Building Affordable Housing in High-Demand Areas || Isabel & Juan Perez

About real estate, Juan, Isabel. How you guys doing?

Good. How are you?

How are you?

Good. Good to see you guys again. Well, great. Well, good to have you on. You know, I typically just like to start. Why don't you just tell us a little bit about your background? How did you guys get into real estate in the first place?

Yeah, we started as a realtors almost ten years ago. We we sell. We used to represent buyers and sellers, but. we started looking for that passive income. So we bought some houses, we did fix and flips, we sold those houses. Back in 2016, the fix and flip market was going down, the profits really low. So we started seeing vacant lots, scattered lots, and we started buying it. Uh, We initiate constructions, and, and then some friends and family join us, and, and now we are here. Now we are— we have built over 250 houses in the past, uh, 6 years.

Wow, 6 years, 250 homes. So are you, are you developing those ground up, ground up from like dirt entitlement? Yes, everything.

Yes, yes. We clear up the lot and we start from scratch.

And then are you, are you selling those like retail individually, or are you kind of block selling them, wholesaling them to investment groups, or, uh, you know, what does that process look like?

We sell it, uh, retail through the MLS.

Gotcha.

Cool.

Well, that's awesome. And, uh, primarily, where do you guys, uh, Where are you based out of?

We are in Orlando, Central Florida. We are building in Ocala, Ocala, Florida.

Okay, also in Florida. So you guys get a state of the home state then, huh?

Yes, correct.

Correct.

Love it, love it. Got you. So you started as agents, right? Just brokering deals, and then you got into development. You know, we have a lot of listeners that are nervous to just get into their first deal, right? And, and actually, you know, go from some sort of W-2 job or role or, um, and then finally to, you know, taking down their first investment opportunity. So, you know, what, what advice would you have, you know, to someone who's just totally brand new, you know, thinking about getting into maybe real estate or some other investment opportunity? Um, what advice would you have for them?

Surround with the right people. If you're going to do it by yourself, it is really difficult, and you will pay the price to learn. So surround with the people that have knowledge. Leverage is not only in other people's money, it's other people's time, other people's knowledge. So that is my best advice.

So, okay, going off of that, like, what if I don't know anybody? Right. Like, where do I, where do I go to find people that, you know, I should be surrounding myself with?

Let's talk. Talk with me.

Okay.

There we go. I mean, what did, what did you guys do? You know, how did you start getting connected? You know, did you go to local chapters? Did you join communities? Like, you know, what sort of approaches, you know, would you recommend to others as well?

We started in a brokerage investment focus. So we all in this brokerage, we all bought our own houses, and, and basically it was the, the, the, the main focus of the, of the brokerage. That—

and yeah, so we had that guidance, you know. So even though, um, there's a lot of things that you just learn when you, when you get in it, like you have to get your feet wet, you know, and, and that's when you start getting all this All this knowledge, and for more than others come and try to tell you do this this way and that way. There's there's a lot more to learn when you're when you're at it. But we had amazing people that helped us and guided us, and that's that's the way that we started. And we started, like Juan said, with flipping homes. So, and when we started doing the building, the you know when when we started building the homes, we thought it was going to be very similar. to flipping, and it wasn't. So it was a very— it was a difficult curve, right?

Learning curve.

It was a learning curve, and it was the only way for us to get all that knowledge, just to get wet and do it.

Yes.

Yeah. So how did you fall into then affordable housing? Why that niche? Uh, in particular? Uh, what did you just kind of, you know, fall upon it, or, you know, how did that happen?

After, after analyzing the different niches, uh, we see we can do Section 8, we can do luxury homes, we can do average homes, but we realize that affordable housing, it's, it's called an anti-crisis. So if somebody is renting and he can buy his first house That is the entry level. Or on the other hand, if somebody can afford the house they are— they have, they are about to lose it, they can sell it today. They have equity, so they can restart, restart again from an affordable house.

Downgrade as well.

Yes.

Yeah, gotcha. Well, uh, Isabel, you, you, you mentioned that, you know, when you're just starting out, you kind of just have to do it, you know, get your, your hands dirty and just start doing the work. What, what maybe are some of those lessons that you learned early on as you, you know, really got into your real estate career and, and, and got things going? What, what are, what are lessons that you wish you would have known, you know, when you were just starting out?

So there's a lot of processes to it when you think about constructing a home. There's, there's just so many details. Right. And timing is, it's, it's in essence. So when you get started, you realize that, oh, I should have done this earlier, or I, you know, you have to order parts ahead.

Ahead.

So you think, all right, this is the step where I'm going to do trusses for the roof, and you go order it, and it's 5 months out. So trying to get, you know, all this process together before you even get started, it's, it's really the— it's really the important thing to me. I think it was the biggest, the biggest—

Yes. And also, don't, don't get in love with the, with the house. Get in love with the numbers.

Yeah, the first house that we made, that we built, it was a very, um, It was, it was a very expensive house. You know, we did a lot of things to it. We put the windows that we thought was the best windows to put on. And when we went to sell the house, you know, we could have gotten a lot more profit. So that's why up to this point, we've built the same house over 250 times, but we, we have refined all these little details just to make sure that profit, it's, you know, at the highest.

Yeah, no, so it's just, it's just a process, right? By doing it over and over again, you're able to iterate and refine and, you know, you know, refine your investment thesis, right?

That's—

it just happens over time, right?

Yes. Yeah.

Well, that's awesome. Well, you know, tell me a little bit about, you know, what does the future look like for you guys? Do you plan on staying in affordable housing? Are there other industries you want to get into? Um, You know, overall, what is the next— what does the next decade look like for, for Juan and Isabella as they, you know, you guys continue to, you know, build out and refine your, your investment career?

Right now it's build for rent, not selling. I think we, we, we want to keep as many houses as, as we can, as many houses as we can to create wealth in this Next decade, the strategy is build for rent.

Cool.

Well, that's awesome. You know, I, uh, I know, Isabel, you were just talking about it, but, you know, uh, development is a, you know, radically different beast than acquisition. And I don't think, uh, I think a lot of people underestimate, uh, you know, you know, the workload that goes into that. So I I always tell people, if you can do development, you can do anything. Acquisition's a walk in the park. I mean, there's going to be, like you said, the timing of tranches of materials and to stabilizing the asset, getting 2 different types of lenders in place, right? You've got your construction lenders, and then once you refi out, there's just so many, So many different bits and pieces of the development world. Anything else specifically on development that you would like to either tell your peers of why it's great or why they should avoid it or things that they should know as they're maybe considering getting into development?

The team, the team, your general contractors, your subcontractors, Make them your family.

Yes.

It's your team.

Yes.

So take care of them and they will take care of you.

That is—

Hey, that's great.

Yeah.

So, um, do you then— do you have like a general con— do you guys basically function as the general contractor, or do you just individually have all of these, you know, subcontractor teams that you, you call in for, you know, the different types of work, the HVAC or electrical or—

Correct. Correct.

So we call in, um, different teams, and we per se, we have 3, 3 different teams, and, uh, we subcontract them all. But we try to do everything by times, so whoever could be available for the, let's say, the next 25 houses, at, um, that's the person that comes in. So we basically try to get everything in subcontracted But we do also have our contractors that work directly with us. And then we have our project managers, which are working with us hand by hand every single day.

So yeah, no, that's great. I love it. Hey, why don't you tell me a little bit about how you guys select your market specifically? I mean, there's a million different places that you you can get into real estate and build real estate or buy real estate. Um, you know, what are some of the reasons or metrics you look at when assessing different geographies to, you know, plant your real estate business?

Yeah, uh, looking, looking at the path of growth of the cities. Uh, we did back in 2020 when the pandemic hit, we spent the whole quarantine analyzing markets. Where is the, the, the cities going, growing? So when we see that the population is growing in, in, in this city, the, the, the city is friendly, it's investor-friendly, um, calling different type of investors, huge developments. For example, Ocala has the World Equestrian Center. Which is an investment over $2 billion. So it will, it will grow big things for the city.

They generated a lot of employment. So it, it— and right now the homes that we are taking out in the market to rent, um, we put one for rent and we had over 100 people.

Yeah, for every, every 3—

it's hot.

Yeah, every 3 new jobs that the city creates They need a house. That's why.

Oh, interesting. Uh, so kind of as a rule of thumb, for every 3 additional jobs—

Yes.

You need an additional place to live. That makes sense. That's cool. So wait, to summarize, what is the single most important factor as you're determining, you know, location for these real estate things? Is it the population then, or is it job growth? Is it median income? Like, what would you say is the single most important factor when determining a market?

Population growth. If the population is growing, uh, the economy of the city is growing. Uh, yeah, I think it goes by hand. Yeah, population.

Everything else goes hand in hand.

Yes. Yep, yep.

Gotcha. Awesome. Well, that's so great. Thanks for letting me pick apart your, your kind of how you guys think about real estate investing a little bit and kind of some of your strategies. You know, before we, uh, wrap up for the day, is there any— anything else you'd like to, you know, tell your listeners? Um, you know, just experiences you've had or, um, you know, why you decided to, you know, get into the fund management world? Um, any pieces of advice?

Don't be scared to grow. Sometimes growing, it, it can scare you, but don't be scared. Let's, let's do it.

Love it. And Isabel, from you?

For me, I would say, um, yeah, I totally agree with what Juan says. Don't, don't be scared and, um, surround yourself with the right people. I know sometimes it's difficult. Hey, I don't know anyone, but you could put yourself in places where you get to know people. that are in this business. I think to us, it's been one of the biggest pieces, who we have been surrounded with. We have friends that have pushed us when we thought, let's just not continue, which it happens and it happens to all of us. And being around these people that have been through it too, to push you to, you know, to keep your, your eyes, you know, looking forward. It's important. It's very important. And it keeps you with, um, how do you say this word? I haven't—

Your focus.

It keeps you focused.

Yeah.

Yeah.

Hey, well, that's awesome. Well, I appreciate you guys coming on today. You know, if people want to get in touch with you, where's the best place? To do that.

Instagram as Myre, M-Y-R-E, Inversiones, is investments in Spanish.

Gotcha. Okay, perfect. Well, thank you so much. Appreciate you guys. Oh, what's that?

Thank you for having us.

Hey, no, yeah, it was great having you guys on.