Do you love shows like Bravo’s Million Dollar Listing New York? So do I! I was curious about people really living and breathing that high stakes real estate drama in real life without cameras around. The New York Business Journal called Michael Shah of Delshah Capital “the next wave of New York real estate magnates.” I had to ask him about how any of us can make money doing what we love and what being a Manhattan real estate developer is all about.
How has your family’s personal story of moving to New York from India influenced you later in life?
My parents came to this country as physicians with maybe a thousand dollars each to their names, and jobs in hospitals they had landed from overseas with their medical education. Growing up, we were comfortable but not wealthy, and they both worked incredibly hard. I think is very important to experience that and grow up in that environment, because you see how hard people have to work to succeed. You don’t take money for granted, and of course, with Indian immigrant parents, education is very important.
Do you believe that it takes money to make money?
As evidenced by my parents, no it’s not absolutely necessary, particularly if you have a 20-year time horizon. However, if you want to accelerate that to, say a five-year time period, it absolutely takes capital or access to people with capital.
You learned a lot when you saw your father get involved with real estate. What did he teach you that you applied on a grander scale with your bigger development projects?
The importance of community building in affordable housing is something that I learned directly from my father. All of the real estate that he bought was in affordable neighborhoods, and working with not for profits, police and community building groups was crucial to his success. To be honest, I learned more from my father’s mistakes in real estate than from his involvement. My father’s background was medicine, and doctors don’t usually make the best business people. He was very trusting of the wrong people, often got conned, and systematically didn’t do proper due diligence. He did however get into the business at the right time and correctly figured that parking his savings in real estate would pay off for him, and it very much did. Watching his interactions with people taught me to be very detail oriented, look at all the angles, and to verify everything that’s integral to a business plan. Going into a deal, my team and I work through every possible scenario so that we are never surprised.
When you aren’t working, do you do anything that helps you succeed more at work like meditation, prayer, playing sports or anything one might not think plays a big part in business?
I lift weights to relieve stress and watch lots of episode of Through the Wormhole on the Science Channel. I was a chemistry and physics major, so I love learning about what’s at the cutting edge of science. Thinking scientifically and analytically is very useful in special situations. I also love reading about social dynamics and body language, because so much of what I do involves reading people and situations.
Every profession has its risks. For you, you have to chase down tenants with delinquent rent in court. Someone else might study a different medical specialty, never design toys or avoid putting out a frozen food product in fear of the higher risks, like being sued. How can someone prepare so if they do get hit with a financial loss and/or bad product publicity, it won’t hurt as much?
Expect the worst, and then prepare for it. My business has really moved to real estate special situations, where there is a lot of risk around how judges may decide litigations or some other uncertainty. Analyze the risks, the possible outcomes, assign probabilities, quantify the risk, come up with plan B, Plan C through Plan Z, and then move forward. Recalibrate the contingencies every time an outcome is achieved. If you’re prepared, you won’t be surprised and you’ll be able to regroup after setbacks.
A lot of readers are either students or young adults beginning their careers. If you are stuck, frustrated and nearly sour every time you think about your current job or possibly, your state of unemployment with college debt — and as we both know, extra pressured if many of your family members are not American! — how do you find your way in your career? Or at least, how do you set yourself up to be on the right road to where you hope to end up?
The most important thing is to find something that you love and that you take pride in doing well. Once you find those things, do not be afraid of taking the chance to pursue a career in that field. People are most likely to excel at the things they love, and when you excel at something, financial security usually takes care of itself. The hard part is figuring out something that you love.
You said you were bored as a lawyer. Is boredom a huge red flag? Shouldn’t work be fun?
I was bored as a transactional lawyer, and yes boredom is a huge red flag. If you’re bored at work, or doing your job just for a paycheck, it’s not going to be a career for you. I have lots of fun at work and love the people on my team as well. I don’t even think of it as work.
So then, if someone wants to be a commercial or residential real estate developer, what can they do to follow in your career footsteps?
I had to transition from a totally different industry. The best advice is go to work for a real estate firm to understand the business and learn some basic skills. If you don’t have any experience, offer to intern or work for free for a trial period. Development companies always have so much going on that there’s need for additional hands. It’s a great way to learn the business.
What advice do you have for people that works for other careers? An empire is still an empire, whether it is built on pharmaceuticals, designing cute prom dresses or being a vegetable farmer.
Building an empire starts with being able to recognize opportunity, attract investors and human capital to your way of seizing the opportunity, and then persistently working through all setbacks with your team. Always anticipate the good and bad outcomes and have your plans in place for each one. Learn to read people and situations and that will go a long way. Also, don’t be afraid of giving away value. Try to radiate value and positive energy and give it freely. It will come back to you.
What exciting things are you doing right now with DelShah Capital? You just bought a few new properties, correct?
Working on finding great tenants for the three meatpacking buildings, opening four new restaurants by the end of the year, and working on several acquisitions.