the story of one Russian entrepreneur in America

the story of one Russian entrepreneur in America

One of the projects of the developer Schon Tepler

Today will be a sad fast, sorry.

I’ve been following on Twitter for a long time Artem Tepler. This guy, together with a business partner, created a small development company in America, Schon Tepler, they built multi-apartment houses in California. In total, they built about 30 apartment buildings with a total cost of several hundred million dollars.

One of the projects of Artem’s company in Los Angeles

Artem moved to America from Moscow as a child, in the early 90s, together with his parents. He grew up there, but he spoke Russian perfectly.

He talked about business and his projects in his blog. Well, in general, an interesting blog of a young audacious entrepreneur. I have always felt a kind of closeness to him, both because he is a namesake, and because he is also Russian-speaking in an English-speaking environment, and because he is also interested in real estate.

At the beginning of November, I learned that Artem had committed suicide. He is survived by his fiancee and a two-year-old daughter.

In one of the last interviews, he talked about the fact that the cost of construction and interest rates have increased significantly in the last year, but prices and rents have not changed much.

Due to the increase in rates and the slowdown of the real estate market, their company got into a difficult situation, and Artem gave a “personal guarantee” for a number of loans, and thus not only the company, but also he personally turned out to be bankrupt. He turned out to personally need more than $10 million, which he no longer had. Artem was a multimillionaire and suddenly he finds himself in a situation where the bank will literally take away the house in which they live.

Another project by the Schon Tepler company, they are all about this style

Obviously, it turned his whole idea of ​​himself and his future life upside down and ended because it ended.

Honestly, I can’t stop thinking that he had a young daughter who needed him regardless of his net worth.

Even in a hopeless situation, there is always a choice. This choice can be extremely unpleasant for us, but it is there. In the twenty-first century, it is difficult to die of hunger in any developed country. Suicide is a permanent solution to temporary difficulties.

A few practical thoughts in connection with this tragedy:

  1. I have always been afraid to seek rapid growth at the expense of borrowed capital. Yes, such leverage can be a very good accelerator of your development in good times, but in bad times it can bury you, both figuratively and literally.

    Buying real estate with a down payment of 20% and a loan of 80% of the value of the property means that if prices rise by 20%, you will double your capital. Imagine how it works not on the scale of one apartment, but on the scale of a $50 million project.

    On the other hand, a 20% drop in prices means that you have lost all your invested capital.

    If everything goes well, you will be invited to podcasts and asked how you learned to invest so brilliantly. If things don’t go well, you will be forgotten very quickly.

    In my opinion, there is a lot of casino in this and a gambler may develop an attachment to such risky and potentially extremely profitable deals.

    Risking everything for the sake of seeing an extra zero on the bank statement is irrational. It is better to go towards your goals more slowly, but more reliably. Yes, no one will invite you to talk about how to make millions in the real estate market, but you will not even notice a 20% drop in the market.

  2. There are many people around us who look very successful – they drive expensive cars and live in expensive houses, but in reality they do not own anything, it all “belongs to the bank” and one day it may end.

    Each person is an iceberg and we see only the 5% that they want to show.

  3. “Lifestyle inflation” is dangerous because if you accustom yourself and your family to such a lifestyle that requires constant high expenses, then if you can no longer afford it, losing that lifestyle will be a very difficult test to all.

    Being simpler and living simpler is not only cheaper, but also reduces risks.

Maybe it sounds like a defeat, but if you don’t climb too high too fast, then falling won’t hurt too much.

It’s a very sad, really sad story, but it has lessons for all of us.

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