Joao Macavilca start his Real Estate Journey using the BRRRR process.He expanded his portfolio, acquiring multiple properties, including a 12-unit commercial building. Emphasizing teamwork and delegation, Joao leveraged his construction expertise to establish a successful company in North and South Carolina.
Joao Macavilca start his Real Estate Journey using the BRRRR process.He expanded his portfolio, acquiring multiple properties, including a 12-unit commercial building. Emphasizing teamwork and delegation, Joao leveraged his construction expertise to establish a successful company in North and South Carolina.
All right, everyone. Welcome to the Real Estate Game Changers show. I'm your host, Mike McKay, based in the Jacksonville, Florida market. And each and every week we do this show with people who are changing the game of real estate all over the country. For anyone in the Jacksonville area we are hiring acquisitions reps. You don't need real estate experience. We are looking for someone with some sales experience. So if that's any interest to you, send me a DM on Instagram and let's talk about it. This week on the show, we have Joao. Joao, welcome to the show.
Joao:Thanks man. Truly appreciate being here.
Mike:Absolutely, man. So for those who don't know you you want to tell us a little bit how, about how you got involved in real estate and how that's led you to where you are today.
Joao:So I got involved in real estate. I grew up in Jersey about 30 years and had a standard nine to five job. Just always trying to move my way up, being the harsh work in the room, doing everything I can to get out of that and realize somewhere down the road, it's just. It's just not going to happen with inflation, prices going up, things always changing, rent going up, or mortgage things, it's, it was never really realistic and just seeing so many other people truly came from nothing and were able to change it around, I was always just curious why can't that be me? I'm a hard worker, I want more, I grew up very poor, my parents are first generation here I'm first generation here, I just needed to change. I didn't want that lifestyle anymore. I decided to move from Jersey to South Carolina. Two things were going to happen. I was either going to fail miserably and move back home, or I was going to force the change and make it work. And one book that a lot of people that I've met, investors, entrepreneurs, read that has been amazing or a game changer, if you will, is Robert Kiyosaki, Rich Dad, Poor Dad. I think it was a second or third time going through it. The light bulb went off and it was just something needs to change. I need to do something differently. And this is literally giving me the blueprint of how to start. And that brought me into bigger pockets, into different events, different people, and just asking everyone, everything I can. And, thankfully I went from no doors or my personal home. I think it was at a 16 doors. We just closed on a commercial. Less than two weeks ago, maybe three, 12 unit. I'm closing on nine more in two weeks and we've got 30 plus going in the next few months. So we've got a good amount of commercials coming up. A single families flips on the side as well during doing that as well. There's no stopping. And we're just getting started. It's the beginning, so it's exciting.
Mike:Were you, cause I know we were talking a little bit about offline, how you obviously have your commercial GC license in North and South Carolina. Were you in the construction business? Prior to going out on your own in real estate.
So
Joao:just at an earlier age, my dad was very how do I say it? Financially frugal and would buy me like the Home Depot books or, YouTube and check how to do this. I started doing things on my own to save costs here and there. And when I bought my properties, I would again, do YouTube or read about it. Started doing, LVP flooring, click lock, painting, subway tile, the basic things, toilet swaps, repetition makes you better. Kept learning more about it. Then I had my first job required a permit. Realize it's not going to be as easy as what I used to do. Cause likewise had to read the books, be under somebody for a little bit, ask some questions and learn and grow from there. So I ended up saying, ended up talking to contractors and seeing. What things cost, because I can get a great flip 30 grand, for example, put 30 into it, have an ARV equity, 40 grand, for example, but contractors in my experience, originally, if you don't know what that cost is or how to control it, it can really screw up a deal. And I want to get more involved and learn more about it. So I'll be studying and learning, reading as much as I could realize a GC license. The only stuff above that is a commercial GC license, which means you can do both commercial and residential. Went for that one first, 17 books, different trades, studied, asked questions, took some courses, passed it, and then decided to go for the South Carolina one as well. I took that one past it, and if all goes well in two months, I'll have my Georgia one as well. Just again, make sure you control costs and you vertically integrate the system because you need to control your costs and be weary of everything going out there and what you're being charged for. That could break a deal.
Mike:Yeah. What's your advice? What are some things that you do? To control those costs.
Joao:So to control the cost is I like to buy things in bulk or like to get as much as I can, as far as that goes and make sure it makes sense overall. I like one system. I used to paint my ceilings, for example, white and my walls gray. It took a lot of time. It was a lot of things being done. I'd rather just make them white across the board. Top, bottom, white, trim, everything, semi gloss. Saves time on flat and things like that. And getting my product in both from Amazon business or from Lowe's or Home Depot or has better pricing. Working with the store managers or my reps to see what's on sale, what makes sense, what is overall better and just do it that way.
Mike:Gotcha. So you you, when you do a project, like you source all the materials for the project.
Joao:Yes. So actually when I first started in building up, it took a long time to get to a nice system and I was able to eventually start hiring things out. Like doing things on my own was great, but it took a lot of time, a lot of energy. So the right person, the right spot I was able to like social media was terrible for me. For an example, so I started making spreadsheets of what I need and now I got a great virtual assistant who has it all for me, a spreadsheet that shows all my items, the skew number, the cost. If I buy this much, it goes for this cost. And then with my other partners in commercial, we have full transparency of everything, what it's going to cost, what the turnaround time is, what, how much it is, it's just so much easier having systems in place to make it more cost effective and efficient.
Mike:Gotcha. And then are you just hiring people to do like the labor then? And then do you have a fixed cost for what it should cost for each to install or do each of those line items or?
Joao:So it depends on the project. I have some in house guys who are on salary. So obviously, if they're busy or I'm booked somewhere I'll find some subs to do the work. We're on a price. Everyone wants top dollar. Not everyone gives top dollar work. So I have a bottom line price the most I'm willing to pay. And the way I try to tell people is, you may get 30 to hang and finish a sheet of drywall, but if you finish 50 a sheet, this is on you. This is what I'm willing to pay for the job because I know what's fair. The faster you do it, the more you're going to get paid in the day. So it's up to them, we try to do it as best as possible in house guys. I train them as much as I can. So if I got three new guys working for me and we've got a sheetrock job coming up, I'll say, Hey, go help them out. You're going to learn from him. Make sure you get it and any questions you got to ask them, help them practice. This is your time to increase your value overall, learn, grow, and just become an overall better, better person to be on these projects. And that's how my, all my foremen know, backsplash, click lock floor, basic plumbing, basic electric from going on SOBs I put, subcontractors and just learning from them. And that's something else I'll now help control the cost when it comes to it.
Mike:Yeah, I gotcha. And your construction company, is it only exclusively for your own projects or you're also doing them for like other investors or?
Joao:So when I first started out, it was for, whoever's called, but as things started scaling up, it turned into more, our projects we're doing in house and doing it that way. They're here and there while other investors, but at the day, it's more beneficial for me just running things on our projects personally. And doing it that way. So I don't mind hopping on calls video. I've got a lot of other investor friends who will call me or FaceTime me at Home Depot or while they're talking to their subs to work out a system or see what's going on or just review their invoices and make sure, am I being overcharged? What's wrong here and do it that way. But for now, it's just an in house kind of thing. It just makes more sense for me to. Have my guys focus on my stuff.
Mike:What's your advice to someone who's, really trying to systematize the construction side of their business?
Joao:Learn as much as you can. Being on site and talking to guys, whether you know what they're doing or not, ask those questions, have them explain to you why. I've worked with some of my partners now in the commercial building I bought and they will sit down and listen and sometimes it may not make sense, but. We break it down for a way that it makes more sense. One thing is, why does a house settle? And I was just telling them in my, I was spending it too in depth, but the easiest way to say it is if you've got a bucket of dirt, for example, that's to the rim flat and I fill it with water, no matter how much it's going to come back, it's going to get tighter and smaller, same thing's going to happen on you that gets wet. Eventually your house is going to start to settle. The foundation is going to take a hit. Which is, yeah, you can add more foundation, but the main thing is you got to fix that water. So easiest fix at a gutter system, get your water 12 inches away from your house. And that water will never again, surround your house and have all that sediment, compact, say, just have a couple of hundred thousand, not a hundred, but tens of thousands of dollars there just by doing that simple things like that, just breaking it down. We can all explain it ways. Just ask the question. You don't understand the first time have them break it down again I mean I've yet to one sub or another GC that doesn't want you to learn I'm sure there's some out I have yet to meet one
Mike:and then what about like the systems that obviously want to learn but if someone wants to build out like the systems On the back end like what kind of systems have you built besides just like the pricing sheets that you were referring to
Joao:So building a relationship is a big thing for me and system wise. I kept Home Depot, Sherwin Williams, these managers, all of my direct sell, I can say I got a project coming up in a few weeks and if they don't have the gallons of paint I need, they'll order from different stores, have them ready, they won't use them, but they'll help me for me to use, again, make an inventory list of these are the most common items I use for a low grade rental, mid grade and high grade, different fixtures, gooseneck faucets, higher end bathroom fixtures, They have these new mirrors for bathrooms that have built in defoggers and light up things. Just having all in place so you know when you get in there, you walk the property, as you're driving home, you can start, don't do it while you're driving, but when you get home and start plugging in what you need, and you have a better idea of your material cost, your overall cost. Hey, it's going to take about two weeks. I like to add an extra week just for flex. Things may happen, they will happen. A little more time there. Have a relationship with. Insurance guys, inspectors, whoever you need to build that team, they give you the most confidence. So you don't make as many mistakes on these deals. One wrong mistake can cost you thousands and can probably bankrupt somebody. So we need to make sure you do as much due diligence as possible. Ask anyone any questions. There's even public Facebook groups. You can ask questions and people will answer. Not all of them are great, but people will answer and try to help out.
Mike:Yeah. What's your, and what's your advice for people if they're trying to make sure they find the right subs to work with as an investor?
Joao:Interview a lot of them. Don't sign up with the first one. The way I like finding my subs or my guys is go to Home Depot, Lowe's, go to these big box stores, 6 in the morning, 7 in the morning. You're going to see the ones that are up there early getting the material, getting this stuff ready to go on the job site. First, the guy that just walks into your job at 10 a. m. 11 a. m. and just starts work until five on the dot. I like finding those guys that are, they're bright and early. They built the rapport there. And when they see you as an owner or an investor getting your own material, which I used to do all the time, it means it speaks volumes to them just because they're not used to seeing in their eyes, someone at that level being there that early one. Loading up the truck, blood, sweat, and tears side by side with them. And they'd want to work with somebody like that because they're not an employee at that point. They're part of your team that you're building and you want to learn. You want to grow. You're going to see where they're at and it means a lot to them.
Mike:And what is once you've start talking to a few people, like early at home Depot there, like, how are you? I guess evaluating to know if they're like actually going to be able to do the job well, or if they're like the right person for you.
Joao:So I'm not a big fan of showing me, pictures of your previous work. They can Google find things or take someone else's more than likely if you're finding them at Home Depot or Lowe's, they're doing a job now. Or they've done a job before. So I always tell them, can I drive by and check out your work? Can I see what you're doing? And they're never going to say no, they just going to be like, come look at it, here's the address, walk by and they'll walk you through it, give you a tour and you can see where those detail items are, they may be great. Sheetrock hangers and preppers, but they may not be detailed guys, which is fine We'll do the majority of the work and then you find some detail ones at the end to clean up and make it get that Final look so it just you know, definitely walk it live. See what they're doing Some people like the pictures reference pictures. Some people like references. They're great I just know I can give you five references their personal friends or cousins and just come see the work being done in person Look at it yourself walk through it. Talk to the homeowner if they're there. How have you worked with them? You know just get real life story
Mike:And then once you decide to move forward with someone like are you like how are you structuring your process with them in terms? Of like draws and or anything I guess in general.
Joao:So my biggest thing there too, and that's a great question is I like I have my own Pro account and there, you don't need to have a credit card or, a contractor license, you're going to go to home Depot, low, Sharon Williams, open a pro account and have them all put it under your account. So you get the points. You get easier visibility of invoices what's being used and you know You buy the materials up front so they can make a material list They go in the store pick up what they need call you to pay for the phone all goes on your account You get the points for it. You get visibility of what was purchased and then as far as labor goes I don't mind doing 20 percent down to start. And then as we hit certain milestones, so if it's a seven day project, you get 20 percent to start and then day two, depending on how far we get, 10 percent day four, whatever we go that way, I will never give someone all of it up front. I wouldn't even do half just because there's no more motivation to come back. I'm not saying they're going to take your money and run. But they may take on two or three other jobs and they'll get it done, but you're no longer a priority for them because they've got everything they need from you already. So I'm a big fan of pay as you go and you get paid for progress and hitting milestones.
Mike:Gotcha. Any other tips you have for people who are trying to scale a construction operation?
Joao:Definitely vertical integration. So if you can, bring it in house. I like to do things like where it's going to call the market rate is 5, 000 for example, to paint 1000 square foot house. And these are just numbers I'm throwing out. But all these new rules coming out of doing a refi in six months, need seasoning period or whatever. If my guys in house to 2000, my construction company is going to charge my property management company 5000 which is market rate. So I get my money out quicker. I can use it for the next deal. I can keep that way and I don't have to wait this six month seizing period. I may leave 5 percent in there, but not the full 25%. I have my capital back to be able to go into the next deal and use it up as I need to.
Mike:God is this, sorry, say that part again. So you're saying your construction company will do the work for the. Property manager. And then I just want to understand how that
works.
Joao:So I have an LLC for property management that controls all my properties and then my construction company, a separate LLC. So when it comes to draws from the bank or wherever we're going, I'm going to match the market rate price. So I get more of my money back up front. I'm not going to wait to see Sally or anything.
Mike:Like on a construction loan, for example. Gotcha. Okay. Makes sense. And then I know we were talking a little bit offline about how you I know you're still doing some single family flips, but you've really made the jump from a residential to commercial. When did you do that?
Joao:So we bought our first commercial building and by way, my business partners, Cole and Nate, they're also part of my social media. If anyone wants to follow that, we. We all met, I want to say, geez, probably three months ago, maybe four. And we're just ping pong off each other. We've all got properties. We all wanted to grow and scale cold already had around 10 or 15 units, something like that. And Carolinas are just booming. It's crazy. So it was talking of why we want to make that jump. And for me it was, I've got a few duplexes, a few single families and. Each one was built different 1940s, 1950, 1970, different roofs, different HVAC, different everything, basically. And just the time talking to tenants or fixing things or looking for properties on these commercial buildings. We just bought a 12 unit in Kernersville, North Carolina. They're all the same two bedrooms. One and a half bath, the layout's the same, so that gave me more bargaining power with Home Depot and Sherwin Williams and Lowe's to, now I buy 10 toilets minimum for around 73, something like that, versus buying one or two at a time for 120, 130. Doesn't sound like a big deal, but at the end of the year that adds up a lot. Same thing with paint, I was able to get a great rate of paint, five gallons I think, of semi loss paint I pay around 134. Semi gloss Promar 200. So just being, and then doing these things so much faster and easier, I no longer have to deal with the three T's, trash and toilets. Don't want to deal with that anymore. I'll just get an email from a property manager. Here's what's going on. I either prove it or I don't, like a ridiculous water bill or something. And just walk through why it's being done and gives me more time to focus on the bigger things, focus on all the single family flips we got going on, focus on the birds we got going on, focus on, my teams on the ground that are doing construction currently. Knowing that the other people are in their right spot handling those things.
Mike:How are you going about sourcing your properties, whether they're like the single family flips or the, multi families you're now looking for?
Joao:So that was one of my biggest weaknesses, I would say, where I was not great at talking to wholesalers. I was not good at driving for dollars. I wasn't You know, cold calling, those just weren't my things. I don't have the voice for it. But I found other people that do and they're great at, they love driving around, getting lost, putting post its on doors and mailboxes and, knock on wood, we were able to get three in the contract three days ago, working on getting one of the contract now, single family, commercial side. We've already sent out a few LOIs for more commercial buildings. Because that's where my other partners shine. That is their niche. They love it. I don't, but in fairness, they don't love construction the way I do. So it's a perfect fit. They get nervous about the budget or this happening or what do we do when this goes wrong. And for me, it's pretty simple. Like here's plan B here's plan C. We already got it. So just building that team that can help elevate you and help you scale. It's been amazing for me. We just, this year it's going to be crazy.
Mike:What's your ultimate vision for the next call? Three to five years,
Joao:three to five years. So
I
Joao:think I made my first. I definitely recommend everyone get a vision board. I was laughing about it and saying, it doesn't make any sense. Then I built one and now it's in my, every time I take a few seconds off from emails or work, it's in my face. So it's powerful, man. I think it was October, 2023. I made my vision board of two flips, two commercial buildings. Dump trailer and something else, just little things, just cause I was trying to, and two trips. January 2024, we had two flips on the contract. We closed on that building in February. Like I knocked that out where I have to amplify that vision board now. So on there now for this year is 100 doors. So at least three more buildings, I already got the flip. So I'm going to add six to eight more, either flip or bird doesn't matter. Burr, I'd rather keep long term flip is for quick capital. And then I have surprisingly, it went from trailers and things like that to now more vacations,
it's
Joao:getting surreal to when I built, when I was able to not even build it because they, we all found each other, have this team together where I'm noticing this past weekend, Saturday and Sunday, my phone was not that crazy at all. I was able to sit down, have dinner with my parents. Just talk, hang out. Some days during the week, weren't as bad. And it's not that it's not as busy. It's much as we've got a team now that handles certain areas and we all meet up as needed and can scale bigger. And it's just getting. Bigger and better. I've been my busiest year before this year. I've had maybe four houses under contract with my business partner Jackie, we've got
I
Joao:think we got eight pending and we just started March.
Mike:Nice
Joao:Crazy.
Mike:Yeah, that's awesome, man So you're Gonna keep the single family flips going and also just the multifamily more like a pat like a passive income type approach or
Joao:correct? So the commercial ones are long term. So obviously being you know, he's on those projects. We don't get paid so The sale we have, we invite other investors to come invest with us. A lot of people that don't want to get involved in the underwriting, walking properties, talking to tenants, but they want to be involved in real estate. They want to avoid taxes. They want to just be part of a group. And inflation is real. So be part of something that where their money grows and they know they've got a team that can help build it and take care of it. We have webinars, meetings, we have this opportunity and people can invest in there. And just get emails from us, updates from us, call us and move their capital there. Say they own part of a building, which they do, and get those tax benefits and have the money grow. Our last deal, and I think it was a 2. 3 percent return or equity. So people put in 25 K when it's all done at the end, they're walking away with double a little more. It's a, it's just a crazy game and you just got to find the right people.
Mike:What are you like specifically looking for in these commercial buildings? What's your criteria?
Joao:We love value add. The reason we went after Kernersville was, it was a 12 unit. Their current rents were 695 when we got them and the market was 1200. So this was part of it was, acquired landlord. He had it. As we were walking the properties and one big advice for new investors, you never tell people you're the owner. You can be the insurance guy. You can be that landlord. You can be whoever you want. You just not the owner. Otherwise you're going to get those. What's your name? How can I call you? How can I email you? You don't want that headache. So we're walking there and just saying, Hey, we're insurance adjusters. I'm in my construction close. I'm there to do some work. And it was, popular managers don't answer us had this leak for so long, had this happening. And we're just like, Yeah, they just weren't being heard. So we knew right away we needed to make those changes. We needed to bring these apartments up to current standards. And if we want to help change the neighborhood, which a lot of cities want you to do. If you see a rundown building, chances are the owner is not as involved for whatever reason. The other buildings are just, they were inherited it, whatever the case may be. Finding a way to fix everyone's problems so it's a win situation. And seeing how we turned a C, our goal is to change that to a B. And I can send you guys some videos too of, some of the walkthroughs you're gonna follow me on my social media to see some of them, how we turned it around and changed it. We got granite countertops, stainless steel appliances, backsplash, brand new floor, it's just, it's night and day. And it increased the value, so we bought it at 1. 05 million and I believe my partner Cole said it today, when we're done, we're going to sell it for, I think, 2. 3. It's a good bet and just the right people there. It's just been, it's been crazy.
Mike:Are you guys, plan to hold it for a certain period of time or is it just until you stabilize it enough to sell it? Or what's your strategy?
Joao:We're gonna stabilize it and then year one or month 16 window refi get everyone their money back Obviously more on top of that. And then we're going to sell it year five.
Mike:Gotcha. And I don't know as much about the multifamily space. Is there a reason to sell it in year five versus, I don't know, hanging onto it for another 10 years?
Joao:Just to get the appreciation back, get all that money back, the capital and get more and just keep doing it over and if we find a great one, plus when it comes to syndication, if you know you and five more people invest, you don't want to hold on to it. 10 years, you're gonna want all your money back. Plus then some, and then get the next one, get a bigger one or a better one and do it that way. We find one that's amazing. I don't know how well you know the Carolinas, but like Greenville, South Carolina, if we find something down there, that's like an F for cheap and we're going to buy it and fix it. We probably would never let go of that one because that's the next Charlotte, that's the next Atlanta. So knowing it's going to build, we'll hold onto that for a pretty long time.
And
Mike:outside of just looking for something that's value add where of course you can bring into your construction experience. Is there any other like things that you guys are specifically looking for in these multi family buildings?
Joao:So just no, pretty much this value as we're looking for making sure it makes sense for everybody. The reason I love working with Cole and Nate is because we got to make sure everyone is safe. So we go very conservative. Just to make sure whatever we tell you, you're going to get, that's the minimum you're going to get. Knowing that you can always get more. I want to make sure we take care of everybody. The last thing I want to do is promise you a hundred dollars and give you 70 still making money, but you've already got your eyes on a hundred. So if we can give you one 10, one 20, you'd be happier. So we just got to make sure we take care of everybody. Everyone's. And then if we have GPs that want to join the team as well with us, they hop on the calls, ask us questions, fly down or drive down wherever you are, walk to the properties and truly help you grow. It's become so surreal just from two months ago of what we're learning now with other investors that go into single family or commercial. The questions they have. And so we're actually working now on building a program, if you will, that trains you on how we did these things, and obviously we can help out and answer questions, but we want to give everyone those tools to learn and grow. I'm not a genius by any means. I'm not the most athletic guy in the room. My corners are the same where there's one same trend is just being consistent with it. If you keep trying, growing, you don't give up. We're all going to fall. I can't tell you how many times I've fallen or I've stumbled, but. I'm not going to stay down. I'm going to learn from it. I'm going to grow from it. And my partners are the same way. We all have that. So ask those questions, put yourself in the room, get yourself to grow. That's the only way we're going to get through this. That program that my buddies are building or my partners are building. I told them it's going to revolutionize this whole thing. I've been part of programs and coaching programs and mentors. Now I was just dumbfounded, this is crazy. It's great. I'll send you a copy to check it out. Let me know your thoughts. It was great.
Mike:That was another thing we were talking about, like offline. You said like a big shift for you was just getting in the right rooms with the right people.
Joao:Exactly. I don't know if you can tell or not, but I'm not very extroverted at all. I'm very introverted and It was always my way I did things. And when I saw a lot of posts for these real estate events, real estate meetups, breakfast, whatever you want to call it. And I just didn't want to go in a room with people I didn't know. But again, the force that changed. So the first event I went to was Bird360 from Nate Barger, his group. He's been an amazing mentor. Absolutely phenomenal guy. Super smart. He's a human calculator. Basically I'm serious. They gave him a calculator to use just to slow him down. So I went to this event, walk in there thinking there's gonna be 40, 50 people. There's at least 200 people in there. I'm like, crap I don't want to, I can't walk around to a table and meet people. So I found the Tape on the back right corner. It was empty. There were like six rows of empty tables, but I was like that's where I'm going to sit. Sat back there, kept my head down, got my laptop out to take notes. And there's other people in there, extroverts, like one of the guys I met, good friend of mine, Okino Smith. He's actually, I met him at that conference. He was one of the first original members and he had, I want to say, three or four flips under him at that point. We met a year and a half ago. And he's actually currently in the final steps of buying his first hotel. So it's just great. And I took them after the whole event, people were meeting. I was going to talk to this kid, went up to him, shook his hand, said, Hey man, your story was inspiring. I'm just telling you, I'm going to, I'm going to be big too. I'm doing my thing. I'm coming for your spot. Just joking with them. A lot of people came up to him and met him. So I didn't think he remembered. I think fast forward a year, doing, more flips, more things going on, see him at another event. And he went up, gave me a handshake. I was like, you remember me? He's yeah, you're coming for me. How's that coming? And we just started laughing and going, and we just started walking. And he said, can you help me do a PowerPoint presentation? That's no problem. I was like, I can do that. I was just like, just make sure I'm not going on stage. Cause I don't, I can't do that. Yeah. Yeah. No worries. Don't worry, I got you. Cool. We met a few times, went over the PowerPoint. The day of, he's he went off the cuff completely. He did not follow the PowerPoint, did not follow the script, nothing. He's just I want to bring someone up here, I want to talk to him. And immediately, I felt my body get 100 degrees, instant fever, I'm starting to sweat. But he pulled me up there anyway, started talking, everything, dead silent room. But I got some of the best advice during that conference when I was done just saying, Oh, one of my mentors, I was nervous. I was scared, like talking in front of people. And he gave me the best advice I've heard, which is why I can now speak is everyone that comes to these events or comes to these online things, they're not there for you to fail. They're not there to laugh at you. They're there for a reason. They want to learn. They want to grow. They've got questions. They were in the spot you were in, or they know someone in that spot. So they want you to succeed because when you succeed, they're going to succeed. And that was. Another mind blowing event for me. But if it wasn't for Okino pulling me on that stage and making me talk, I wouldn't have met my business partners today. Like they were watching, they were there listening. And they're like, we got to talk to this guy. He's nervous. They told me every time you're clearly nervous and scared, what you were talking about and. We just had to talk to you and, a few months later we closed the building and there's no stopping us. We've got so many more in the pipeline and we're just growing bigger and bigger.
Mike:Yeah, that's awesome. How did you how did you guys find that first deal? I know it's your kind of other two partners who handle that side, but I'm curious where it came from.
Joao:I asked the same question. So they make relationship with brokers. So Nate Farmer. Amazing guy. If you have him on the show, he's, he can go in a room and do a cartwheel, talk to everybody immediately. Like I cannot, I'm going to go around the side and, or maybe just walk in now, but I can't do that. He has a relationship with brokers. He'll call them up, introduce himself, let them know what we closed on, share our portfolio, let them know how we can close and do things. Cole as well has that great relationship. He underwrites, he founded on loop net, ran the numbers that, Hey. Your numbers don't make sense. It makes more sense at this, where can we meet in the middle? They worked out a deal, got in a contract, and then just went from there.
Mike:And what about the upcoming stuff? You said, I think you guys have about, like you said, 30 units in the pipeline that you're working on.
Joao:I think six in the pipeline right now. The smallest one is 30 units. And it's 40 and around there for more of them in the Carolinas, North Carolina. And same thing, just reaching out to these brokers, either calling them, emailing them, seeing what they have, giving them what your criteria is, what you're looking for, and take them out to lunch or dinner, whatever you want to call it. Show them that you are serious. You're not that you're wasting their time. You can close, you've got friends and you can leverage. Events like Nate Barger, my mentor, my main mentor, he has a group of thousands of real estate students across the U. S. and he'll tell you, listen, if you got a deal up and it makes sense, leverage us, tell them, you're part of this group, you're part of a group of hundreds of thousands of people and you can close and it makes sense. We'll hop on the call with you and help you close. So just meeting those people that want to help you grow and truly want you to succeed. Has been phenomenal for me.
Mike:Yeah. And you said that the next thing you guys have in contract, that's it's 30 units.
Joao:Yeah. We put an LOI, letter of intent. Hopefully they accept it if they don't. What's the next one? There's more deals out there every day. We always hear new markets going to crash. Things are coming. Interest rates are too high. As long as you're making money on it. Interest rates are going to go up and down. As long as you're positive on it, you've got a good team. The best time is now. Simple as that. Yeah,
Mike:for sure. Gotcha. And then you were saying something about your property management company. So are you guys handling that in house then? Or, separate entity, but in house?
Joao:So when I started my single families and duplexes, it was in house. I was handling it. And then as I grew, it just became too much of a headache. And we actually just give that off to a separate property management company and let them handle it and then just report to us, let us know what's going on. It just became easier because now I'm more hands off on a lot of these things and just give it to somebody who, is part of that group and performs in that area.
Mike:And how do you find that person? Because I'm sure you get, you have to buy in all over both Carolinas, right? It's a pretty big space.
Joao:Yeah. So we just had interviews. We interviewed all of them, gave the worst case scenario, best case scenario. Things, that I've been through that I've seen how they would handle it, what they would do in a situation. And at the day, hold me accountable. I was on a podcast earlier where one of the biggest thing was a property manager. They're great. But when you bring that in house or you vertically integrate that, no one's going to take care of the property the way you do. No one's going to care about it as much as you are. So as much as you can do to succeed in advance and bring that inside and have better control, bring a property management as a GP, as a co owner, co sponsor, whatever you want to call them, make sure they are more incentivized to take care of it the way you would. One story for the Kernersville one, I don't know if you want to go into that plumbing one I told you about, but
Mike:sure.
Joao:So there was a, we close, let's say it's Tuesday, Thursday we get a call. There's a. A major leak, of course it happens, for all units, 12 units and the front, I get out there. It's a two hour drive for me. Get out there. You can see it coming out of the ground. Call up some plumbers, commercial plumbers, everyone can fix it. First bid came at 14, 000. Second bid came at 16, 000. Talking to other investors, it's not a crazy figure for a commercial 12 units, the main drain line. It's a pretty good deal. Me being construction, I didn't like that price at all. Like I'll dig this by myself and you give 14 k, sure do that. I was like, lemme, what are we paying for? Exactly. Break it down for me. Line by line. We did, there's so many things on there we didn't need. We didn't need excavator. When you're damn well, it's only two and a half feet deep. A dye test. So that segment of toilet leaks, you throw the dye in there, flush a toilet wherever you see that. Color come out of is where your leak is in the pipe. It's coming out of the dirt. You're not going to see it. Don't need that. Or taking things off. We don't need and saying, this is all we need. I know what the leak is. I have guys who can dig it up if you don't want to, this is what we've done. And today we paid 3. 8 thousand versus 14, 16. And my partners were beyond happy just saying that was a huge save. And I'm just feeling like I'm not going to pay a lot of logs. Just not going to happen. Yeah. I went to Lowe's, picked up some shovels, picked up some flex tape. I was like, I could do that, but gave it to somebody else when we agreed to a good price and got it done that way. And just. Again, having the right people in the right spot, like that's one of the biggest things why they want me on the team or invite me to the team because these things can be handled in house and better off and, worry about inflating costs here or paying for things they don't need. It's just not going to help.
Mike:Gotcha. We're we're getting close to the end here, but there's there's always two questions that I like to ask at the end. And the first is, what's the craziest or most uncomfortable situation that you have ever experienced? In a real estate deal,
craziest,
Joao:most uncomfortable, I would say aggressive. Previous tenants, I guess can't say any names or anything, but we had tenants that were a quarter or so behind on rent. Didn't want to pay. Eviction process started obviously. Letting them know what's going on. I had my team on site and my team didn't make any communication with this guy, but I'm there wearing my construction shirt. So I'm not an owner. And this guy was just very irate, big guy, very irate, try screaming, cursing, try to rush my guys. And I don't know why I did it, but I just got in the middle and just. Stopped them and just try to talk to him on what's going on. And he was screaming cursing at me, putting his finger in my face. And in my head, I know the whole story. Like you're being evicted. You didn't pay three months rent. You broke stuff inside. You're not even on the lease. It's crazy that he's there yelling that he's paying for this and he's owner of this. And I'm like, you're not, let's just knock it off. Let's just, you're, he was in his at least late forties. I'm like, I don't know what's going on. You really want to start this. It doesn't make any sense to me, but advice everyone out there. Don't ever get in a confrontation. Leave the situation, call the police, don't put yourself in a bad spot. I only got involved because I didn't want my team members to get hurt or injured. Always try to defuse everything as possible. If you can't just get out of there.
Mike:Gotcha. And for some of the newer people listening to the show if you could go back in time, give yourself one piece of advice when you were looking for your first real estate deal. Knowing what you know now, what would you tell yourself?
Joao:Meet other people, go to these network events, whether it's a breakfast, whether it's An event going on, whether it's your local CREA, whatever it is, just go in that room and just talk. There's going to be new people there, experienced people, and then, veterans of real estate that can answer every question you got. If I sat down with somebody that's getting brand new into it, and I told you all my horror stories or how I fix things, that could save you tens of thousands of dollars. Just learning that like Nate Barger, my mentor, after he released a construction template, whatever it was. And I went back and my old projects using it. I could have saved on one project. I think it was like 42, 000. And I told him that I was like, listen, you've saved so much for us. It's crazy. Just ask those questions. We're all, smart people. We can read all the books, everything, but ask those that have been through it already have gone through it. I've yet to meet anyone that's not going to share their information and try to hold it close to their chest. Ask those questions, whether you think it's dumb or not, just ask them. I'm, I've got no issue to this day going to a local event, raising my hand, asking a dumb question. I'd rather do that than walk away and not know the answer and, ask them. That's the only way you're going to learn. Put yourself around people that have been through there, that are in that spot. And I'm a guy that if you ask me a question I don't know, it's probably going to bug me. So I'm going to go find the answer for you so I know as well. And, we're going to grow together. That's the best way to do it. Help each other out. We can all do this.
Mike:Yeah, I like that. Great piece of advice. If people want to reach out to you after the show if they have any questions or, maybe they got a multi family deal that you guys can look at, how can they do about, go about doing that?
Joao:Yeah, they can shoot me an email at joao, J O A O at S T F hyphen capital dot com. And I can even send you guys my link to, that to put in the episode and, You can have all my social media tags and posts, see the updates, see the renovations we're doing, see the flips, see the commercial opportunities. And we're going to start some blogs. We got how to DIY your backsplash, how to, frame a wall, things like that help the community grow.
Mike:Cool, man. Awesome. Thanks for being on the show, man. This is great.
Joao:No, thanks for having me. I appreciate it, man.