Agents Building Cashflow

EP 162: Easiest Way to Get Started in Real Estate Investing with Brooke Ceballos-Pinero

• Brooke Ceballos-Pinero

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Seasoned multifamily operator and investor, Brooke Ceballos-Pinero, shares her journey from a passive investor to co-sponsoring over 480 units, offering invaluable insights on market trends, investment strategies, and the importance of hands-on experience in multifamily real estate. She emphasizes the benefits of starting as a passive investor to learn the ropes before becoming an operator.

Brooke also discusses her move from California to Texas and how this transition has impacted her investment strategy. Tune in to hear Brooke’s expert advice on navigating the complexities of real estate investing and how to crack the wealth code through strategic property acquisitions.

Key takeaways to listen to:

  • Learning the benefits of starting as a passive investor in real estate.
  • Understanding the importance of hands-on experience in multifamily operations.
  • Exploring strategies for transitioning from passive to active investing.
  • Discussing the impact of geographical relocation on investment strategies.
  • Emphasizing the need for strategic planning and market analysis in property acquisitions.

About Brooke Ceballos-Pinero

Brooke is a passive investor in 676 units, a sponsor in 481 units, and 1 NNN (Triple-Net) investment. She’s using her 22 years in corporate America, team sports background, and numerous paid masterminds to scale her investment portfolio and educate others - especially women and minorities - on how to do the same.

She’s the Co-Founder of the Real Women in Real Estate (REWIRE) book project, CEO of Empower Capital, Creator of Multifamily Momentum and the Co-Founder of Crack The Wealth Code. In her free time, Brooke enjoys health and fitness, baking and dancing with her daughters, and hitting every food stop she can with her husband.

Connect with Brooke Ceballos-Pinero:

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To connect with Randal and learn more about passive investing, visit www.ridgelineig.com and follow our social media pages below!

[00:00:00] Brooke Ceballos-Pinero: Because I was a little nervous. I was only a passive investor originally with Grant because he'd been doing it for 25, 30 years. So when I was investing with him, I saw what I liked and I don't like. And I always tell people if you are new to this, the best way to get started before becoming an operator is to be a passive investor and you'll learn the pros and cons and how you can do it differently and how you can do it better.

[00:00:23] Intro: If you're a real estate agent earning 200, 000 a year and you want to grow your passive income. This show is for you learn secrets, other agents use, and hear from experts in our field who will guide you on your journey to investing in assets like apartment communities. So you can take your commissions and turn them into cashflow.

[00:00:43] Intro: Here's your host, Randall. Let's dive in. 

[00:00:45] Randal McLeaird: Hey, welcome back. I have Brooke Pinero on today. We, she's a multifamily operator and investor. She's got over 676 units as an LP or limited partner, passively investing in those deals. And then over 480 units [00:01:00] that she has either sponsored or co sponsored her on. And so we talk about operations and some of the things that she's seeing in the market.

[00:01:06] Randal McLeaird: She just moved from California over to Texas. She's in the Dallas market now, and they have some assets up there that we discuss at length, how they purchased, what they're working on. We talked about some of the mentorship programs that she's been in and just what she's seen in the market and how she's shifting a little bit to earn some more current income in the single family market as well.

[00:01:23] Randal McLeaird: So jump in, hope you enjoy the show. If you could go on rate and review, helps us a ton, bring on some great guests so that you can. Learn and get some value out of the time you spend with us. Just a reminder. Again, we have the Ram capital fund where we are raising capital right now. We're raising 5 million and we are offering up to 10 percent preferred return for your investor dollars.

[00:01:42] Randal McLeaird: We pay that out on a quarterly basis. So if you're interested in a, an investment that's secured by single family real estate in the Texas market, then by all means, take a look at Ridgeline IG. com and go to the offerings page and you can check out all the information there about the Ram capital fund.

[00:01:59] Randal McLeaird: Let's [00:02:00] jump into the episode. Talk to Brooke. Here we go. Hey, Brooke, welcome to the show. It's awesome to have you on. Thanks for joining us. Looking forward to having the conversation with you. We were just talking a second ago. You've got 676 units as a passive investor, 481 as a sponsor. So I started to dive.

[00:02:14] Randal McLeaird: I'm like, okay, let's talk about this. So welcome to the show and just tell us kind of your corporate background. You got out now you're in real estate and you have a solid portfolio. So of the 481 that you're sponsored on, what types of assets are those? Okay. 

[00:02:27] Brooke Ceballos-Pinero: Those are multifamily. 

[00:02:29] Randal McLeaird: So 481 is that one facility?

[00:02:31] Brooke Ceballos-Pinero: That is one is 419 units. So that was the first one that we tackled down. And the other one is 62 units. So we're currently in acquisition for another 204 in San Antonio. Wrapping it up. That's a massive. 

[00:02:43] Randal McLeaird: Okay. So you're, are you in San Antonio? 

[00:02:45] Brooke Ceballos-Pinero: I just moved to Prosper. So I'm in North Dallas. 

[00:02:48] Randal McLeaird: Okay. All right.

[00:02:48] Randal McLeaird: I've only been here for a couple 

[00:02:49] Brooke Ceballos-Pinero: of weeks. So 

[00:02:51] Randal McLeaird: that's what you were saying. And then I'm in San Antonio. So that's why I was wondering. Yeah. All right. Where are those units right now? The two, two properties. 

[00:02:59] Brooke Ceballos-Pinero: So one is [00:03:00] in North Dallas. That is about 20, 30 minutes from Prosper. The other one Amberwood is in Dallas Fort worth.

[00:03:06] Brooke Ceballos-Pinero: And then my triple net, which we own the land in the building is in Southlake, Texas. That is the learning center. 

[00:03:12] Randal McLeaird: Awesome. Okay. A lot of things I want to ask you about. You were in corporate America, team sports background. Explain to me, what were you doing in corporate America? 

[00:03:19] Brooke Ceballos-Pinero: So corporate America and the total touch on the team sports background is, in my perspective, in my experience, anybody who's been an athlete.

[00:03:27] Brooke Ceballos-Pinero: I grew up. I was a forward. I played ball. I did powder puff football, but just CrossFit for 4 years, kickboxing the whole 9 yards. And with that, with team sports, It is not you. It is the sum of everybody together that wins. And for me, real estate is a team sport, like the 419 units. There's no way I could have taken that down.

[00:03:45] Brooke Ceballos-Pinero: We had a lot of people involved in that, right? Corporate, I was corporate 22 years. My focus was sales, marketing, and negotiations. And as most people know, it's golden handcuffs, right? You're told to go get a corporate job and buy the beautiful house and [00:04:00] get married with the white picket fence and go invest in your 401k and go to college.

[00:04:04] Brooke Ceballos-Pinero: And what do those have in common? They're funded by the government and they take more of your money, right? As a W 2 employee. And I was reading Grant Cardone's books, COVID hit, I was in sales, and I was responsible for putting fiber into Northern California and Nevada and offices where nobody was at. And I'm like, I need to get creative.

[00:04:22] Brooke Ceballos-Pinero: I'm not making any money here. I went from six figures to 65K, making money and I had just bought a house. That's my only experience in real estate when I started was the owning of my home. Read his book, the 10 X scroll sign up for sales, all of his books, sales and marketing internship, a year later, he invited us to his real estate summit.

[00:04:40] Brooke Ceballos-Pinero: In 2021, I got a free VIP ticket. I showed up, I was around all these wonderful millionaires and billionaires and the creativity is going around. And I realized what I've been taught my whole life is wrong. If I really want to be wealthy, I need to be in real estate. I always thought people that were wealthy not paying taxes were wrong.

[00:04:59] Brooke Ceballos-Pinero: I'm like, what the [00:05:00] hell? You guys are, douchebags. Like you're not paying. But then I realized that's not, it's my fault. I didn't know what I didn't know. And when Jared Glant, who is the president of Cardone's operations said, Hey, it's 25, 000 to start the rest of your life. I had this weird. Cool in my gut.

[00:05:17] Brooke Ceballos-Pinero: And I knew I wanted to be out of corporate. I was miserable. I was tired of chasing my money. I was tired of being the only female. I was tired of being told you want to make a change, Brooke, go work at a startup, and needless to say, I dropped the 25 K and y'all that's a lot of money. How did I have this money?

[00:05:32] Brooke Ceballos-Pinero: Cause I left AT& T. I gave them my notice, took all my 401k and I was going to transfer it to my new corporate role. Needless to say, I didn't do that. So all of my 401k wiped it out. It funded this journey. And then once I left that summit, I then reverse engineered my goals to how was I going to leave corporate?

[00:05:54] Brooke Ceballos-Pinero: And I lived the next few years off the base and all of my commissions got invested. Don't [00:06:00] come from a wealthy family for people. So your commission's from what? From my corporate job. 

[00:06:05] Randal McLeaird: Got it. Okay. Okay. Okay. So you, yeah, Cardone. So let's break down this first acquisition because that's quite an acquisition for your first one.

[00:06:15] Randal McLeaird: Were you an LP in any deals prior to you taking that on or what? 

[00:06:19] Brooke Ceballos-Pinero: Yes, I was. So I only, because I was a little nervous. I was only a passive investor originally with Grant because he'd been doing it for 25, 30 years. Okay. So when I was investing with him, I saw what I liked and I don't like, and I always tell people if you are new to this, the best way to get started before becoming an operator is to be a passive investor and you'll learn the pros and cons and how you can do it differently and how you can do it better.

[00:06:45] Brooke Ceballos-Pinero: So yes, I started off passively and the first 18 months, the first year I went to 19 in person events. A few months later, I started Empower Capital, which is our private equity company. I busted my ass. We had our team. It took me 18 [00:07:00] months to close my first deal because one, I trusted people that I shouldn't have trusted.

[00:07:05] Brooke Ceballos-Pinero: I think I was a little too excited and I should have slowed down and focused at the task at hand. And I may be able to saw some red flags that the person who is going to sign on the debt wouldn't flake on me last minute. So bottom line, when you're new and you're taking down multifamily, a lot of people who are investors, they want to know your experience.

[00:07:26] Brooke Ceballos-Pinero: So are you liquid? How much money do you have in the bank? I didn't have a few million sitting in the bank. Absolutely not. Brooke, who are your investors? Who do we interview to show that you haven't done a capital call or that you actually honor your disbursements every quarter and that you are clear on your communications and on top of your K ones.

[00:07:43] Brooke Ceballos-Pinero: I didn't have that either. And then lastly, they want to know, have you gone full cycle and full cycle for many people who may not know you're acquiring it, you're executing the business plan, and then you're refining or selling and you're paying out the profits you promised, right? Doubling their money or the quarterly, et cetera, the tax [00:08:00] appreciation benefits.

[00:08:01] Brooke Ceballos-Pinero: So in the beginning of this journey, you guys date. This is not a one night stand. This is a marriage. You need to break bread with these people. You need to see how they treat the waiter. How do they treat people? Because if you get into these, the multifamily game, it's a three to five year commitment on average.

[00:08:22] Brooke Ceballos-Pinero: And if the operators and general partners don't have the same mission, vision and values and the ability to execute, you're going to fail to, you need to be working with people that are further along than you are. All of my partners are at least 2030 years ahead of me, they have the liquidity, they had gone full cycle.

[00:08:39] Brooke Ceballos-Pinero: They had investors and because we partnered together, I was now able to adopt what I was lacking. So make sure when you start this, don't bring on people cause they're cool. Bring on people that are great at what you lack. 

[00:08:52] Randal McLeaird: Yes, I agree with that. Breakdown then on that deal. You said you had some struggles with the, the person on the debt who was going to be [00:09:00] your key principal, I assume.

[00:09:01] Brooke Ceballos-Pinero: Not with that particular deal. This was my first successful deal. And the reason why I'm telling you guys this is because a lot of people get started in multifamily, 4 to 6 months later, they're like I'm not making any money, blah, blah, blah. It took me 18 months. To successfully close our deal and that was our 419 units with my partners.

[00:09:18] Brooke Ceballos-Pinero: That being said, when the beginning of the during first 18 months, I was accepted in eight best and finals, which I was great. This is a form of sales y'all. So if you are in sales. Real estate is a form of sales. So you're negotiating, you're doing all the things. I had to rely on people that were, I thought were good people in the mentorship where we're spending time together.

[00:09:37] Brooke Ceballos-Pinero: And then I'd be in best and final, which means, you've beat out a lot of people and they're now debating between you and a couple other people to be awarded this deal. And they would say, Hey, we're going to sign on the debt. And I would have it in writing. And then they would back out on me. One in particular, and I'm not going to drop name, Brooke, I've been doing this for 18 years.

[00:09:52] Brooke Ceballos-Pinero: And you think you can just tackle your first deal. And I think it was like 118 units or something. This, I'm like look at my team though. Like it's [00:10:00] not just me. And then and he would get back out. And then another person was poking holes in my boat where they were negotiating things differently behind my back with the broker and seller.

[00:10:10] Brooke Ceballos-Pinero: When I got the just little things, you guys tread lightly day, all of my partners I've known for over four years. So let's just put that out there. But it took 18 months. When I was doing it on my own, I could not get past due diligence and a lot of it was due to the partners that I was with. So that's my fault coming from a military family.

[00:10:30] Brooke Ceballos-Pinero: You need to trust, but validate. And I didn't do that fully. 

[00:10:33] Randal McLeaird: All right. So let's talk about the deal then, like you got this deal. So yeah, 419 units is again, a pretty large deal. Where was that? Was that one in San Antonio? 

[00:10:42] Brooke Ceballos-Pinero: That is in North Dallas. North Dallas. Okay. That is the landing at McCallum in North Dallas.

[00:10:47] Brooke Ceballos-Pinero: . And so we had two different capital partners and then we had, God, there's 20 people on this deal. This deal was $68 million. So our first deal, it was like $68 million. Excellent deal [00:11:00] Walker and Dun up actually contributed $19.8 million to this. which gave them the first 18 months of profit.

[00:11:07] Brooke Ceballos-Pinero: And so even to this day, we don't get disbursements for this particular deal until the summer. That was a very difficult deal to close because we had this around the holidays. And we closed and then our partners had to front the money up front to ensure that we closed and then we did a post sell raise to get some of their money back.

[00:11:29] Brooke Ceballos-Pinero: But it was a lot. 

[00:11:31] Randal McLeaird: When did you guys close on that? 

[00:11:32] Brooke Ceballos-Pinero: That was closed approximately 18 months ago. 

[00:11:36] Randal McLeaird: Okay. And so what kind of debt was it, this was past the let's not get bridge any longer, right? 

[00:11:42] Brooke Ceballos-Pinero: No, this was Fannie. So this was a fixed Fannie debt. 

[00:11:45] Randal McLeaird: Okay. Awesome. And so you were co GP, raising capital, you were lead, like where were you on that?

[00:11:50] Brooke Ceballos-Pinero: Both. So I help with property management and raising capital. And I was able to hit 1. 2 million in six weeks. My goal is to get a [00:12:00] million raised within 30 days. But that didn't one of the deal people fell out. So I ended up being at 750 K, but my best asset that I bring to the table is I'm good at, I show up, I tour all the properties.

[00:12:12] Brooke Ceballos-Pinero: I don't invest or run any property. I have not actually personally seen or toured myself. So I toured it. I worked with the brokers, the property management negotiations. We work with the contracts, this particular one, I came in during due diligence. So we walked in during due diligence, help with that, interviewed the tenants, came up with parts of a business plan.

[00:12:30] Brooke Ceballos-Pinero: How do we. Execute the value add. How do we provide more, NOI? How do we increase this income? Because this is not going to be a hold. This is going to be a refi and sell within three to five years for our investors. Yeah, I helped them wrap it up, help the due diligence. I work with the property management teams.

[00:12:48] Brooke Ceballos-Pinero: We execute their business plan. When something comes up, I now show up. I was flying constantly for the last four years. For some of these properties, now that I'm local, I'm able to have a more hands on approach, which I'll actually be there [00:13:00] on Friday with some of our investors. But yeah, hopefully that answers your question.

[00:13:04] Brooke Ceballos-Pinero: Yeah, it does. 

[00:13:05] Randal McLeaird: Yeah. I'm just curious. So through the Cardone like setup, how do they typically promote that you structure the deals? Because having 20 co GPs is numerous, I would think. I'm on a deal that's like that. It has a lot of co GPs on it, but yeah. Do they promote that sort of setup and Hey, you're going to syndicate syndicate, bring on a bunch of co GPs, raise capital.

[00:13:27] Randal McLeaird: Or is it like, Hey, tackle a deal that makes sense. Go after a hundred unit. Don't do a. So 

[00:13:34] Brooke Ceballos-Pinero: transparency. So I'm in multiple mentorships. I am probably part of four or five. So some rock, Micah Blanc, Vina Jette, Grant Cardone. And a few other that were all local. And that being said, Grant, if you're new and I love Grant, and he literally gave me the jacket off his back. Him and I actually went against the Hayworth, a deal together when I was in his [00:14:00] mentorship and him and I went toe to toe and I wouldn't have backed up. That's a whole nother story. He tells you to go bigger with the right team. And however, though, if you're not self driven or self motivated, Grant is only great.

[00:14:13] Brooke Ceballos-Pinero: He's a great cheerleader. And he's excellent on telling you how to raise the deal and how to win the deal. But then that's it. The buck stops there. And there's everybody knows who's in this field. The work starts after acquisition. Okay. It's not just the glitz and glamour of syndicating. And syndicating is hard.

[00:14:30] Brooke Ceballos-Pinero: It's very difficult. So his perspective is why go for residential and all of these other things when you can scale faster if you're going over 100 units, 150 or even more one, you're going to leverage an excellent team that has way more experience than you first of all, to you have the ability to be hands off because you're hiring a property management team.

[00:14:49] Brooke Ceballos-Pinero: You're not dealing with tenants, toilets, termites, etc. So that was really appealing to me that okay, I can. Give back to this community. I can find something with meat on the bone [00:15:00] and I don't have to have a bunch of money. I don't have to have millions of dollars in the bank. And I had zero real estate experience, but I leveraged and showed up everywhere because y'all, this is a pay to play game.

[00:15:11] Brooke Ceballos-Pinero: And if you're not showing up consistently, you're forgotten, right? Nobody wants to invest and collaborate with people who are here today, gone tomorrow. We're not going to invest with you or partner with you. If you won't even invest in yourself. And we don't want to educate you and teach you when we're in acquisitions, when you haven't signed up for a mentorship to educate yourself.

[00:15:30] Brooke Ceballos-Pinero: So that being said, brands, very high level. If you're brand new and you don't have sales marketing type of experience, the way I had, there wasn't a lot of success there. The people who had the most success were already in real estate or they already came from a strong sales background where other mentorships like Michael Blanc, he has a program that will hold your hand from A to Z in an acquisition, right?

[00:15:53] Brooke Ceballos-Pinero: I think some rock community has that as well. Being in the jetty is really great for brand new people. So you need to know what your goal is and who [00:16:00] resonates with you and where you are today, because some of them will be more advanced than others. 

[00:16:05] Randal McLeaird: Good advice. Good advice. If you're looking to get into it.

[00:16:08] Randal McLeaird: So now you've owned this asset, you guys are operating it, right? And you have another 60 something units. So how are those performing now? Have you said you haven't taken any distributions you guys are still waiting for? Because I know Dallas market a little bit, right? I'm down in San Antonio cap rates got compressed significantly.

[00:16:30] Randal McLeaird: And now I'm not as familiar with it as I was like 21, 22, 23. So how are they performing? You guys, is there cashflow or has that been compressed due to the rates? What are we seeing? 

[00:16:40] Brooke Ceballos-Pinero: So the first property, Amberwood, it is cash flowing, but as sponsors and passive investors, we're not seeing any of that cashflow because Walker and Dunlap came in to contribute 19.

[00:16:52] Brooke Ceballos-Pinero: 8 million on this asset 

[00:16:54] Randal McLeaird: for equity. 

[00:16:55] Brooke Ceballos-Pinero: Correct. So they got all of the cash until about [00:17:00] July of this year. So we're waiting, but we got the bonus depreciation, so getting in front of the cost segregation, the bonus appreciation on the K 1s to wipe out our taxes. Right now it's only been at 80, it's like 82, 86 percent for the last 18 months.

[00:17:15] Brooke Ceballos-Pinero: And we just had a property management call. What was it on Tuesday? And I told them, I'm like, why are we still stuck here? Granted, we had to switch property management teams. Someone was stealing money and this happens y'all like this was a referral to when people give you a referral, ask. Do you have experience with this person or is this Hey, if you refer me, I'll give you 100 referral fee or something like that because the first property management didn't work out.

[00:17:40] Brooke Ceballos-Pinero: So in the middle of this way to transition, retrain our business plan on the property management team, because you guys, just cause you have a property management team doesn't mean your hands off. You need to be managing that team every single week. You need to be on calls and make sure they're executing your business plan.

[00:17:56] Brooke Ceballos-Pinero: And that being said, the new company is [00:18:00] fabulous, but I feel like we've been sitting at 86 percent occupancy for 18 months. And the reasoning behind it is one, they advise that there's been a lot of fraud and that is really common. You guys, people May lie on applications or fraudulent checks going around.

[00:18:15] Brooke Ceballos-Pinero: They're advising that 62 percent of the applicants that come in aren't qualified, which I then, of course, rebuttal, okay then you need to change your marketing efforts because you're obviously not marketing to the right people that can afford or qualify because we want three times of your income in comparison to the rent.

[00:18:34] Brooke Ceballos-Pinero: And we do community events and there's going to be one in a couple of weeks. I'm going to show up because there was a comment that was made that, Oh, it was a grab and go event. Like we gave them bags of, and I'm sure it was wonderful. And the property management, the new one, they've been doing great. But I feel we need to change.

[00:18:52] Brooke Ceballos-Pinero: Who we're marketing to one, two, I want to attend a community event and see our [00:19:00] property management team. Are you really engaging with them? Are you learning what makes them tick? Is the community collaborating with each other? Because most people will pay a little bit more if they're happy where they're at and they feel like it's home and it's a community.

[00:19:14] Brooke Ceballos-Pinero: And we've done a lot of work on this property. It is performing. I'm happy because Walker and Dunlop are coming to us out, right? They're a big company you don't want to mess with. And so they're getting their money. It's part of the business plan. We have to wait till summer. But I, my frustration is more that I feel we've been sitting at under 90 percent occupancy, which is our goal.

[00:19:34] Brooke Ceballos-Pinero: Which I want to make a point. And single family, and I'm just now getting into the flipper side. I've never been in a residential. Okay, y'all. I'm going from multifamily to residential. But one thing that I've noticed to all my flippers and all my people who like to buy a whole bunch of houses and get that income.

[00:19:49] Brooke Ceballos-Pinero: If you have a few houses, somebody leaves that house, you just lost 100 percent of your income. Now, if 10 people move out of our apartments, I still have 90 percent of our cash flow, [00:20:00] right? That's also another beautiful side of multifamily. Is that I can lose people. People can come and go and the cashflow isn't super damaged.

[00:20:09] Brooke Ceballos-Pinero: That's why when you underwrite, we're usually underwriting for 90%, sometimes even 85 percent occupancy, 52 percent debt. Everybody says, Oh, we're conservative and are underwriting. Yeah. You and everybody else. Okay. Nobody's going to say that they're not, but just make sure that. That the business plan is being executed.

[00:20:28] Brooke Ceballos-Pinero: And I don't, I think I answered your question, but it is performing, but I feel like it can be better. And we need to get, we need to market to different people because the people we're marketing to can't afford it. And there's a lot of fraud. 

[00:20:39] Randal McLeaird: So here's a question I got then. One, we'll talk about single family in a second.

[00:20:42] Randal McLeaird: I'm just curious, the shift on the occupancy and on being a co general partner on a deal, how much say do you feel like you have in that compared to what the actual lead sponsor is doing, because a lot of calls that I'm on with Lead sponsors. It is a that's nice. Yeah. We're already [00:21:00] working on that, but then you don't have like full buy in, right?

[00:21:03] Randal McLeaird: Or the ability to influence the actual decisions that are being made. So how do you feel about that? 

[00:21:08] Brooke Ceballos-Pinero: So for me first thought is that I am curious how long you knew those people for the people who are on those calls. That is not our situation. I'm in the same mentorships with these people. I've known them for over four years.

[00:21:21] Brooke Ceballos-Pinero: And what makes me stand out is I'm their top, one of their top capital raiser. And that doesn't mean anything. Just because you're a capital raiser, it doesn't mean anything, y'all, because it's illegal. You can't just come into a deal. I'm a good capital raiser. You need to be able to do more. Okay?

[00:21:33] Brooke Ceballos-Pinero: And be super active because per SEC law, it's illegal to come into a deal and raise capital. So let's just put that out there. But I know the value I bring and I show up. I never miss a call. I tour if something hits the fan, I'm there. And when we are on our team call, so we have our overall team calls every Monday, 9am with our partners and our property management teams and the extended potential partners.

[00:21:54] Brooke Ceballos-Pinero: And when we have our, okay, so for example, let me give an example because I don't want to just beat around the [00:22:00] bush and blah, blah, blah, blah, and just go off wind here. One of our investments is only 62 units, for example, and we were waiting for, I think, washer dryer stuff to come into play and one of the lead sponsors had made, and we've been waiting for a long time, made the comment that it was one of the smaller deals or something along that line.

[00:22:20] Brooke Ceballos-Pinero: And it made it seem like it wasn't as big of a, not that the deal wasn't a priority, but it was like, not as big as of a priority or actually we're going to focus on this instead. And this, and a few of us, cause on this one, there's only maybe eight of us. I was like, and first someone else jumped in and no, that's not right.

[00:22:34] Brooke Ceballos-Pinero: But this is why you need to be professional, but you can't complain if you were going to be unhappy about something, come up with a solution. And that's one thing most of us have in common. We'll say, you know what? This is not going to work because of X, Y, Z, or when the previous property, when we had people stealing from us what did you guys bet this people?

[00:22:54] Brooke Ceballos-Pinero: Yes. And this is why we collaborate and we're solution oriented if in fact, because they [00:23:00] can't honestly, you guys, you are partnership heavy. You cannot grow and scale without people. You can go far alone, but you go further together. And we know the value we bring. If I'm bringing a bunch of money and I'm bringing investors and I'm touring and I'm doing negotiations and I'm bringing deals.

[00:23:18] Brooke Ceballos-Pinero: You're going to have a strong voice and they give us a voice. What questions do you have? And they're never combative, but sometimes I might say something that we're like, no, that doesn't make sense. Or help me understand why that is. They never, Oh that's just the way it is. But I hear these horror stories and you bet your ass that if I want to partner with you, if you were like that, it would take one deal, one conversation that you think that you're King Tut.

[00:23:38] Brooke Ceballos-Pinero: No, we brought the equity. We're bringing the money. Yes. We'll put in our own money, but your team. Can make you a break you. So no, make sure you get to know people because that is a horror story I'm hearing going around, but know the value. And before you say no to something, or you don't like how something is being run, come up with a potential solution.

[00:23:59] Brooke Ceballos-Pinero: Don't just [00:24:00] complain about it. 

[00:24:00] Randal McLeaird: Yeah, that's good advice. 

[00:24:01] Brooke Ceballos-Pinero: Yeah. 

[00:24:02] Randal McLeaird: I love it. When somebody comes with a solution, not just a problem, it's Hey, here's a problem. Yeah. You figure it out. You're like, 

[00:24:08] Brooke Ceballos-Pinero: Hey, okay. That's why I tell everybody you need to treat the CEO the same way you do the janitor. That's why I tell people you need to break bread with people, go out to eat.

[00:24:18] Brooke Ceballos-Pinero: What is their character? How are they treating people? And I've had partners that I see them be rude to the waiter or how they talk to women or they exclude somebody this. And I'm like, but then they might want to talk to me for some reason. In the back of my mind, I'm like, I'll be cool because you guys, there's a lot of people that are good as friends, but not business partners.

[00:24:35] Brooke Ceballos-Pinero: Okay. Okay. Y'all need to vet that just because you need to look at somebody's character because when stuff hits the fan and it will, you need people to all be in the same boat, rowing in the same direction, taking accountability because this is our reputation and this is our brand and it takes years to grow a brand, a reputation and only seconds and minutes to break it down.

[00:24:58] Brooke Ceballos-Pinero: So date the people that you're [00:25:00] with and if they try to downplay your feelings on something, Note to self, I would not suggest partnering with them in the future. Or, open your mouth. You said this, and I've done this multiple Anybody who knows me, I'm not afraid to speak up. I have a mouth. And so I'll say, you know what, you said this, I heard this.

[00:25:18] Brooke Ceballos-Pinero: Where, and I'll put it on me. I think I missed something. I think I'm confused. Where's the disconnect? This is what I heard. Am I hearing this correctly? Reiterate first, because humans are sensitive and you don't know if what they meant on their delivery meant something else. So clarify. And if they make the comment like no, you only brought in 250 K or you only did this, or I'm in charge here.

[00:25:41] Brooke Ceballos-Pinero: I'm the one that signs on the debt. Cause we did have a situation on I signed on the debt. So I'm the one taking all the risks. Really? And I'm like, no, that's not true. If anything was to hit the fan, our money's in this, our investors are in this, and it's just our money too. So speak up professionally and pretend that you don't, [00:26:00] you misunderstood, reiterate and go from there.

[00:26:02] Brooke Ceballos-Pinero: Then determine whether this relationship is worth you moving forward on. Once the deal is done, move on, be friends, be professional, but don't work with them again. 

[00:26:11] Randal McLeaird: All right. So you mentioned a second ago about single family, like why this shift? If you are acquiring larger assets, why go to single family?

[00:26:22] Brooke Ceballos-Pinero: So I'm going to quote one of my mentors. All problems can be solved with real estate. Any and all problems. You're in a tax situation, you need some cash flow, you want to just, leave your W 2 so you can have financial freedom and time to run. So what my point is, being in corporate for 22 years, and especially coming from California, I'm now a resident of Texas, 55 percent of my check, and I gladly left in October.

[00:26:49] Brooke Ceballos-Pinero: I told myself, I will never Go back. I don't have a net of a passive income. But what I did was I paid off anything that wasn't a priority. A lot of people will tell [00:27:00] you, Hey, you want to keep your 10, 000 15, 000 a month corporate job. It's gonna take you five years and multifamily need to do all of these things.

[00:27:08] Brooke Ceballos-Pinero: No, what I did was I paid off everything. And I made sure I just had my mortgage and my utilities to survive. The only thing that I messed up on is I had no fund money. So what does that mean? Why does that matter? It's because I going into flipping houses. So that can now be my income. I have some passive income, but I have no, I don't have a bunch of bills.

[00:27:27] Brooke Ceballos-Pinero: Y'all we have two vehicles. They're paid off. I don't have credit card stuff. I do not want to trade time for money. I don't buy things just to buy things. I don't want to keep up with the Joneses. And so if I'm keeping my expenses low and some people like man, but you only have three grand of passive income and then your bills are only this much or this.

[00:27:46] Brooke Ceballos-Pinero: That's not financial freedom. You need to have 10, 15 grand. No, I get to run my day. What I say goes, I get to pick the people that I'm with and everybody who's an entrepreneur knows you get bursts of income. So when I get those bursts of income from different projects, [00:28:00] I'm managing, I put it in savings and put them away.

[00:28:02] Brooke Ceballos-Pinero: And flipping houses. You can make anywhere from the mentorships that I'm the one that I'm in. And I've interviewed majority of his students. The lowest poorest ones like 42 grand was like one of the worst flip. The best one they just did was 220 grand. And that was net. That was after they paid everybody off.

[00:28:20] Brooke Ceballos-Pinero: And we're going to document 80 percent of that is going to go back into real estate. So 80 percent is going back into real estate. 20 percent will be to fund taking care of my family because I am the breadwinner of the family. So that is why I feel as long as I say in real estate, even if I'm a broker or I'm doing something, anything in a real estate facet where I'm getting to choose the people that I work with, or I am educating myself and I'm continuing to grow in all facets, I'm okay with that.

[00:28:45] Brooke Ceballos-Pinero: So that's why I'm choosing to work with Tommy Jones who I've known for about four years and I'm now part of his community and then educating them to invest. 

[00:28:54] Randal McLeaird: Tommy Jones. 

[00:28:55] Brooke Ceballos-Pinero: Through real estate, he's 

[00:28:57] Randal McLeaird: thought of Tommy Lee Jones was in some movie I [00:29:00] watched a long time ago. 

[00:29:01] Brooke Ceballos-Pinero: He's an actor men in black too.

[00:29:04] Brooke Ceballos-Pinero: And I get that question a lot from some of my peers man, you're going from Multifamily to flipping. I'm like, y'all, it's real estate and you're helping people. This was what sold me because I'm like, Oh my gosh, I'm just going to go hunt all these things. People in door knock it. And I'm used to hearing, no, I'm in sales.

[00:29:18] Brooke Ceballos-Pinero: The close more nose you get, you're closer to it. Yes. I've been cussed out, hung up on. I don't care. I'm not that sensitive. I'm here to freaking make money. But what makes Tommy's wealth through real estate his platform different is that they are working with people who are in pre foreclosure, and we give them options to either keep their home.

[00:29:34] Brooke Ceballos-Pinero: So either when I'm buying this from you, you can rent it from me. You can buy it back, or we can sell it and give it to another first time home buyer, because we like to focus also on historically excluded communities preferably and women and people who don't always have a chance to buy a house. Thanks.

[00:29:53] Brooke Ceballos-Pinero: So you want to buy it back for me now that it's less because we want it to not go on their credit and we don't want it to hit foreclosure. [00:30:00] And we're going to go in and we'll even give them a little bit of money to start over. And usually the fault, what happens is because of divorce, a death, a disease, someone gets laid off.

[00:30:10] Brooke Ceballos-Pinero: One of these people lost their job. They're making 54 bucks an hour. And now she's making 14, 15, like 15 bucks an hour, and she can't afford her house. So now we're looking at, okay, do you want to keep this house? And we'll remodel it and you can rent it from us or you buy it back, or we sell it to a new family and we'll give you some money, say 10 grand or something to start over and you can start renting somewhere else.

[00:30:32] Brooke Ceballos-Pinero: So 

[00:30:32] Randal McLeaird: this is like a big sub two strategy. Is that what I understand? 

[00:30:36] Brooke Ceballos-Pinero: I'm still learning more. It is similar because I know I've been to Pace's. Pace is fabulous. So he's big on sub two Pace Morby. And we were in Montana. And so I still know a little bit of sub two. I think a lot of it is similar to that.

[00:30:49] Brooke Ceballos-Pinero: And again, I'm new to residential, so I'm still getting this curve, but I'm also a people person and I can talk to people and I'm in sales and I'm in real estate. So for me, I'm just going to [00:31:00] execute and I learned by action and have phenomenal community support. 

[00:31:03] Randal McLeaird: It sounds like either pre foreclosure show.

[00:31:05] Randal McLeaird: If you do pre foreclosure and you're paying the owner like 10, 000 to move out and then it's, Unless you're actually closing at like a sale price, then you're probably doing a sub to like wrap is my 2 second. I've heard this for the 1st time. 

[00:31:20] Brooke Ceballos-Pinero: You're probably right because I don't and I'm still learning that.

[00:31:23] Brooke Ceballos-Pinero: But that's the cool thing that I like about it. You're giving them an option to avoid foreclosure and then you're remodeling it and you're staying in your budget and. So it feels good because you're helping people, but also as an investor, you're making money and now we're investing that. So for me, 80 percent of that is getting invested and we're going to show the check and we're documenting it because a lot of people are just blowing the money and you're not going to grow wealth that way.

[00:31:49] Randal McLeaird: So again, if you are for you, I don't know Tommy Jones's deal, but are you buying this with a group like these single family houses? Oh, Hey guys, I [00:32:00] found one, two, three main street. Like we're taking this thing down now and Tommy swoops in with a bag full of cash and pays for it. And then you get, like, how does it, I don't get it.

[00:32:09] Randal McLeaird: You have a choice. 

[00:32:11] Brooke Ceballos-Pinero: So what you can do. So first, the first thing that you're going to do is you're going to look at what the house is worth. What is the comparison, right? Okay. And your rehab is 35 per square foot. And most banks around here are not loaning over 70%. So you're going to take the biggest value of.

[00:32:30] Brooke Ceballos-Pinero: The median average of what, like looking at Zillow, Realtor, hell, even BFA and Chase have like different properties that they're selling. Take that average and then look at the ARV, the actual repair value of the house. So it's 35 times a square foot. You're going to subtract the value of the house that the current market would buy that for.

[00:32:50] Brooke Ceballos-Pinero: Do 70 percent off. And then subtract your 35%, right? So that, that gives you your offer price, right? So there's that. And [00:33:00] then when you're speaking with the person, sometimes it's overinflated and they want way more than it's worth. Okay, then we can have you for a list on MLS. I have a real estate agent.

[00:33:09] Brooke Ceballos-Pinero: They'll do it for a flat fee. You'll get more money there. My job is to get you out of foreclosure, not get this on your credit and get you something to start over or rent back. So we're not going to offer over what the actual repair value is. So that is done either as with your own money, because for example, one of them just put in 20, 30 grand and you want to keep within your, on their own cash because then when they sell it, they get all their money back, right?

[00:33:34] Brooke Ceballos-Pinero: The other way is hard money. So we have several hard money landers that will work with Okay. Give us the hard money and then they're paid back first. And then we get left over your own money or a hard money lender, unless you choose to work with a wholesaler, which many people say that I've never worked with a wholesaler.

[00:33:51] Brooke Ceballos-Pinero: Most of them say they're too expensive. But what I have started doing on social media as of yesterday, because I know a lot of real estate agents is if someone who has [00:34:00] a distressed property, Reach out to me and we can work on keeping them in the homes, renting it back from us, selling it back, or just selling it to a new home and giving you money to start over.

[00:34:11] Brooke Ceballos-Pinero: So I hope that answered your question. It does. 

[00:34:13] Randal McLeaird: Yeah. I flipped it. I flipped a bunch of houses. So that's why I'm like, what is the strategy that you're telling? Cause it just. Hard 

[00:34:19] Brooke Ceballos-Pinero: money or your own money. Sure. Sure. Sure. 

[00:34:22] Randal McLeaird: Yeah. 

[00:34:22] Brooke Ceballos-Pinero: So 

[00:34:23] Randal McLeaird: what it sounds like as well is that you are targeting a very narrow niche of people that are in pre foreclosure.

[00:34:28] Randal McLeaird: I would not limit yourself to that. If that's the strategy that you're doing, I would also talk to a bunch of wholesalers. It is by far the easiest way to get into that business. If you are trying to buy property, I would call every single wholesaler you possibly can. Today I was doing the same thing. I was like texting my friends who I know flip houses.

[00:34:46] Randal McLeaird: I was like, Hey, I'm buying again, send me some wholesalers you've been working with. So they sent me a bunch of people. I'm on go to investor lift. com and there's a bunch of properties that are listed there that are all. investment [00:35:00] property, investment grade. And that's a bunch of that look 

[00:35:02] Brooke Ceballos-Pinero: like?

[00:35:03] Brooke Ceballos-Pinero: Working with a wholesaler. So some people, maybe they're wrong. Some people say that, man, whenever we work with a wholesaler, they took almost all the profits. And their goal is still to 

[00:35:13] Randal McLeaird: That's their fault for not doing their numbers. 

[00:35:16] Brooke Ceballos-Pinero: Seriously. Okay. 

[00:35:17] Randal McLeaird: There's a ton of deals that are on there that are awful.

[00:35:19] Randal McLeaird: There's super terrible deals and wholesalers. I looked at one, I'm literally looking at my MLS here in San Antonio right now for an area that. Like they say, Hey, the ARV is going to be 450, 000. I pull it up and there's four or five active listings on that same street for three 80. And yeah, you could probably justify there's maybe one comp that sold for that price.

[00:35:39] Randal McLeaird: But overall, when you're competing with new builds and other things that were going on in the neighborhood, I was like, there's no way I'm taking on that risk. So you want to sell it at a 70%. Anyway, the whole point is you got to vet them just like you're going to vet it in anything else. Do your own numbers, do your own due diligence on the deals, but it's a much faster way than going and knocking on doors.

[00:35:57] Randal McLeaird: Somebody is already doing that. It's just like [00:36:00] MLS, if you're a realtor and you're going out and you're trying to find listings Takes a lot of work. If you're looking to buy something and you don't want to do all the marketing on your own, go to the MLS has all the deals.

[00:36:11] Randal McLeaird: They're already there. You can make offers on them. That's what I think. It's very similar to a wholesaler. We used to do a lot of marketing on our own. We would go direct to seller and that's all we did for our investment in business. And yeah, you can buy deeper deals. You get deep, but at the same time, I spent a lot of money on marketing.

[00:36:26] Randal McLeaird: So it's a trade off. If I could just find one or two deals from a wholesaler, And I don't spend any money on marketing. Then there's something to be said about it. Especially if you're just starting out, I would not neglect it. And I would go to every single real estate investor meetup that you can go to the app meetup and just start.

[00:36:46] Randal McLeaird: Yeah. Just start attending. All the RIAs and saying, Hey, I'm buying, I'm in this area. Here's my buy boxes. What I'm looking to do. I'm using hard money or I'm using, I'm paying cash, don't send me this, and this, but do send me this and you'll start building up a [00:37:00] little book of people who are going to send you deals.

[00:37:01] Randal McLeaird: And then it just makes life a little bit easier. 

[00:37:03] Intro: It 

[00:37:03] Randal McLeaird: grows your funnel of deal flow rather than just trying to do it on your own or door knocking, because that's a very slow approach. But again, if you find that one deal, you find that one deal that you get on your own, then maybe you hit a home run on that.

[00:37:17] Randal McLeaird: So anyway, look, Brooke, it's been good catching up. I appreciate you jumping on if you're raising capital or anything like that. I'd be curious to see what other deals you're putting out, what kind of things you guys are seeing on the multifamily front. And so we can catch up and talk more about that at some point.

[00:37:32] Randal McLeaird: But again, appreciate you jumping on and talking about your business, what you guys are working on. 

[00:37:35] Brooke Ceballos-Pinero: I appreciate you giving me the time. I'm very grateful. I love your podcast. I was checking it out. Congrats on having 148 episodes. I was like, do this for a minute. And I listened to your most recent one. Why assignment?

[00:37:48] Brooke Ceballos-Pinero: I think it was the good thing. I left your review and listen to your previous episodes. And I said this on the review. No matter what sector of real estate you're in, [00:38:00] you learn something. You learn something, whether it's a delivery, whether it's a cost, whether it's a process, whether it's a system. And at first I was like, man, their whole team are real estate agents.

[00:38:09] Brooke Ceballos-Pinero: I'm like I don't have my license. I'm going to, I'm like, but you know what? All of these people bring something different to the table. So congratulations to your ABC. The agents building cashflow and having 148 episodes is great. Cause I know quite a few people trying to get into this industry.

[00:38:23] Brooke Ceballos-Pinero: And it's not easy. 

[00:38:24] Randal McLeaird: No, it's not. But thank you so much. I appreciate it. Enjoy conversations like this one. So 

[00:38:29] Brooke Ceballos-Pinero: yeah, it was a pleasure, Randall. Thank you. 

[00:38:32] Randal McLeaird: Thanks. Talk to you soon. Bye bye. Did you know that 80 percent of the agents we speak with got into real estate in order to gain passive income so they could obtain financial freedom and become work optional?

[00:38:42] Randal McLeaird: If you want to stay up to date, the best way is to make sure you're subscribed. So if you haven't done that, go ahead and do it now. We'll catch you on the next episode. 

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