5 Talents Podcast - Passive Investing, Cashflow, & Wealth Creation in Commercial Real Estate

Ruben Greth - 2,000+ Wholesale Houses, 850+ Units Using Your Platform to Raise Capital

October 14, 2020 Abel Pacheco Season 1 Episode 18
5 Talents Podcast - Passive Investing, Cashflow, & Wealth Creation in Commercial Real Estate
Ruben Greth - 2,000+ Wholesale Houses, 850+ Units Using Your Platform to Raise Capital
Chapters
5 Talents Podcast - Passive Investing, Cashflow, & Wealth Creation in Commercial Real Estate
Ruben Greth - 2,000+ Wholesale Houses, 850+ Units Using Your Platform to Raise Capital
Oct 14, 2020 Season 1 Episode 18
Abel Pacheco

If you find the right deal, you’ll easily be able to raise the capital right? Today we’ll touch on this misconception with our guest Ruben Greth, Capital Manager at Bakerson. He and the capital management team at Bakerson have successfully placed, managed, and returned tens of million dollars by helping by primarily focusing on value-add and workforce apartments and managing every aspect of a project from start to finish.

Let’s tune in to Ruben’s dynamic story and learn how he leveraged his platforms to raise capital, build trust and awareness, and add value to his company.

[00:01 - 07:49] Opening Segment

  • Let’s get to know Ruben Greth 
  • Ruben gives us some background on his story 

[07:50 - 14:07] From Connector to Capital Raiser 

  • How Ruben started building his business 
  • Ruben shares the growth process and strategy 

[14:08 - 20:24] Financial Thermostat; Breaking Through Limiting Beliefs 

  • Ruben shares his story of going back into corporate then leaving again 
  • Breaking through the limiting beliefs
  • Building new partnerships  

[20:25 - 30:35] Using a Platform to Raise Capital 

  • Ruben talks about his current work with Bakerson and their model
  • Learning the most efficient way to gain brand awareness and build trust
  • Summarizing the Bakerson model and its value  

[30:36 - 35:47] The Skills to Make Profitable Deals 

  • Ruben talks about the plan and property types he focuses on 
  • Breaking through limiting beliefs regarding scaling 

[35:48 - 42:51] Advice to Investors and Operators 

  • Ruben give some insights from guests on his show 
  • Ruben’s advice for passive investors and operators

[42:53 - 51:50] Closing Segment

  • Connect with Ruben - links below 
  • Ruben gives insights to people transitioning into Multifamily 
  • Resources from Ruben - feel free to reach out
  • Final words of wisdom from Ruben and Me.


Tweetable Quotes:

“We thought this… ‘if we find the right deal, we’ll be able to raise the capital for it...’ and we found that to be the opposite.” - Ruben Greth 

“You have to get people to know, like, and trust you. If you don’t have a database of capital, of people, who share your vision and want to grow with you, then it’s very challenging to raise the capital from scratch…” - Ruben Greth 


Resources:


------------------------------------------------------------------------------------------

Connect with Ruben on LinkedIn, Instagram, and Facebook. Visit https://bakerson.com/ to learn more about offers and their Newsletter.

Guest Email: [email protected]

Connect with me:

https://www.5tcre.com/

Facebook

LinkedIn

Instagram

Watch 5T CRE on YouTube

Leave us a review and receive your free ebook

Email us --> [email protected]

Support the show (https://www.buymeacoffee.com/5Talents)

Show Notes Transcript

If you find the right deal, you’ll easily be able to raise the capital right? Today we’ll touch on this misconception with our guest Ruben Greth, Capital Manager at Bakerson. He and the capital management team at Bakerson have successfully placed, managed, and returned tens of million dollars by helping by primarily focusing on value-add and workforce apartments and managing every aspect of a project from start to finish.

Let’s tune in to Ruben’s dynamic story and learn how he leveraged his platforms to raise capital, build trust and awareness, and add value to his company.

[00:01 - 07:49] Opening Segment

  • Let’s get to know Ruben Greth 
  • Ruben gives us some background on his story 

[07:50 - 14:07] From Connector to Capital Raiser 

  • How Ruben started building his business 
  • Ruben shares the growth process and strategy 

[14:08 - 20:24] Financial Thermostat; Breaking Through Limiting Beliefs 

  • Ruben shares his story of going back into corporate then leaving again 
  • Breaking through the limiting beliefs
  • Building new partnerships  

[20:25 - 30:35] Using a Platform to Raise Capital 

  • Ruben talks about his current work with Bakerson and their model
  • Learning the most efficient way to gain brand awareness and build trust
  • Summarizing the Bakerson model and its value  

[30:36 - 35:47] The Skills to Make Profitable Deals 

  • Ruben talks about the plan and property types he focuses on 
  • Breaking through limiting beliefs regarding scaling 

[35:48 - 42:51] Advice to Investors and Operators 

  • Ruben give some insights from guests on his show 
  • Ruben’s advice for passive investors and operators

[42:53 - 51:50] Closing Segment

  • Connect with Ruben - links below 
  • Ruben gives insights to people transitioning into Multifamily 
  • Resources from Ruben - feel free to reach out
  • Final words of wisdom from Ruben and Me.


Tweetable Quotes:

“We thought this… ‘if we find the right deal, we’ll be able to raise the capital for it...’ and we found that to be the opposite.” - Ruben Greth 

“You have to get people to know, like, and trust you. If you don’t have a database of capital, of people, who share your vision and want to grow with you, then it’s very challenging to raise the capital from scratch…” - Ruben Greth 


Resources:


------------------------------------------------------------------------------------------

Connect with Ruben on LinkedIn, Instagram, and Facebook. Visit https://bakerson.com/ to learn more about offers and their Newsletter.

Guest Email: [email protected]

Connect with me:

https://www.5tcre.com/

Facebook

LinkedIn

Instagram

Watch 5T CRE on YouTube

Leave us a review and receive your free ebook

Email us --> [email protected]

Support the show (https://www.buymeacoffee.com/5Talents)

Speaker 1:

We tried a couple of things like going to a five Oh six C raising capital style where we could advertise and we thought, Oh, well, we'll figure it out that way. You know, we'll get new investors, but it's a long sales cycle and you have to get people to know like, and trust you. And if you don't have a database of capital of people that share and see your vision and want to grow with you, then it's very challenging to raise the capital from scratch. Once you've outgrown your friends and family capital. That's where we found ourselves maybe about a year and a half ago, right. When I came on board and they're like, so you know how to raise capital. And it was a little stressful at first because they were like, you know, go raise capital right now.

Speaker 2:

Hello. Hello. Welcome to the five talents podcast. I'm your host, Abel Pacheco. I interviewed the top commercial real estate investors and industry experts. So you can learn from their experiences. So if you're an investor, I'd high W2, earner, or real estate or tech sales professional that wants to invest in real estate without having to manage properties or leave your day job. Then this podcast is for you, or if you are ready investing in real estate, but you're doing it part time and you want to become a full time multifamily or full time commercial real estate investor. This podcast is for you. So you're going to learn a ton. You will learn from real life multifamily investors and other professionals in the industry. They're going to share their blueprints for success, and I'm super excited that you're here. So I hope you enjoy the show. Hello? Hello.

Speaker 1:

I am Abel Pacheco. I'm the president of five towns, commercial real estate. You are on our five talents podcast and we wanted to welcome just a really awesome guest. I met Ruben in the recent moments of probably the last year I'd followed him. I seen some of this content and he just seems like a really first class individual that generally sincerely cares about others and people. And so I thought, and I definitely wanted to have him on somebody that gives freely of his information, that content. And so let me introduce mr. Rubin, Greg , before I turn it over to you, Rebecca , I know you've got started really raising capital, right? So I think I got to raise 650 grand for small multifamily units in the last crash and you'd have on the internet, right. YouTube social. And so that's awesome. And now you work with a different company Baker sun , which the capital manager doing multifamily syndication there in Arizona. So we'll definitely dig into that, but man, give us a quick introduction. Tell us who you are and a little bit about yourself. Sweet man. Thank you so much for having me on your show and great introduction. I love the way that it's just flowing. So it's not like scripted and there's no bio that you're reading. I really love that aspect, but yeah, man, I,

Speaker 3:

In 2008, I just created a meetup and met a couple of people and just was like looking for a way to partner up on deals. And I knew a little bit about underwriting, but not too much. And we're just talking about small little under $200,000 , either small multis or single families that started recording people on YouTube and , and promoting them and , and receiving either a marketing fees for promote , you know, what they were doing on in terms of fixing flips or what their business model was. And then I came across this dude that came to town with a bankruptcy and started buying a bunch of fourplexes. He had raised probably about three or 400,000 and it was just buying them cash with his investors' money, creating LLCs, where they had partnership shares and decision making rights. And I'm like, dude, I don't know. So how you are doing this, I follow you around. And basically shared his model, how he was taken down properties, fixing them really quickly, analyzing them and tenant, occupying them and renovating them and putting them back on the market for resale within a very aggressive timescale, like 15 days. And just by sharing our model without ever asking people for money, we attracted some investors that were really interested in our model and they would come into town or we would have lunch with them. We'd show them our property, show them our track record, let them physically touch the assets, show them the equity position that we had and the , and the cashflow that we were creating at that time, which is completely different time today. But through that, we raised an additional 600,000 had raised like 50 grand for some small, some small single families and then 600 for a 12 Plex, a fourplex, a threeplex and another threeplex. And that's how I got started. It was a lot of fun. I created what , what is now known as a thought leadership platform? I didn't know what I was doing. Honestly, I was just recording somebody that was sharing concepts from the rich dad, poor dad book, you know, assets versus liabilities and getting out of the rat race and , uh, people really grab potato to it. So on YouTube Facebook, we shared our message and people invested about 600. He, I think he raised an additional, you know, maybe a little more than a million dollars. He took down 70 units. My share of that was 22 and we started growing and eventually we came across a situation where we were overleveraged . We were micromanaging our contractors and got to a point where we could no longer scale and started arguing a little bit. And we split ways and I disappeared from real estate altogether and ended up back in corporate America, hated it just cannot be behind a desk. It's just not for me. I , one day I quit took off to Mexico and spent about a down there. I met my wife along the way, came back home, tried to sell real estate. Wasn't very good at that. Probably because I was dealing with single families and small multis . I should have gotten into commercial resale, but eventually I asked my broker, I'm like, Hey man, I'm interested in this syndication thing. Like, I've just barely hearing about it. Who do you know that syndicated properties? And he introduced me to Baker CIN . So I interviewed them was like, Hey, I'm looking at syndication. Who do I need on my team? And they turned it around on me and said, well, why do you care about multifamily? I explained, you know, I saw it as a great Avenue for generational wealth and legacy investing. And there's a lot of tax benefits and whatnot. So they broke it down for me. They're just like, so you have raised capital on social media and you have a little bit of social media presence. We don't have that. Why don't you just come work with us? Cause I was about to drop some cash on a guru and they're just like, yeah, yeah, don't do that. Why don't you just come work with us? So that was the beginning of my relationship with Baker center . It's been a fun ride. They have a pretty solid track record, 850 units here in Arizona and that's where I'm at now. So I started a podcast to get recognition for them. And it's been a great ride.

Speaker 1:

Yeah. What a story, man. So I definitely want to dig in here, but that's awesome. Congratulations, kudos to you. And you know, it's really just taking action. I think even in the beginning, you know, the way I heard it is I've never done this before. I'm not sure I was creating a platform back then, but you had a thought process to record somebody thought it was worth value. And like maybe somebody a little , see , want to see this and you did it. And then you created value for you and your partnership and man, that's awesome. So let's start there. Mr. Rubin, Greg man, I'm excited that I'm excited to hear your check . So the 2008 run, I was also in technology for 13 years of corporate world. So I kind of remember 2006. There was no iPhone. I think MySpace had just started and LinkedIn may have been later. I don't think it came in. I was six or eight. I think

Speaker 3:

It was different back then. But yeah, it was there

Speaker 1:

And YouTube was actually one of our customers where I worked at Rackspace. We serve them and they were a huge customer. And anyways, we would always hear funny stories about these videos that would go viral and they need people need more servers. So I imagine it was some of them were yours. Yeah . That's awesome. So in that space, what said to you, Hey, I think I should record this. I think I should record it. And I think it should put it out there. Were you thinking about money or pay-per-click or ads or what, what was it that said, you know what, I'm going to record this to make sense. People want to see this.

Speaker 3:

So I used to label myself as a connector back then I had a meetup and really, I was trying to put people together and figure out a way to make money in the process and didn't know how to do it legally. But I had studied a little bit of the legalities of capital raising and it was a little different back then, but I did know a couple of main things. Right? So you can't promise any type of return, any type of specific number and same thing like from the lending industry, right? So there's regulation Z I think, or a couple of other things and lending where you can't say, Hey, this is the interest that we're offering. You have to follow a specific protocol and you can share that you have great deals or great interest rates that you can offer. And very similarly in the capital raising space or the, or the real estate investing space, you can't promise anybody any specific return unless it's one investor in a note. And even then it's pretty sketchy. So I knew that you can't bring on somebody that's a passive investor or somebody that doesn't have an active role and do it legally. So we never tried to do that. We just try to share our message. And as a result, you know, I got an ownership share of the property and I was doing stuff. So I was finding the property, putting them under contract, analyzing them and had a significant role in terms of the investor relations. Even though that sounds silly because we were just taking down four unit properties, but also in terms of the decision makers ,

Speaker 1:

Significant amount of money, which, you know, you gotta make sure you're involved in the analysis and this is a good deal. And then, you know, I want to know where my money is, right? So I'm going to call Rubin . Here's a guy that I followed.

Speaker 3:

Yeah. Yeah. It was me touting somebody else that had a track record that was really good at it. And sure enough, we partnered up with some people, they brought all the cash and we would just create an LLC and they would have decision making rights and they would walk the properties, look at them, check them out, purchase them all cash. They were JV, which is a very different, by the way, it's a very different way of raising capital versus what, you know, we know as syndication limited partner capital, which is a totally different process, very different life cycle or sales cycle better said than just bringing somebody on as a joint venture partner, people require a different level of communication and in the syndication space and they do as a direct partner. Yep .

Speaker 1:

I'm going to cut a couple of babies right now. So I'm like, Oh yeah. Think about the communication level is different and you know, the expectations are different and no one's limited. No, one's passive. Like everybody's got a decision making voice at the table, right?

Speaker 3:

Yeah. It has to be written down into the agreement, which I'm not sure that we were totally good at that. Comparatively speaking to, you know, a large multifamily, what you have to write down in terms of your ongoing roles back then, Hey, let's just put together an LLC and you know , we'll own it together and we'll have different roles, not totally clear in of what you're supposed to do. Looking back on. That was a big learning process when I compare it to the way that we would coast syndicate or do a joint venture in today's world of larger deals.

Speaker 1:

Yup . Yup . All right . Well, that's awesome. So how long did you do that for

Speaker 3:

Let's see from, it was a little bit later than you mentioned. So 2008 was the beginning of the crash by 2000 at the end of 2009, I think Arizona had hit rock bottom and hit a really hardcore, we had this weird law where there was this sheriff in town, Joe, our PIO , and he facilitated a specific bill passing that made it very challenging for immigrant workers to stay here or to find new jobs. And pretty much overnight the entire small multifamily market became vacant and there was distressed multi-families at the bottom of the crash for $20,000 a unit right on the MLS. And we would cherry pick them. But it was a very interesting time because a lot of people suffered. I don't know that Texas suffered the same way, but I know that they were affected Florida, Nevada, Arizona, and I'm forgetting one market, but those three ones were severely impacted and there was so much stuff available that you could literally just go on the MLS, find a property. I used to drive like 30, 40 properties a week just going through neighborhoods all across Phoenix, looking to see what made sense visually. Right? Empirically speaking, I would look at our property if it had missing AC units or I would go and kind of peek around. I've had wires yanked. I knew immediately. That's probably a bigger undertaking that we wanted to, but there was plenty on the market that were almost like rent ready. You just had to go in and change some countertops, maybe replace some carpet, fix some windows, do some landscaping and then purchase it, printed it back on the market. And if you had an effective strategy to get people into the property, you know, new residents, it was a killer model back in that day, which no longer exists. Right. But it was a lot of fun at the time

Speaker 1:

You left that, you know, obviously I understand in partnership in business, it's one of the key things that, you know, I think about a lot is like you got to have great partners. They have to be able to match your communication level. They have to be able to have the same values. They have to be able to deliver on their commitments. It's super important. She's right. Partner. As you're learning this, we also grow and change sometimes. Right? So at the beginning it may be been good. And then at the end kind of breaking up and going back, but you didn't go into real estate. You went to the corporate world and then back to real estate, but into multifamily. Tell me a little bit about that mindset. Like, it sounds like you had something good and then you left and they're like, man, why'd you come back and then why multifamily? And I've single family. I'd love to just hear this side of it.

Speaker 3:

Yes. Let's talk about financial thermostat. Right? So everybody has a specific belief system that they are worth so much. Like in my case, I got a partner that could really elevate me. And that doesn't mean specifically that I had arrived. Although I thought it at the time, my partner, because we found ourselves being over leveraged in terms of, you know, we were really micromanaging the contractors and got to a point where we had no time left to acquire new properties. He basically broke it down this way. This is an interesting part. We thought that we had such a great model that he was like, Hey, we don't need two machines doing the exact same thing, underwriting properties, putting them under contract, getting them ready to purchase and to partner with why don't you let me handle that? And you, because you raise capital on social media, which he thought was astounding, why don't you focus on marketing? So I'm like, okay, if you want to go that way a little , let's really take it to the next level. And we were going to get a book written. We were going to create a CD program. We were even to the point where, you know, email drip campaign, all of that stuff was starting to fall into place. And I hired this group out of San Diego to come into town and to film us, we were creating a pilot series or maybe like a trailer for a pilot series that we were going to pitch the a and E and my partner started not showing up because he just had no time. And I had this money invested in him and he started flaking or at least that's what it felt like. And it wasn't his fault. We were scaling so big that we didn't know what we didn't know. And we started fighting a little bit. So we ended up splitting up because of my own limiting belief system thought that like, well, multifamily partners don't grow on trees. I don't have anybody else to tout. I don't want to go back into raising money for single family. What do I do? I'm out of cash. We had flipped our properties. I was making good money off of them, but I no longer had a partner. And I didn't know where to look. And I didn't have enough of a belief system in myself to basically raise capital on my own. And on top of that, there's this other thing called the team sport, right? So in multifamily, you want to be with somebody. And I had a bad experience breaking up with him and tried to do it on my own, which caused a lot of, you know , tire burning tire spinning where I wasn't able to move forward. So that's why I got stuck back in corporate America. I had run out of capital and it just wasn't the right Avenue for me. Now I look at it as a blessing, right? So God puts paths , you know, for you in place. And you may not understand why they're happening at the time. But as a result of me breaking up with him and not liking corporate America, I took off to Mexico. And I mentioned earlier because this happened, I was able to meet my wife, who I'm madly in love with, and that would have never happened if I had not broken up with him, I would have just probably who knows. I might have figured out a way to scale onto multifamily and then been alone and miserable. But now instead I have a wife that supports me and through the inspiration that she gives me, I was able to attract a new partner many years later, but nonetheless, where we can continue to grow and do some new things. And, you know, they say that every successful man has a amazing person behind them. And for me, that's my wife. And it's the same thing for women, right? So every successful woman has an amazing person and behind them too. And I feel like we have that collaboration and that partnership between us as man and wife. So it's just been amazing and she's younger still, and she's going through a lot of the growing pains of learning to focus on one thing. But that's where I was when I was her age. And, you know, I think she's learning a lot from the fact that I am really disciplined in that I'm going to do one thing and master it and not split out until it is established at a very high level. And she sees that. And I think she's starting to pick up on, Hey, you know, let me figure out one thing to do and master it. And it's been really cool for both of us.

Speaker 1:

Yeah, that's awesome. So a few of those things are just to point out for the listeners. I mean, I , I heard if , if I could summarize some of the tools that original limiting belief that Rubin had and the ability to break through that is where, you know, I spend a lot of my time just probably like Rubin Eva's now, today, it's just a different limiting belief, but you've got to break through that, you know, in order to do great things that obviously the stories like, man, if that wouldn't have happened, then he wouldn't have met his wife, which is awesome. And then your wife, and now the focus part, I'm the shiny object, the same way if anybody's listening or watching this, you know, and you're trying to chase all these different strategies, you're going to find that focus in one direction, one path first until you kind of have that degree of mastery that has proved success for me over and over and over again in the professional career, in real estate. And even now certain segments of real estate, the more focused, the better it is, you can weed through everything and see the opportunity. So that's awesome. Ruben , so thanks for sharing. Thanks. Yeah, yeah, absolutely. So today, today you're with a firm called Baker sin . So , or a group maybe enlighten us , like, what are you doing today right now? So

Speaker 3:

Who is Baker said ? And I'll answer that question. We, we are a family business, right? So there's the main CEO. Bruce will let his son, his brother in law and there's about seven or eight of us on the team. Some us are employees, some of us are partners. And we started by wholesaling properties. We got really good at it. We're talking about 2002, between 2002 and 2014. I believe we wholesale 2000 plus houses and got really good at that. But as a lot of people know, you have to be able to shift and adapt and through these different real estate cycles and new technology systems that have come on board where people can find properties at auction very easily through just technology. They started weeding us out, making it very challenging for us to compete with them. So we had moved into wholesaling, multifamily and sold a couple of properties to some bigger investors and watched what they did. They would take the property, renovate it, put it back on the market within a couple of years and make a couple million dollars. And we're like, wow, we have to figure out how to do this. So we started syndicating properties and took our investor database from the wholesaling business into that purchase . 16 properties as little as eight units, as big as 120 units. And we scale to the point where we could no longer grow anymore with our existing database. They were all invested in our deals. And we tried looking at, we thought this, and this is a common misconception. If we find the right deal, we'll be able to raise the capital for it. But if we just hustle strong enough, it's based on the numbers. And we found that to be the opposite and small multifamily or small deals. That was actually true. But once we got into the syndicating model, we could no longer do that. So we tried a couple of things like going to a five Oh six C raising capital style where we could advertise and we thought, Oh, well, we'll figure it out that way. You know, we'll get new investors, but it's a long sales cycle and you have to get people to know like, and trust you. And if you don't have a database of capital of people that share and see your vision and want to grow with you, then it's very challenging to raise the capital from scratch. Once you've outgrown your friends and family capital. That's where we found ourselves maybe about a year and a half ago, right. When I came on board and they're like, so you know how to raise capital. And it was a little stressful at first because they were like, you know, go raise capital right now. We need to have some great deals. And it's just like, I'm starting from scratch. And I have a data base. I don't have anything. I have no social media presence. All I knew was that if I started a podcast, it probably the new school version of a thought leadership platform, interview based thought leadership platform. And that we could, that could be the most efficient, effective way to get brand awareness for us in the quickest way possible. And that's really what I've been focused on. I've grown the business, I've done some social media for them, really on a national level where I'm talking to people all across the country and sharing our message all across the country. And people are starting to find out, even though we're small local operators who we are, you know, all across the nation. And it's been really effective in terms of creating and establishing new relationships with people that can maybe help us scale a lot faster than we thought possible, creating this database of limited partners, which we also want to do. And we have some systems in place that we're implementing the communication infrastructures that we're implementing for that. But in an immediate time, we have a 90 unit that we're looking to partner up with. And we've had a couple of the properties that we're liquidating because our partners have been short term and we're really evolved from this buy fix and sell multifamily, you know, like 75 unit type properties to a buy fix and hold, you know, forever with a compounding legacy type investment style where the investors get their capital back in year three, but yet maintain ownership into perpetuities. So we're really focused on building that model out in a presentable way, because, you know , we can share that model on an Excel spreadsheet, or we could really have some visually appealing communication with people that want to potentially partner with this that is really required in today's market. You know, if we're scaling into bigger deals, do you have to compete with these other guys that have all of this communication and, and visually appealing presentation styles for their deals. And that's where we find ourselves today is, Hey, you know, as we grow, let's create a system and communication system and visually appealing software or slide deck is, I guess, is what they call it so that people can see us as credible, because we're really good at finding and acquiring deals, but we're not so good at the social media side, I guess I've helped a lot with that. But like in terms of presenting something that people can really find appealing in terms of a deal deck or a slide deck for a deal, we've really started stepping up our game in that regard.

Speaker 1:

So yes, there's a lot there. And I, I heard a lot of things that I love . Like Rubin's let me backtrack one too . So it sounds like everything at Baker center is doing amazing. So wish you a ton of success there. Thanks. One of them was the fact that when you're raising capital for single family, which I started in single family, I was there for 10 years as well. And if we find a good deal, it can come because you have one investor, a hundred K. Okay, cool. I got this one up there. Many people floated out there, you can get some capital, but if you're trying to raise several millions of dollars at once in 45 days for due diligence, and then a few days to close it, like, woo , it's a different position. So having the platform is super valuable and I a hundred percent agree writing and it doesn't start, you know, I met somebody today and maybe they're going to invest tomorrow. Like he says, not a speed thing, but it's Baker center . They want to know Rubin . They want to know who you are and, you know, do you do deals this way or that way, are you conservative or risky? And, you know, and do you do a buy and hold forever, which is super cool.

Speaker 3:

We'll talk about that in a minute. Or, you know, am I going to just fix and repair it and then get it out there as quickly as possible and get my money back in a year or somewhere in between. Right. So knowing you over time, I think that's pretty awesome. And then people start to know, Oh, this is who I am and you know what I believe in. So that's great. And then I also heard, you know, the part that I want to ask a few questions on for the family listeners is so Baker seven for you guys. I like the model where you can invest in it. And then maybe at some, like you said, three years, I'm assuming, tell me, this is right. You're pushing the NOI up, increasing rents or decreasing expenses, whatever that may be, the value is higher. You refinance, everyone gets a seed, their seed money back. Yeah . Then you're like, Hey, we're going to cashflow this thing for, for frigging ever. And now we're buying holders. Is that right? Yeah. So what's really sexy about that model is that people can use one initial capital investment to get their money back and reinvest it. And then hopefully another two or three years get that money back and then reinvest it . So one piece of seed capital can get you into four or five deals over a 10 year period of time, which increases your returns exponentially. We're not the only people that do this model. We just like this. And some people that have only a buy and hold model, their investors just stay in it forever. And that can be great. But for the people that like to turn their money around on a regular basis, that's an objection that they might have is, Hey, I don't want to have my money in one place for 10 years. This solves that specific problem. And then it gives them a really big kicker in the sense that they get to keep ownership and cashflow into perpetuity for as long as we hold the deal. Not to mention that when you give people their cash back completely, if your strategy is to sell in five to seven years, they have to go then turn around and find a new deal with either a new operator or a new market or whatnot, and pay the capital gains on it, unless they 10 31, if that's even a possibility. So it solves a lot of those problems. And if we become an operator that allows for them to reinvest with us and diversify into multiple properties with one specific capital investment, that that solves a lot of problems for a lot of people. So it's a great model. We're very interested in exploring and explaining and getting it written down into paper and in a presentable way so that people can see it. And we're super excited about it.

Speaker 2:

Hello. Hello, you're listening to the five talents podcast. I'm your host, Abel Pacheco. If you're enjoying this podcast, then I know you're serious about achieving financial freedom. Are you ready to create your own path or multifamily investing for yourself and your family? Then I know you're going to appreciate our investor's guide to multifamily investing. It's titled tackling commercial real estate. The easy way we use this guide to invest ourselves in $93 million worth of real estate. So we're going to show you the basic mechanics of multifamily syndications, and how to evaluate your next passive investment opportunity. So the best part, if you subscribe to our podcast, now leave us a review and a rating. I'm going to give you a free copy of our ebook. So please take a moment to do that. Now, once you've done that, go to five T C R e.com forward slash new book five T cre.com forward slash new book . Make sure to let us know you left a review and we're going to send you a free copy. So thank you so much for subscribing to the five towns podcast. We really appreciate it.

Speaker 3:

Yeah, that's awesome. I haven't done a deal where I'm holding it that long, but we definitely did a longer deal like eight years plus. And, you know, in that it was similar with trying to refinance and get some money back out. So it was really cool, man. So the position that you're in today now, okay. We're green light go , uh , see me on a lot of LinkedIn. I've seen you on, you know , your , you know , me as a guest on your podcast. So that was really cool. Great stuff. Good summary. I was like, I like the way it's well put together, you're attracting more people that are interested in, you know , new projects, right? So maybe give us an idea of the, like what's your property type and, you know, everyone has different property types that you're looking at. Are you doing, you know , B and C value, add a hundred plus units? Are you doing, you know, other types of opportunities? You give me a little bit, you know , idea of what you guys go after today. Yeah. I can tell you what the ideal scenario is and what the reality scenario is. So we want it , we want to take 150 units down where it's very competitive in Phoenix and in Tucson for that specific market. There's not a lot of properties. We think that we can find one. I think one of the major points that I want to contribute to is that a lot of people, particularly me coming from the crash, we used to buy stuff by units, particularly cheaper than we buy them for now. And a lot of people get stuck on, well , I used to pay 60,000 a unit or 50,000 unit , and I still want to find those deals. So I'm not even going to offer on something that doesn't hit that threshold. Then the reality is, is that with the market evolving into what it currently is, you probably have to pay more per unit to get a good deal of value, add deal. But if you break them down in terms of numbers, can you still make it work? And do you have the foresight with what the market is doing? And the belief that there's not a correction coming or that you can stress as a property to the point where even if it goes down in terms of, you know , rent increase and some market fluctuations happens where jobs stop coming in, or population stops coming in, can you still make it cash flow and produce a return? And I think that if you open your eyes to the fact that properties cost a little bit more than they did back in the day per unit, but you can still make them work. If you have the right underwriting software or right underwriting skillsets , that's kind of where we find ourselves today. So we're starting to look at, Hey, you know, we're just going to have to pay a little bit more per unit in Phoenix, but that's the only way that we can take these down because the old pricing doesn't exist. But if we underwrite it correctly, we can still make this a profitable deal and then scale into the next level where we've going from a hundred units, 250 250, and look at it that way. So let's go back to the reality of the situation. As we're a little bit nervous to scale into that size property, we still need to pay for the lights, right? So we're looking at some smaller deals, some eight units and 50 units to 25 units, redevelopment deals. There's one individual deal where somebody is struggling to make the deal continue where they've run out of capital. And there's like four constructed buildings and a bunch of infrastructure, entitlements and foundations in place to build the rest of the 12 unit complex. And we've, we have a little bit of experience with this type of thing where we find small deals and flip them one by one, resell them. We took down 39 units in Tucson. They were all townhomes portfolio and we've been flipping them one after another one at a time. And that has been able to provide some additional income while we're looking for deals. And that's where we find ourselves today is, Hey, let's look at a couple of things. Maybe some development deals or some small deals that are very profitable or can keep the lights on as we search out these larger deals. And that's ideally what we want. We've had a few partners come on and say, Hey, you find 150 unit deal. We'll give you a $3 million check, but that's probably the bottom end of what we want to invest. And it's scary because you don't know if they're telling the truth or if they'll back out, or if they're legitimately interested in the type of properties that you're looking for. But we have a lot of interest in Arizona because it's so close to California and your dollar goes a lot further here than it does over there. And it's just a matter of like, Hey, breaking through that belief that it's, you know, it's kind of scary to get to 150 units plus , but we have some capital partners in place already through the relationships that I've built through the capital raiser show. And over the last six to 12 months that have said, Hey, we like what you're doing, man. Let's just take it to the next level,

Speaker 1:

Kudos to you. So I'll highlight a couple of things though, as well. So one I heard while your goal to get these longterm holds the active capital, which is needed today. I like the townhome model, big acquisition, sell it off these by piece. And that puts some money in the kitty and you guys can keep going on. Right? So, and then the another one or your goal, and then the reality of what's happening. So Ruben mentioned a couple of things for maybe potentially the brand new passive investors that are trying to figure out, well, how do I make sense of it? Right. He mentioned underwriting assumptions modeling, and really, you know, as , as he mentioned, there's some different ways to he call it stress test , right? So you're , you're trying to Rubin say, Hey, I think we can buy this property at 10 million bucks. And if I put some assumptions on rental increase or reducing expenses or whatever the business plan is, you're trying to say, I'm going to take it from 10 and move it to 12. Well, that's the goal, but what happens? The stress test part is what happens if some of the population leaves the area or continuing unemployment or COVID happens. This is, you know, it's August, 2020. So we're right in the middle of all this stuff. So what happens if in a city or a market, it drops that sensitivity analysis. Some of the other finance guys will say either which way it's saying, if this apartment complex drops , uh , you know , like 80% full, can I still pay the bills, right. If it drops up , what point will this analysis drop to that I can afford to still pain , make the bills? And I think that's what a lot of passive investors, maybe they don't understand the difference between, you know , a good deal and a great deal, a good deal, and a great deal, kind of great deal to say, Hey man, you've got to DCR a debt coverage ratio to X and you can make this payment and it's well capitalized. So what Rubin's talking about, and I would reach out to him being him for that. And that's a good mindset to have to stay conservative in your underwriting. Your goal is this having been able to underwrite for that. So we're trying to make some app active capital from now , so that Travis, go ahead, go ahead.

Speaker 3:

The squats came on my show and he's a passive investor. And he said, when he was first getting started, he would look at operators. And if somebody said, I've got a 10% return and somebody else has an 8%, he would always go at the beginning with the 10% that projected and then realize that, Oh, well just because somebody is offering a bigger return, doesn't necessarily mean that the investor experience or the actual return is going to be what they say they are. And it was, he learned along the way was that it's really a lot more important to have an alignment of interest with the operator know, like, and trust them and have a faith and belief in them and see their track record and really vet them out. And the actual return that people are offering is less important than who you're working with. Right. So that's a big part. If we're going to be talking specifically to the passive investor out there, or the beginning, passive investor, specifically, maybe my invitation to you would be really check out a few different operators and don't always necessarily go with the biggest potential return, but go with the operator that you trust the most, that has the most reliable track .

Speaker 1:

Yeah. That was a great point. That's Travis. Why ? So I'll have to reach out to him and see if he wants to come on our show. And so a nugget also is for the general partners, the operators, the principals and sponsors Ruben mentioned, Hey, that's some investor that says, you know, I got a million bucks, I got 2 million, I got three let's go. And if that comes from a single source and you're relying on that single source and you find this amazing deal and that investor falls through man, you've, you've spent all this time, effort and energy, your reputation with their broker reputation, with the seller reputation in the market, all these things are like, Oh , they're going to suffer. And to mention your hard money on the line and hard money and it , you know, everything out there. So what you want to definitely do for as you're an operator is , man, don't put your, you know, don't put everything in that one basket. So definitely diversify. You want to have a ton of investors. You want to have a great opportunity and you know, so great nugget on that side for the new, or, you know , maybe even seasoned operators that just kind of are going after it. So, okay. Good stuff.

Speaker 3:

Yeah. It's a very different type of capital raise when your avatar is the coast syndicator versus limited partner, it's also a different capital raise. What I've learned on this show is that there's these institutions that have funds and they can basically do the same thing, leave you hanging, or family office or private equity firms or broker dealers. Or sometimes you think that you're talking to a , the money source and you're really not. You're talking to the intermediary or middleman, and it's kind of a different capital play when you're looking at raising money from these large sources, because they will often want to take out some of your fees, making it less profitable for you. But man, if you can create one of these relationships, which we're really seeking, that can come in and fund your deals over and over, wow. Maybe you take a little bit less on each deal, but you can scale a lot faster. So those are some of the benefits and problems with going after these bigger investors. Not to mention that these guys are probably so sophisticated, we're talking about Wharton MBAs and people that probably have plays that you haven't experienced. You have to be super careful and maybe put them in a situation where they have some money on the line. And if they back out at the last minute, they lose too . So that's some of the stuff that I've learned in terms of those types of capital races . There are so many different ways, right? So you go joint venture capital, you can go limited partner capital. You can go institutional capital, you can joint venture. It's different in every scenario.

Speaker 1:

Got it. And Baker , and do you guys partner with other syndicators that are also raising capital and kind of doing deals together or do you keep it in house and just your team?

Speaker 3:

We haven't yet. So that's kind of the thing that I'm bringing is that I'm really pushing for this. And I think the team is open to it. We haven't done it as of yet. And that opens up a whole nother can of worms, right? Is how do you create the co syndication partner? And then there's this like kind of a sliding scale of what do you bring as a capital partner? Is it just the money and maybe some investor relations or is it like you're going to bring some additional assets like property management or an ability that maybe not everybody knows of to lower the expenses on the property, special negotiations with the utility companies or special tools that you can bring onto the property, where everybody gets, you know, a cable for a specific price. And then that increases the NOI because now you're getting paid on that too. There's all these little intricacies. And if you've never partnered with anybody, it's just like, you have to learn to negotiate that. Now I would say that we find ourselves in that place where we're open to doing it, but because we don't have a track record of doing it, you probably want to find somebody who has already coast syndicated to lean on that ability that they have in terms of structuring the partnership. Because if we bring on somebody, that's looking for us to be the lead sponsor on a deal, which we have some people like that, but we've never done it. Then that creates this kind of curiosity, this place of like, how do we structure this? And we're not totally sure that we know how to do it. What we do know is that we have some potential partners that have coast syndicated in the past that can guide us along that route. So as we're scaling and growing, there's these growing pains and the evolutionary process that we have to go through. And a lot of that requires us to vary , you know, to do a great job of vetting our potential partner. And we feel that we have those pieces in place.

Speaker 1:

Nope. All right . That makes a lot of sense. Well, you've been extremely generous with your time. I have a couple more questions, but before we wrap it up, if somebody is trying to get into your world, they're trying to connect with you. They want to reach you, where do they go? How do I reach ?

Speaker 3:

Yeah . I connect with a lot of people on LinkedIn. I have a handle on Instagram at capital raiser, but you can check us out at [inaudible] dot com. See our offerings sign up for our investor newsletter, same thing with the capital raiser show. You can go on there, get hooked up with a newsletter that we have for getting, you know, basically just sending out what we're doing. You know, our shows who's come on. What are they talked about? Because there's a lot of different people that talk about different aspects of capital-raising , that's kind of fun, but that's it. I mean, essentially go check us out on bigger sin.com or follow me on LinkedIn is really where I like to network a lot.

Speaker 1:

Very good. I'll make sure to put those in our show notes. And you know, before you go, though, is there any topic that we really didn't cover that you were, you know , just dying to provide some of our listeners value, any certain area?

Speaker 3:

Well, if we're talking about people that are getting started or evolving into syndication from a single family space, I always like to invite people to master one specific Avenue or, or aspect of the thing that they want to do, particularly if you're just getting started. We mentioned it before the shiny object syndrome. When I first got started in real estate, I learned all these strategies. So there was like subject twos and rehabs and note investing and multifamily investing and negotiations and just the list went on and on. And I wanted this investor label, right? So I could say I was an actual investor, right. And I didn't really hone in on one specific strategy. So I didn't begin having any success until I locked into multifamily and specifically a aspect of multifamily, which is the capital raising portion. So I've been really focused on investor relations, social media marketing, and trying to dial in those process and becoming a master of that one aspect, which is capital raising. So if you're looking to get into multifamily, you know, you can do a call with different ways, but don't lose your focus. You can go from a passive investor like Abel did to an active syndicator and then get some coaching along the way, which is a great Avenue, but maybe focus on one specific thing that you can master along the way before you try and do it and find some partners that you can lean on their track record and ride their coattails,

Speaker 1:

Some good advice or event . Thank you. So the most recent book, whatever it is, media, whether it's YouTube or a webinar or a book, where's your comments .

Speaker 3:

Yeah. I'll mention no, you're good. Brother. I'll mention two books. My favorite book of all time, which is by Wayne Dyer, it's called the power of intention. And it really talks about living a life of peace and attracting things into your life, through a process called manifestation, which some people buy into. And some people don't, depending on the language they use, because some people call it mindset. Some people call it peak performance. Some people call it autosuggestion. Some people call it meditation. Some spiritual people call it faith. There's a lot of different languages for the exact same processes, which is going into a place of praying from a place of gratitude as if you already have the things that you want. So that's what that book is about. It's called the power of intention by Wayne Dyer. And right now I'm reading a book by Richard C. Wilson called raising capital, I believe. And it really talks about establishing a specific things in your business for raising capital, whether it's the creation of an avatar or a marketing system and a SWOT analysis for your competitors. And some of it is like a buffet to me where I get to pick and choose the things that I like and that I don't like. But that's one of the books that I'm reading right now. And for anybody that's interested, we have a book racing club through Logan Freeman and Jerome Meyers , where we're constantly talking about raising capital and masterminding about different for anybody that's in the raising capital space, reach out to me or Logan or Jerome Meyers to become a part of that and share ideas with us or learn from us as we are learning ourselves on that.

Speaker 1:

I think I've seen, y'all kind of publish that. So it's similar to a mastermind, but around a specific book, is it a , a group we've got to pay for? We can join together ,

Speaker 3:

It's free. And a lot of people don't take advantage of things that are free, but this is something that we break down on a hardcore level. We break down, we read a book, we dissect a chapter by chapter. We get on a, somebody as a lead chapter, you know , describer of what they learned. And then that the rest of the team all goes in and says, Hey, this is what I learned or I didn't learn, or what I liked or didn't like, and then on some books, like if they have a worksheet or specific protocols to develop yourselves as a group, we'll dive into that. Like we're going to, in a couple of days, we're going to basically talk about what our avatar is, what our competitors are doing and all of these other things that are on the worksheet that we have to really dive into and to do it in a group environment for free with people that are amazing at raising capital and in the multifamily syndication space. It's just like an immense amount of value that doesn't cost anything. And we are open to having anybody come on there. For sure .

Speaker 1:

That's good. You guys should join probably ended up reaching out to you or that for me too . Well, Ruben, thank you very much for your time. We sincerely appreciate it. You joining this has been a segment here for the five talents podcast. My name again is able , but check it out . I'm the principal of a five T CRE. So if you were interested in learning a little bit about us, we're going to broadcast this podcast on whatever the Apple version, the Stitcher Virgin for Android, and probably put links to our videos on our YouTube page as well. So five T C R e.com. You can go hit that. And if you're a passive investor, you can find some other resources. We're just about to publish a passive investing guide or a free ebook. So that'll be available. But actually by the time this comes out of Ruben , I'll have my first ebook out there. So sense .

Speaker 3:

Well, yeah, man , don't be afraid. I know that when I got started podcasting, I never asked for a five star rating. So for the audience assisting Ebell is an amazing individual. That's rocking it out in San Antonio and for him to grow his podcast, he could definitely appreciate you going on to his Apple podcast and leaving a five-star written review. And that's one thing that I'm going to do right after the show, man. I appreciate it. It's been a pleasure and thank you very much and I appreciate it, man . Decent strength guys.

Speaker 2:

Thank you for listening to this episode of the five talents podcast with your host myself, Abel Pacheco, each week, we're going to bring you interviews from industry experts in commercial real estate investors who followed their dreams and achieved massive success. Before you leave. Let me ask you a few questions. Did you enjoy this episode? Did you learn something valuable? Was your mind stretched to what's possible and what you can achieve? Do you want other experts? Just like the one you heard today, if you answered yes to any or all of those questions, then please take a moment to subscribe to the five talents podcast. Give us a five star rating. And most importantly, leave us a written review. Tell us what you liked. Tell us your favorite guests. Give us any feedback. I'm excited to learn and improve so you can get a more valuable shelf. So thank you again for subscribing to the five talents, podcasts.