As Northeastern undergraduates, Eric Doroski and Nitzan Mokady decided at a table in the dining hall at International Village on the Boston campus that they wanted to develop a way to make money while attending classes.

They ventured into the stock market, but after a little experimentation, they concluded “that wasn’t sustainable.” 

Then, in early 2018, in the middle of their college studies, they decided to pool their money and invest in real estate.

Mokady and Doroski went searching for property. However, Boston real estate prices were too steep. So they looked for a more affordable market.

“We quickly came up with the idea of just going into real estate and naturally we couldn’t buy anything in this area because we didn’t have anywhere near the sufficient capital,” Mokady says. 

Also, nobody would sign a loan for them.

“So we said, ‘OK, where can we find houses that are cheap, where it looks like we can get good rents for them?’” he says. “So we went into the Midwest, we flew there on the weekends.”

The search ended in Cleveland. They paid cash for a vacant rental property in April of 2018 and spent four months doing renovations.

“We picked up a duplex that had no tenants in it, renovated it up, got it rented out with two long-term tenants and, just slowly, added on from there,” Doroski says.

The partners officially formed Zanzibar Capital and incorporated as an LLC. The two Gen Zers went baby boomer, naming the company, at least partly, after the Billy Joel song “Zanzibar.”

“We’re both Billy Joel fans and when we listed that name during the brainstorm we both liked it instantly,” Doroski says. 

They also liked the name because Zanzibar—located on an island off the coast of Tanzania—is home to one of the best beaches in the world, yet is almost always overlooked. 

“We like that premise because we aim to identify opportunities that are overlooked or not seen by our competitors,” Doroski says.

In 2019, they purchased two more rental properties, both within a few blocks of the first building in Cleveland.

“We selected low-priced assets we were able to buy personally,” Doroski says, “from the cash flow of the first.”

Between the second and third purchases, Doroski, Class of 2019, graduated from Northeastern with a degree in math and economics. 

Mokady graduated a year later with a degree in mechanical engineering and a minor in economics. However, before Mokady graduated, the two made a big jump, a $3 million leap.

“We were talking about it for probably six months at the point that we actually executed trying to figure out where to pivot to. Do we want to keep buying piecemeal in the Midwest? Do we want to bring investors to it?” Mokady says. “And our big decision came down to: We want to pick a market that we know forwards and backwards, but we also trust is stable, has strong jobs. Let’s say a recession happens, that it has a lot of different industries, and has a history of recovering quickly. You know, good biotech, good education.”

Doroski and Mokady decided they wanted to be in the Boston area rental market. They went looking for investors—what they called a “friends and family round” of fundraising. They raised nearly $1 million, secured a $2.2 million loan and purchased a 16-unit rental property on the North Shore for $3 million in January 2020.

Soon after the $3 million acquisition, the COVID-19 pandemic struck. The two young entrepreneurs suddenly had to be accountable to investors but could not predict what would happen in the rental market.

“Honestly, it’s the case with us—and pretty much any apartment investment—that it really wasn’t that much of an impact,” Mokady says. “It was more of a blip. People kept paying their rents. The world slowly reopened, but people need a place to live. So we lost a lot of sleep—I don’t want to say for nothing—but more than we should have.”

Zanzibar Capital currently has five properties with a total of about 100 rental units, all in the Boston area since they sold the Cleveland properties. In addition, a ground-up development project is underway on another property. 

Last year, Zanzibar, which has an office in South Boston, purchased a 55-unit residential housing property in Lynn, Massachusetts, for $10 million.

In January, they made a $7 million purchase of a property on Dorchester Street in South Boston for a planned development of 32 residential units and commercial space, which will include a boutique grocery store and a cafe. The property is the first “ground-up” development project in which the partners have invested. Completion is expected in 2024 and the units will be sold as condominiums.

The entrepreneurial spirit, experiential learning of co-ops and alumni network at Northeastern University helped them start and develop their company, Mokady and Doroski say.

Mokady says he had three co-ops—from a large company to a startup—while attending Northeastern and learned so much about business at each of them. The Northeastern alumni network, he says, has been incredibly helpful.

“Northeastern alumni have helped us in so many ways in different parts of our business. Northeastern alumni who graduated the same year as us, or someone who graduated years before and are well into their careers, and just being able to call and say, ‘Hey, oh, you went to Northeastern too?’” Mokady says.

The two business partners and former college roommates met during one of Northeastern’s Dialogue of Civilizations programs, which offer students an international experience.

“We went on a Dialogue of Civilizations. The one we chose was to the Dominican Republic and it was with professor (Peter) Simon. It was an economics dialogue,” Mokady says. “I had no idea who he was and vice versa. We got to the place where we would be staying and the professor says, ‘Okay, everybody pick your roommate.’ And we just both looked at each other and said, okay, seemed normal, so let’s see if this works out.”
Mark Conti is managing editor of Northeastern Global News. Follow him on Twitter @markconti11