The Norris Group Real Estate Podcast

Breaking Boundaries in Real Estate Ventures with Carlos Diaz| Part 2 #873

• The Norris Group, Craig Evans

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Carlos is a seasoned real estate investor and proud owner of Ridgewood Property Investments.  A company that buys, fixes and flips properties in southern California with an emphasis in the Inland Empire.  A licensed Real Estate agent, he will on occasion represent buyers and sellers in a traditional manner as well.   

 Growing up in the inner-city taught him many life lessons and credits his parents for his work ethic and navigating the neighborhood gang violence of the 90’s.

After years of obsessing over the real estate industry, Carlos bought his first rental property in 2011.  Always dreaming of quitting the traditional 9 to 5 job, he decided to dedicate more time to investing.  Working 2 jobs to save enough to launch his flipping business which he funded 100% for 2 years.  In an effort to grow his business he would discover advantages of leverage and in 2022 became a full-time real estate professional.  Finally quitting that 9 to 5 job.

In this episode:

  • Mentorship: Who were his mentors when he was starting
  • Carlos highlights the importance of finding the right club for your market
  • Funding his first deals without leverage
  • Introduced Ridgewood Property Investments
  • His advice to people that are starting out: Be consistent


The Norris Group originates and services loans in California and Florida under California DRE License 01219911, Florida Mortgage Lender License 1577, and NMLS License 1623669.  For more information on hard money lending, go www.thenorrisgroup.com and click the Hard Money tab.


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Narrator:

Welcome to The Norris Group real estate podcast, a show committed to bringing you insights from thought leaders shaping the real estate industry. In each episode, we'll dive into conversations with industry experts and local insiders, all aimed at helping you thrive in an ever-changing real estate market. continuing the legacy that Bruce Norris created, sharing valuable knowledge, and empowering you on your real estate journey. Whether you're a seasoned pro or a newcomer, this is your go-to source for insider tips, market trends and success strategies. Here's your host, Craig Evans.

Craig Evans:

Let me ask you, as you were going, as you get started into it, did you have any mentors? Did you have people that were guiding you along the way? Are you just winging it the whole time?

Carlos Diaz:

I want to say, obviously, in the beginning, I was, it was just me trying to figure it out. And I will keep on hitting walls dead end walls. Because you can read a book, you can hear a tape, one at a time tape, right? And, right and all that would have been outdated, right? Or it was somebody in a different state, different county, there was a lot of information, but nothing worked at the time, right? All that was new, the whole foreclosure thing was new. Nobody really wanted to buy at the time the government was giving you $8,000 to buy a house, right? Like they were giving you money to buy a house. So that was that was weird, too. So there was nothing that I can see. And read to figure it out. So I had to look for somebody, right? That was the next best thing. So at the time in the Inland Empire, there was a guy that was doing it in his own way. So okay, well do I just get somebody that's mediocre, or I go to the top guy. So I just went through the top guy, you know, a lot of phone calls, a lot of persistence. But he was actually the one that assisted me with getting my first rental. And a few years later, he was the one that assisted me with the flips. So I was able to learn a lot from him. But as you may know, when you're starting off and building your own empire, you're going right, so this guy was going he was going, going, going. So it was difficult to catch on. But once I did, he was more than willing to share all the information, which I appreciate to this day.

Craig Evans:

So, I'm interested to hear who is this guy?

Carlos Diaz:

So a lot of your listeners may know, it's Ricardo Acevedo.

Craig Evans:

Okay.

Carlos Diaz:

So he actually was at Century 21. And he opened up his own brokerage. He has his own building now in Ontario. So you can see at the time that he was calling, he was just extremely aggressive in the real estate industry. And I respect that it's so much to where okay, if he doesn't answer my first five calls. He'll that's where my six. Which he would, right and I understood, I

Craig Evans:

Right. understood what he was doing. Because I got the sense to where that's where I'm going to be, right. And unfortunately, we do get caught up because it's happened to me where people you know, reach out. And I'll tell them, I'll call them back or I tell them how much are my tax at and days will pass by, you know, it's not like we do it on purpose. It's just we're caught up, we're working, right so I respected that from him. But when I was able to catch him, which I respect that even more he was more than willing to share everything he knew. So, I know you've got good history with The Norris group.

Carlos Diaz:

Right.

Craig Evans:

I have through through kind of studying prepping getting ready for this i i understood that you had done some stuff with Aaron, loved Aaron, good friend of mine, big reason why I now own The Norris group. You know, him and Bruce are just wonderful friends. But from what I understood you you did went through like an investor roadmap with Aaron, is that correct?

Carlos Diaz:

Yeah, so I don't remember what year I sat down with him and Joey as a matter of fact.

Craig Evans:

Okay.

Carlos Diaz:

Right. And it was when I was...

Craig Evans:

I would hold that against you used if you sit down with Joey also know.

Carlos Diaz:

But being new into the industry, obviously, you call yourself a real estate investor or that title, but there's so many different aspects of being a real estate investor. So that's where I was lost. And I knew the new Norris group would have a lot of information on their website they would Bruce would have host, he wouldn't host but he would be part of meetups and I would go to at the time. So I had set up a meeting and it was Aaron and Joey, that pretty much well, Aaron, that laid out that roadmap of what I truly should be doing. So he actually gave me the step by step, if you will, right, of where I need to start focusing on and the steps I need to be taken in order to actually start this as a real business, right, because prior to then, I was getting deals. And I wouldn't say they weren't easy. But Ricardo was sent to me. And it was pretty much a mirror of everything that he was doing. So in the speed, it was difficult to actually catch every single aspect of acquiring a deal. And selling the deal, right? And everything in between, right, that's where it was a little, that's where I was a little lost, right? So sitting down with Aaron, he pretty much laid out everything that was getting done already. I just didn't know and what steps, you know timeframes who I should be, you know, associating with. And I want to say he was actually the one that sent me to a couple of meetups, which I actually loved one of them and I was an active participant in that one for up until they closed. So I think the biggest thing is, number one. And this one, I took it to heart, and I won't say I used well, I don't want to say I do use it even until this day, that not everybody in this industry is in there for you, right? In other words, you have to really like trust your gut, right? Well, that's what I got out of it. Him sharing and him being open was also without him even saying it but that was a roadmap of the type of people that are out there in this industry, the type of people that I want to be around with, you know, in the industry, you know, him his father and Joey being, I want to say the leading educators in the Inland Empire, if not Southern California, or all of California, it meant a lot to me that he, he himself would sit down in front of me and take an hour, it might have been two to be honest with you. And just...

Craig Evans:

Knowing about this, no one Aaron and probably was two or three because Aaron was right. He was this selfless person out there.

Carlos Diaz:

So he was and his conversation, it was just, it was probably an hour or two and it felt like 10 minutes. Great conversations full of value. But that's pretty much what I would, what I took out of it.

Craig Evans:

So what else did you do? You had a mentor you obviously you went and sought out Aaron and Bruce, things like that. What else did you do to try to educate yourself?

Carlos Diaz:

So it was, I want to say the only thing that I did do consistently was go to these meetups, these real estate investment clubs, right. And there was one particular one in Orange County. And aside from that, is actually just doing it. Just getting out there and doing it. I wasn't going to know, in my mind, if I was learning anything until I did it for my for myself, right, from A to Z. Once I started doing that, it felt literally the momentum felt like it was picking up, right.

Craig Evans:

So when you first started going to clubs, what do you think the most important thing that you did early on?

Carlos Diaz:

I would say the most important thing is speaking to the people, networking, but more than anything, finding that 1,2,3,4 people that were actually doing it, right. And just running scenarios by them, right, like worst case scenarios, best case scenarios, but there were people that were actually doing it. And I felt that's why I appreciate that club so much because there were more people I felt at that club that were active, as opposed to more let's just say non active, right? Well, I think that was the biggest thing.

Craig Evans:

You know Carlos, let's face it, there's a lot of people that are going to clubs that are great people, and they're all desiring to get ahead and to be more successful, to reach their goals, whatever their goals may be, right. But you said it not everybody is out for everybody. Most people are out for themselves. You know, it's like no, I'm gonna get mine, right.

Carlos Diaz:

Right.

Craig Evans:

And so it's a different mindset of people. When you say hey, we really want to see the group as a whole be successful, right? So, for the new listeners or for the listeners or listeners that are new investors, because I know we've got those, so if you're talking to them today, what do you tell them when they're looking for a club?

Carlos Diaz:

So what I typically tell them and I get that weird look, is get a feeling for it get, get, a feel for it, that's because it's business, I feel that you're gonna have to trust your gut a lot in it. And I think that's one of the first places that you're going to start at, right, because every club is different. Every speaker, every environment, that's the biggest thing is going to be different. Just find the one that you're most comfortable with. And just be consistent. I think that's the biggest thing too, because we jumped around from club to club, go from Inland Empire club and go to a South Bay Club, and then downtown LA club, there are going to be different people doing different active things, right. So just find that club that's in your market, the one that you feel comfortable with, and be consistent at that one.

Craig Evans:

I find it interesting you saved and saved and saved and funded.

Carlos Diaz:

Right.

Craig Evans:

All of your flips early in your career yourself, you use no leverage. So why was that factor important to you?

Carlos Diaz:

So I'll go back a little bit. So growing up, my mom more than anything would always tell me save if you make$5, save $1. If you make $10, save $3, whatever a little bit, you make save that little. And before you know it a month, two months, a year from now, it's going to be X amount. So that was already planted in my head. So I was a saver by nature. Then fast forward to what I was trying to do. I knew about, I didn't know what's called leveraging, I knew you would ask people for money, you borrow money. At the end of the day, you would ask people, most of the people that I would hear this from what has borrowed money from family members, right. And I heard so many stories of things going wrong, that I, it just wasn't even a thought anymore. I was not going to jeopardize anybody's money for something that I I "wanted to do." So since I wanted to do it. I had a funding and I had to figure it out. Because at the end of the day, if something did go wrong with the first couple of plates, it was going to be on me nobody else. I wasn't going to jeopardize anybody's money, but my own, right. So that that was pretty much a whole force behind it up until you know, a few years later.

Craig Evans:

Right. Right. So you know, obviously you can only you can only find your stuff by yourself so long. So, what kind of shifted and changed for you that helped you start to grow and expand your business?

Carlos Diaz:

Right? So this I remember the property, I just don't remember what year it was. But Craig and I had a conversation right at The Norris group. So he and I had a conversation. And if anybody's ever spoken to Craig, he knows what he's talking about. He knows his numbers. So that was more than enough for me to listen to him and actually take what he's saying. to heart, right to where I can leverage my money and have the investors safe. How he does that was enough for me to say, okay, you know what, it's still going to be on me if this doesn't work. If initial happens, it's on me. These people are going to be safe, and their money will still be their money, right? So that first property that I leveraged, I want to say needed, like$7,000 on it right? It was turnkey, pretty much when when I acquired it. So all this was going on in my head before I actually pulled the trigger on the first leverage. The agent that was listening for them, for me at the time had a buyer this property was in Riverside, had a buyer that was looking in Riverside within that price range. So I said okay, well, I have this property, but I haven't purchased it yet, right. I send them pictures. And they were extremely interested. Long story short, that was the first property that I leveraged once we closed escrow. It was like a three day rehab, right? And I want to say two days after they went to go see it. And obviously they had a Tacoma amongst themselves and they ended up purchasing it, right. So that's where I was able to see it was it was a baby step, okay, to see how it would be like leveraging the what the payment was going to be, what I was going to expect from them, and what they know the leverage company or The Norris group, what they would expect from me. And since I saw everything that worked out so well. After that, I kept on doing it. Every now and then if there's a deal that comes across I'll still, it makes more sense to fund it 100%. But I want to say maybe 90 to 95% of them are leveraged now.

Craig Evans:

Sure. What kind of volume was your goal early on?

Carlos Diaz:

So, in the beginning, I just wanted to be able to do two at the same time, right? If I did to at the same time, in one year, I was happy, right? It was just being able to organize the teams organize everything, and making sure the products came out in a way to where your average consumer wants a body, they knew it was a good product, and something that took a designer or construction team, six months, right, but I was able to tweak, that I was gonna be able to tweak everything to streamline the process, right, having two at a time, because having two at a time, okay, then I would just copy and paste to third one, copy and paste to the fourth one, so on and so forth. So that was a goal in the beginning just to be able to do two, then as that started to work, I just started to increase it right. And it just depends on the market. You know, there's times when the market gets a little slower time when the market picks up, when when when it gets a little slower, that's the best time for me to purchase. So that's when our loader right. And now we can just streamline all the other properties to where once we relist them, it's a good product.

Craig Evans:

What's a good market for you? How many will you be doing at once kind of what's your process from a volume perspective now?

Carlos Diaz:

or right now we can handle roughly for starting on a fifth one, today. So the way it is four is a limit because of the construction crew, which is now what I'm starting to look for pretty much more construction crews to fill in that void. But as long as we have that fourth one finishing, were able to take on a fifth one. So that's when the rinse and repeat is today. So with the crew that I have the most we can take on, I want to say would be five.

Craig Evans:

Okay, that's awesome. So, tell me about Ridgewood Property Investments. Tell me what is it? What is it that you guys do? And what is your vision for the future for Ridgewood?

Carlos Diaz:

Oh, great question. Thank you for asking. So Ridgewood Property Investments, it is what how it says, We just invest in properties, single family homes, we fix flip and list, which is a "slogan of the property." So we'll buy the property, distressed, we're able to close within seven days or less sometimes. And then we take on the construction, we fix it up, bring it up to cold, bring it up to Sanders, make sure that property is financeable. Depending on the area, we're able to see what we can do in order to get top dollar. Because that's another thing I look for every property that we do realist, we have to make sure that once it goes on the realist side, it is FHA compliant, which I like to call the property will qualify for an FHA loan, and they will pass FHA inspections. So that's what we look at. Once a property is done, we go ahead and list it. And everything's pretty much taken, "in house." So I will be the acquisition, and I'm also the listing agent.

Craig Evans:

Okay. So what's kind of a catalyst for you finally, let me rephrase. What was a catalyst for you to finally say, alright, I'm leaving all of this and I'm completely going out on my own. I'm no longer punching the clock.

Carlos Diaz:

Yeah. So once, I want to say it was towards the year before last that I left, I actually hired a CPA. And he was looking over all my numbers. So obviously, we discussed, we discussed what my goals were. So him being that person that isn't emotionally involved. That's from the outside looking in. I knew he would be fair, right? He would tell me what it was not what I wanted to hear. So I would touch base with him every year that past 'Hey, man, you know, I'm increasing this much. I want to leave by this time.' So my goal was 40, right by 40 years old, no longer a clock in and out. I want to say it happened a year sooner, which was great. Thank you. Thank you. So it got to the year before last. And that's where I had sustained it for two years, right. But the income, so the income was enough to cover not only what was going to be my lifestyle, but obviously I had to take into consideration mortgage, insurance, 401k, what I will put away aside from real estate in retirement, and it had to cover everything in order for me to be able to be comfortable in leaving. The first year could be that you get lucky, which is a way I looked at it. The second year to me was okay, well, it wasn't luck, obviously. There was Plan, and it worked. So rinse and repeat the second year. Okay, I'm ready to do this right. And April 15, the tax deadline was the last time I ever walked into a W-2.

Craig Evans:

Really?

Carlos Diaz:

Yeah, that will start out too. Yeah.

Craig Evans:

So you've been in this several years now that you've been out of a job, so to speak?

Carlos Diaz:

Right.

Craig Evans:

Working for somebody else. How are you sourcing deals now?

Carlos Diaz:

So today, it's usually from agents on the MLS. It's easier to deal with the agents I found, because they can always research you, right. And whenever I deal with an agent, I let them double ended, right? Because they obviously have to make an extra buck for bringing the deal to me knowing interesting that I'm able to close on it. So that would be one or a wholesalers. Now when I say wholesalers, I'm not talking about these big wholesale companies. I'm talking about these local market wholesalers that actually know the market that I'm in and know what numbers I need in order to purchase it.

Craig Evans:

As we've talked through this, again, we have a lot of people that listen that are young investors, right? What's the one piece of advice that you would give yourself? If you were starting right now?

Carlos Diaz:

If I was starting today.

Craig Evans:

The young you What do you tell you?

Carlos Diaz:

I would tell myself to take more calculated risks. Not to be paralyzed by analyzing too much. And just listening to one mentor early in the beginning, just pick one, right? I felt that I found my guy a little later, right. So just pick one earlier on.

Craig Evans:

Okay.

Carlos Diaz:

And be, what I learned today, which I was struggling with back then, is the whole consistency consistency thing. So just be consistent. You know, I know there's a lot going on, in your early 20s, mid 20s, even late 20s for people, right. But you need to treat this like a business and be consistent, which is the biggest thing I would tell myself.

Craig Evans:

You know, I've heard you talking about I think this is the third time now in our talk today that you've talked about consistency. What do you think is the biggest surprise that you've had in your investment career?

Carlos Diaz:

I think the biggest surprise is knowing what you're actually really capable of. I think for me, that's been the biggest surprise, trusting yourself and knowing or then knowing what you're able to do. Absolutely.

Craig Evans:

So do you think maybe trusting yourself was maybe one of the biggest hurdles you had overcome?

Carlos Diaz:

I want to say so in the beginning, if it wasn't the biggest, it was one of them. It was one of them, because everything was so brand new. And the key to his businesses. You know, and I hate using this, because it's been said many times in other podcasts, but being comfortable with the uncomfortable, right. But that's truly one of the keys because nothing's ever gonna go smooth, right? Even with the guy that does 100 flips in six months, they don't go smooth, you always come across problems, right? And it doesn't matter how big or small guess what you're in it, and you need to figure it out. And once you are able to figure it out, not only does it improve your confidence, you know, but it also improves your character as just as a person that you're great to.

Craig Evans:

Yep.

Carlos Diaz:

Of what you're able to accomplish.

Craig Evans:

Do you have a buy box?

Carlos Diaz:

I do. All right. And it's extremely straight, which is why...

Craig Evans:

I say you stick to that.

Carlos Diaz:

100% if that property doesn't check off all the marks, I pass on those, I pass on those. Because there's certain products that are tried and proven. So I know that the risk is I want to say almost right? But it's not existed. So that's why it's so straight. There are only certain type of properties in certain areas, certain locations, even if the spread looks great on "paper" but it doesn't fit my buy box, I won't purchase those.

Craig Evans:

So did you formulate your buy box or did someone did a mentor help you with that? How did you come to what that looks like for you?

Carlos Diaz:

So what's funny, I would literally back in the day back at that time I would be on Zillow and look at all the properties In certain areas, and I would see, okay, 3/1, 3/2, 3/1, 3/2 2/1. Okay, well, the majority are three twos, which means these are the majority that are selling. So the success of getting rid of these properties are a lot greater than a two, one. So that's where it all started. And Zillow really did help me out a lot, believe it or not, because I didn't have MLS access at the time.

Craig Evans:

Sure.

Carlos Diaz:

So I started going deeper into it, where I was able to see how long it was on the market, obviously, just on Zillow, but it will give me an indicator of okay, a two, one will sit longer. But a two one, let's say in a huge, half an acre lot will go faster, right. But it has to be in this area, like it would have to be like, in the center of Montana, because that's a property and experior or sit forever. So it's just a certain buy box that those properties have to fall under, for those reasons, again,

Craig Evans:

Carlos, I go back to the guys that have I shouldn't say just guys, but the people that have been successful men and women buying and holding, buying and flipping new construction, regardless the measure of what you do in the investment world. I love the fact that one of the biggest things that you've hit on so many times today is the consistency. And I cannot tell you how excited I've been today to to listen to your story of how you started and how you grew up into a world of like men, I can't even go play in a yard for fear of being shot to now running your own business and like, Hey, I'm trying to shoot for five starts at a time. You know, that's that man. It's so exciting, encouragung for me to hear, as well as just other investors starting out young and old to to be encouraged by what our industry is about, you know. So I got one last question for you. If your dream isn't big enough, if you're I'm sorry, if your dream doesn't scare you. It's not big enough.

Carlos Diaz:

Right.

Craig Evans:

Right. So I guess my question to you is, what does your career look like in the next five to 10 years for you?

Carlos Diaz:

It scares me. It scares me. And that's 100% True. Um, because what I have planned is obviously something that big, that I have no idea from now to then, right. So it's going to be learning, it's just going to be learning. So ultimately, where I want Ridgewood to be is to be a syndication, to where we still buy SFRs by now deal with commercial real estate right now, when it comes to commercial would be the aspect of industrial and some office, which may happen sooner rather than later. So that's why it kind of scares me because when an opportunity comes, we're going to take it, right, we're going to take it and we're going to figure it out, or get across people that have done it to assist us. Because once opportunities are there, if you don't take them somebody else will, right. And that somebody is going to be the person you're going to be bringing about seeing their success. So you just have to go out and do it. So that's what the plan is five to 10 years from now to be in that at that point.

Craig Evans:

That's fantastic. Well, Carlos lism. And I, I can't thank you enough for taking time out of your day to spend with me. And I hope that we will get to see each other soon. I know I'll be out your way in June. Hopefully we'll meet.

Carlos Diaz:

June 6, right?

Craig Evans:

June 8, June 8. Yep. So we'll we'll hopefully get to meet in person then. If you want to hear more about Carlos and understand what he's doing. Feel free to check him out and pass that we will look forward to seeing you next week at the same time. Thanks so much, everybody. Have a great day. Bye bye.

Carlos Diaz:

Awesome. And thank you for having me, Craig. Appreciate it.

Craig Evans:

Carlos. Thank you, my friend.

Narrator:

For more information on hard money loans, trust deed investing, and upcoming events with The Norris group. Check out thenorrisgroup.com. For more information on passive investing through the DBL Capital Real Estate Investment Fund, please visit dblapital.com.

Joey Romero:

The Norris group originates and services loans in California and Florida under California DRE license 01219911. Florida mortgage lender license 1577 and NMLS license 1623669. For more information on hard money lending go to thenorrisgroup.com and click the hard money tab.