As an entrepreneur since day one, real estate developer Shree Kulkarni has learned an immense amount throughout his career, and we had the pleasure of sitting down with him to ask a few questions. From developing multi-million dollar projects to navigating the ever-changing landscape of the real estate market from 2008 to now, Shree has made a name for himself in Ohio, Florida and beyond. To learn more about Shree’s career in real estate, the projects he is working on now, the advice he gives to young people looking to get into real estate, and more, read the full interview below.

1. What did the start of your career look like? Did you always know you wanted to work in real estate?

   I went to Purdue University; I am a chemical engineer undergrad then I went to Ohio State for law school. The whole goal in pairing these two together was to do patent law. Sort of my entire law school career I did a lot of IP classes, patent classes, and that was going to be the focus. After I graduated, I was on a golf trip with a guy who did commercial real estate. It was kind of a crazy story… it was 2006 and this guy was telling me these stories about real estate that were all pretty unbelievable. 2006 was an insane time for real estate! Not unlike now but almost more insane. At least now the lending standards are tighter, back then, people were literally throwing money at you. He was telling me these stories about ‘Oh, I was buying this…’ ‘I was buying that…’ ‘I developed this…’ and it got me sucked in. So, I had no clue I wanted to work in real estate until after that golf trip I just said to myself, “If he can do it, I can do it.”

    

2. When did you decide you wanted to start your own company? What drew you to development?

   I went straight into starting my own company. I have never worked for anyone, literally in my entire life. I had a couple summers where I worked as an attorney but no positions other than that. It can be looked at as a very fortunate or unfortunate thing… I think you learn a lot when working for someone else. I think as a young person it is really important to learn on somebody else’s dime. Frankly, for my kids, I wouldn’t let them work in the family business – I will absolutely make them work for someone else. But, you know, I was fortunate to be able to start something by myself. If you think about the timing, I started in 2007 then 2008 was the beginning of the crash. So, we had a few really tough years trying to make it through, but I am an entrepreneur and love being my own boss and managing my own time. As an attorney, you bill by the hour. The idea of billing by the hour is unfathomable to me. I just cant stand to think that my value is capped at how many hours I have in the day. It’s a return on your time and even from the beginning, I just wasn’t interested in that.

   I don’t know… frankly I did a lot of investments in the beginning, but I think development is an opportunity to make something from nothing. You get to use the creative side of your brain to make something that lasts as opposed to investments being a way of financial engineering. It is an equation. Development is riskier in most cycles but there is more money to be made.

    

3. How has the current rate environment impacted your current projects?
   I think everyone is getting smoked, right? What typically happens is rates go up and demand goes down… typically this is what you see! Especially when rates go up at the rate they have in the past few months. Usually what you see is, A – the rates have gone up so fast that the demand side is lagging or B – there is so much demand that rates are only impacting the product type. Now what you are seeing is that it is more expensive to borrow and still very expensive to build for reasons such as macroeconomics or supply chain or the lack of subcontractors… Long story short, it has impacted us a lot and we are trying to figure it out.

    

4. On your website, you often mention that Kulkarni Properties “develops for the future.” What does that mean to you?
   So, we almost never sell. We will sell but for the most part we don’t. Everything we build, we build with the idea that we are going to hold it for my kids, my kid’s kids, etc. Sometimes, it is in the aesthetics of it but for the most part it is how we think about the invest. Are we okay earning a slightly lower than market return because we think there will be a higher return in the next 20 years as opposed to the next six or seven? It is also in the materials we use to build. You want to build something that lasts and is easier to manage.

    

5. What does a day in the life look like for you? Are you still spending most of your time in Ohio?
   No, so I spend probably 80% of my time here (Tampa, FL). I probably go to Ohio once every six or seven weeks for a week at a time. And what does my day look like? Oh, I don’t know. There is a lot of networking, a lot of conversations. I spend most of my time reading and trying to understand the world because I find it very complicated. I don’t know… everyone talks with such certainty about the world. I am always trying to understand why people say the things that they are saying. I usually don’t get to an answer, but I spend my time just trying to figure it out.

    

6. What are your long-term goals for Kulkarni Properties?
   With Kulkarni Properties, if I had to distill it, we have one really big project in Cincinnati, Ohio – a 40 acre, mixed-use facility, at the corner of a major intersection that goes to the University of Cincinnati. It is a hundreds of millions of dollars project with multifamily, it has a big hotel component, a ton of office space, retail, the whole bit. Right now, it is really about trying to plan that and get it started. It has taken a long time but ya know, it reminds me of Midtown here. It’s a 20 year project so one day people are going to go ‘Oh wow! That’s amazing,’ but in order to get there, you have to spend 20 years planning it. That is what I spend most of my time in Cinci for. We have a beautiful Courtyard Marriott lined up for the hotel component, office and a multifamily deal… it kinda ties into your question about interest rates. Who the hell can build a hotel right now?! We are in Cincinnati… It’s a great market but there is no beach, less business travelers… so life is changing and we are trying to change with it but it takes a lot of planning.

    

7. Tell me a little bit about Serenity Capital Management. Is that your new main focus? What is Serenity Reserve?
   Serenity Capital Management started out as the home building… or lets call it, ‘We wanted to be experts in the home environment.’ We wanted to be good at multifamily, build for rent, build for sale, townhomes, you name it. That all stemmed because we did a development in Lake Nona, which was an 85 unit, 56yr and older community that we ended up selling out of. Lake Nona is a suburb of Orlando, which is on fire! We were successful there and we realized, hey man, Florida has a lot to offer and the residential side has significant returns if you can figure out how to do it right, so we wanted to do more of that. That was the thesis for Serenity Capital.

    

8. How do you split your time between your companies? Are they able to all work in tandem?
   Yeah, they kinda work in tandem. It is all in my head and I just manage whichever opportunity had the biggest need at the time. We have started a couple software companies internally as well, so we are super busy. We are having a grand ole’ time!

    

9. As an entrepreneur, what is the most important lesson you have learned throughout your career?
   I think there are two lessons that I would tell every single person that starts in real estate because I think they are extremely important and I wish somebody had told me these things. I have said this on podcasts, on my own… First – start early! If you want to be in real estate, start early. Why? Because the nature of real estate, the way that we end up financing and owning real estate, all of these loan terms end up being 5 years terms, 20 year ams, 25 year ams… if you would have bought a property at 20 years old, you arent making money at first, that’s okay. You don’t need much money! You are young, flexible, working hard, time is your own… by the time you are my age, I am 40 years old, you would have almost paid off this asset and I am telling you, time flies! So, people who start early, when they are my age, they FEEL the rewards of that investment in a way that is hard to describe. Even if you made no money, which never happens by the way, when you are 40 years old, that ten grand you made at first is now 15 grand with inflation and you are making $180,000 per year and that is mailbox money. Its hard to describe but its an incredible feeling. Okay, and now second – do real estate in markets that are growing. It is a really simple thing but there is this famous story about people who look for their keys… lets say you lose your keys outside of your front door. It is very natural to look for your keys underneath the light. There are plenty of other areas your keys may be but you find yourself just looking in that one spot, under the light. This is very similar in real estate, typically you do real estate where you live. It is a weird dynamic. Let’s say you grow up in Toledo, you are probably looking at buildings around Toledo. That is not to say that there arent wildly successful people in real estate in every single small, medium or medium to large size town, but if you are going to place a bet on yourself, you should place that bet in a market that is growing, because there is demand. It is a direct function of population growth. You can be wrong at first but if you can hold it, 10 years from now, you will look like a genius! For example, people who bought properties in this area (Tampa) 10 years ago once were saying ‘Aww no, I paid $180K/door… why did I do that….” Those people are sitting pretty today. So, long story short, remember those two things. Start early and start in a market that is growing. If I had done that, I would be worth 20 times what I am now.

    

10. What is your favorite thing to do in your free time?
    Other than hang out with my kids, I would say read. I read all the time.