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Today we are joined by, Omar Khan who dives into his journey to entrepreneurship and his success in the real estate industry.
Omar shares his financial plans and goals and how they are focused on creating a lifestyle of freedom. He also points out why he favors real estate development opportunities and how they differ from traditional value add deals.
Omar says, “What is financial freedom? It’s different for everyone, but it usually means having enough money so that you can live your life and purpose without worrying about how much more debt there might be or if today will finally be the day where everything falls apart. And while many people pursue this dream through traditional routes like working hard at a job and saving up some cash before heading out into society to start living large (or even just getting by), others find themselves with unique paths towards self-reliance–whether they’ve chosen minimalist lifestyles or something greater.”
Hey everyone and welcome to the show. Today we have a very special guest joining us, Omar Khan of Boardwalk Wealth and also a trusted Pantheon partner. Omar is a CFA charterholder. He has 10 years of investing across real estate and commodities. He’s advised on $3.7 billion of capital financing and M&A transactions. He has syndicated large multi-million dollar deals across the U.S. He’s advised high-net-worth advisors and entrepreneurs on real estate portfolio allocations. Omar is also a global citizen having lived in Dubai, Toronto, Calgary, and Dallas.
And now Ada, Oklahoma, just to let y’all know.
And Oklahoma, you got it. Omar, welcome to the show. So good to have you, my friend.
Thank you, David. Thank you so much for the invite. I know it’s been a little while coming, but I’m very appreciative to be here.
Absolutely, so great to have you here and really to talk about your journey. We want to hear about Boardwalk and what you’re doing. I think we can kind of jump into that, but really want to hear your personal journey of what got you into private equity, the field of real estate. I know you have quite an extensive background in the financial industry and everything. So if you could help us, tell the guests a little bit about your story and your journey and what led you here, that’d be a great start.
Sure. Look, my family is entrepreneurial, so that always helps a little bit. I always had that gene. But when I was graduating from college, I just kind of followed the herd in the sense that most of the folks that I knew went into portfolio management, investment banking, equity research, big four type jobs, you know, those sorts of respectable white-collar jobs that accounting and finance guys or girls do. I still remember my girlfriend at the time, my ex-girlfriend now, she basically said that she couldn’t really envision me working for anybody for very long periods of time because I like to do my own thing. Even in college, I had a couple of my businesses running and all of that stuff. But either out of the fear of the unknown, maybe I was scared, whatever you want to call it, I went down the whole career path. I did that for a good decade. I was very lucky to work with some exceptionally talented people in world-class firms.
But around the time, what also happened is about six years ago, maybe seven, I moved to the U.S., and that was just me being in the right environment. Because I think a lot of times in life, it’s not necessarily whether somebody has the hard skill to do something. A lot of this is a mental game. So I was just in the right environment. When I moved to Texas, America generally is a lot more entrepreneurial. I was in Canada. Canada is a phenomenal place to live, but the culture is very different. Americans are a lot more, “Hey, shoot first, ask questions later” type deal. And Texas was kind of like the ground zero of a lot of these things happening. People want to do deals, we’ll meet for coffee, let’s make this happen. Very positive sort of environment. And that, I think, was basically maybe just the mental push that I needed. And that’s basically how I got started.
Now, for the real estate aspect of the business, as a business, what had happened is a few years ago we had a big tax event—a positive problem, it was a good problem—we had a lot of gains we wanted to shelter. So because I was running and structuring deals on the institutional side, working in these banks and companies, I had pretty extensive experience. And because of my family, my family has been in real estate for the third generation; they had their own businesses as well. So I was privileged and lucky enough to have good personal and professional networks. Personal in the sense of understanding the sacrifice that’s involved, and professionally in the sense of having the technical competence, the people, the know-how, all of that stuff.
So we wanted to shelter our gains, that was the impetus for doing the first deal. And then, being new in the country, I didn’t have existing networks built in place that people who’d been living here, born and raised in America, would have had. So I had to go build those networks out, and then you do one good deal after the other. The intention never was to go do so many real estate deals or this business deal. The intention was to find a way around this tax problem. We did that, met interesting people, did interesting deals where everybody made a lot of money, and then just kept putting one foot after the other. But being in the right environment—without that, nothing would have happened.
Yeah, so do you think you kind of left traditional financial markets and got into real estate? Was that really the influence of your family?
No, not really. Look, my family is… I can tell you from my personal family point of view, I still invest in the stock market in the sense that I’m not picking stocks or anything. I invest in the index, like an S&P 500 index. So for me, it was never a case of picking this or that. I usually try not to have those options in my life. I like and options, not or options. Do this and this, not do this or that. I feel like, at least in my opinion, there is no one right way of being financially independent or achieving freedom. People have crafted their own path and journey towards financial freedom, and there are so many ways to get there that just because I’m not thinking of a way doesn’t mean that way doesn’t exist.
So for me, it was still being involved in the stock market in the sense of indices, but from a portfolio point of view, what that helps me do is have liquidity all the time. When I’m investing in my real estate deals, because 90% of my net worth now is in my real estate deals, that’s not a very liquid play. Once you invest money, you can’t just take it out. So I still need a pool of liquidity on the side that I can use. For instance, whatever holdings we have, I have a line of credit against that from my bank. If I ever need to extract some money out short term, either to pay hard money on loans to close a deal quickly, I can do that.
That’s great. Okay, so this is a great segue into the next question. Do you have a defined overall wealth strategy? We like to talk about it as an overall wealth strategy. A financial planner will talk about creating a plan for you and everything, but in this contrarian world of thinking differently about passive income and everything, it’s an overall strategy. You’ve got tax planning, learning, it’s about mindset, how you’re going after the game, and really looking at assets that are multi-dimensional as well. They’ve got upside, they protect your downside, and things like that. Do you have a particular wealth strategy that is your playbook right now?
No, I don’t, frankly. I have a lifestyle. Okay, let me rephrase this. I don’t have a particular wealth strategy to directly answer that question. But what I do have, based on my experiences, again, my experiences are limited, but based on the perspective I have from the many successful people I know, my personal family, other people I read about, I’m a big believer in that. My personal philosophy is that money is a very important component, don’t get me wrong, but my wife is a high-income earner. She’s a physician, so I have a lot of luxury in the sense that I can afford taking certain risks that someone else who does not have a high-income earner might not be able to. Being a physician is as close to having guaranteed income as you can get because, frankly, people are going to keep getting sick.
I have the privilege and luxury of going out and taking risks, for instance, on the real estate side of the business, starting that business up, starting a QSR business, starting that fund. I had the luxury of doing that, knowing that the immediate financial day-to-day need is covered. We also live extremely below our means, not as part of some sort of fire movement, it’s just that I had such a good time on my parents’ time, spent all my money when my parents were spending it on me. Now I understand the value of a dollar when I make it, so I’m not going to spend a lot of money.
From a net worth point of view, I’ve kind of achieved at a bare minimum what I need to have a quality of life equivalent to roughly $200,000 a year for the next 30 years. Luckily, I’m very privileged, I’ve already done that. So now, what’s very important is to understand what are interesting ways that I can enhance my life. Whether it’s by doing interesting businesses that return a lot of money to our partners and investors, meeting interesting people within those businesses so that I can learn and expand as a person. Those experiences are now a lot more important to me than just saving $200,000 this year into this slice to go do this thing.
Yeah, no absolutely. So where would you see yourself? That’s kind of part of your vision, I guess. Where do you see yourself in the future instantiating that vision?
First of all, that’s a good question. This is why I need to have more conversations with you because it’s not fully clear. Where I see myself basically is that, for me, the biggest thing has always been time freedom. Again, it’s like that Maslow’s hierarchy of needs, right? Time freedom is kind of like the third or fourth level. If you’re not paying the bills and your kids aren’t going to college or school or wherever you want to send them, they’re not well taken care of, then your time freedom is meaningless. You might as well be homeless then, right?
So taking care of that, for me, the biggest thing has always been time freedom. Growing up, one of the things that I always saw was that I was lucky enough to go to a good school and I was surrounded by kids whose parents were relatively affluent. In the grand scheme of things, they were relatively affluent, but a lot of those parents were two income earners. They’d be two lawyers or one lawyer and one business owner, and they were always trapped for time. Those people might not have come to their kids’ parent-teacher meetings all the time or they might not have been as involved in the kids’ lives as much as my parents were or I was lucky enough for my parents to be.
So for me, time freedom is very important. Having a life where I’m fulfilling my obligations both as a husband, father, household member, but also having the luxury to put my feet up and read a book whenever I want to, listen to music whenever I want to, and to a reasonable degree, travel whenever I want to. That’s limited with COVID and small kids, but having the lifestyle where I’m not just constrained by going to the office at a particular moment in time, checking out at a particular moment in time, and being geographically constrained.
Yeah, absolutely. It’s really the four freedoms, right? So not only having freedom of money but having freedom of purpose to do what it is you want to do, having freedom of time to do what it is when you want to do it, also freedom of relationship to be able to work with the right kind of people that you want to. And that’s one thing that I found that’s just really awesome about this business is working with great partners such as yourself. It makes a difference. You don’t want to go to work and be in some corporate job and have to work with people you don’t want to work with and you’re not necessarily aligned there. It can be frustrating.
It’s destroying, man, because you take that half-hour, 45-minute, one-hour commute, then you’ve got to put a fake smile on your face to meet the guy you hate inside, and then you have to do this for the next 30 years.
Right. It’s no fun. We’ve all had those kinds of relationships. I think freedom of relationship is really important as well. Here’s another point. I know we’ve talked about strategic coach a little bit and everything. So what would you say from a personal development perspective has really helped you out the most in terms of something that you do that’s now a habit or practice that you have? What has helped you out the most?
Like a real tactical thing that’s an immediate help, that I feel not just helped me but can help a lot of people even though my family initially used to make fun of me, my mom made fun of me, like I made fun of me, but they’re all on board now is you have to put things on a calendar. If you don’t put things on a calendar, it does not exist. I mean, it’s to the point where I have some of my friends saying to me, “Why did you send me a calendar invite? You can call me anytime.” I’m like, “Look, it’s not for you, it’s for me.” Because what I want to do is, if I say, “Hey, Dave, let’s talk at 2 p.m. on Friday,” what I don’t want to do is, while I’m talking to you, think about the 15 other things that I could be doing or have the pressure of thinking, “Hey, I gotta get off this call, I gotta go do this thing.”
Managing your calendar, learning, and everybody’s got a different process. I color code my calendar to have time blocking on the calendar. So I am very calendar-driven, and obviously, this has happened in the last few years. I was always organized, but I think the calendar aspect to me at least and the people that I’ve seen who’ve implemented it, it just forces you, without you even realizing, to be organized. When that happens, a lot of pieces just fall into place because a lot of times you don’t leave it to feelings like, “Hey, I don’t feel like making that call, I don’t feel like doing that thing.” Because you and I both, I mean, you’re in the Marines, you definitely know this: feelings are meaningless; they don’t get the work done. Work has to get done. A lot of times you have to play games with yourself to make it more enjoyable or just get it done.
I think the calendar part is the biggest productivity tool I’ve had, which, by the way, is implementable by everyone, not just me.
Right. No, it seems really basic, but it is super powerful. One of the things that I work on weekly is every day on Monday, I put together my weekly planner so I can focus on the top three most crucial results that I have to have that week. I’m looking at those key initiatives that I have to get done on each day, and then I can drive my calendar from that so that it becomes your work becomes so intentional.
Because you’re absolutely right, in this day and age, everyone’s trying to grab your attention. If you don’t have it blocked out in your calendar, it’s probably not going to happen. That includes time with family and time with friends as well.
My wife made so much fun of this time with family part. My mom made fun of me initially, but you’re going to put family time on the calendar? I was like, yes, because I’m going to put family time. Then if somebody calls me, I’m not going to answer because I’m so itchy. You want to pick up the phone, you want to check one more email. I’m telling you, if you’re an average person like I am and you’ve got the average family and friends, they’re going to make fun of you initially, but that is such a key point, David. That in itself might be the biggest productivity hack for your life, forget about day to day.
Yeah, totally agree. The other point I would throw in here that’s made a huge difference, now in this COVID world that we’re living in where everyone’s online, these little calendar apps like Calendly or OnceHub, if you don’t have a calendar scheduler, you’ve got to get one. It really cuts out on all that back and forth traffic of five emails to figure out when you’re going to set up the meeting. Just doing a quick calendar invite is super helpful as well.
I agree with you.
Yeah, awesome. So what would you say? Can you tell us a little bit about Boardwalk, what you’re doing this year in terms of 2022? Lots going on. I heard your quarterly report: interest rates, the economy, where we are in the cycle and everything. How are you feeling about multi-family? How are you positioning yourself this year? Any insights that you can share?
Well, Dave, I don’t play a macroeconomist on TV because I’m not one. It’s always funny to me all these guys who couldn’t pass Econ 101 suddenly know what Jerome Powell is going to do tomorrow. So I don’t like to be in the game of making predictions that have no basis in reality or in areas where I don’t have expertise. For me, the game plan has always been the same: do deals in a conservative manner whether times are good or bad because you never know what’s around the corner.
Times could be really good right now, and tomorrow something so weird happens. Who would have thought coronavirus would have happened? This wasn’t even a thing we ever thought about. The point always is to be doing deals that make sense in good times or bad. Specifically, what does it mean for us? We are doing acquisitions and developments, so we’re on both ends of the spectrum and covering everything in between.
Now, for me, what I’m also doing is launching a QSR fund with a very experienced operator. We’ve been in discussions for about two years. QSR is a politically correct term these days for fast-food restaurant. This is going to be a healthy eating concept, Clean Eatz. It’s a regional brand, it’s pretty famous and a great model, but it was very uncorrelated to our real estate business. Our real estate business is very asset-heavy. It’s a very asset-heavy business. You have to constantly feed the machine with money and not just brainpower. Because you can have all the brainpower, that’s not going to buy you materials to fix up your property.
It’s a great business, but it’s an asset-heavy business. For my other big business, I wanted to do the exact opposite: to have an operator-heavy business, an intellectual-heavy business. There’s always a CapEx component, real estate not real estate, but a dollar component attached. The vision there is less asset-heavy, more operations-heavy. This is a business with very high cash margins. Investors are going to see magical things.
What I didn’t want to do was just be focused on real estate because I tried explaining this to people. The really sophisticated people get it that the bulk of the money that’s created in the world is created outside of real estate. Once people have made the money, then they park it in real estate. The real big ones, right? This is why, for instance, you see all these tech guys. The top ten is chock-full with tech guys because frankly, you could be the biggest real estate person on the planet and not even be in the top 100 of the richest people in the world. Again, not saying I’m getting there anytime soon, but trying to explain that when you build scalable businesses, and you’ve been a successful business owner, you know this, when you build scalable businesses, you put the right people in the right place, which are intellectually heavy. Your returns on a return on equity basis are, I mean, real estate can’t even compare, but it’s a very operationally intensive business. So you have to have the right people in the right spots.
Yeah, absolutely. It’s that cash flow creation component, right? And in order to build wealth, you really need mass times velocity. So it’s creating that mass for your cash flow and everything. Tell us a little bit about, I mean for investors maybe out there who aren’t familiar with doing development, straight real estate development opportunities compared to say a value-add type of opportunity, how would you explain that from your view?
Look, you have to realize it’s a spectrum of things. You have to look at things as a risk-reward spectrum. So if you think about it, if you say value-add is here as an example, this is just a made-up example. Value-add is here, so less risk, less reward traditionally, not all the time, and development is here. Now, the thing with development is you’re taking a lot of risks. You’re developing a property from the ground up, so many variables can happen. The economy changes by the time you’re finished developing a project. The rents drop. If you’re so inclined to sell a property because the economy is in a tailspin, you might not be able to sell.
From a sponsor’s point of view, basically what we have are recourse loans. We don’t have non-recourse loans when we do development. So the idea is because you are taking a greater amount of risk, your returns are way higher because you’re going earlier in the process. Think about it this way: somebody had to develop the value-added property that you’re now buying. They probably made money on it. Somebody bought it, ran it, made a little bit of money typically, not always, and then they kind of sold it to you, hopefully, and you’ll make some money. So obviously, if you go all the way to step zero or step one, in this case, developing the property from the ground up, that’s where you’re going to get the highest amount of returns. For every ten units of input, you get like 100 returns. So that’s where you will get the most returns on average, risk-adjusted and otherwise.
For us, basically, again, a lot of this is like I told you with the QSR fund, right? It’s a diversification strategy. This is within the realm of real estate; we’re going back in the value chain and capturing all of the profit that all of the people before us were capturing. Now we are capturing that profit for our investors. Again, it doesn’t mean stop doing value-add. It doesn’t mean only do the developments or do QSRs. It means that you need to have a holistic approach and you need to pick and choose your battles wisely. But remember, there are many ways to finish for freedom, and you always have to be curious to learn, find the right partners, and really be opportunistic in availing the right opportunities.
Yeah, 100%. I love that word that you just said, which is you have to be curious to learn. It’s so interesting. I’m sure you talk to plenty of new people in this space, whether they be investors or just people who aren’t familiar with it. A lot of people are not curious. They say they have a financial planner, they’ve been doing everything one way forever and that’s just the way it is, that’s what they learned, and it creates limitations.
Those limitations, by the way, are also created by financial planners who have a vested interest in you not being curious. I was a portfolio assistant portfolio manager, so I was managing portfolios. I know this industry inside out. A lot of times, these financial planners, they’re not looking out for your best interest. So if you could invest in Dave’s real estate deal and make exponentially more money, that guy’s probably going to tell you no because he can’t charge you fees on the deal that Dave is helping you invest in. That’s a big issue whether people say yes or no. That happens more often than you would think.
Dave: Right, it’s not in their bag of tricks to be able to sell. That’s why you typically don’t hear about it. But I just wanted to highlight that point that you said, which I think was really salient around just being curious. I think not enough people are curious. It’s one of the things I love about entrepreneurs and people who are really willing to bend the curve and do things differently, challenge the norm. What that becomes is you can become a lifelong learner where you’re always learning. No one has all the answers, but the more you can be curious and you can ask the right questions and learn, you’re going to become more educated. As you become more educated, you start to reduce your risk because you understand things more, and then you become more empowered in making the right decisions and having that clarity.
Also, it’s a more enriching life. Think about it. A lot of times, when you hear perspectives from people in other fields, they might not even be directly opposite to what you’re doing. They don’t necessarily have to translate. But a lot of times, you can look at somebody’s way of thinking and get inspired by that way of thinking, even though whatever they were thinking about does not apply in your situation. You can say, “Ah, these are the ways this guy or girl thought about it, and maybe I can try to apply it to my own life.” A lot of times, you do enough of this by reading, being curious, and subconsciously, it goes into your mind and it helps you become a better person, not just in investing but in life.
Right, 100%. I’m not sure if you’ve started the Strategic Coach.
I am going to start next February because you remember I had it booked, and because of COVID, they had to cancel it. Then they had two virtual sessions, and I was like, no, no, I want to go to the physical because we talked about it. I want to go to the physical person.
Yeah, but it’s interesting because high-powered coaching programs, all it really is about is asking good questions. That’s really the entire format. You’re thinking about your thinking, and you’re asking good questions, and you’re being curious so that you can learn and gain this clarity of insight, which I think is powerful.
I’m actually very interested in the Strategic Coach and I’ve been counting the days.
Yeah, I look forward to hearing your results. I know we have a lot of investors in our community who are actually members as well, so it tells you something.
For sure.
Also, just going back to the development piece and everything, can you tell us a little bit about markets? Are you looking at specific markets differently from development versus value-add? This year, are there any particular markets that you’re focusing on?
The markets are still the same—Texas, Georgia, Florida, and South Dakota. I have a really good partner there, plus that market is on fire. Basically, the same principles as the Southeast markets: low cost of living, landlord-friendly state, business-friendly state, no taxes—all of that jazz is still there.
For me, the biggest thing was even within these markets, whatever I’m doing, am I doing it with people that I trust and respect? In the case of the South Dakota thing, I knew about the place and the great statistics it had, but I might not have done those deals if it wasn’t with a trusted partner. I had already done close to $100 million of deals in the Southeast with this partner. He’s a very prolific developer up there; he’s done over $100 million projects easily developed. Because he and I had such a good relationship and complementary skill sets, I cannot do the work he does because, frankly, my brain doesn’t even work like that. He straight up told me, “Dude, if I ever have to do anything you’re doing, I’m just going to straight up quit this partnership.” And that’s perfect because we’re all leveraging each other’s skill set.
But if that trusted partner wasn’t there, I wouldn’t have done that deal no matter how good it was. For me, markets are important, and we’re in this little, I mean, it’s a big area, but it’s a small area if you think about it. For me, it’s very important that before I do a deal, who am I doing a deal with? I’m at a stage where I want to enjoy the fruits of that partnership and the process and the journey, as opposed to doing a deal, making some money, and getting out.
Absolutely. I’m always telling people that real estate is a people business. It’s all about putting the right people together, and to the extent that you can collaborate with great partners and each one having their role to fulfill, that’s leverage right there. That’s human leverage that you can get, and the sum of the parts is always greater. So definitely, I’m with you on that as well. Omar, if you had just one piece of advice to give to our listeners around their own wealth trajectory as an investor or wherever they are on their journey, what would that be?
Be curious, like we talked about earlier. I can tell you this: I was very lucky. It’s not because of whatever intelligence I have or don’t have; it’s nothing to do with me. I was very lucky to have so many good mentors and partners along the way. If I had just kept on doing the great corporate career I had, I would still be stuck in the machine. Again, it’s not like I’m worth $200 million or I’m a billionaire. I’m not that; I’m not even close to that. But relatively speaking, I would still be stuck, and I would hate my job. You’re always playing politics.
I was curious enough and lucky enough to meet the right people and then diligently follow up on those opportunities. A lot of times, I think this afflicts a lot of white-collar professionals because we’re used to knowing the answers to things—doctors, lawyers, accountants, engineers, IT folks, STEM people. The whole idea that schooling teaches us is you already need to know the answers. A lot of times in life, you don’t know the answers. So you have to be curious enough to want to learn about something but intellectually honest enough to know that you will never learn about something 100%. A lot of times, it is a leap into the darkness, but if you never take that leap, you’ll always be stuck in the mire that you’re in.
Be curious, realize you never have all the answers, but take action—not just being stuck. I don’t know if that’s one piece of advice, but it’s stepwise advice you could take in one go.
That’s really a great insight. I definitely agree with that. It’s fascinating, and it’s probably why Robert Kiyosaki, with “Rich Dad” and everything, proclaims to be an education company. If you think about all the schooling we have in the world, whether you’re a doctor, a lawyer, a pilot, or whatever, your advanced degrees, your undergraduate degrees, all this training is about learning how to make money and build a career, but nowhere does anyone train you how to protect and grow your money. It’s really not taught anywhere.
The only place it’s taught is things like podcasts, reading books where people are talking about it, or the school of hard knocks—in doing it. So I think the education component is key, and that ties well into your point about being curious and being a lifelong learner. The more you can learn and become educated, it definitely correlates to your net worth.
I think this is just me observing things because I talk to so many investors. A lot of highly educated people, people with advanced degrees, are either, in my experience, afraid of appearing as if they don’t know the answer. They’ve been taught to know the answer, so that holds them back a lot of times. If you think about it, these are the perfect candidates for self-learning because they’ve already exhibited so many good traits to be able to get those advanced degrees. It requires the ability to take pain, the ability to self-learn. But I think a lot of times, modern schooling beats any sort of creativity and initiative out of you. It just beats it out of you by the time you’re done.
Absolutely. That’s a good observation, a good way to say that. Omar, thanks for coming on the show today. If folks wanted to reach out to you, do you have any resources or contact info you’d like to share?
Yes, you can go to our website, boardwalkwealth.com. Right on the front page on the right, you’ll see an email opt-in page. It says name, email, and how you found out about us. You can also email me at [email protected]. If you email me and give me your cell phone number, I’ll have Sean, my marketing guy, add you to our app so you can start seeing all these videos and courses where we talk about all this kind of stuff and similar stuff that we’ve talked about with Dave. You can have it at your fingertips. This is stuff that’s not just my experience but the experiences of other people that we’ve distilled down into easy-to-understand concepts so you don’t have to make the same mistakes that I did or Dave did or somebody else did.
Absolutely. It’s all about learning and empowering people. Omar, thanks so much for your time today, coming on the show and sharing your insights with the listeners. I know it was a ton of value, so I really appreciate it.
Thank you very much, Dave. I’m very grateful for the invite.
All right, thanks.