Danny Flores spent 16 years in construction, then moved into banking where he syndicated $25M to $1B+ corporate loans. In 2018 he applied those skills to real estate, learning to raise capital and syndicate multifamily deals instead of just underwriting them for banks.
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Are you one of the many busy professionals working in offices day in and day out? Do you wonder how some people grow their wealth fast, retire early and play on work days? Well, you're in luck because Ginny Bolling hosts this show Pivots of Prosperity where she interviews people that can do just that play on work days. Many guests have become financially free. She also interviews people that are on their journey and people that are in support roles like attorneys, contractors, brokers and others. Commercial real estate is the common element. She is on a mission to be sure. Busy professionals know they can own substantial commercial properties too, like apartments, self storage facilities and others, and not have to do the work managing them. Passive investing is the key. Syndications are the typical method. Tax write offs are some of the biggest rewards. Ginny and partners find the deals, build a strong team and business plan, then offer the investment opportunities to passive investors. New episodes are released every Tuesday at 12, so watch for new releases. If you want to get involved, let us know. You need to get pre qualified to hear about most deals. See the show notes for contact information.
Hello, Hello. Jenny Bowling here with Pivot to Prosperity brought to you by Pivotal Real Estate Investments where we help our investors build wealth and income through commercial real estate that improves communities. And today we have Danny Flores with us. And Danny, thank you for coming. Appreciate it.
Thank you. Jenny, thank you for having me. It's a pleasure.
I goofed. I didn't ask you if you had a bio. Usually I like to read a bio for people, but why don't you go ahead and, and do you spiel on your background and all? I guess.
Well, okay, so I'll run through it fast and then you can come back and ask me any questions that you may have.
Okay.
So my early part of my career I was in construction. I was in the building industry for 16 years. Then I decided to pivot, go back to school. By then I knew I liked numbers. So I went back to school, got a finance degree and I went into banking. Once I, once I graduated, became a banker. We did 25 million to over billion dollar loans. We syndicated those from bank to bank. But my passion and my dream was always to buy multifamily. So I started saving money and bought my first four plex in California, Norwalk, California in about a year and a half after that, and that was in 2000, about a year and a half after that, I sold it for about $100,000 profit. We did an exchange, bigger building, saved some more money, bought another one and did that for about 15 years. Also during that time, in 2006, I started a property management company, LA County, Orange county area here in California, and grew that business, sold it about four years ago. In about 2018, a friend of mine said, why don't you syndicate? He saw what I was doing in the apartment industry and I was like, what does that mean? I, I kind of didn't know. And he says, well, my mom and dad have had invested with a syndicator and the projects that he was doing in la, they made plenty of money. He put him and his sister through college. They bought a few houses out in west la. And I was like, okay, that seems to work. I need to figure this out. I need to learn. In long story short, 2018, I learned how to hire a coach, learn how to start raising money to do larger projects. And that's what we've been doing with, with a little bit of my background in construction, my finance, my property management background, it's given me a good skill set to be able to manage our projects and make them successful.
So that's, that's a terrific background. So I've got several questions. First of all, though, you did say that you were syndicating bank to bank.
Yes.
What were you syndicating?
So what happens is, because these loans are so large, if somebody comes and this is, these are companies like, like Jack in the Box, Metro, Golden, Meyer, Smart and Final. You know, their loans, you know, they could be billion dollars, 500 million, 400 million. And not, not one bank holds that paper because of the risk. So they mitigate the risk. So it happened to be either we were the lead bank and we led the deal because it was one of our clients, and we brought other banks into the deal, you know, bringing in maybe 5, 10, $20 million a piece. So we got a group of banks to hold the paper, or sometimes we were invited to participate in another bank's deal and we were putting in 5, 10, $20 million at a time. And so. And it's just strictly within the banking, from one bank to another, and that's how they mitigate the risk in case of the deal goes sideways.
So did you have to do any of the presentations to the other banks or was there even a need for a presentation? Or did you just, what'd you do, just send a data sheet or how did that.
Oh, it was, it was actually when a deal came. So basically how the banking structure is is that you have relationship managers throughout the bank that deal with the clients, and they have a limit on loans up to a certain amount. And when these companies grow or a new client comes in that has, that has a larger need, they would come to us. So we were one unit in the bank that all larger deals were done through us. And so, and so in regards to presentation, we get the deal. We had to do a lot of underwriting, a lot of analysis, a lot of modeling of, you know, growth, their current same store growth or whatever, whatever the industry was. There were different industries that came to us and then, and so we had to learn about the industry, we had to learn about their market share within that industry. We needed to understand the, the, the, how good their operations were. So we did, we had to have like manager analysis and find out what the management was like, how they compared to their peers, how their growth compared to the peers. And then we had to also figure out what, what were worst case scenarios as well. Primary forms of repayment, second forms of repayment. And so when we're done putting all of this together, it wasn't just one sheet, right? It's too much information. There were actually books and we needed to get approval from credit, the credit department within our bank. So just because we like the deal and we thought the deal was good, we couldn't just do the deal. So the bank.
