The Silicon Review
What does it take to build a successful company? A great team? A brilliant idea? Money? Yes. We need all those things to succeed. But more than anything, what we need to succeed is belief. A belief that will help you in addressing significant problems and deliver what the consumer wants. Today before we can go ahead with the interview, let us get to know about Harshad Dharod, the man behind the genesis of Silver Star Real Estate.
Harshad grew up in a small village near Bombay, India and as a boy growing up, he was stranded in poverty. When he was only five years old his father passed away, there is no doubt that this had a tremendous impact on him. He and his three brothers struggled to survive every day but there’s something about his innate character, his DNA, that keeps him pushing for excellence no matter the circumstance. Even at that young age he understood that he had to move on quickly to support his widowed mother and help out with his brothers. This was when he picked up his first job as a milkman. Harshad would wake up 4 hours before school, get on his bike, and deliver milk to the villagers. His route would be around 15 miles long, and he received $5 a month to help his family out.
Harshad was lucky to have a savvy mother who prioritized education, in hopes that it would pay off in the future. In school, Harshad was always top of his class and he also took up weight lifting as an outlet for his ever growing mind. At that time in India, health and wellness were not priorities and many of his peers did not understand what he was doing or why. For Harshad this was his escape, he was always ahead of his time in his thinking and he wanted to live a long time. If he was not working, in school, or working out, Harshad spent the balance of his free time playing cricket with his friends.
When Harshad turned 17 years old, he and his family packed all their things up and moved to the US. Originally, Harshad had planned to become a doctor, however, medical school was extremely expensive so to cover costs, Harshad looked for a job. For weeks, Harshad walked the streets of Los Angeles each day for 8 hours looking for work. After three weeks, Harshad received a call from Jack-in-the-Box in Culver City. He went in for an interview and started the same day. Harshad vowed to not stay longer than six months. However, each time Harshad tried to quit, his boss promoted him as he was a valued employee. Within a five-year span, Harshad went from fry cook to cashier to drive-thru to shift leader to assistant manager to manager.
Seven years after his start at Jack-in-the-Box, Harshad had the opportunity to buy a store at a hefty purchase price. He scraped together his and his family’s savings and put it towards the purchase. He still did not have enough. Harshad started visiting banks to get a loan and this is where Harshad’s relentless nature truly kicked in. Harshad was rejected by at least 50 different banks. Finally, after months of searching, Harshad was approved for a loan and bought the store. After he gained control of the formerly corporate-operated store, he immediately increased sales by around 40%. The franchisor was so impressed with Harshad’s work that he was able to buy another store, and another store, and another store. Five years after his first purchase, Harshad had owned 19 stores, with each store improving sales like the first location.
In 1999, Harshad sold all his stores as there was little possibility for growth. Harshad started looking into different business opportunities, and after 6 months, a close friend of Harshad showed him a deal. It involved buying 67 Carl’s Jr. stores at a price of $70 million. Harshad used the money he made from Jack-in-the-Box to make a down payment, and in two years, collective store sales had risen by an average of 25%. Since then, Harshad has maintained a high level of excellence in his company. Although Harshad did not know anything besides the restaurant business, in 2006, he was able to expand his business through real estate. Since then, his son, Sunny Dharod, has pushed the business to a new level.
In conversation with Sunny Dharod, Silver Star Properties Director
Q. What are your focus areas? Please share an overview.
We are currently focused on acquiring 100 unit plus value-add multifamily opportunities in the Southern California, Phoenix, Tucson, Austin, Dallas, San Antonio, Denver and Las Vegas markets.
Q. You must be decisive and persistent to succeed in this massive industry. That said, how do you plan to combat your competition?
Though there is a lot of competition in the market we are in today, we try not to get too caught up in storylines and the emotional aspects of our deals. We always look at deals from the perspective of what’s the maximum I’m willing to pay? We pick that number, and we never go above it. If the deal makes sense, we buy, and if it no longer does, we hunt for the next opportunity. All our decisions are based on the returns we are trying to hit.
Q. Setbacks are a part of every growing business. Tell us about your roadblocks that helped you and your company grow through the years?
The biggest roadblock which I think many people are facing right now is deal flow. Today there’s just so much capital out in the market and so many assets have already been renovated and remodeled that people are willing to take significantly lower returns in order to jump into deals just so they can put their money to work. How we’ve gotten around this is by having a strong network of brokers and lenders that have assisted us in being in a position to move fast and aggressive on opportunities that come up.
Q. What marked the beginning of your success? What do you regard as your greatest achievements throughout your professional journey?
In 2013 I started out by managing one small 32 unit property in Buena Park. That building had a 10% vacancy rate when I started. By working with the onsite team to fill those units fast at market rents and then shortly after going through a full renovation of the property (common areas and unit interiors) and understanding the value that was created was my biggest victory in terms of learning. My biggest accomplishment to date was probably closing The Landing in early 2019, the largest deal in our company’s history so far at $78MM.
Q. How do you plan to transform your company into a future that is unfolding before you?
I think the key right now in multifamily is to diversify your risk geographically. The future is uncertain now more than ever, but the key to risk is diversification. We want to diversify through the markets we buy in, we have a heavy focus on core markets as well as a healthy balance of assets in secondary and tertiary markets where we see high growth potential.