes, ongoing education, and real estate cycles

In this episode…

Moving from building homes to leading larger real estate investments requires more than simply taking on bigger projects. It means changing how you think about capital, risk, delegation, and your role in the deal. What does it take to make that shift successfully?

Real estate investment strategist and former home builder August Biniaz says the transition starts with moving from doing everything yourself to becoming the sponsor who finds opportunities, assembles the right team, and brings investors into the deal. After raising roughly $5 million for a townhome project, he saw how joint ventures and syndication could unlock larger real estate opportunities. August also learned to view capital raising as offering investors a valuable opportunity rather than simply asking for money. His approach emphasizes disciplined underwriting, adapting assumptions to market cycles, maintaining transparency, and building long-term trust with investors.

Resources mentioned in this episode:

• Yonatan Schmidt on LinkedIn
• Mat Zalk on LinkedIn
• Keyrenter Property Management
• Keyrenter Property Management in Tulsa | Oklahoma City | Arkansas
• Keyrenter Property Management email address: [email protected]
• Chris Lile State Farm 
• August Biniaz on LinkedIn
• CPI Capital
• Real Estate Investing Demystified
• “Navigating the Obstacles of Launching Your Big Idea in Property Management” with Vondell Burns on The Same Day Podcast
• “Exploring New Possibilities in Entrepreneurship” with Chip Gaberino on The Same Day Podcast
• “Renting to Own: The Advantages of a Contract for Deed” with Brook Reutter on The Same Day Podcast
• Ava Benesocky on LinkedIn
• The Secret Wealth Advantage: How you can profit from the economy’s hidden cycle by Akhil Patel
• FrontFundr
• Wise

Quotable Moments

• “You should never change your standards when it comes to underwriting.”
• “You should stand by your thesis; you should understand by the analysis you do on deals.”
• “Today we’re on a first-name basis; we have investor dinners with our investors.”
• “At the end of the day, the best referral you can get is… from active investors.”
• “Investors just should know what options exist, what’s the risk profile, and how much of their investment should be invested in alternatives.”

Action Steps

1. Shift from operator to deal sponsor: Let specialists handle day-to-day execution so you can focus on strategy, capital, and overall deal performance.
2. Treat capital raising as providing an opportunity: Reframing investor conversations builds confidence and helps you communicate the value of access to alternative investments.
3. Maintain consistent underwriting standards: Sticking to a sound investment thesis prevents short-term market conditions or individual deals from weakening your discipline.
4. Build genuine relationships with investors: Strong personal connections can increase trust, encourage reinvestment, and generate valuable referrals over time.
5. Diversify across investment opportunities: Understanding available options and their risk profiles can help investors build more balanced portfolios instead of relying on a single asset class.

Sponsor for this episode…

Chris Lile at State Farm Insurance:

This episode is brought to you by Chris Lile at State Farm Insurance. 

Chris Lile at State Farm helps you protect your most precious assets and investments, including home and auto. 

To learn more about how you can save double digits on all your insurance needs, visit diallile.com or call Chris’ office at 918-878-7771.

Keyrenter Property Management:

This episode is also brought to you by Keyrenter Property Management.

Keyrenter Property Management is a full-service property management company that helps clients buy, renovate, and operate real estate assets.

The team helps clients build wealth while taking the headache out of property management.

That’s why, no matter what rental you have — single-family homes, condos, townhomes, or apartments — they can give you the management solutions you need. 

To learn more about their services, go to https://keyrenterpmc.com/ or send them an email at [email protected]. 

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Episode Transcript

Intro 00:04

Welcome to The Same Day Podcast, where we discuss driving incremental business growth and other topics related to real estate, property management, and entrepreneurship. Now to the show at hand.

Mat Zalk 00:21

Hi I’m the host of The Same Day Podcast where I connect with top business experts and real estate leaders. Had a ton of guests on the show. If you go back, way back, Vondell Burns was on from Thankless Productions. Chip Gaberino is a local real estate entrepreneur and restaurateur, and Brook Reutter talked about contract for deed versus lease to own properties. 

Today’s episode is brought to you by Chris Lile State Farm. Chris Lile State Farm helps you protect your most precious assets and investments, whether it’s your home and auto investment, rental properties, or other valuables called Chris Lile State Farm. For a quick and painless phone call to potentially save you double digits on all of your insurance needs. You can find them at diallile.com, or call his office at (918) 878-7771. Today’s episode is also brought to you by Keyrenter Property Management, where we are a full service property management company helping our clients buy, renovate, and operate real estate assets. We help our clients build wealth while taking the headache out of property management. No matter what rentals you have single family homes, condos, townhomes, apartments. We have the management solutions that you need across seven soon to be eight markets. Go to keyrenterpmc.com or email us at [email protected]. 

My guest today runs investment strategy as the Chief Investment Officer at CPI Capital. CPI Capital is a real estate private equity firm that moves Canadian and American capital into American multifamily assets and build to rent assets. August Biniaz has closed north of 225 million in multifamily and build to Durant. And he’s done it for 15 years. He’s also the host of the Real Estate Investing Demystified podcast, which is a great show that I highly recommend. August Biniaz, welcome to the show. How are you?

August Biniaz 02:10

Great. Thanks, man. I just have to I.

Mat Zalk 02:13

Do just have to comment. You the curly hair, the beard. I mean, I just got back from Greece, to be fair, there’s a lot of statues that look just like you.

August Biniaz 02:20

Well, we fought them for 300 years. So, you know the Persians? Persians. So, yeah, maybe as a Persian, that’s.

Mat Zalk 02:26

The wrong thing to say.

August Biniaz 02:27

You look like.

Mat Zalk 02:27

You look like a Persian statue.

August Biniaz 02:29

Yeah. No, the thing is, I actually named my sons my firstborn Atlas. My second born Apollo. So they have Greek names, so they gotta be might be upset at me later on, but they’re, you know, the Greeks are, you know, they’re at the foundation of Western civilization, even though they learned a lot of stuff they do from the Persians. I mean, when you talk about drinking wine, the Greeks used to mix their wine with water until they met Persians in battle and other places.

And. And they learned that the Persians or these crazy people who drink wine straight, they don’t mix it with water.

Mat Zalk 03:00

So that’s funny.

August Biniaz 03:01

That’s funny. A lot of different things. We go back.

Mat Zalk 03:03

A little bit, a little bit of trivia. August, you’ve been on a ton of podcasts. People can go through and listen to the history of entrepreneurship. You’ve answered a lot of questions. I’m going to try to skip some of those questions.

I do want to understand you went from swinging a hammer essentially, to running a real estate private equity firm. Most people start from finance and make their way into real estate, private equity. But you were in an agent, a flipper, you had white rhino developments. You’re building custom spec homes with your own crews. Walk us through how somebody ends up going from swinging a hammer to running a successful fund.

August Biniaz 03:44

I wasn’t actually swinging a hammer. I was more of a GC, so there was times I would get my, my, my hands dirty. And you have to, as a general contractor, kind of, you know, Physically get involved in projects. But yeah, I was more of more of a, I was, I was a builder. So as a, as a, as a home builder doing both spec and custom, I wore many different hats.

I was the GC, I was the developer, I was the contractor, I was a designer, I was a bookkeeper. I did everything within that space. But sitting in my F150 and driving up and down a road that I drove on every day to go to most of my job sites. I always wondered, is this what I want to do for the rest of my life? And I looked around my peers, others who were home builders. 

 And it usually in the case of, you know, when there was a lot of success, it usually took Multi-generations before a home builder like me for their grandkids to be able to do build these mega projects and what have you. And that was my dream. That was the ultimate dream to become a developer, a builder on a larger scale. And but it just that the velocity of getting there seemed. The timeline seemed so long, it seemed like that I don’t want my. 

 You know, I want I wish all the best for my grandkids, but I don’t want them to be building these mega projects. I want to do it in, in, in my career time. So I always wonder how was that possible? I was always curious about how these projects are built. As a home builder, I understood that in most cases, you need at least 30% of the total project as equity needed that cash to be able to do it. 

 So when I would look at these larger projects that are in the tune of hundreds of millions of dollars, I’m like, how did these people have $30 million, $60 million, $100 million just sitting around? How is that possible? It seems so unattainable to get there with, you know, with high cost of living as well in the days that we’re living today and in particular in Vancouver, west coast of Canada, where I am originally from. But so, you know, that curiosity, you know, turned into frustration. And eventually I stumbled on this, this term that I heard that I’d never heard before, which was called syndication. 

 And I started googling this was before. before AI and what have you. So I started googling what syndication was, but. And syndication was exactly what I wanted to do. I wanted to have the brain power. 

 I wanted to, you know, bring this, bring a deal to my connections. And I wanted there to be a mechanism there, to be a structure where I could raise capital from them without getting myself in trouble and, and doing it correctly. So I went down that path. And while I was exploring that, that aspect, you know, serendipitously, a deal came across my desk, which was I was a single family home builder, but a multifamily, a townhome development project came across my desk, which somebody had put five single family homes that were all, you know, in a row under contract. We call it land assembly, where you can take a single family zoning and convert it into multi. 

 And in that case was townhomes. And they had put it under contract that put a $250,000 deposit. Another 250 was due. I think they had 10 or 12 months to complete on the contract, but that this guy had come to some financial hard time and he couldn’t complete on that purchase. Now there was a lift in the property. 

 He had put it on the contract for 8.7 million, put it $250,000 deposit, but the property was worth more than 8.7. It was worth, you know, in the mid nine. So we were making money on the buy. The issue just I didn’t have the capital to buy that deal. Sure. 

 I didn’t really have the experience of building townhomes either at that time. So I took, I took the contract on before having the, the money to, to, to do, you know, to execute the project. But I took the deal to a few associates of mine. I was able to put together around $5 million and buy that project, eventually built it. And it was a very profitable project. 

 But I fell in love with that model, which aligned with my idea is finding the deal, you know, providing your brainpower, investors and partners coming on now, that deal was a joint venture. It wasn’t a syndication because syndication, there is a a passive investing passive investor component to it, where certain groups of your investors are just the capital source, and then there’s other investors or the managers are running the deal. That one was more of a joint venture, but that was the model. So I fell in love with that model. So I started educating myself more and more about how deals are structured, syndications, funds, REITs, other vehicles that can put put together to do deals. 

 And I went down that rabbit hole. I was lucky enough a year into this, I was lucky enough to partner with a couple of great partners and start our firm, CPI, focus on US real estate, which is totally different than what I was doing as a home builder in the west coast of Canada.

Mat Zalk 08:29

Just to be clear, the joint venture model is essentially the co-op versus a GP LP split into a syndication. Is that roughly right?

August Biniaz 08:36

Well, there is no general.

Mat Zalk 08:38

Partner, there’s no GP, it’s just your co, your investors.

August Biniaz 08:40

Your co investors and the. It’s important to distinguish this because in the case of a GP LP, you’re immediately dealing with silent investors, not those investors are sheltered through the entity that they don’t have to sign on the loan. Lenders understand this, brokers understand this. Service providers. Your legal team understands how this structure has been put together in a joint venture.

Know you’re, you’re, you’re both on equal partners now. Now some of you, one of you might decide say, hey, I have more experience. I’ll manage the day to day. You put up the money. But both in most cases, both of you need to sign on loan documents and so on. 

 So joint venture is much more involved, whereas a GP LP structure is defined.

Mat Zalk 09:22

Did moving from being a general contractor, home builder into the world of this joint venture and then eventually into the GP, LP model of syndication? What did you have to unlearn? I mean, you were formally looking at projects very closely and monitoring every part of a project. And I can only imagine, you know, let’s make sure the framing is plumbed and let’s make sure the plumbing roughing looks good and all the rest of the steps that go out to building a finished product with installed windows and brick exteriors. And then you go back to a 300 zero foot view where you’re, you’re a capital allocator and you’ve got to have a high level view.

You’ve got to have a strategic perspective on where the market is going and where this asset could go. If you do the right things like what did you what did you unlearn from your years or what were you what did you have to unlearn from your years of close up building in order to become successful at allocation?

August Biniaz 10:15

No, for sure, I would say. I mean, we touched on it a bit earlier as far as kind of pulling my sleeves up and, you know, picking up a hammer myself, which was something that I, I had done over the years, if it was through cleanup or having to finish a job that was unfinished or moving materials around, that was a, an input I could no longer do. I had to allow the professionals that had bring on to do that. They could not be a. You know, I couldn’t just jump in and try to finish the project or or have to be on site every day.

So there was a component of understanding that, no, you are the general partner, you are the developer now. You’re the sponsor of the deal. Not every day, every day, you know, day to day manager of the deal. The other aspect was something I had to kind of unlearn or actually overcome was the moment that I went out there to raise capital. And I initially when we founded the firm, I was the one dealing with investor relations side of things. 

 I had a huge Rolodex of people I had not only have worked with in the past, but people had made a lot of money for. So it was the it was the, you know, the normal move for me to be the one dealing with those investors. But I, I just, I, I as a, as a, as a, as a young man, I, then I, I felt that I going to somebody and asking for money. It was as if I’m bowing my head, I’m asking for somebody to help me out. And I had to overcome that. 

 And one of my advisors taught me a lesson saying, hey, you’re offering your investors a product that’s not available. It’s not available to your financial advisor. It’s not available at their bank. It’s an opportunity for them to come, you know, to build wealth with you, with your expertise and your team. So you’re offering something special to them that they would alternatively wouldn’t have it. 

 So feel, you know, feel confident when you’re, you know, asking people for money. But anyways, I didn’t end up being the best at raising capital. My other partner has taken over that role, but that was another thing I had to overcome, that I’m actually providing a service to my investors rather than asking people or begging people for money.

Mat Zalk 12:15

Sure, it’s an opportunity that you’ve created that you’re allowing them to, to partake in. Exactly. It’s, you know, I’ve syndicated deals too, and I tip my hat to you for doing this for a living because it’s not my favorite thing to do. The big difference in being a home builder, maybe not being a home builder. The big difference in what I you know, in owning real estate directly and syndicating out deals with other people’s money is the fact that it’s other people’s money.

My, my, I just have such an aversion to losing other people’s money. I remember we used to own an apartment complex and we should have. It was a boiler chiller system. I don’t know if you’ve dealt with any boiler chiller systems. They’re awful, full of things that can go wrong. 

 And when the system goes down, it’s 100 people that have no heating or cooling or whatever it is. But it would keep me up at night. It would stress me out. I should have replaced it at the beginning. We didn’t. 

 We mandated it. But when I’d have to put $10,000 worth of refrigerant in and it wasn’t my money, it was painful to me. If it were my money, I would have said, done it, do it. No big deal. So the the question or the thread is, tell me about a time and the way you felt when you came close to or actually did lose somebody else’s money. 

 I mean, what, what, what did it feel like? And more consequently. What did you change in your underwriting standards for the next deal that you learned from that event?

August Biniaz 13:42

Well, we’re going through the process currently. We raised over $10 million on a deal that we have currently as part of our portfolio, Atlas at Bay Point in Saint Petersburg, Tampa, MSA. And we got hit by by the hurricane in 2024, two months after we purchased the property. And it’s a big claim. It’s a $17 million claim.

And we’re going through the process with our insurance provider. And we had to take the action of suing our insurance provider now. So it’s been two years we’ve dealt with that distributions have stopped to our investors. And because of that huge amount from 2022 to 2024, we didn’t do any deals. We really sat on the sideline because the fed was on a tightening cycle and we saw what was taking place. 

 So when we came back into the market, equity was somewhat abundant because we hadn’t squeezed the juice out of our database, so raised that $10.5 million put into that deal. Two months after closing, before we even made our first distribution, we go into this get hit by a by a hurricane. Over 50% of our units are offline now. The property is performing excellent. Outside of that, we’re sitting at 98% occupancy in the online units. 

 And even though half the property is offline, you know, people are still coming in and living in our community. But it’s been a it’s been a very difficult process sending those updates to our investors. Some investors are kind of reserved to go invest in any other deals because they’re like, hey, you promised us that you’re going to pay us distributions. And those have paused now. So but as a general partner, those anxieties that exist, they are going to be there. 

 You have to understand that, no, there are bad players and actual unscrupulous and fraudsters out there who go and rip people off that deserve to be imprisoned. There are people that maybe don’t have the knowledge and expertise and get involved in something, or their company grows too fast. And there is a level of, you know, minor incompetence that exists. But then there’s also GPS who are trying their best. They get hit with a hurricane or maybe put the wrong dead product and something goes wrong. 

 As long as it’s not, you know, complete unscrupulousness or complete incompetence or. In that kind of situation, you should weather the storm. My good friend and lawyer and advisor, John Carden, rest in peace. He told me that in this space that you’re going to be, there’s going to be times where you might end up losing investor capital, but as long as you can come back and recoup that for them, they understand that. Investors understand that some large firms, as I was, I was studying this myself because I always say that there is going to be possibly a time that there’s going to be, you know, distress or difficulty and you might end up losing investor money. 

 And how do you recoup that now in looking at some recent cases where there has been firms who’ve done tremendously well starting in post GFC and made their investors insane returns. And then when the hard times came, they actually have lost the same amount of capital that they had, you know, made for their investors. So that level of loss is something that I, you know, I think it’s hard for an investor to forgive, but if you’ve done great deals and a deal goes sideways, I think it’s part of the part of the industry, part of the business.

Mat Zalk 16:53

When you say like recoup the capital that you lost for an investor, are you referring to kind of getting into another deal, putting more capital at risk, getting into another deal? And that one, statistically speaking, not all of them are going to lose. Not all of them are going to win. So that one would would win and you’d recoup some of that loss.

August Biniaz 17:09

Yeah, yeah. As general partners, as sponsors of the deal, especially having a lot of savvy legal team available these days. You can structure these deals any way you wish. So yeah, I’d say there is something that goes wrong on a deal with investors. And now what you can do provide to your investors, say, hey, come and get involved on my next deal and I’ll reduce my GP stake in it.

I’ll reduce my promote in this deal for you guys to make money on this deal or hey listen, I’ve lost some of your money. Let me recoup that over the next few deals I’m going to do every time I get my fees. I’ll, I’ll, I’ll, I’ll pay you back a portion of what you’ve lost in the deal. So there are ways because at the end of the day, the best referral you can get is from, from active investors, right? Either them reinvesting with you or people that refer to you. 

 We’ve had that many times. So I think this is a I don’t look at maybe, maybe this is a flaw that I do have, but I don’t look at it in an institutional sense that there’s just another number that you can just go out there, raise more capital. I feel very intimate with my with our investors. And I want to build that relationship. Maybe at some point when the company grows to a point, that won’t be the case. 

 But today we’re on a first name basis. We have investor dinners with our investors. We we’ve come very close friends with our investors. So it’s, it’s, it’s a pretty hard process to even think about losing your investors money, but I’ve definitely thought about it and put systems in place. If that does happen one day, what should I be doing?

Mat Zalk 18:31

Did it I mean, do you underwrite differently, though, for deal? Were you not formally underwriting for potential hurricane loss and now you are or the not necessarily the hurricane loss, but the delays associated with insurance claims and the capital requirement for actually engaging attorneys and suing an insurance company. I mean, any of that stuff change our calculus.

August Biniaz 18:56

I will explain, I’ll kind of answer in two, two parts. One is that, of course, as you know, the the more you learn, the more you experience you are, the more knowledge you gain, the more you can take care of your investors and the more knowledge you have in this space. It’s just, it’s a common thing that takes place. You know, when you look at it in life and in business, but when are you talking about as far as the underwriting and how critical we were on a deal or how Aggressive or conservative. We are under underwriting.

I wouldn’t say so much because if if you are being aggressive or conservative, depending on the deal or the the moment of life you’re in, that’s not the right way. You should you should stand by your by your foundational understanding of your underwriting. You should stand by your thesis. You should understand by the analysis you do on deals. Now, I would say that depending on where we are within the real estate cycle, your, your, your underwriting forecasts should should differ a bit depending on where we are in, in the states in the real estate cycle. 

 So today I would say we’re either at the bottom or near bottom when it comes to commercial real estate in the US, particularly in the Sunbelt. So your you have to take into account into your analysis that you. You can’t Just because you’re underwriting to, you know, 2% rent growth or 0% year one, 1% year two, and then moving to 2%, that that rent growth might go back to what it’s been historically at at 3% every year or, you know, organically. So you take that into account that you are at a near bottom of the market cycle. So it, it changes depending on where you are in the cycle, not particularly on a deal. 

 You should never change your standards when it comes to underwriting.

Mat Zalk 20:51

You mentioned that some of your investors in the deal that has gone the way of the hurricane in Florida have where distributions have stopped, you said have been hesitant to invest in other deals. And it strikes me that our businesses may be similar in the sense that emotion, which our businesses should be pure arithmetic, plays my opportunity to invest in the stock market is X with some return, with some risk, and my opportunity to invest in a syndicated real estate deal is why, with a depreciation and cashflow and whatever else and and corresponding risk of that deal. And yet there’s emotion involved in these decisions. You mentioned in another show that that and we talked a little bit about this before the show, that Apollo Oaks, some of the Canadian investors that had self committed capital decided that because of political infighting between administrations in the US and Canada, they were were going to opt out of of investing, which is an emotional response rather than an arithmetic response. In our business, it’s like an owner of a single family property may have a bad quarter and decide they want to sell an asset.

Whereas the math all says that they really should, you know, hold for the long term. The question is, you know, when when a spreadsheet says one thing and that’s in your case, the proforma of the property and how you expect that the annualized returns to to kick out over time. And the client’s gut says another thing. I don’t want to invest in the United States because I’m a proud Canadian, or I don’t want to invest in the United States because I’m I feel like, you know, hurricanes are going to be more intense this year than any other. And I don’t have any factual basis to back that up. 

 Like, what’s your what’s your actual move? Does anything change? Do you do you ever consider that there something in their gut that is not in the spreadsheet that’s actually correct or just write it off entirely?

August Biniaz 22:54

Yeah. I mean, retail investors, when you’re dealing in that sandbox, retail investors are inherently very emotional. They do emotion plays a big part in their investment decisions. And that’s just the nature of the beast that you have to deal with. We understand that when it comes to our deal.

Apollo Oaks, where 70% of investors who soft committed walked away from the deal. Canadian investors as a result of tariffs that were slapped onto Canada and the nationalistic pride that they felt and other reasons really. Historically, that number has been 10% from soft commit to actual investment. 90% of people who soft commit end up investing in that deal. Only 30% ended up investing. 

 Now we raised the capital needed, and it’s still majority of the capital did from camp come from Canadian investors. That’s just because we have a large database and we haven’t done a lot of deals. But but yeah, that’s the nature of the beast. When you deal with retail, even in the communications, you have another thing that I was telling you about when it comes to myself being an investor relations team member or my partner who took over that division, my partner Ava, is very emotional. She goes into conversations learning about investors and talking about her kids and and so on and becoming so friendly. 

 I would have never done that. I’m talking about the deal. Why do I believe in the deals? What are the numbers? What do I love about the deal? 

 And if there’s any, any, any risk profiles and investors don’t like that. Investors. Honestly, it depends on the investor. Retail investors in particular don’t like. They want they’re giving their hard earned money. 

 They’re signing a 200 page document that says if this guy loses their money, they can’t really do anything about it. They don’t, you know, it’s it’s an equity investment. So they, they, they will feel much more comfortable if they know that the person they’re talking to is connected with them on an emotional level. Then a guy coming in and talking big word and, and private equity jargon almost hang up the phone on me. Yeah, in some cases.

Mat Zalk 24:47

It’s just so interesting. So your partner in this whole thing speaks at a more emotional level and is able to actually do better in investor relations, unrelated to whether the deal annualized return of the deal is better agnostic to deal size or deal returns. She’s, from an emotional perspective, able to deal with retail investors better than the person that speaks about the deal. Only.

August Biniaz 25:09

No, no, I mean, the returns are still very important. Again, that’s another thing about retail investors. They just look at the returns. They’re not looking at the risk profile and so on. So the returns are very important.

But what I’m saying is in that onboarding call or in that initial call or in their relationship with them, majority of the her talk is about the personal life or the investor’s life or what’s taking place. I don’t have the like I would have I would have fired myself if I sat there talking to the guy about how my day was and how was the family, I’m like, get to the point. Like, you know, your, your investor is busy and I’m busy. So, so that was the point that I was very confused about. I would say probably 60, 70% of the time she’s on calls, she’s talking about personal stuff. 

 So that’s something that makes sense to me, but it definitely works, obviously.

Mat Zalk 26:00

Let’s touch base for a second. You mentioned we both mentioned the Canadian investors. There’s I would imagine that there’s a lot more complication in moving money cross-border than people tend to understand. You mentioned doing a mutual fund structure in Canada, which allows people to invest self-directed funds similar to self-directed IRA in the United States. Can you can you just give us a little bit of insight into that and how much work is involved in actually getting that stuff done?

And then another question that I have is, did you specifically build that fund structure around a potential investor archetype, or did it did you did you come to that from another way?

August Biniaz 26:44

Yeah. Giving a 3000 view crash course on the way that capital is raised in Canada compared to the US is very similar. The US, the Securities and Exchange Commission is the governing body that oversees everything to do with raising capital and sale of securities. Canada has the same, same body. It’s got a federal agency, but it’s every province has its own provincial agency that sets the rules in raising capital in that province.

So that’s when we raise. Yeah. Every, every province that we raise capital and we have to adhere to that province’s rules and regulations to raising capital. So that’s one one aspect which is similar to the US, is a bit different. Another aspect that’s different in Canada than the US is there is no legislation or rule or playbook when it comes to sale of securities as a sponsor to investors. 

 As long as you have a deal and you want to allow your investors participation, the investors can invest directly with you. In Canada, the regulators say at some point, if you’re continuing putting these vehicles together and continually selling securities, you might be triggering. Sure. The, the, the, the fact that you are in the business of business, of selling securities now you’re stepping into the world of in the US, you call them broker dealers. In Canada, we call dealing representative or exempt market dealers. 

 I am going to require you to be a licensed broker if you want to keep selling securities, at which time a group like us at CPI says, hey, what, what what is, you know, what does that entail? Which means that somebody who has have to have certain qualifications, CFA or what have you, they need to, they need to be on the company and they usually get paid like $200,000 a year. So it’s very laborious and cumbersome to be an exempt market dealer and then to sell your securities. Some firms do that, believe it or not, but we’re not as a boutique firm, we’re not at a stage. So then the regular say, say, here’s an option. 

 You could continue doing what you’re doing, and we might come after you eventually. And most of the people work for regulators or lawyers in Canada, believe it or not. So they’re there to, you know, punitively come after you. But the other option is use a third party exempt market dealer to sell your securities through. So even though the offering is yours, investors that you’ve cultivated, but the decision that’s being made and the actual sale of securities and the actual transfer of funds gets done through this third party, that gives you at least a layer of protection. 

 That is, you’re not doing the KYC and K, y, p on yourself for the investor. There’s a third party doing that, and that’s what we’ve elected to do. We use the platform called FrontFundr as our exempt market dealer. So all of our investors go through them. So they’re not they’re not out there raising capital for us. 

 They could that’s a different agreement we have with them. But the agreement, the the agreement currently is that any investor that we have, we send it to them. They then do obviously, the background check on us, all the executive team members. Every time we have a new deal, they have to do due diligence on that deal as well. Again, on the deal, on the deal, but not on us again and so on. 

 So so that’s kind of on a high level as far as raising capital. Again, the other parts just very quickly, since this is going to be a crash course, our deals are in the US. We’re buying in USD. Our distributions are going to be done in USD at divestment. The returns are going to be done in USD. 

 So we’ve learned this kind of on the job. Historically, we would get investors to invest in CAD and we would do exchange. So today we require investors to do the exchange themselves, like get get the exchange done. Now we give them we we forward them to a platform called Wise. The Wise that, that, that breaks everybody else’s rates when it comes to exchange is unbelievable. And they do the exchange. 

 They invest in USD. Their subscription is made in USD. Their their distributions are made in USD. So it makes it a lot more cleaner when it comes to their investment amount. We’ve also received from investors. 

 Go ahead.

Mat Zalk 30:46

Does that mean that they have to have U.S. bank accounts that you distribute to?

August Biniaz 30:50

Exactly. So they have to have a Canadian bank account that U.S. dollar. Yes. So you just you have your Toronto Dominion or Royal Bank bank account. You have your regular Canadian dollar bank account, and you just go to your same institution, say open me a US dollar bank.

Most Canadians have a US dollar bank account. Just just just just so so now the other part was relieving them from having to file U.S. taxes. That was another big part. So we modeled another company that existed here in Canada, did what we did. They were in the business for way longer than us, had done billions of dollars in deals. 

 And what they required their investors to file U.S. taxes, apply for an IAUEIN or itin itin. If there’s an individual EIN if they’re investing through a corporation and have to pay an accountant 600 to 1200 bucks a year to file those taxes, so that becomes erosive to returns, it becomes cumbersome for investors. So the structure that we created was relieving the investors from having to file those taxes. But that’s kind of on a high level when it comes to, you know, investors utilizing their, you know, cross-border investing and what have you. Now, going back to the second part of your question, when you were talking about self-directed retirement accounts and investing through those vehicles, and that the archetype, the investor profile, who, who invest using their, their retirement accounts, that really the impetus there was really, from the conversations that our investor relations team had with investors and the, the most common question we got over the last six years prior to launching this fund was, can I use my can I invest using my registered funds? 

 And the answer, unfortunately, was always no, this is a cash investment. So at some point we’re like, there’s just so much interest here. And when we looked across the landscape, a lot of other groups were offering that as well. So we’re like, hey, we got we got to be able to launch this. So the process there was to launch a mutual fund trust, which is an independent fund on its own, and investors invest through the fund to then be able to have exposure to our syndicated deals through the fund, which then A custodian is utilized. 

 Their funds come from their financial institution to custodian to our mutual fund trust, and then it flows down through our particular deal. And then it takes the same route on its way back.

Mat Zalk 33:10

That sounds like a complicated structure that you had to figure out.

August Biniaz 33:13

It’s very complicated. Yes.

Mat Zalk 33:17

On the on the topic of stewardship, I mean, I think you and I have similar businesses and that somebody, you know, hands me a house with keys and they say, I inherited this and it’s going to fund my retirement, take good care of it for a little bit and give me some income. And somebody conversely, in your business wires you $100,000 or more. And you say to them, I’ll hold this for five years, and in five years I’m going to, you know, have I will have distributed to you every quarter and then give you some principal return, whatever the actual whole period is. Are people buying a product? I mean, you mentioned the emotional connection that your partner has with them when, when she’s, you know, raising capital or people buying a product or they buying peace of mind for their capital.

Are they buying some other product? It’s not just the return that they’re buying. What do you sense that they’re, that they’re actually buying when they, when they write you a six figure check?

August Biniaz 34:11

Yeah. It depends on the investor. A lot of times, one of the common questions that we ask investors is, have you invested as an LP before as a limited partner in the past? That’s, that’s one of our top questions that we ask because it profiles us, the investor, immediately. If they’ve invested as an LP, they understand how private equity works.

They understand what the mechanics of investing as an LP and so on. It makes the conversation a lot easier. If they haven’t. There is a learning curve that goes there, but a lot of times the investors, these investors are very savvy. They’ve invested an LP before they understand the risk associated with it. 

 They’re more high income and high net worth. They are the less questions they ask because they know the process they have to go through. Today, with the prevalence of AI, a lot of people are utilizing AI to cross-reference our offering docs and come up with sheets and sheets of questions. So we have a program, our AI, that we can just input their questions, our AI chatting with their AI pretty much. So it’s going there. 

 So but but I would say, yeah, I think it goes back to this idea of options. And it’s something that I personally felt, you know, depending on what stage in life I am always, there’s a point that I come to and I feel like I’m missing out of this thing that exists, right? If it’s my partner who’s got used to Claude and he’s joined a mastermind and he my partner, Paul Hopkins, understands Claude very well. I kind of have that fear of missing out, and I’m missing out on learning Claude and being left behind. I think in the in the in the financial literacy world world for high income earners, there is an aspect of, hey, what else is out there? 

 Is there some other savvy way that people are building wealth? Is there something that I’m not being told. My financial advisor is just talking about stocks and bonds, something that’s been around forever and it’s a great way of investing. But I would say you need to be diversified and there exploring those options that exist to them. And syndicated, multifamily or syndicated build to rent deals should be part of a diversified portfolio, especially if we look at some of the best managed, diversified portfolios in the world, which are university endowments. 

 They have an allocation to real estate through similar models. They have an allocation to private equity, and they have an allocation to stocks and bonds. Of course they do. So it should be the same thing. Investors just should know what options exist, what’s the risk profile and how much of their investment should be invested in alternatives, including crypto. 

 I think, you know, Mark Cuban talks about 1% of your net worth should be in crypto. And that’s not something that’s going to make anybody go broke. But at least you have an exposure to it and you have potential upside on that end as well. So I think our world is similar as well. So yeah, as far as the profile of investors, in most cases, they’re very savvy. 

 If they’ve invested as an LP before, they understand the space and, and they’re excited to have this other option that exists.

Mat Zalk 36:53

And when somebody sends you a clearly AI written list of 40 questions, there’s nothing that makes you just cringe and say, I actually don’t want to work with this person. You’re, you’re happy to say, I’ll respond with my AI bot and I’ll educate you and my perspective and we’ll keep going.

August Biniaz 37:09

Yeah, I mean, I don’t think there’s been a situation where we turned an investor in a way for asking too many questions. We’re not at that stage yet. Our investor relations team are great people. They have much more patience than I do than I do. There’s been cases where others have come through and, and, and maybe trying to learn the process.

And we have a pretty I mean, at some point it’s clear that, hey, they’re just trying to learn. And we say, hey, listen, why don’t you just make a small allocation? Why don’t you invest? We’ll lower our minimum for you and you can come on board and learn everything hands on if you wish. And that’s the way. 

 That’s our policy, not policy, but that’s our company kind of thing. If you want to learn the ropes, Not a problem. Just come in and make an investment and we can be open book with you as much as we can.

Mat Zalk 37:53

Yeah, I mean, I think you mentioned it, though. You’re straight forward about it. Like the largest tickets that you’re going to get. The largest allocation is going to go to somebody who has a high net worth and they’re not going to ask any questions. They’re just like, take this, I trust you.

Send me my return checks and it’s going to go to my CPA or my bookkeeper, and it’s going to go back into the system. The people that are allocating 10 or $15,000 on a $50,000 minimum that you’ve lowered or whatever it is, or like they’re going to be asking questions every single time you spend a penny to renovate a property, they’re they’re asking questions. We get the same thing. We get AI, we get inquiries for property management services, where it’s so clear that AI is written and they’ve generated 14 questions management feed, pet feed did it, did it, and it’s the same. We get the same version of the email from, you know, 20 different people. 

 It’s like, Good God, please, I think we’re you’re better off finding somebody else. I’ve got a, I’ve got a send me uncomfortable question that I’m that I’m hoping you’ll be willing to answer. There are and I and I’m an I’m an LP in a bunch of different deals. And I recognize that there’s not always 100% alignment. There are times when you’re going to earn acquisition fees and you’re going to earn a promote. 

 And so that means that you get paid to do deals. And sometimes the correct answer for the disposition of a property may be this year, and it may be not this year. And so the question is if if you say, I’m going to sit on this deal or I’m going to transact on this deal, it means you may not get paid and you may get paid, and it can can skew the incentive vis a vis what a of the sponsor vis a vis what the, what may actually be best for the, for the LP. I mean, how would an investor from the outside, how, how do you deal with that or think about that slight misalignment of incentives? And how would an investor ever know if, if that that was happening one way or the other?

August Biniaz 39:42

So there’s, there’s a few different ways I want to kind of touch on, on this question. It’s a very important question when it comes to the decision that’s made as a general partner of of when to divest from a deal or other major decisions. And, and is it beneficial to investors and also the fact that investors have or don’t have a control on the deal as far as exit. So the one way of looking at it is if, if, if we are consistently promising a five year exit or a three year exit or whatever amount that is in our Performa and our offering docs, MVL consistently missing those dates and prolonging it, that’s going to result in investors not investing with us. So that’s, that’s just a free market.

Doing is, is his own is, you know, it’s it’s own thing. The other part of it is that allowing the GP to make a decision of when to exit takes the emotion out of it. I’m sure people listening today, even myself, there’s been times that we either sold something or bought something that we shouldn’t have. It happens all the time in, let’s say, in an investment world, not as far as kind of goods and services, but in the investment world, there’s been something that we’ve either invested into or not invested into. And the timing was incorrect on when we made that decision. 

 A working with a general partner who has an investment committee, who has an executive team and makes that decision not only for themselves, but for the benefit of the deal, takes that emotion out of your hands on clicking a button and exiting something. A lot of public, public REITs today, public Real Estate REIT, multifamily public rights in the US today are trading on a per share price, 70% on a dollar of what the properties are worth today. If you go and take a public REIT and you evaluate of their property, if you sell all their properties today and you got 100 million, their shares are at 70 million. Right now, the public REITs are actually purchasing their own rights back. Why? 

 Because there’s uncertainty. There is geopolitical issues. There’s a war in Iran. There is so many things happening in the world and investors. There’s AI and people losing potential of losing jobs. 

 People are nervous. They’re getting online. They’re clicking that button and they’re selling their, their, their public REIT shares, and they’re bringing emotion into the deal. And it’s forced prices to come below what the property is actually worth. So working with a GP allows for that emotion to come out. 

 So that was two ways of kind of discussing your question. Their.

Mat Zalk 42:18

Integrity pulling some of the emotion out of it. Market driving forces will ultimately lead it. Let’s, let’s I’ve taken a little a little page out of your playbook. I sometimes ask it sometimes don’t you ask a bunch of great questions at the end. What do you call it?

The lightning round or something at the end of your show.

August Biniaz 42:39

Talk about the ten the ten championship rounds to financial freedom because I come from boxing background, right? So it had to be the rounds of like the analogy with boxing world.

Mat Zalk 42:51

Everybody should check out August and Avon Real Estate Investing Demystified. If you haven’t watched that show, it’s a great show. I do love the two questions. What’s the what is the best? I think you asked what’s the best investment you’ve made and what is the worst investment you made?

You ask if you had $1 million, where would you invest it? And you ask about books. Let’s, let’s let’s hit him from real estate. Ooh, yeah. What’s what’s the best investment you’ve made?

August Biniaz 43:15

Best investment financially. Oh my God. I’ll say a recent one. I sold a condo that I owned in downtown Vancouver. I bought it pre sale a few years before it was built, and I sold it at the top of the market.

And I just bragged to my friends, I have a group here, barbarian aristocrats. When people come around and talk about real estate, I just show off all the time. I’m a guy. Just look at the timing, look at when I sold this thing, I’ve literally sold it at absolute peak of the market for 750 grand. I bought it for 300 grand years ago and I sold it at. 

 And the market has come down significantly since then. So that was a great investment as far as real estate. But I would add to that as well. I would say that the biggest investment, aside from the financially that I’ve made, is also an investment in myself, investment in loved ones. So time investment that I’ve made has been probably the biggest investment as far as $1 million cash, and have to make one investment today, man, it’s it’s, it’s, it’s hard to talk about one investment. 

 I mean, some debt, even though that’s not a business I’m in. Actually, I kind of am because I am a part owner in a debt fund. Shout out to capital Mic Mortgage Investment Corporation. I’m a small shareholder in that company, but debt funds are are great vehicles to invest in a lot of a lot of times they their sleepers. A lot of people don’t know about them, but debt funds are great. 

 If they’re not managed well, they could go belly up very easy. So million dollars into a debt fund that has redemption rights and liquidity rights is a great option. But I would say also there’s there there’s a lot of savvy ways to, to invest $1 million, but today it would probably be in a debt fund just because there’s so many uncertainties that exist in the world. And then any comments on that before?

Mat Zalk 45:05

Yeah, real quick, the debt fund structure. I’m also a I have a small interest in a couple of debt funds to, and I like it. Let’s just say what it is. Essentially the ones that I’m in at least are funding fix and flip projects. They’re funding like D, S, C, R and they are taking, they’re returning the fund on the repayment of the loans and then the cycle through the velocity of the capital, essentially.

So they take a fee, an underwriting fee and origination fee. They take high percentages because they’re People. A flipper of a house doesn’t really care whether they’re paying 8% or 10%, because they’re only trying to hold it for four months or six months. Is that similar to the structure that you’re talking about on the debt fund?

August Biniaz 45:42

Absolutely. But keep in mind, usually the fees go to the fund managers, but the interest is what goes directly to the investors of the fund. Because as an investor into a fund, there’s fund managers. So the fees usually go to the fund itself and, and people involved in managing day to day. It’s the interest that the borrower usually pays that goes to the investors of the fund in most cases.

So but yeah.

Mat Zalk 46:06

The fund I’m in returns something like 18.5% a year or something. Is that is that in line with what you’re seeing? Are you seeing better or worse?

August Biniaz 46:14

No, I mean, I mean, that’s that that is that is the highest yield I’ve ever heard. But but yeah, the funds that I’m talking about is usually high single digits or in a superstar cases, maybe 11 to 12%, maybe to the investors.

Mat Zalk 46:28

Maybe they’re just in like super duper growth mode. I mean, I’ve seen.

August Biniaz 46:31

Possibly.

Mat Zalk 46:32

Costs explode. I mean, their month on month.

August Biniaz 46:35

Or their high risk or their riskier notes like are the fund that I’m in, they go maximum 75% LTV and most cases don’t go on second place. You got debt funds that go in third place, right? So they’re sitting behind. That’s crazy. The you know, that’s crazy.

The initial note and secondary note. So yeah, it depends where you are within that, that risk profile.

Mat Zalk 46:55

Let’s, let’s go back to the worst investment you ever made.

August Biniaz 46:58

Worst investment was crypto related. It was I, I just, it was that buzz. I made a lot of money in crypto. I still hold some crypto, but it was a shiny object syndrome and trying to find a coin that would that’s better and or superior to Bitcoin and got my butt handed to me. I deserved it.

Mat Zalk 47:19

All right. What are you what are you reading right now? What are you what are you doing to to add to your knowledge base.

August Biniaz 47:26

I am reading a few books I am reading. Let’s see here. Let me see if I can pull it up. Pull it up. I am reading Trammell Crow.

So the biggest developer in US history. I’m reading that book. And what’s the name of the book? He’s I think.

Mat Zalk 47:49

He’s he’s a Dallas guy, right in your neighborhood where you’re buying all your.

August Biniaz 47:53

Exactly. He he is, he is. He is a Dallas guy. That’s that’s the name of the company he’s passed now. But his sons and family are running the company.

And they they’re operating in more of a style of a family office. So they’re actually investing with developers and they have equities allocations. It’s been a very interesting journey that they’ve gone to.

Mat Zalk 48:12

I have not read that book, but a lot of my friends that are real estate developers love that book. I mean, I think the beautiful part about Trammell Crow operation, historically, when he was alive, at least, was they they controlled a ton of assets and they had like, I don’t know, seven people in the office or something. It was a really lean, small team. is that yes, you get that context from the book.

August Biniaz 48:32

Yeah, yeah, that’s that for sure. But they’ve definitely grown. And the other book I’m reading is The Secret Wealth Advantage by Akhil Patel, where he talks about this, the real estate cycles that real estate continuously goes through.

Mat Zalk 48:45

Secret Wealth Advantage.

August Biniaz 48:49

Secret Wealth Advantage. Yes. This the secret. No.

The Secret Wealth Advantage. The Secret Wealth Advantage.

Mat Zalk 48:56

Advantage. Got it.

August Biniaz 48:57

That’s right.

Mat Zalk 48:58

August, I appreciate you being on the show. Where do people find you? If they want to invest in CPI Capital, where do they find you? If they want to hear the show, where do they find you? If they want to just reach out and send you an AI list of questions?

August Biniaz 49:10

Absolutely. I, I’ll make sure my AI responds to them, but I’m very active on, on LinkedIn. August Biniaz on LinkedIn. Reach out to me, tell me you see me on the show. And our website is a great place for a lot of great information.

cpicapital.ca. We have our underwriting model. You could download, we have access to our webinar masterclass that you can watch, expert guests that we bring on once a month, and we have interviews, and you can only access that through our website. And then we have access to our, our podcast, real estate investing, the investment of the website as well.

Mat Zalk 49:41

Love it. August runs investment strategy as the chief investment officer at CPI Capital, a real estate private equity firm that moves Canadian capital and American capital into American multifamily. It’s a harder job this year than it used to be, but they’re still doing it. He’s closed north of 225 million in multifamily and build to rent across 15 years. So good, good tenure there.

And he’s also the host of Real Estate Investing Demystified, as we have mentioned, August. So good to have you.

August Biniaz 50:11

Thanks for having.

Mat Zalk 50:12

Me. Thanks for being on the show.

Outro 50:16

Thanks for listening to The Same Day Podcast. Tune in to a new show each week, and be sure to subscribe to get future episodes.