EP 655 - 5 Talents: The Fundamentals Of Commercial Real Estate Investing With Abel Pacheco

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This is the no Closer show where you get the latest developments in distressed note investing and learn the secrets.

Of how you can control millions of.

Dollars worth of property for panties on the dollar. Get educated and entertained by someone who has closed thousands of deals and lives.

To support you in achieving the same. Now, here's your host, CEO of We Close Nodes, Scott Carson. All right, hello, hello. Abel Pacheco here, the host of the five Talents podcast and president of Five Talents Commercial Real Estate. I am super excited because we just had an amazing conversation with Mr. Scott Carson on the Note Closer show. We talked about raising capital, we talked about, you know, going from single family to commercial multifamily, about going passive investing to active investing and a lot of the things that we do to get out there. So hopefully you can check it out. You're gonna learn a lot of insight from Scott and me and we hope you enjoy the time. Thank you very much.

Good morning, good afternoon, good evening, everybody. Welcome to this episode of the Nook Closure show. As always, Scott Carson. Excited to be here with you today and really honored to have a buddy of mine just down I35 down in that little city called San Antonio who's amazing real estate investment not only on the residential side of his past and current stuff, but also on the commercial side. And if you're a fan of podcasts, you're going to want to check out his five Talents of commercial Real estate podcast out there. He does a great job. And I'm talking about the one, the only, the man, the Myth, the legend, Mr. Abel Pacheco joining us today. What's going on, Abel? How you doing today?

Hey, man, I'm doing great. Thank you very much for having me on your show. As your listeners and your guests know you have a ton of fun. So we had a great conversation, man, I'm so on our podcast. I'm super excited to join Jump on yours, man.

Yeah, man. It's always good to get people that aren't, you know, Lone Star states, you know what I mean? If we can. And I always love having people come on that have made the transition from one type of career into the real estate facet of things. And with it being early 2021, so many people are setting new year resolutions and I'm an anti resolution. I want revolutions, you know what I mean? If we can do mental revolutions and change things. Let's talk a little about where you're at today and how you got to where you're doing. How you left high tech to get to be what you're doing today.

Yeah. Well, thank you very much again for hosting me. I appreciate it. So I live here in San Antonio, Texas. I grew up in Corpus Christi, Texas, so I grew up near the beach. Now I'm in the Alamo City. Right.

Wait a second. I didn't know Corpus Christi. I lived in Corpus Christi for years.

You did?

I graduated from Ingleside High School across the bay by Sponge Hospital back in the day when I lived in Corpus.

That's so funny. I know where Spahn Hospital is. I know where Ingleside. Right. I mean, it's little small towns. We're all talking about it right there. So that's awesome, man. That's where I grew up. And you know, we went to the beach. We'd go to Port A and go to, you know, little spots, right. I don't know, over the JFK Causeway. And my dad took me fishing under the bridge all the time and.

Anyways, what high school did you go to?

Oh, sorry, sorry. Corpus Christi, Carroll, Carol.

There we go. There we go.

We had fun over there. And I think we probably scrimmaged with Yalls. Team at football is where I played when I was younger and threw a little shot, put in disk in track.

So I don't think it was much of a scrimmage considering you guys are 5A and Inglesides. 3A or 4A.

But way more people to choose from. Yeah, we have way more people to choose from.

But anyway, sorry to be interrupted there. Okay, Antonio now.

Yeah, that's good. And I'm married, two kids. I have a three year old and a one year old at the house. And you know, I did it tech. I sold. I was a salesman for years. Like I sold Cutco knives when I was younger, did that through college. I ran an office with them, sold cell phones when they first came out. I did furniture. I sold BMWs and Porsches and did that and really landed in it sales. I did that for 13 years. And pretty much the gist of my sales career was like, I had a lot of fun. I met a lot of great people. I never really said I was a salesman. I was like always the consultant, always the advisor, always that person that tried to emulate some of my dad's favorite that my dad gave me a bunch of books. Dale Carnegie, Stephen Coveys, he gave me Al Williams, some of those guys. One of the things I picked up from Zig Ziglar was you can have everything in life you want if you just help enough people get what they want. So that was what I did. So I had a great time over all the years. But one trend that I realized was my quota kept going up and the time and effort that I put in never stopped. And if I ever stopped then the commissions and quotas and pay would stop. So that was really what led me to commercial real estate in general. And I led a full time career 2008 till today and or last year in 2020 was when I actually stopped working full time. W2 but I try to keep both of those things, you know, together for as long as I possibly could to make sure I had a good jumping point to finally say okay, I need to go do this real estate thing full time. And yeah, so that's kind of how we jumped and started in single family. Now we're in commercial real estate now I'm a fund manager. I have a fun going and a few different things. So a lot whatever we can jump in on. Happy to start.

That's good. I mean that's the beautiful thing is so many. And going from the sales background, I think I heard Primerica in there when you said Al Williams. Is that correct? Back in the day.

So I think that's who it was. I never did that. I think my dad was doing that and I heard those like they were like cassette tapes. Right. And that's the motivational speaker and his name was Art Williams. Al Williams. But if you go Google it I bet you can find like YouTube. He's a super motivational like leader and I think it transcended that brand. He became bigger and was like a mo motivational speaker. But that's what I grew up on.

Yeah, that's funny. But the rule to. And all that good financial education and when you talk about sales training and goes with that, you know, same thing here we I went through work for some major companies that they really focus on the sales training, you know, whether it's enterprise or Cutco as well in high school, college and using that to where you're at today makes you a great. I won't say sales guy but you understand the language of people and I think that's really coming to what you know when you can put a need or find a person's need and fill that need or what they're really looking for, whether it's in residential, commercial real estate or they're looking to invest really. I mean identify those needs, huh?

Yeah, absolutely. It was a. I'll start first by just being comfortable talking to people. So most people that know me very well today, they know like Loud, very comfortable talking to people. I like introducing myself to big groups and being like, you know, in the middle, saying hello. Well, when I was like 16, 17, it was not really that way. So that first sales job I work in, I think telemarketing, so maybe landed that and then went to do, you know, Cutco later when I was working at Cutco, I we did in home presentations. So I'd go set up something over the phone, schedule my timeout because nobody, you didn't have a clock to punch, you basically had to motivate yourself to go do it. And when I was in college, there were other motivating factors when you're 18, 19, 21 away from the house for the first time. So you have to motivate yourself to actually go do it. Set up a call, go make that appointment, get out there. But I was talking to married couples with kids aged 30 to 50 and there's this 18 year old college kid. And I think that experience having a ton of appointments helped me get more comfortable talking to somebody that was outside of my age group, outside of my peer group, and just building rapport, having conversations. And that there was so much value in the discipline, the time management, blocking your own schedule that aligned to the sales side. So that's what I taught a bunch of my sales guys over the years and gals that were very successful. And then I realized, oh, the more that I helped them perform highly, the better our teams did and so we made more money. You know, all these things kind of lead to that, you know, entrepreneurial like, okay, this is really good, I'm gonna do this for myself. And even at Cutco I, you know, he was a sales guy but they asked me to run an office and I ran my own office and I was, I owned that business for, you know, five, six years. So it was, it was fun.

Well, but I think, well, you said something. There is really something we hone in on a lot here too is that you have to own your schedule. If you don't respect your schedule, nobody will respect it for you. And I think that's where thinking of my entrepreneurial journey when I first became an entrepreneur. Left my full time corporate job originally and I failed is because I didn't control my schedul. I slept till noon, had the bankers hours at 3 o'. Clock. Happy hour couldn't come fast enough. Cause I get away from talking from people, you know what I mean? But those things become more and more relevant now to the point that we've got, I've got A pretty dedicated schedule like you do. I mean, things pop up all the time. But I know that you control your schedule, you, time block. And I think those are probably some of the most important things that are successful, Especially for those that are successful out there is those two things. They control their schedule and they time block to get things to be the most productive. Right?

Yeah, absolutely. 100%. Our podcast, Talking to new investors, going to look at properties, figuring out how to underwrite new deals. So got to stay there. And then, of course, family time. So got to make sure it's all there.

Happy wife, happy life, right?

100%. I still learn that mistake. Every time that I think I'm right Or every time I think I'm disagreeing for the right reasons, I'm like, oh, no, you're going to learn that lesson.

Yeah. Even when you're right, you're wrong. A lot of times I'm gonna have a shoe flung at me before too long. Let's talk about the five talents. Commercial, straight. What do you mean when you talk about five talents?

Oh, man, that's. This is an awesome question. I like it. So for those that are listening, I'm big on faith, and this is. It comes from Matthew 25 and 14 through 30, I think is essentially the parable of the five talents. So it stems from there. Most people always goes, what are the 5 Tal? They think that I'm going to list them. I go, it's a little Bible scripture, But that's a lot of who I am and where I grew up. And that parable, the five talents, was like, hey, there's a few servants that are watching over this master's plot of land. And presumably he's gone for years, and he gives them all some talents to their own abilities. And one of them's five talents, One of them's two talents. One of them's like one talent, right? And they thought, you know, back then, it's like a talent was about 10 grand. So 50 grand, 20 grand, 10 grand. He comes back, takes account, and the guy who gave him. He gave five is like, how did you do? He said, I doubled your money. Well done, my good and faithful servant. The guy with two, hey, you did. I doubled your money as well. Well done, my good and faithful servant. The guy with one talent. Instead of. He said, well, what'd you do? And he goes, well, I was scared. I didn't want to lose your money. I knew you to be a hard man of business, and I don't want to lose it. So I buried it here's your one talent back. And he gave him that money. He goes, man, you wicked and lazy servant. You could have at least given it to the money lender. They would have at least given me some interest on it. And kind of think about that as like, I never wanted to be the wicked and lazy servant. And I always want to hear my good and faithful servant. My grandfather is such a strong. Well, my grandfather, father all the way. All my family is super, you know, Christ follower and just motivated by that, the faith driven. So that's like ultimately the bottom line of what drives me then. Family and that. So I go, I gotta be a good steward of people's money. I'm raising capital to go buy big deals. Like, I don't have millions of dollars to go buy millions of dollars of comm. Commercial real estate. So I gotta put somebody's money and I gotta figure out how to double it or be a good steward of their money. So that's kind of five talents.

I love it, man. I kind of knew that's where it was from. My dad was a ordained minister and a deacon in the church as well too. So growing up with it, so I had a little bit of idea, it was that I didn't think it was gonna be like the five tools of baseball. He can hit running. Somebody asked me that the other day. I was like, what it is? It has to deal with the five talents from the Bible, Matthew.

I love it. I love it. That's awesome, man.

But you and I, when we were talking earlier on, you were talking about how you started off on the residential side to fix and FL side and doing that and then have transitioned in the commercial side. Let's talk a little about that immersion into it. Because you started off kind of passively, and then now you're really very active, leading the deal flow for commercial investments, right?

Yeah. So I invested passively into my first apartment complex, which is 128 doors. And it was the biggest deal I had ever done at this point, and actually the most money that I think I've really put in a deal. And I didn't have to do anything other than my due diligence. I knew the market because I kind of live. I live here. I invested in my backyard, so I did know the market there. But I vetted the team, so I knew who was running it and a little bit about them. And then I vetted the deal. I looked at the property on paper, probably their offering memorandum, and I go, this is pretty cool. Let's do it. That was my due diligence property. And man, I did that. And I realized, well, it was a $50,000 minimum investment and I actually didn't have $50,000 cash. But I had just left one of my longest stretch at an IT company called Rackspace and had a great run. We did $57 million business a year is what my organization led through the sales side of it. And big team, lot of success, put as much money as I could in there. And when I left I go, oh, I can direct this somewhere else. I put it in a self directed IRA and looked over this 120 page document that's called a private placement memorandum. And I'm looking at this thing, I go, I think we may need a lawyer for the lawyer. I don't even know how this stuff works. And my wife goes, well, I mean, what are they going to tell us? They're going to tell us that there's a few things, that there's some risk. This document, every single risk you could possibly imagine that said you could lose your money, you know that. So we were like, well, if we never make the, if we never risk it, it's not ever going to grow. Like this is a great one, let's try it. And that was my experience. That's all I really needed to get into 128 unit apartment complex. So once I did it, then I guess where your money is you also tend to focus on. So started educating myself, started learning more. And then as a passive investor you get some kind of reports. So I looked at the P and ls, I looked at business plan, I found out what they were doing, I found out the strategy and all of this stuff. Just started clicking and making a lot of sense and paid for education. You know, I joined, you know, four or five programs on commercial real estate. And I man, we went on a tear. My wife was pregnant, our first little one. We waited a long time before we had kids and she's, we're finally pregnant. And I'm like, oh, this is amazing, we gotta go do this. And she goes, I agree. I go, I can sign up for these programs, but I'm gonna have to go like every weekend for like a year and a half to consume all this stuff. And she goes, well, now's the best time. If you're gonna go, go now because once the kids are born, you're probably gonna have less time, so get after it. And you know, we had one of those heart to heart conversations and you know, she just supported me all the way through. Amazing Beautiful wife, that's very supportive. And that's what we did. I went and took education every freaking weekend. I would take off a work on a Friday and either call in sick or take a day or whatever. So I'd go there and be back on at work, regular work on Monday. But that education, education really helped a bunch. So I felt comfortable jumping in. A second deal was 282doors and I go, wow, this is twice as big. This be twice as hard. And then a passive investor, I realized, no, the same thing. 128 docs, you bet the team, you bet the market, you bet the deal. And we moved our money from 401s to a self directed IRA. And then I invested passively into both of those deals. And that was my first 400 doors. And as I was talking to people about this process, everyone is because I started becoming social marketing like Facebook and a little bit of Twitter. I worked in tech, so I was never a social marketer, but I was working with a bunch of tech people and their Facebook and LinkedIn and stuff. So anyways, I would put my post, hey, I just invested in 128 unit deal. And my posts blow up like what in the world? Congratulations, this is amazing. Da da da da. And I really, I just put some money and directed it. But I did that again and again and started having people asking me. And as I started educating others, I realized, oh, all these people that my friends, co workers, people that I work with, with, you know, they wanted to know more about making money too passively. And so anyways, that kind of start to the commercial real estate, right?

I love it. I absolutely love the story because you and I both were teaching, we're helping other investors out there. And that's always one of the biggest things. People are scared, well, what if my boss finds out what I'm doing on the side? I'm like, what if, what if they.

Invest with you, silly? Yeah, yeah, yeah. I've had, you know, my former CRO, my former sales guys, my some VPs, directors, people at a highly level people at a lower level, people in other organizations and they're like, hey, they knew me. You know what, it's kind of funny. They work all their time. You know, everyone you work with, W2, they've got hard work, integrity, character, you know, all of those things that people know you as and know of you. You've spent so much time accumulating all these traits that people describe great things about each and every one of you listening. And that's the very thing that helped me realize is, yes, they do know, like and trust you from work and now you're doing something else and they're still going to and trust you. And as long as you're educated and can help them with their thing, they're absolutely going to be interested and potentially invest with you.

Well, that's the thing too, is that you weren't on those first 128 doors or the first 400 doors. You weren't funding the whole deal yourself. You were doing it passively. But you had a piece of the pie, you had opportunity. And I'm sure you probably shared a little bit of some of your single family stuff that you were doing too on the side too, about, hey, I just bought this property or this fix and flip too. Oh, yeah, and kind of the day in, day out stuff. Is that correct, Abel?

Yeah, that the day in day out was, you know, people would ask me, hey, hey, where are you going for lunch? And I go, I'm going to go check on my property. And they would ask me that and I'd tell them and they go, well, can I come with you? Or somebody would say, you're buying another house. I'm going to close on another house today. I can't go drink beers with you during 4 o' clock or whatever. I got to close. And anyways, all of that stuff, my sales guys, people I worked with around, knew that I had multiple houses. And so they would always ask me the advice and I would share. It's funny, I would share my friend advice and my sales manager advice. So I might as well share it with our listeners too. So the, as a sales manager, my job was to get as many people selling as much as possible, you know, to make big commissions, big quotas. We got to meet them, right? So my friend advice was always save all of your money. Take every single extra dollar of commission. And you want to create your active cap, your seed money. And once you have enough seed money, that's what you want to go invest and like buy some real estate, buy a second house and rent it out and you'll get a little passive income and you got to save it. You know, don't buy a big car, don't buy a big house. Who needs a fanc suit? We're virtual. They only see your face anyways. It's like, man, we're in tech. You don't have to have a fancy car to host anybody, so don't do that. And they would say, yeah, that makes a lot of sense. What's your manager, sales manager advice. So I'd say, well, you need to go get your credit card and buy a big watch, buy a big house, buy a big car, overextend yourself so you have some motivation to go sell more because you're going to be in so much debt. You're going to have to hit this quota. You're going to have to this commission and it take them a second and like, oh, dude, hey man. There's my friend advice and my sales manager advice. You should absolutely take my friend advice. But if you do take the manager advice, I know what you need to go. Let's go drive it and go get some sales. But man, it was like that. It was. I tell people you need to invest in real estate. And we got, you know, one house, two houses, three houses, four houses, five, six, seven, eight. And you know, I think the most we've ever held at one time in a rental portfolio or like actually held is about 10 and then doing a couple transactions of buy and sell or you know, owner finance or they'll create a financing deal here. A couple of whole wholesale deals a month. You know, it just a little activity on the side.

Yeah, but you filled in your 7pm to 2am kind of schedule thing and.

That'S a lot of nights and weekends, Monday through Friday. Yeah, that was your job.

But that's. I'm so glad you brought that up because I think a lot of people are lazy. They want the fastest and the easiest path to success. And it takes work. It always takes work. It takes giving up your weekend. It takes giving up they free happy hour. And I think Rackspace would always have a keg on Friday because I've had somebody friend that worked there too, didn't they?

Yeah. I was 26 when I started working at this job. And they had like, you know, remember the field day events? You remember like in elementary. And it was like a great field day. And we would go outside, they did those but with kegs and margarita machines. And it would be during the day and we would go back to work. So it was like we were, you know, drinking during the day as it's just a. It was a different. It was a small startup. That company went from a hundred million dollars a year to $2 billion when I left. We had a ton of success. Right. But like, it was those things that sometimes I would say, hey man, I can'. They were like, dude, we're gonna go drink. There's a keg, like at work. Like, where are you going, man? I Gotta go. Like, I can't hang with you guys for this moment. I still had fun, I had plenty of fun. But.

But it was always nice to show up after you closed with a check or. Yeah, that's worth celebrating, you know what I mean? That's definitely the fun of that stuff because then you're not only building, you had a work ethic, you're not only building wealth, but you're building success. And you're building a whole different kind of path and destiny for you, your wife and your family too, doing that stuff.

Correct? Right, yeah, absolutely. It's a time, effort, energy, focus. And your focus goes to, you know, where you put the most effort, your focus, intensity. And then you're like, okay, well let's go do some bigger things. And those muscle, I guess the muscle of taking risk and putting in some, you know, that capital 10k, 15k, 20k, 30k is now a bigger risk where you can say, oh, okay, we're going to go sign on this like 20 something million dollars deal. And that allowed me to move that muscle a little bit and sign the documents at 20 something million dollars. And you're like, okay, let's go get it.

Well, I had a friend that basically likes to use the analogy of a rubber band that we all kind of are constrained initially. And if you stretch yourself and if you stretch that rubber band five times, it never goes back to what originally was. It always expands and expands that expands that comfort level. And that's kind of what you were doing there. And like that's everybody that's successful has had that happen now. They've had a few times where that rubber band snapped back on them a few times. Let's talk a little about that. Anything along the way that kind of. The shins are in the teeth, Abel.

Yeah, I'll talk about this one deal that it's my frame of reference for the apartments now, which is you gotta just make sure the properties are running well. In my job as the apartment complex investor, commercial real estate investor, there's professional property managers, there's professional, very professional teams that are doing the construction, the construction management, the project management, making sure all of our units are turned, making sure it comes out the way you want to, staying on schedule. But ultimately like you still have to watch the data and watch the numbers and make sure we're on track to have the successful five year turn that we're looking for. Right. Buy low, sell high. Same principle, except there's a lot more moving parts. Well, one of the things that motivates me to watch the numbers on bigger numbers now was this three bedroom, two bathroom house that I bought that was just a tremendous deal. We got a great price on it. I'm looking at all the math and looking at all the analysis that I did, which is my Excel sheet and I go, well shoot, If I put 20, 25K in, in X amount of years it can be worth 180. And I looked at the appreciation, the, you know, the rent growth, 2%, 3% a year, the cost, everything was like calculated really pretty on this pro forma. But what I did not do for 5ish years, 4 or 5 years, I never walked this house. I never did check. I never checked on quarterly or yearly for the renters at least, at least yearly able. I just like assumed there's the check, rent checks came in and there you go. Right. Well when I went to do move out on their house there was like this 30 cubic yard, you know, U haul, was it not a U haul, A big old trash container. Like it looked like something that should be at the apartment complex. We're doing renovation at this little three two bedroom house and anytime you walk into or drive up to your house when the renters are pulling out and there's that, you know, commercial grade trash bin, it's never going to go good. And that's what it was, man. It was like car parts, car, you know, like broken down motorcycle pieces inside the house. I mean there was no carpet. There was a bunch of like terrariums and tarantulas and you know, all kinds of like fish tanks in weird places. I was like, you know, dogs were all over the house and it was like rank, you know, everything was jacked up and that cost me 36 grand to do the renovation. So I realized right then and there you better make sure that you watch like, you know, your property, watch the numbers, watch it. You can't let anything go because the money's coming in. You still have to be very proactive and set up a system in advance that says a check mark every month, every quarter, do X, Y and Z. And now that we have property management that really does a great job at this, I still want to, let's go check it out. Let's go look at the numbers. Let's go find it. The more proactive you can be, the less opportunity you're going to have. So that single family lesson definitely helps me even what I do today.

Yeah, I think we learn more from our mistakes or I would say that missing mistakes, that's the tuition.

Yeah, we paid for that education. So it was good. It was a good education. I'm thankful it happened on 120, $50,000 house as opposed to a $10 million building. So anyways, yeah.

Now are you investing primarily here in the San Antonio market or all across the country with your multifamily stuff?

I started with San Antonio because I live here. So our first six, 700 doors were here. The passive investments then turned into me jumping into my first active deal, which is 120 like 4ish units. And that was here in San Antonio. Then we did a 268 unit that was in San Anton. All of those have been there. I wanted to make sure that I like had a good grasp of what I was doing locally before I started going further. And then our first jump outside of San Antonio was 120 units right outside of Dallas and Greenville. And then we did our second deal that was outside of San Antonio's in McAllen. There's about 88 doors there. So it's San Antonio. Then I kind of expanded and then we've got this long project that I have a team that's boots on the ground. I'm the sole guy that's out of New Mexico, but we're doing a grassroots ground up new development in New Mexico, about 150 plus stores.

Nice. Very nice. Therefore, but I love that you talked about, hey, you understood, you got your systems down, you got your vendors down, you got everything rock and rolling now. Now you're able to go duplicate that in other markets there for you.

Yeah, yeah, it's helpful. What I duplicated, I think was it is just the ability to build the right team. So the team is so critical, you know, in commercial real estate and I'm sure your world too, you know this, your team is like the foundation of the core of being able to scale or go do more and build that system and process. And I was able, established an amazing team and I had some people that I worked with here in San Antonio and was able to transition to the New Mexico deal. And then some old friends that I know that I worked with and they've established themselves as really successful entrepreneurs. So I was able to partner with them and they had their own local boots on the ground team. And we're like, okay, well that's great. Let's merge some of this insight, education, knowledge and you know, build a great team. And the team is what allows me to go do this deal in another state and you know, never not have to drive out there you know, once a month or anything.

Yeah, no, it makes a lot of sense now when you're talking because we. It's one of the most. One of the most requested things I get when people talk about, hey, do you got any notes on any multifamily stuff? And I'm like, I wish I did because I'd be taking them down for the most part because it's still a very desirable. It's still a very desirable asset class. I still, in a lot of cases, I think a lot of people are overpaying for multifamily. What would you say has been your kind of your magic formula, a recipe for success in finding stuff that makes sense for you because you're buying below market or you're finding some pocket deal deals, aren't you?

Yes. And it's my easy button. So I don't want to pretend here that I've got all these amazing relationships with brokers that see me as the big guy closer, which I think you really need to get these pocket listings and commercial, the commercial multifamily listings. They're big deals, big commissions. The brokers have these really well established sellers that trust them to go sell this property, get the top dollar and figure it out. And they know that not everybod can close a $10 million deal, $7 million deal or $20 million deal. So they're going to talk to the people that they know have done it again, again, again, over and over again. So that's who sees these property before you show them, before you see them on an email list and says, hey, I got this property. And I just, I'm not in that space right now. Like in this point in my career, I was the passive investor for a number of deals and now I've been active on. I think this is our. We've done six active deals and I'm still not the guy that somebody would call. And the way I've been able to find those pocket listings or those properties that the numbers work was my partners, my team, my other general partners. So they were already doing deals. They were already in the market. They were already the person that the brokers trusted. And what I did was team up with them. We have to build teams. So any lack of or deficiency you have or area of, of just lack right. On your ability to get a big deal done. You can partner with somebody that already has that bucket filled or already has that deal flow. And that's what I did. I partnered with teams that already were in deal flow and I helped contribute My part. So it was kind of like, oh, that's how I found these deals. So like, hey man, that's great. And I tell them thank you all the time. My buddy Devin, we do a bunch of deals here in San Antonio. We were on this webinar and somebody asked that question, how did you guys end up partnering or how did this happen? Happened? And I explained it like, man, I was trying to provide value and I brought him investors and I started a meetup with him because I did all of those things. But in the end he goes, oh man. If you know Abel, he's a nice guy. I worked with him, I grew up with him at the professional world. And he goes, just a nice, genuine dude. Like, I wanted to partner with good people. So anybody that's listening, it's not just like, oh, Abel's the good guy, so he's going to get it. It's like, you have your strengths, you have your things that make you very desirable, unique. Even if you're not a hard, you know, like a full time investor in your W2 world. Some of you are project managers, some of you are really good at systems. Some of you are better in front of large groups and can talk and be, you know, this investor relation person. Some of you are really great at Excel and can run a, perform a run analysis, run numbers. So whatever strengths you have, those things can be applied to any portion of, you know, commercial real estate. And for me, it was like, man, deal flow. How do I find them? Well, who's got the deal flow today? I was lucky to have partners that are in deal flow in every one of these markets. And that's what I did. I just partnered up.

Well, that's the thing. You networked, I think more so you probably met quite a few of these people, not only in your local market, but going out to these workshops and masterminds and things like that. You've built a network out there across the country and just to stay active and communicated with them.

Correct, Correct. The education that I paid for was sitting in front of a large room, somebody speaking to you. You get these big thick workbooks and you're like, okay, well let me figure out what IRR means. I was like, oh, that, that was a hard one. But at the same time, like before the education, during lunch, after the event, look, you're networking the whole weekend that you're there, meeting others, doing deals, finding out who's a capital partner, who's an asset manager, who's an operator, who's an underwriter, who Is any one of these skills or functions construction, construction manager who can help with due diligence. And you're building your teams along the way. And that's a super big part of like paying for education is being around other people that are already doing what you want to do and then learning from them. They're already doing it. And now I just want to partner with the right people.

Well, one of the great things about commercial real estate is it really takes it away from the individual. You know, commercial is more about the actual property and the team. Whereas if you don't have a lot of experience, but you've got, like you said, the team that supports you, the team with experience behind you, that's what the bank is more worried about more so than anything else. Correct?

Yeah, yeah, yeah. And as a from the bank perspective, like a lot of people don't know how the financing part works. And I'm also now a commercial loan broker. So if anybody needs help with something, let me know. I can help you find a Source for your 10 or 20 million dollars for your apartment complex. But I mean when you look at it, they want three things. They want your net worth equal to the size of the loan. So if you're taking down a $10 million, you need a $10 million loan, all five or six or three or four, however many people it takes to do it, they have to be equal to $10 million net worth. You also have to have 10% of liquidity. So they want you to have 10 million loan in cash post closing liquidity. So you need a million bucks between five or six of y' all in your bank account. That stays there. Something happens, they want to know, you can write a check. And then they want the experience. And the experience if it's local, if it's there, people that have already done deals, that's the basic component for outside of the capital that we're raising. Right. So I guess it's four things. But to qualify, that's it. Net worth equal to the size, 10% liquidity and the experience. And if you have those and the down payment, a 20% down usually on that deal, then you go buy the deal. But I mean, I can't qualify for $10 million. I don't have a million dollars liquid cash. It's just not there. But between five or six of us now we can, let's go. And that's how we team up.

Well, that's the thing is sometimes there's capital partners that'll come and just be that stop gap for you they're involved in the deal, and hey, they're part of the deal because they've got the liquidity to help us with that. And everybody has different strengths. And that's the most valuable thing about it is you can't find it by being a secret agent and not getting out and networking or talking about people. Right.

Yeah. That role is a key principle. So that's their formal title, is the key principle. And the KP for accurative is exactly that. You know, they put in their hard work, time, effort and energy. They've created their millions and they have capital and they can sign on a loan. They get a piece of the deal and we give them a percentage. And that's their role. They help us with the financing. And so sometimes it is one person, and that's what they do. And as long as we're all working together, somebody's asset managing, somebody's construction managing, somebody's raising capital, or we're all doing that together. Whichever team you're on, that's. Everybody has a role.

With 2021 being new in the year, everybody is focused on doing things differently. Goal setting. And the biggest thing that holds a lot of people back is that private capital side. I don't have any capital. I don't have any of my own money. I technically can't qualify for traditional loan. Could you give any counsel? Not advice, because advice is like assholes. Everybody has one. Doesn't mean it's right. Yeah, give people some counsel on what you've done. Been really maybe your top two or three things done to raise private capital the last couple years.

Yeah. So it comes back to the know, like and trust. And I've said this for years because I was in sales. I got a know like and trust you. And the trust was probably the biggest one that I've always said. I can't control the know or the like, but I can control trust. If I educate myself on the product, the service, the benefit, the value, as a sales guy, I could control that. And I got to figure that out. And if I did that, then when I hustle, make my outbound calls, get my leads, that's the no part. Then I can't control like. But if I do work really hard there, that was going to be the area that I was going to be the trusted person the most. And now I still see that as very ultimately important. They got to like you and trust you. But I thought raising capital, trusted was the most important thing. And then I realized, like, no. Now I feel like in this point of my career, one of my advisors in a mastermind told me, you're wrong. He didn't say it like that. But I go, I think trust is the most important. Raise my hand. He goes, nah, it's no, they gotta know you. If they don't know you, they're never gonna be able to like or trust you. So to raise a lot of capital, like, if you're trying to raise millions of dollars from, I'll say like this, I raise money from like average, everyday people that are kind of like me. For the most part, we're working hard. We do it our things through the year. We know we gotta save money and put it to work. And that's kind of who I think I attract. Right. So if I'm gonna do that at $50,000 at a time, it's gonna take a lot of work for people to know. Or. Yeah. Last year, 2020, I started a podcast. We started a meetup in 2019. So I guess technically we started a year before, but that's probably the biggest one. Make sure people know you and know what you're doing. So get uncomfortable and get out there and tell people what you're doing. Personally, if they don't know, they're never going to even ask you the question. And so don't be afraid to just really get the message out that this is what you do. And then if I were to say one change, like, I do have a lot of my everyday, average people, my friends, people that are just like me, we've gotten a few hundred grand and we worked really hard for 41 now, right? And so I've been putting in my 401k, I've been trying to save my money. I put, every time I had 20 grand, I put it in the house, and 30 grand, I put it in another house. So, you know, not the multimillionaire. And those people, it's really hard to meet. Like we have like 30 to 40 partners on a deal at 50k a pop, that's 3 to 4 million bucks. And you're like, shoot, that's a lot of hard work. So now, I guess the next stage kind of in my career is trying to figure out how to find larger sources of capital, somebody who can at least put a few hundred grand or a million bucks in a deal, as opposed to 20 individuals that do 50. But I still serve. I think I don't want to forget about the people that help me and the people that just. People that are just like me. Right? So I'm like Man, I don't think I'm ever going to say no to a $50,000 investor. I don't ever want to get there. But I definitely would like to find a sing or a couple of big sources of capital that can, like, understand my vision, understand the plan. They know. And really, those people can really help you. Because if those, you know, bigger investors. We've had a couple that are, you know, you know, bigger investors, hundreds of thousands of dollars, and they're across money, multiple deals, so they can help you from the team perspective instead of being passive. They're passive, but they're like, hey, you know, if you ever have any issues, let me know. Because they want to make sure their money's secure so you can start to ask them a little bit of questions on the market, their insights and what they're seeing, and they're eager to help you. So I would say two paradigms that I'm going to continue on for 2021 to raise capital is all out force to, like, get known. Podcasts, podcast interviews, social, social marketing. Oh, there's this new app called Clubhouse. Oh, my gosh, be careful if you haven't been on there. It's like, super addictive for somebody like me and probably like you, Scott, which is I want to go talk about what I'm doing and I want to go meet new people and network. But anyways, just get yourself out there. And that's what I plan to do so that, you know, more people can know. And then I'll let them filter themselves, like, if they should come talk to me as opposed to me, like, making an outbound call and asking for money. That's not. Probably not going to be the best use of my time. But really get a big source or big, you know, a microphone, if you would, and figure that microphone out. And then the people that are interested will be like, hey, I'd like to set up some time with you, which is what's happening right now. I probably have, like, you know, anywhere from six, eight, some weeks, 10 people get on my calendar, have a calendar link, put it on my LinkedIn, put it on my website, put it there. And, you know, my calendar starts to get full now with people that are interested investing, which is really cool. That didn't happen last year, and I don't think it would have happened had I not got out there and then trying to get focused on, like, a few entities that can really source these deals at a bigger clip.

Yeah, I love what you said, because you're not doing cold calling. You're doing warm content, really. You're providing the content with a meetup group. And you've been doing virtual since COVID hit doing it online. And you have been very active on clubhouse. I've been gotten some late night invites to jump in some rooms from you, but that's late night, very late. I'm like, don't you have kids? I'm going to bed.

I'm like, I'm like, my kids went to bed at 8 and it's 11:45. I'm already. Anyways, well, and that's the thing is.

That you're not afraid to share what you're passionate about. Anybody is around you for 10 to 15 minutes knows that you're passionate about what you're doing. Passion attracts honey, attracts flies more than vinegar does.

Yeah, that's the truth. That's the truth.

And you've done a really good job of sharing that. You've built that community. Looking at your meetup group, when you started it, where it's at today, what's been the big thing in helping you grow that virtual and in person meetup? What do you think helped out the most? Just that you've been consistent with it or what?

So we started in 2019, before COVID and at our first meetup we had like five people. And I was like, all right, we got people here. It's not empty. Our second meetup was like, you know, 12 people. Third was like 20 and it was growing and then it went back to like four. I was like, oh. The consistency though, is what helped, I think a lot in the beginning is that I wasn't, you know, yes, there's four. Four people who I wanted, 30 the next one. But we didn't stop. We just said, yeah, let's do this once a month. And we'll say it's monthly. We'll call it monthly. We'll say it's monthly. Now we're committed to doing it. And every time we were committed, I had people tell me, oh, I wanted to go by, but I wasn't able to. What did I miss? So I was like, oh, okay, so you're still interested even though you couldn't go. And I realized, oh, hey, we'll be there on November this date, December that date, January this date. So you tell them and they're like, okay, I'm going to catch up to you. I have investors today that have told me. I've seen you, I've thought about it. I knew you were doing this. I just wanted to see how if you were going to continue. And this is two years later and they're investing in their first deal. Right. So it's the consistency. They want to know you're going to do it. It's their money. So shoot. It makes sure it's important. But exposure, just getting it out there, like I put up on Facebook, put it out there on LinkedIn, I put it out there. My boss did ask me, hey, what are you doing? Like he asked what's going on? Or I go, yeah, that's at 5:30. We're going to be doing meetup after hours. And I put a post on anyways, these are the things that I would just kind of continue the in person side of it and then when it was in person, hopefully, God willing, we get back to it sooner than later. Vaccines and all this stuff. But we tried to make it really. We had name tags in the front, a system to sign in, we wanted the register up front. We would get a small little sponsor, they paid for food, we'd make it a nice event, really big networking event and we would blast it on every one of our socials. Me, my partners, the team. And so all of us doing that together, maybe I brought six people, they brought, brought five people, they brought eight people, someone else brought more. And together collectively, it was like that buzz that started Covid happen, make it virtual was the decision that was really cool because you know, that was one of the good things about freaking Covid is I guess it spurred all this virtual stuff, right? So podcast and virtual meetup and the thought process for the meetup was give away education, tell people exactly how you're doing it. There's only so much you're going to fit in. 30 minute session, right? It's. You can't teach somebody to buy an apartment complex in a couple hours. It's not going to happen. But just keep giving the education. Here's 30 minutes. Here's how to finance it, here's how to raise capital, here's how due diligence, here's how to do asset management. Here's how. And so we give that information. I think that helps. And then the consistency of grabbing a name and an email, you got to have somebody's email, you got to have a list, you got to tell them you're going. Again, thanks for coming out ours our next event and just kind of driving that momentum of the existing people that showed up and new and now that's allowed us to kind of put that list together that also helps in raising capital by the way. So the those things Work together, and then the virtual is just the same. And now our intensity has picked up. We're doing them weekly, not monthly. So it's like, there's a lot more stuff, a lot more activity, but there's people every week that say, hey, thank you very much for doing this. And, you know, some of our investors are truly passive. Like, I've never seen them at any of our meetups. Right. I think the point is they know, like, I'm there, I'm doing the education, I'm doing the content. We record the virtual ones now. We put it on our website, 5TCRE.com, you know, education page. You know, it's just, I do my newsletter. Here's all this education that's out there. And I think giving, giving, giving that value piece, that's the value that I think people can create right now with this virtual. Virtual moment in history with the pandemic. And that's, you know, that's kind of how we got started. Just kind of stay with it. Persistence, dedication, don't stop, Keep going.

Yeah. And one person is better than none. You know, when you do that, if you have one person new, one person new, it all adds up. And people a lot of times want to see, see that you're sticking around. I preach the 80% of sales happens after the fifth contact. And you've got to be consistent with it, whether it is monthly or weekly. You've got to set that flag point, that flag and stick with it whether you like it or not, and make it a priority. So. And people are watching. If you give up on it, they flake again. You know, unfortunately, you want to be around the 1 percenters or the 5 percenters, because there's 1 percenters. They'll take action about 5 to 10% that'll write a check to be passive about it for most of the baton, right?

Yeah, yeah, yeah, yeah. Yep. The 90% that don't do anything. If you're listening to this and you've never taken action, action. Like, you've got this amazing resource in Scott that gives and gives and gives an education. So much time, effort, and energy to give at his level and the time and intensity that he does it for all the years. If you've been listening to Scott and you just haven't been able to take action and you're the 90% that can't even do it passively, I would encourage you, like, reach out, Just go for it. At this point, if you've consumed a bunch of it, like, just go for it. Do one, do a deal, something you're comfortable with. And, you know, I think it'll benefit you. And now you'll be on at least the passive side. Go for it right now.

Abel, how many times have you had somebody contact you and say, hey, I've been following you for six months. I'm ready to do something.

I've had more than a few people that say, hey, I know this is the first time I've talked to you, but I feel like I know you. And for you guys that are listening, I mean, that's it. You have some education, you're there, which is. It's really cool. That's the part. And if for some of you that haven't kind of wanted to go active, like even in this world, go active, go make a podcast and get it out there, you're going to benefit way more than, I think, anybody that catches a single show because you're on the front line, you're asking the questions and you're getting the information, like right then and there at a source that, you know, it's hard to get someone's time for 45 minutes these days or an hour. And now you've gotten. You can pick and choose the best of the best. And so thanks for having me on, Scott. That's why I chose you to come on my show, man. So I appreciate it.

Same here, buddy. Same here. What's the best way for our listeners out there that are watching or listening to this for them to follow up with you and find out more about what you're doing?

Abel, the best place is our website. There's the contact page. There's education there. We have a free ebook. You can go to our Invest page as well, you know, and we'll set up some time to talk. And that's five the number five tcre.com, five t. Cre com and, you know, you can go reach out to me and set up some time to talk and phone numbers on there. My email, if you feel comfortable, or if you set up a calendar link or you want to stay passive for a little while, that's totally cool, too. A bunch of contents on their website.

We'll have to make sure to have the links on the website along the description in the show. Notes for everybody as well, too, for you guys. But, Abel, I know you've got big goals for the year. What's your biggest thing for 2021 for you before we let you go?

Yeah, well, so I've been at the state in commercial real estate, where I'VE been a smaller partner on bigger deals, and that percentage, every time I do a deal, it's like, grows a little bit more. Oh, great. I want a little bit more. A little bit more. A little bit more. And at this point, I'm not as focused on the size of the deal. I'm focused on the percentage of ownership in the deal. So my biggest goal is to be. Be, you know, get two deals in 20, 21. I'm not, you know, doesn't have to be a 200 unit deal. It's like, man, let's figure out a. An 80, 90, or 100 something in that size and be the, you know, the primary lead sponsor, the lion's share deal. So the reason I say two is I have to make up for 2020. That was my goal for 2020. I didn't get it. So I'm like, well, it's gotta be two. I gotta make up for 2020 and get my 20, 21. So that's the goal.

Well, we wish you continued success. We're definitely gonna have to have you back on a later date here and.

See how you rock and roll.

All right, brother.

Yes, sir. Thank you. Thank you very much, Scott.

Thank you, man. Hey, guys, gals, as you listen to Abel there, he gave some great nuggets about consistency in giving and giving and giving some more to your audience out there. Not being afraid of the no's, but what and the what if. But what if you succeed? So for those of you that are scared or timid or afraid, just start sharing. Start sharing what your passion is. Start sharing and finding ways to make it work. Maybe you have to give up the weekends for a few months. Maybe you've got to give up some of your hours at night to do it, but talk with your family, talk with the people support you, because if they're there, they're going to be your biggest cheerleaders and support you on your way. It's always easier when you've got the support of your friends and families, when you're moving on to something new. So go out, take some action, everybody, and we'll see you all at the top. Bye.