Listen to hear how Jorge left his UPS job to become a full time single family real estate investor. Then hear how he took action to move his family from Miami to Dallas after the great recession hit where he started his construction and rehab company, JNT Developers, and ultimately went on to syndicate over 1,700 multifamily units.
Table of Contents:
- Taking Action on the Great Recession
- Making the Flip From Resi to Multifamily Units
- Trying to Grow the Multifamily Units
- Let the People Know What You Do
- Active Investors Versus Passive Investors
- Vertically Integrated Company in Multifamily Units
- The Influence of Not Being Born Rich
- How to Start Your Own Multifamily Units Syndication
- Make Yourself Your Greatest Financial Investment
- How to Connect with Jorge Abreu
Taking Action on the Great Recession
Darin: A little background on Jorge Abreu. Jorge grew up in Miami with his mom and older sister. In his high school years, he knew he wanted more. He left his corporate UPS job to become a full-time single family real estate investor. When the great recession hit, he took action and moved his family from Miami to Dallas.
It’s where he started JNT Developers and ultimately got into the multifamily syndication space. He’s now a general partner in over 1,700 multifamily units. And he wants to grow that number to over 10,000 multifamily units in the next two and a half years.
Jorge and I know each other, I've only been in the multifamily space for the last two and a half years. I met Jorge, relatively early after getting involved with a multifamily mentorship group. He was actually a sponsor, a vendor that was at many of the events. So I got the pleasure of meeting him and his wife, Tasha.
I've just seen him and his business, and now multiple businesses, grow over the last few years. I'm so excited to have you on Jorge. I really appreciate you coming on and sharing with the rest of the group. First of all, you moved from Miami to Texas. Why did you do that?
Jorge: Because I'm crazy. Real estate investing a few years before the 2008 real estate crash is when I had started investing in single family down in Miami.
Investing in Fix and Flips
Darin: So that's 2005/2006. I was down there, I was in the Fort Lauderdale area, I lived in Fort Lauderdale. Then I lived in Parkland and I was working on a trading desk in Boca Raton. That was a hot time in South Florida. Real estate was cooking.
Jorge: We did well. I quit my W-2 a few months after starting and getting a few deals in. Things were going great. Almost too good which the market told us that. Luckily at that point, we were just doing wholesales and we had a fix and flips. But the timing was just right. In Miami, it was literally like a switch just from one day to the next. I didn't get caught with a bunch of properties or anything like that.
Darin: That's good for you. Not everybody could say that.
Jorge: The thing was, nobody was touching real estate, the prices were going down daily. When I say down, I mean $20,000 a day, prices were dropping. I had to make a decision. It was either start looking for a job and go back to corporate America or figure something out. We looked at Dallas and Arizona as far as making a move.
Had a couple of buddies that had made a move a few years back to Dallas. They were also investors. We came out here, spent some time with them. It was crazy comparing the two cities. I love what I saw here in Dallas and haven't looked back since.
Darin: You started a fix and flip business and you were doing development work. It was JNT developers, was that developed in Miami and you brought that to Dallas?
Multifamily Value Add-Type Deals
Jorge: Sort of. Back in Miami, we didn't have the construction company. We're just investors and we were doing fix and flips, hiring general contractors to do the work. I had a couple of issues with contractors back in Miami, then I came to Dallas. Really wanted to scale the fix and flips. I ran into some issues with finding a really good general contractor to keep up with as much as I wanted to scale. That's when I decided to start the construction company.
A buddy of mine had a company in Miami, he was a general contractor. His company was JMD Developers. The idea was to do a branch of his company. But a few months in, he really wasn't feeling it. I wasn't either. At that point, I had already kind of spread the name out. So I figured change it to JNT which wasn't a huge difference.
Darin: Wasn't that too far off?
Jorge: Yeah. And it worked.
Darin: Then you guys started not only investing in Dallas fix and flips for yourself. You also started to do development work, rehab work for other single family investors.
That's how you kind of got started in the Dallas market with JNT. When I came to know you, you guys had already kind of made the flip to say, all right, we've done the resi side. We want to get into being a contractor, general contractor for more multifamily value add type deals. You started coming to different multifamily events. Help me understand how you made that decision.
Jorge: I can kind of take you through that, we started with working for other investors.
Making the Flip From Resi to Multifamily Units
Jorge: We were doing our own flips as well as working with other investors and doing their single family fix and flips. At some point that kind of led down the path of doing work for homeowners as well. Started doing real custom type flips and adding second stories onto houses and some new construction as well. It is a tough business working for homeowners.
I put as many systems and processes as you possibly can. At some point, I landed a couple commercial clients and multifamily clients. It was like night and day working with those type of clients versus the homeowners and even some of the investors. We kept getting a lot of newer investors.
Our ideal client was an investor that had a lot of experience and they get it. But then we kept running into these newer investors and they were treating it like a custom home. You're not paying for custom home. So that was a struggle. When we landed those clients on the commercial and multifamily units side, I just completely decided to change everything. I knew that was the path that we had to go on.
Darin: The dollars are bigger and you're dealing with professionals. You're also probably working more during the normal work day. Versus working nights and weekends. A lot of positives moving from the resi side to the multifamily and commercial side. One of the things you said you started to get into more custom stuff and adding on second floors and stuff. What made me think about when you said that was, here's a guy who started out as an investor in Florida.
Communication Is Key
Darin: Came to Dallas, just couldn’t find the trusted, general contractor that he wanted. So he formed his own company, you formed your own company, but you didn't know how to do it. I'm sure that there was a first time you had to put on that second story and you had to figure it out. You had to bring in team members, and have trust in them. Be able to hold the hand of the investors and let them know it's going to be okay
That hand-holding and giving guidance, it's going to work out, that lends itself a lot to what happens later when you start going into syndication also because people start now giving you their hard-earned money. They have to trust you with that, that you're going to be able to execute on a business plan and give them the return they're looking for. But not everybody is wired in that way to be able to take a chance and have confidence in himself and his team to deliver.
Jorge: Communication is key, I always say that. I always tell my staff, look, you can have a project that's delayed for months on end, for whatever reason. If you're not communicating with your client and letting them know what's going on, they're going to think the worst. But if you communicate and constantly giving them updates and letting them know what's going on, nothing. They get it, depending what the delays are and what not.
Darin: It just says a lot about you and about the company that you formed, that you're willing to go out there and learn how to do the next thing.
Making a Name in the Multifamily Units Side
Darin: Now you've got this company, and you're breaking into the multifamily space, which that in itself is a risk. Here's a single family guy coming in and trying to make a name for himself on the multifamily side.
You do that and then help us understand what happens because I don't know the story behind this. I'm kind of guessing you start seeing some multifamily investors make some pretty good money and you're like, why am I not doing that?
Jorge: I was still doing the single family, the fix and flips while I had some clients that were doing the multifamily. Like what you said, I started speaking with them more and building a relationship and really understanding the syndication aspect of it which I didn't know existed till then. I always thought an investor that's buying multifamily units you've got to have millions in the bank to do that.
Darin: Most people believe that. I believed that too until about two and a half years ago.
Jorge: I was at the point where I had been grinding it out for however many years at that point. Maybe eight years, maybe 10. I just started feeling very transactional. I had done some holds, some smaller multifamily properties but I hadn't built a large portfolio. I didn't have a lot of passive income coming in. It was a grind. One deal to the next, one deal to the next, one deal to the next. And scaling is difficult in single family. It can be done but it's just not easy.
Darin: I hear that a lot from single family guys. Where does the scaling kind of hit a wall.
Managing the Cash Flow
Darin: People talk about, when I get between 10 and 20 properties, I'm just getting bogged down. I don't know if that's the right number or not. But what's your sense? There's certain bandwidth that you have if you own a bunch of rental properties. All of a sudden it starts to make it really hard to go to the next one. Because you're spending so much time managing the existing portfolio.
Jorge: Usually you don't have a large staff when you're a single family investor. You don't have a ton of cash flow coming in. Like I said, it's very transactional, especially on the fix and flips. You don't get paid until you sell it.
Managing that cash flow gets difficult and it’s hard to justify having the staff to be able to scale. When you scale you need to have your systems and processes in place. Then you need to have a team that can execute on it. On single family, you've got to really be on point with those systems and hold your team accountable.
Darin: Now you mentioned that you had some small multifamily. I don't know if it was you or Tasha or somebody mentioned, you had a smaller property in Waco. How many units was that?
Darin: For a lot of people 37 units is not tiny. In our world, when people are doing huge deals, that sounds small. But for a lot of people, that's a huge jump. So how did you do that 37 unit deal?
Jorge: That was our first syndication, small one. Before that we had a couple of fourplexes, eightplex and some single families.
Darin: Was that about the time when we got to know each other?
Trying to Grow the Multifamily Units
Darin: When you started to come to the multifamily events and started trying to grow the multifamily business?
Jorge: It would have been a little bit before that.
Darin: I ended up getting a deal, my first syndication deal, 76 unit deal. I've counseled with a lot of other syndicators. Everyone said the first thing you got to do is start on the external rehab, which is very smart. I understand the thought process behind it. It's you make the outside of the property look nicer and attracts a better tenant. Then you can start to charge higher rents.
And then you start to upgrade the interiors. When we took over my first syndication, it was a slow process in terms of doing that external renovation. The reason was, I did not come from the development side. I did not come from the fix and flip side. I'm a numbers guy, a business guy, but not a real estate guy. I really wanted to bring out a number of different developers and contractors and walk the property.
Get comfortable with a partner that I was comfortable with. It took me a few months of bringing you guys out and a few other people out. I ultimately decided to go with you guys. You guys did a great job, you were very patient with a newbie syndicator. That goes to the line of building trust. You have to build trust, not only as the GC but also as a syndicator. Talk to the listeners about what your view is on building trust.
Jorge: That's what I've built my companies on from the beginning. It's relationships, it's huge. You build that trust through your relationship.
Building Partnerships and Establishing Relationships
Jorge: Delivering on your promises, executing on what you say you're going to do. Once you do that, it's massive. You can get one client, one relationship can bring you so much business. That goes with construction or even syndications. Once you realize that, that's what I try to stress to my team, you never know. You got to treat each relationship the same because you never know where it's going to go.
Darin: That's a great point. So you've got this 37 unit. I didn't even know you had a 37 unit until talking with Tasha or whoever during the renovation. Next thing you know, I'm on your email blast. I don't know what the number was, but a pretty darn big number was your next syndication. You went from 37 to what on your second syndication?
Jorge: To 216.
Darin: Then the next one was?
Jorge: 1,275. It's a little jump.
Darin: That is crazy. Talk about scaling. Going from 37 units to 200 and sum odd to 1,000+. You started to bring on, once you got into syndication space, other partners. Who are your partners? How did you develop those relationships? What are your roles within the group? How did you get the mindset to be able to do a 200 unit or 1000 unit deal? It's a lot there.
Jorge: The team, partners. Eric Bodiwala is my business partner. I've known him since middle school, we went to middle school together. We went to high school together. Went to university together. On the executive board. I can't get away from the guy.
Darin: You guys know a lot about each other. I'm going to have a few beers with him.
Covering the Gaps and Doing Things Differently
Jorge: Him and I decided to do the single family stuff together. We both quit our W2. We were both working at UPS after getting our degrees. Then we started doing the single family, moved to Dallas.
We started to Elevate. As we began to grow, we started seeing where we had gaps. When I started the multifamily units, I told myself I was going to build it as a business. With my single family, with the construction company, I didn't start off that way. I was trying to do everything, even within our partners.
With this one, I wanted to do it different. We knew if we wanted to keep our pipeline filled, we're going to need somebody handling acquisitions versus just Eric and I.
Once we get a deal, then we get tied up into that deal, we don't worry about the acquisitions. That was the first person we brought in which is John. His main role is to be building relationships with brokers and looking for deals. We realized the next gap was raising capital and having investor relations or somebody constantly in contact with our investors.
That's when we brought in Keri. Our plan is to continue to just fill in those gaps. We just brought on a VA recently to help us with our marketing. Probably going to bring on another VA pretty soon. I think there was a two part to that one but I can't remember what it was.
Darin: You covered the partners part, for sure.
Jorge: All the thousand units. 37, 216, 1,000.
Darin: It's mindset. There's a lot of people that can't get there. So in your mind, how did you get there?
Multifamily Is a Lot of Mindset
Jorge: Multifamily overall is a lot of mindset, just the bigger numbers. Being able to speak to individuals about how much money they have and how much money they want to invest. We're not raised to speak about money like that, which is sad. We should.
One is the mindset and then goes back to how we started with relationships. I was doing a ton of networking and just started connecting with the right partners. Wanting to co-GP with other GPs and leveraging the functions that they're good at with what we're good at. Just making a good partnership.
Darin: I could be wrong, but I recall having a conversation with you. You and your team ended up finding a large partner that told you, we were looking for these big deals. Did that help you kind of catapult to the bigger deals? Because you had another relationship that you developed that said that that's what they were looking for.
Jorge: That 1,200 unit portfolio, without that partnership, we wouldn't even been looking for something that big. But we built a relationship with another GP, that was their specialty.
Darin: Who built that relationship? How'd that come about?
Jorge: It's a good story. Went to high school with this individual, we knew each other. We hadn't seen each other for years, we knew we were both in real estate. I thought he was probably still in single family. Like I said, I hadn't seen him for years. I was at IMN in Dallas and we ran into each other. Kind of did like a double-take, walking across from each other and ended up reconnecting. He told me about what he was doing.
Let the People Know What You Do
Jorge: They had over 10,000 units. At that point, we only had a little bit over 300 or so. It seemed like they were looking to expand into this area, and they're out of South Florida. So we went, met their team, they met our team. We built that relationship for a little bit and then started looking for deals. It didn't take very long to find something.
Darin: That speaks to a few different things. One is letting people know what you do. There are certain people in your life from prior, whether it be growing up or whether it be you worked with somebody in a different industry, they will pigeon hole you into this box that you're this guy. You're a single family guy. It's not until you let people know that, no, look, I've expanded, I'm now in multifamily units.
I've got this other business that does multifamily units rehab, and we've got 300 units under our belt. We're serious about this and we're going to expand. Then all of a sudden, that person looks at you a little differently. Had you not gone to the conference, you wouldn’t have bumped into him. But getting yourself out there and letting people know what you do is critical. Because people might remember you from 10 or 20 years ago in a completely different career path.
Jorge: I agree, I get people that tell me all the time, I don't do social media. Why not? What are you scared of? What's the fear behind it? Just tell everybody what you do. I don't know if it comes with being passionate about what you do. To me it just clicked.
A Phenomenal Opportunity in Social Media
Jorge: I was one of those that didn't do social media or didn't pay too much attention to it. But it was more because I was just so busy. Once I realized what it could do for business and relationships, then I was all in.
Darin: Let's segue there because that's an area where you've done a phenomenal job in social media. Both Facebook, Instagram, you put out a lot of good quality content for people to learn. If you put out content to help people learn, then they're attracted to you to continue. Because you could help them do what you did. There are a few things with social media. One is I remember talking to you early on and like you were a little nervous about it. Nervous about putting out posts.
I remember when you first spoke at an event, you were nervous about doing that. Now it's like, Jorge Abreu on the speaking circuit. It's like he's everywhere, which is awesome. If people don't know you and what you do, they can't do business with you. That's what I kept hearing over and over again when I would go to not just real estate conferences, but entrepreneurial conferences. I was like you, I was not on Facebook or Instagram or anything until I got involved in real estate three years ago.
It feels a little braggadocious posting stuff. But what gets me over the hump is when all of a sudden I have a guy reach out to me on Instagram from Chicago or Las Vegas or a guy from Spain. Then we have a call and he wants to just pick my brain in terms of how I do it.
Document What You Are Doing and Put It Out There
Darin: How do I get involved, and can I get involved in your next deal? All of a sudden, I'm like, "Look, that's who we're doing it for." There are always going to be people that will judge you, just put out another post. Braggadocious. But it's not for the guy that already knows you.
It's for the guy that either doesn't know you yet or he doesn't know what you do. I can't tell you how many times I've gone to the golf course. All of a sudden I play with somebody I haven't played with in a long time. They're like, Darin man, you’re all of a sudden this real estate guy. How do I get involved? This is somebody that never liked one picture or sent one text or one email or what.
In the background, they're watching and then next thing you know, they want to learn. That's what it's all about. I'm sure there are people out there on social media that just want a million likes to pump up their ego. But that's not my intent or my heart and I don't think that's where you're coming at it from. It's how do we get out and interact with more people?
Jorge: It depends on what you're posting and what you're doing on social media. Somebody told me a long time ago just document what you're doing and just put it out there. You'll be surprised. It seems easy to you and it seems natural to you, but others that don't know how to do it and don't live that day to day, they're going to see it and they're going to get inspired or they're going to want to know more.
Two Goals for Venturing Into Real Estate
Jorge: That's all I do, I just document what I'm doing. I put it out there. Obviously we've evolved from that with some educating and try to add a little more value on the content. It's the same thing you said. I get people that reach out to me all the time and tell me thank you. You've inspired me, you've motivated me.
Darin: How awesome is that? For me, there are two goals for doing this real estate thing. One is to have financial freedom like most people want. Two is to inspire others. If you can help one person go after a dream that they didn't think that they can get, that to me is what life is all about. It's like helping others, coaching others. You have been a leader in the space. Look when you start taking off, there's some jealousy that goes along with it too.
Jorge: I've seen that.
Darin: You go from 37 units to 200 units, and then this is the big one, going from 200 to 1,000+ units. I will even say this, I didn't hear anybody say this. But I would put money on it that somebody thought in their head, I want them to fail. On that 1,000 unit portfolio, I don't think they could raise the money. I want to see them fail and fall on their face. That could have happened. It did not happen. You guys raised the money.
You've got the deal. You did what you said you were going to do for that other investor partner from Florida that you bumped into. There are certain people that because their mindset is saying that they can't do 1,000 unit deal, they want you to fall down.
Active-Investors Versus Passive Investors
Darin: Even if you fell down, you went after it and you would have tried. That's the biggest thing.
Jorge: Would have learned from it.
Darin: And you would have not looked back and said fear stopped you. You must have been afraid. Tell me about being afraid about the deal.
Jorge: You got to raise $20 million.
Darin: $20 million in one deal. There were three of you that were raising money?
Jorge: It's about right. Four.
Darin: That's a lot of money, 20 million. Where did you get most of the money? I'm not talking about telling me specific people. Like friends, family, mentorship groups, people you met at conferences. Where did the bulk of the money come from?
Jorge: It was a mixture but mostly from relationships. Relationships that I had for a few years and some that I had recently met at networking events. That was the majority of it. From then we've done a couple more deals. We have a lot more stuff coming now through marketing as well because we've filled that platform out. But in the beginning, it was mainly relationships and networking.
Darin: Were most of the investors first-time multifamily units passive investors or most already knew they wanted to invest in multifamily units. They just hadn't done a deal with you yet?
Jorge: Maybe like 70/30. 70 had already invested in some deals and were experienced. Some active guys too, investors that wanted to put in passively. I don't know about yourself, but I still do passive investments as well. The other 30 were newer. They new they want to invest in real estate and just hadn't done it yet.
Which Is the Better Deal
Darin: Mine was probably more 50/50 between multifamily units mentorship group and like multifamily investors and personal network. Each subset kind of had their own way of looking at the deal. The ones who knew they wanted multifamily units, you don't have to say why multifamily units are good asset class. I'm already sold on that. I like you, I like your deal but I've got four other deals in my inbox, I can only invest in one.
It's more relative value between the deals, which one is the better deal to get into? That's for the multifamily units guys. For the personal network, it’s more like, I know you, I trust you, but I don't really understand this thing. What are the returns and how does it work? There's a little bit more hand-holding, but there's less competition on the deal side.
Jorge: I can't tell you which one's easier. I've had the same thing.
Darin: That's funny, I don't know which one is easier either. I would say that the personal network, the ones that didn't know how to do it, it's more time-consuming. But it's also really gratifying to me personally because they're like, I never knew I could do this. I didn't know we could do this until two or three years ago either.
Again, you've done an awesome job on social media. I applaud you for pushing past the fear on, one, the size of the deals you go after. Two, getting yourself out there on social media and in speaking engagements. It can be scary.
Jorge: It's still nerve-racking.
Having a Service Mindset
Darin: But you think about the people you can help, that's really where the focus is. Who can I help by this and who can I serve by this? The Big man upstairs he didn't put us on this Earth just to have us squirrel things away for ourselves. He really wants us to help each other. So in this space that we're in, building wealth through real estate, you can't help people unless they know who you are. I applaud you for that.
Talk about the money piece again, because raising capital for a lot of people is scary. A lot of people think of raising capital as I need to get money from this person to get my deal done. Well, if you have that mindset, good luck because you're really focused on yourself. You're missing the point of being able to serve others. You have that service mindset that you're presenting an opportunity.
Jorge: The way I look at it is, I didn't know about investing passively in multifamily units until about three and a half years ago. Investing passively what it's done for me, alone, it's a game changer with taxes and with the returns I'm getting. I'm just passionate about telling others about that. I know how many people have no clue. They think you've got to keep your money in your 401(k) or whatever it is your retirement plan. There are better ways.
Darin: I completely agree, it floors me, it really does. It floors me that I went through 48 years of my life and didn't have one person present that opportunity. I know it's a completely different scenario. But if you had a cure to an illness, you would obviously share that with people that you care about.
Vertically Integrated Company in Multifamily Units
Darin: Share that with the world. Here you are, you're saying you invested passively, and it was a game changer for you. Now you're here out telling other people, you can do it too.
People talk about having a very vertically integrated company in multifamily units. A lot of times in multifamily units, so what does that mean to for the listeners out there? You have sponsors that will syndicate deals and raise money from limited partners. Then you have a lot of syndicators who use third-party property management companies.
And then they'll use third-party contractors to do the rehab. Some will purchase goods for the rehab and for the interior rehab through third parties. When you purchase from other people, obviously, there are markups. As syndicators get larger, they talk about this term becoming more vertically integrated. That could be a lot of syndicators.
The first step is all right, once we get to a certain amount of units, we have all these properties that are being managed by third parties, we're going to actually start our own property management company and bring all that in house. So to give them more control. Well, for you, you had the GC side and the rehab side. So talk to us about what your view is on creating a vertical integrated multifamily company and kind of what's your viewpoint on that?
Jorge: It's great if you can do it. The whole point is to have more control on how things get done. That's why I started the general contracting company, I wanted more control. I wanted my systems, my processes to get done, I didn't want to count on somebody else doing it right.
How to Become a Big Differentiator in Multifamily
Jorge: The problem is every function that you decide to bring in house, you're bringing in a new company. It's a whole company within itself. When people talk about it, some investors, they don't take that into account. That company has to be able to maintain itself with or without your deals depending on how much volume you have. If you have enough volume, then yes, your deals can sustain it alone.
Darin: One of the things I looked at from you and your team as being a big differentiator. Jorge and his team when they go on sight before putting in an offer, these guys are experts. They know what it's going to cost to redo the roofs or repaint the property or put up new fencing. Whatever the case may be. You guys have an eye for looking for those items. Being able to accurately within a plus or minus put together a number that you guys are confident that you guys can deliver on. That's different than somebody like me.
I go on to a property, I eyeball it, I'm a business guy. I'm like, doesn't look too bad. Sometimes I might put too much in the budget, sometimes I might put too little in the budget. But I'm doing it based off of not having anywhere near the amount of knowledge that you and your team have. Talk to us about how you guys view that process before you put an offer in. What's the reality after you start executing on your business plan? How close are you?
Jorge: We're pretty dead on every deal we've done. I don't even want to say 5%, less than 5%. And that's from the initial property walk.
The Major Components of Multifamily Units
Jorge: I can't say it's easy just because I've been doing it for a while and I get it. But there's not a lot of variables when it comes to multifamily units. You've got your parking lots, your roof, your foundation, your drainage, you've got your major components. Then you've got your upgrades.
Usually the upgrades are pretty standard too. When you break it down, it's somewhat simple. You asked me before we got on if I was working on anything. I actually am working on one thing. It's not ready to release or anything. I'm trying to fill that gap making it easier for investors when they do their property tours.
Darin: Fill the gap for people like me that don't know.
Jorge: Trying to make it as easy as possible.
Darin: Please put me on your list. That would be very helpful.
Jorge: It was going to be a spreadsheet. I decided I'm going to just make it an app. Make it even easier than a spreadsheet that can really help and get you to that plus or minus, maybe 10%.
Darin: That's massive. Look, you put that out there, how much you charging me for that app?
Jorge: I don't know yet. How much would you pay for that app?
Darin: I was putting you on the spot thinking it was free value. Maybe not.
Jorge: For you maybe.
Darin: Awesome. So I'm going to take a little backwards turn now. Let's go back to your childhood. How'd you grow up? Where did you grow up? Did you grow up rich, poor, brothers, sisters? What was your parents' influence?
Jorge: I grew up in South Florida, Miami. My parents were both Cubans, Cuban-Americans. I'm Cuban-American. They were Cubans.
It Takes a Village to Raise a Child
Darin: So you speak Spanish?
Jorge: Si. I don't know well. I understand Spanish well and I speak it good enough. My father passed away when I was just young, three years old.
Darin: So you didn't really know your dad?
Jorge: No. My mother raised us. She is an amazing human being, she showed me pretty much how to just care. Everything she did was just for us. I grew up a little faster, became very independent and started helping with the household as early as I could. Other than that, I did not grow up rich or anything. I think it has helped me with the passion I have and wanting to be successful. A lot of my family are business owners, my uncles and whatnot.
Darin: So you grew up with seeing other family members start their own businesses?
Jorge: Yes. I had an uncle that had quite a bit of multifamily properties in Miami. Another one that had a construction company. I hadn't put that together till now.
Darin: Rubbed off, for sure. So, brothers, sisters?
Jorge: One sister, older sister. Probably another reason I kind of grew up quickly. I was always around her. She's five years older. It was just us three growing up.
Darin: Mom never remarried as you were growing up.
Darin: The male influences in your life were uncles, it sounds like, and they were business owners. Was there any time while you're growing up that you thought to yourself, I'm going to be successful.
Jorge: Later years in high school is when it hit me. I wanted to do something more than just go to college and go work for corporate America.
The Influence of Not Being Born Rich
Darin: Do you think that your uncles had an influence on that? Seeing other business owners?
Jorge: I hadn't thought about it till now. I guess, makes sense now.
Darin: Now you have what? Three girls of your own?
Jorge: Three girls under six.
Darin: So you're still surrounded with women?
Jorge: I know it's crazy. We got a dog and I told my wife it had to be a male. Big bull Mastiff.
Darin: Growing up and having to grow up a little earlier. The influence of not being rich kind of planted a seed in your head that you wanted something more. You didn't necessarily know what it was but you wanted something more.
For anybody to do anything, you have to make a conscious decision at some point to go after something. To go after a dream, to go after starting your own company, to take a risk and go all in, and with that comes sacrifices. So talk to us about some of the sacrifices that you had to make along your journey.
Jorge: I'll start early on even in college. I mentioned being a fraternity. At some point, I decided that was it. My friends were going out partying and I was at Barnes & Noble studying real estate investing.
Darin: How old were you?
Jorge: 20, 19.
Darin: That's a young age to have made that decision and to sacrifice going out with your buddies. To be sitting in a Barnes & Noble reading about real estate. I want you to talk about some more of the sacrifices you've gone through.
There’s No Overnight Success in the Multifamily Units Business
Darin: There are listeners out there and people who read magazines or books and everybody just wants the quick fix. Some people that you see are successful. Jorge just closed on 1,000 units, and they just think you got that overnight. But they don't realize the years that went into developing that.
Jorge: For about maybe a year and a half where I've controlled how much hours I work. Before that, for 10 years I was working, I don't know, what's possible in a day? 16, 18 hours, day in and day out. Not a lot of wasting time, not a lot of partying. I wouldn't see a Saturday and a Sunday as, okay, I get to relax. It was I get to work without somebody bothering me.
Darin: If you're working that many hours, then that's a sacrifice on your wife too. She must be pretty supportive.
Jorge: She's been amazing. From leaving our whole family and moving to Dallas, to putting up with me working that many hours. A lot of sacrifices in that. But then, about two years ago or so, kids started getting a little bit older. One of my fears is not being there for my children, that's my why.
That's why I do this day in and day out. I made a decision where I'm not missing anything that's important for my children. This was a recent decision that I'm going to be getting home on time, because I wasn't doing that. So there's been sacrifices.
Darin: You have to make a conscious decision to do that. I recently listened to a podcast with Phil Mickelson, the golfer.
Setting Out for the Next Big Goal
Darin: They were talking about how he left a tournament to go back for a birthday party. I can't remember if it was his wife's or his kids. Easily, he could have justified it. Look, you know I'm a professional golfer. I'm going to miss it. But he chose to make it a priority. It sounds like even though you've put in hours and hours, family is very important to you. You want to make it a priority.
So this is, maybe not the best relationship but think about tennis. Tennis players, a lot of them they become number one in the world when they're, especially women, 16, 17, 18. Early. I think to myself, well, it's got to be hard when you hit the top of the top, what's next? What's your next stretch goal, what's your next thing to strive for? So I'm going to put it on you, after closing 1,000+ unit deal. What's Jorge's next stretch goal?
Jorge: Close 10 more. A couple things in there. One, I do want to get, and I know it's just a number and it isn't, but 10,000 doors for some reason is a number that's sticking with me. At that point there's so much you can do. You've spoken about the vertically integrated, definitely want to bring in some more functions in house as we grow. I'm all in on multifamily units.
Darin: What are you guys at now with number of units?
Jorge: We're at 1,720.
Darin: You want to get to 10,000 multifamily units by when?
Jorge: Originally, I had set end of next year.
Darin: So what is it now?
Jorge: With COVID, following year. So what is that? 2022.
Celebrating Your Achievements Is the Key to Achieving More
Darin: That's a huge stretch goal. There are not many people that will ever do one 1,000 unit deal. I asked about the stretch goal because the journey is a lot of times more exciting than the actual finish line. Doing something you haven't done before, that you don't know for sure that you can do it, it's a challenge. It's scary and exciting at the same time. Like you're going to be judged if you fail. But if it's just another deal like the last one, it's probably not going to excite you as much.
Jorge: That's something I'm kind of working on as well, which is, I don't celebrate my wins enough. At least that's what people tell me. I think I need to get better at that. I'm usually somebody, okay, I reach my goal and it's instantly, okay, what's next?
Darin: What's the next one? Every book that I've read and every podcast I've heard that talk about successful people is that they always do set that next goal for themselves. But you do have to celebrate the achievements along the way. You should do that. So whoever's given you that counsel, I would agree with him on that one.
So there are people listening that maybe they haven't done a passive deal before, they want to do a passive deal. The word syndication is pretty intimidating. How does somebody get involved in doing a passive deal, how would you explain it?
Jorge: You're pretty much just partnering on a deal with somebody that is hopefully experienced in managing that type of deal. And you're investing those funds into it and trusting them to do the right thing.
How to Start Your Own Multifamily Units Syndication
Darin: Let me ask it in a different way. Somebody's on the line and never heard of syndication, never heard of multifamily units syndication they're on. They're like, this sounds really good. How do I do it? What action items does somebody that is passive have to do?
I went through 48 years of my life and I did not have one person present me with an opportunity. Now I have a ton of emails that I get, but because I'm in the space. There are some people that are listening that are not plugged into the space. They don't know how to do it. So how do they do it?
Jorge: In general, you're going to have a minimum that you need to invest. It's usually, maybe average is 50,000. I know there's some that take 25. Usually, we start at 100 and sometimes 50. Just depends on the deal. You have to have those funds somewhere, whether it's in an IRA or in the bank.
Darin: That's something new too. If you're not in a space, people are like, what? I could use retirement money? Yes, you can. You can use IRA money. It could be either after-tax money or it could be IRA money. Then whoever you're working with on the deal can coach you through how to make that happen. A lot of people have the bulk of their investable assets in retirement money. They think that this is just stuck.
The first step is you have to meet sponsors. One way to meet them is listening to Jorge here. At the end of this, he's going to give his contact info so you can reach out to him directly.
You Have to Pull the Trigger
Darin: There are other podcasts you can listen to, and they bring on experience syndicators. You can reach out to them on social media. Also in any major city, they have meetup groups that are free. Go to an app on your phone called Meetup. You put in multifamily investing or apartment investing. Find a meetup group. It's free. You go there you will meet other passive investors and you'll also meet syndicators, you exchange information.
As you exchange business cards with these different syndicators, when they get deals, they will email you an opportunity. Typically, they're going to offer you the opportunity to register for a webinar. They will spend an hour to talk about the deal, why they like the deal. It's in this market, this is what we plan to do for business plan. Here are the expected returns, and there is no obligation to invest at that point. All of that is just pure learning.
When you find a sponsor that you really click with, that you want to do business with, and they present you with the deal, it's your job as the passive investor to take action. There's a lot of people out there, they want to do it. They'll look at a lot of webinars, but they're afraid to take action. At some point, you just have to take action.
Jorge: You got to pull the trigger. I would throw in there, there are so many ways to gain knowledge these days. Gain a little bit of knowledge on how to do your due diligence as well on the deal.
Darin: What do you mean by due diligence on the deal for somebody that hasn't done it before?
It Pays to Do Your Homework
Jorge: When you're on these webinars or you get the documents for an investment opportunity, you're going to get a pro forma. It’s where investors are projecting what the financials are going to look like in however many years. Usually the returns are with a five-year projection. You want to know enough to where you can pinpoint some red flags.
Easiest one is an exit cap rate. The cap rate that they're projecting is going to be when they sell the property. That can make a significant difference on the returns as well as the rent bumps. I've said this before. If you've got somebody putting in $200 rent bumps, and their CapEx is minimal, they're not even upgrading the units or something. It doesn't make sense.
So just gaining enough knowledge to see those things is important. As well as obviously doing your homework on the team, the syndication deal team, whatever you want to call them. General partners, that's extremely important as well.
Darin: One last topic before we wrap up here. Early on, you talked about money. People in America talk about everything, sports, politics, everything. But for some reason, people clam up when it comes to talking about money. When I read about the really wealthy, that’s what they do in their family, is that the parents teach the kids about money.
It doesn't happen in the school system. I've been in a number of different industries, and it was pretty much the same thing. People kind of clammed up about money. It wasn't until all of a sudden I started to go and meet with different syndicators. They're so open. Like, my net worth is 500,000. Now it's 5 million.
The Money Talks You Need to Have
Darin: I just met this guy and he just told me that? I'm floored by how open, not everybody is, but a lot of people are pretty open about how it's done. They share with each other, and they're open about what it's done for them personally and their net worth.
That's important because if you don't talk about it, then are you really receiving the returns that you say you are? These people, it’s changed my life. If it could change your life, it could change mine too. That's something big. If you want to change your wealth and you want to change your life financially, then you have to be willing to talk about money.
Jorge: I don't get it. Because you have these books, there's Think and Grow Rich and all these other books that were written years ago. Those concepts still work nowadays. I just don't know why that doesn't make it into our school system.
Darin: I don't know why either. There's a lot of conspiracy theory people out there that say the school system is just rigged to create workers for the wealthy. Maybe that's the case. But if you go buy a book on Amazon, and you spend 15 bucks on it, 20 bucks on it. You get that book, what do you do with it?
Jorge: I read it.
Darin: What happens if somebody just hands you a book? Depending on who it comes from, you may judge it based on who it comes from or if you've heard about it before. A lot of times, if you're just given something, that book might just sit on the corner of your floor and get unread.
Make Yourself Your Greatest Financial Investment
Darin: There's something to be said about investing in yourself financially. Even if it's 15, $20 because now you're holding yourself accountable. You bought that book on Amazon, so now you're going to read it. You're not going to let that money go to waste.
Jorge: That goes for a lot of different things in life. But, yes.
Darin: Hopefully you apply what you've read or portions of it at least. Jorge, wrap it up. Thank you so much for coming on. I thank you and your lovely wife and your whole team for helping us with our project. You guys were great to work with. The tenants stopped me in the parking lot and they say thank you.
Jorge: I love that, man. It's a great feeling.
Darin: It looks so much better. Some of them have been living there for 10 or 15 years and hadn't seen any money reinvested. I'm able to just say, awesome and you're welcome. But I had you guys as a team that came in and knew what you were doing and helped us do that. I appreciate that I appreciate you sharing all this with other people. There's so much about your story. People are not going to be able to get their head around going from 37 to 200 to 1,000.
But it may inspire them to do something less than that. Each step of the way, you didn't necessarily know what you were doing. You just built off of the education you already had and you took a risk.
Reach Out to Jorge
Darin: So with that, thank you very much. Share with listeners, how can they get in touch with you if they want to get in touch with you?
Jorge: Thank you for giving us the opportunity to work with you. It was a pleasure. It was because you're a nice guy. No, it was great. As far as getting a hold of me, on LinkedIn, Facebook, Instagram, if you just search my name or my company, Elevate Commercial Investment Group, you'll find us. We're pretty active.
Go to my website, elevatecig.com, I've got a bunch of free content on there. If your audience wants to send me an email at Jorge, firstname.lastname@example.org, I can send them. I've got a couple of different checklists. Talked about sponsors. I've got a list of questions to ask sponsors before you invest passively and a checklist for due diligence and a couple of other things I can share.
Darin: This guy has a ton of stuff that he gives away for free because he cares about helping the next guy. You went from UPS worker to owning over 1,700 units, and you have a goal of getting to 10,000 multifamily units within the next two years. There is no excuse for anyone listening to not get involved. It's all in your mind. You have to get over that limiting belief and do what this guy did. Until next time, guys, signing off.