RG 341 – Building an In-House Property Management Company with Jorge Abreu

Have you ever wondered what it’s like to take on property management in its entirety? Jorge Abreu of Elevate Capital shares his journey from single-family deals to multi-million dollar multi-family properties while building his own efficient business ecosystem.

Jorge is a multi-faceted businessman with extensive experience in single-family, multi-family, and ground construction. With over 16 years of experience behind him, Jorge is now the Managing Partner at Elevate Commercial Investment Group and the CEO of JNT Construction.

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Jorge walks us through how Elevate finds and manages optimum deals, minimizes market risks, and works with the people involved in every step of the process. We also dabble into Jorge and his team’s specific challenges regarding property management, particularly the multiple approval processes involved.

KEY TAKEAWAYS

• • Some developers are not good operators.

• • Focus on the things you can control.

• • You might not realize you are paying for certain expenses when you have a third-party manager.

• • Hiring people with the right experience to take on the load can help smoothen the transition to full property management.

• • As an entrepreneur, you have to learn when and how to pivot when things aren’t working out.

LINKS

www.linkedin.com/in/jorgelabreu

www.elevatecig.com/

BE BOLD, BE BRAVE AND GO GIVE LIFE A CRACK!

Remember to join my Investor Database for the latest Investment Offerings!

Reed Goossens (00:00):

Good day Good day guys. Now, before we dive into today’s show, I want you to let you know that some of you may be aware that over the past eight years, I have built a substantial multi-family real estate portfolio here in the US worth over half a billion dollars. And in that time, my passive investors have received fantastic double-digit returns. And now you too can invest directly into my deals for as little as $50,000. So if you’re an interested investor, head over to reedgoossens.com to find out more. That’s reedgoossens.com. Now, back into the show,

Jorge Abreu (00:40):

A lot of investors have seen the way multi-family has performed through recessions, through covid, through everything, right? Um, so still a lot of investors looking to deploy into multi-family, especially, um, you know, office and retail is still pretty scary a space. Um, you know, industrials looked pretty good, but for the most part, I would say multifamily has, has stood out.

Speaker 3 (01:21):

Welcome to investing in the US, a podcast for real estate investors, business owners, and aspiring entrepreneurs looking to break into the US market. Join Reid as he interviews go-getters, risk-takers, and the best in the business about their journey towards financial freedom and the sheer joy of creating something from nothing.

Reed Goossens (01:42):

Good day Good day a ladies and gentlemen, and welcome to another cracking edition of investing in the US Podcast from Los Angeles. I’m your host, reed goossens. Good as always, Debbie with us on the show. Now, I’m glad that you’ve all tuned to learn from my incredible guests, and each and every one of them are the cream of the crop here in the United States when it comes to real estate investing, business investing, and entrepreneurship. Each show I try and tease out their incredible stories of how they have successfully created their businesses here in the us, how they’ve created financial freedom, massive amounts of cash flow, and ultimately created extraordinary lives for themselves and their families. Life by design, as I like to say. Hopefully these guests will inspire all of my cracking listeners, which are you guys to get off the couch and go and take massive amounts of action.

Reed Goossens (02:28):

If these guys can do it, so can you. Now, as you know, I’m all about sharing the knowledge with my loyal listeners, which is you guys, and there’s absolutely no BS on this show, just straight into the nuts and bolts. Now, if you do like this show, the easiest way to give back is to give us a review on iTunes, and you can follow me on Facebook and Twitter by searching at Reed Goossens. You can find the show wherever you podcast on iTunes, SoundCloud, Stitcher, and Google Play. But you can also find these episodes up on my YouTube channel. So head over to reed goons.com, click on the video link, and it’ll take you to, to the video recordings of these podcasts where you can see my ugly mug, but the beautiful faces of my guests each and every week. All right, enough outta me. Let’s get cracking in into today’s show.

Reed Goossens (03:15):

Today, the show I have the pleasure of chatting with Jorge Abreu. Now, Jorge has been investing in real estate for over 15 years, and he started his investing journey in single family and small multi-family properties before, eventually working his way up to a hundred unit plus multi-family properties Today. Now, before entering the large multi-family acquisition space, he actually wholesaled over 200 single family properties. He also developed and completed several ground up projects worth over 20 million, and get this, he started his own construction management business or construction company, I should say, which is bringing in, uh, in over 30 million of yearly revenue. And that is growing as we speak today. He’s now an active and passive and full-time investor. And his company, elevate Capital, currently has over 5,000 doors and 325 million of assets under management in markets across Texas, Oklahoma, Georgia, and South Dakota. So it’s safe to say this guy’s gonna be a pretty awesome interview, but I’m really excited and pumped to have him on the show today, this year, his incredible knowledge and insight. But enough outta me. Let’s get him out here. Okay, Jorge, welcome to the show. How doing turn mate?

Jorge Abreu (04:20):

I’m doing good. How you doing?

Reed Goossens (04:21):

Good, man. Good. I know we’ve, uh, we’ve crossed paths a few times and, uh, your name comes up and, you know, it’s been, uh, it’s been awesome to see you guys grow from, from strength to strength. But, uh, and I want to get into elevating this story and all that sort of stuff, but before we do, can you rewind the clock and tell me how you made your first ever a dollar as a kid,

Jorge Abreu (04:40):

As a kid? I want to say, thinking back I remember, um, so as soon as I could have a W two I, I did. So at the age of 14, started working at a grocery store when Dixie, I don’t even know if they’re around anymore, but, um, before that I, I would go sell Candy Rum, neighborhood, um, or different neighborhoods. So always trying to make some extra money.

Reed Goossens (05:08):

Awesome. Awesome, man. Well, walk us through the journey of, you know, your background. You clearly, you said you had w2, did you go to uni, did you study anything specific? Did you have a, you know, an American corporate life before getting into the, uh, you know, the entrepreneur bug?

Jorge Abreu (05:23):

I did. It was a, a small one, but, uh, lasted for about a year, but, uh, went to school for electrical engineering.

Reed Goossens (05:30):

Okay.

Jorge Abreu (05:31):

Uh,

Reed Goossens (05:32):

Ha. Hands off to engineers. Yeah, Woohoo, ,

Jorge Abreu (05:34):

A lot of ’em in the multi-family space for sure.

Reed Goossens (05:36):

Yeah. Yeah.

Jorge Abreu (05:37):

Uh, and, and during that, so during the university, I, I realized I didn’t want to be an engineer, um, . So I started looking elsewhere and that’s when, when I came across real estate investing and, uh, started doing stuff on the side, eventually graduated with my degree, went and worked for UPS in their engineering department, and that’s what lasted for about a year until I started doing enough deals and decided to quit.

Reed Goossens (06:03):

What was the first deal? What did it look like and where was it?

Jorge Abreu (06:06):

It was a wholesale, um, I wanna say made about $20,000 wholesale in the deal, uh, without even closing, not having a clothes on it or anything. Um, and that was really eye-opening, right? You know, at that time I was making maybe 60 or 70,000 a year, and I just made 20,000 in a couple days.

Reed Goossens (06:26):

Yep. No, that’s awesome. That’s awesome. Uh, a brew, is that a where, where’s that from originally? What was that last name?

Jorge Abreu (06:33):

So my parents are Cuban. Um-huh. . Yeah. The last name is kind of spread out. There’s some Brazilians, Venezuelans Cubans

Reed Goossens (06:41):

Mm-hmm.

Jorge Abreu (06:42):

. Uh, so I think it originates from Spain.

Reed Goossens (06:44):

Yeah. Right. Awesome, awesome stuff. So first, uh, generation American, or couple of generations been here for a little while.

Jorge Abreu (06:51):

Both parents Cuban, and then I was born in America. Yeah.

Reed Goossens (06:54):

Yeah. Nice, nice. So it’s a truly living the American dream, my friend, which is, which is awesome stuff. But, but now walk us into Elevate capital. Like, you know, you started wholesaling, I mentioned earlier you did over 200 wholesale deals, you flipped some houses, you did some ground up construction. You know, it seems like you’ve had your, your finger in a lot of different little pies. You now actually have a construction company. What, you know, to the outside of that might look like a lot of different stuff. It was it just figuring out the best way? Or, and, and, and, and you just sort of, or was it just going from, you know, one stumbling block to the next, so to speak? ?

Jorge Abreu (07:25):

I don’t wanna say I, I was stumbling through it. Um, you said 15 years has actually been more like 16 years now. Um,

Reed Goossens (07:32):

Wow.

Jorge Abreu (07:33):

So it was all about scale for me. Uh, I wanted to go big and, um, with the single family, I feel like I just hit a brick wall, you know, we’re, we were doing anywhere from 40 to 50 flips at one point, you know, fixing flips, and then started doing some ground up stuff, and I was spread pretty thin, to say the least.

Reed Goossens (08:01):

Right.

Jorge Abreu (08:01):

And that’s when I got introduced to about six years ago into, uh, multi-family syndications. And, um, before that I didn’t realize that I could purchase a hundred plus unit apartment, you know, without coming in with millions and millions of my own money mm-hmm. . Um, so man, I just ran with it, you know, that that’s, that was instant scale on one deal. So I put all my focus towards it. Same thing with the construction company, put all my focus towards, um, doing renovations and ground up for multi, and that’s it. You know, I put once all that focus was there, it, it obviously began to grow.

Reed Goossens (08:42):

The, the big thing I like to chat about on this show is, is business ecosystems, right? Like, things come because you’re doing something I e picks and flip, you know, like you are hiring a GC and then you’re like, oh, oh, I don’t need to hire the gc, I want, maybe I should just become one. Right. And a lot of people sort of avoid that, but what was your the impetus to go and start your own GC company? Because it’s nearly like property management. It’s really, it’s, it’s, it’s a grind. It’s a HR company at, at the best of times, , and you gotta, you know, it’s, it’s, it’s thankless, you know, as well. So, so what, why, why, why go start that? Is it through trying to save money or is it just through trying to keep building the ecosystem and keeping it in house?

Jorge Abreu (09:18):

To me, it wasn’t so much to save money to me, it was more being able to implement my systems so that mm-hmm. , I could scale. You know, I couldn’t find enough good contractors for me to do enough deals at a certain time. So, um, logically that was the next step. Well, I’m just gonna control this piece of it. I’m gonna make sure that they’re using my systems, my processes so that I can do more

Reed Goossens (09:47):

Mm-hmm. and what does it look like today? So when, when did that company start?

Jorge Abreu (09:52):

Uh, that was about 12, maybe even 13 years ago now. So a few Oh,

Reed Goossens (09:57):

Wow. Few years.

Jorge Abreu (09:58):

That’s long ago. Yeah. Um, and now it’s, you know, we got a pretty big outfit. We got, uh, employees in Houston, employees in Dallas, employees that travel. We do all our, our CapEx work and, um, outside of Texas as well. So yeah, I mean it’s, it’s, it’s a great team. You know, I don’t, um, once I train ’em and, and they know what they’re doing, um, just need to check in on ’em here and there, and otherwise they’re handling it.

Reed Goossens (10:24):

Yeah. Right. And, and so it sounded like that started from the fix and flipping business days. Right. It was just a, a thing, you know, and a lot of, I done fix and flip back in my days and, you know, I, I know, I know the answer to this is bited question, but coming in the resi space, you know, and I’m talking sub four units, you know, the sophistication is probably not necessarily there. Is that what you got frustrated with? And that’s the hence why you were like, you know, screw this, I’m gonna go do it myself.

Jorge Abreu (10:50):

Correct.

Reed Goossens (10:52):

Yeah. Yeah. Yeah. And then, you know, taking into large multifamily, so you’re doing grown up construction today as well as part of, you know, existing multi-family.

Jorge Abreu (11:00):

Yes.

Reed Goossens (11:01):

Right. Awesome stuff. Um, mate, we’re sitting here in 2023, January, what did, uh, how, how did 2022 go? Because I know it’s been pretty, uh, pretty rough for a lot of us. ,

Jorge Abreu (11:11):

You know, it’s, it started off really good. Um, we had a lot of traction. We had a, a massive, uh, 2021. I think we bought 16 properties, 2021, uh, I forgot how many units. I think it was over 3000 units. So we came into 2022 with, with that traction. And, um, you know, we got, uh, punched in the face, right? , . We, I wanna say we’ve done a pretty good job working through, uh, the debt and just, uh, being able to still close some, some really good deals that we’re happy about in 2022. Mm-hmm. , and now we’re looking for those opportunities. I mean, we’re,

Reed Goossens (11:54):

Is, is it slowed down since 2021? What, what’s your sort of, and, and that punch in the face, that black eye, if you, I don’t want to say that you got a black eye, but there’d probably be lessons, right? We, and we’re all learning them in real time as, you know, as the Fed raises, you know, rates fivefold, you know, we was un unprecedented. But, you know, things that have changed criteria wise is, is he coming into 2023?

Jorge Abreu (12:16):

Yeah. Yeah. I mean, it’s, it’s a lot harder to get these deals to pencil. The, the sellers are still fighting it, right? They, they still haven’t felt the hurt, I guess, that much yet. Um mm-hmm. , you know, more some other than some have. But, uh, we’re, we’re still putting offers out there. We’re following up and, and waiting. And, uh, we’ve found we’re, we’re playing a lot in the new development space now where either mm-hmm. , we’re buying straight from developers that don’t care to operate some with really good existing loans, right. So going mm-hmm. for loan assumption. And then we’re also looking at, at, uh, new builds. We feel that’s a good opportunity right now, even going into this recession, um, essentially by the time we’re done building is when we’ll start coming out of it if we time it correctly.

Reed Goossens (13:11):

So, existing stuff, not, not, she’s not the, uh, the, the, the, the hot thing on, on the street anymore.

Jorge Abreu (13:19):

I just don’t, I don’t I just don’t see the pricing there. You know, I, I think it’s gonna be, and we’re ready for, it just doesn’t make sense for me to pay 110, 120 a door for a c class property when I can go pay 180, 190 for an eClass.

Reed Goossens (13:37):

Right, right, right. Yep. No, that it, it, it’s a definitely, and, and I like, I’m, I’m paying more than that in certain markets, depending on where the real estate taxes and where you, where you are. Um, how does that go down with investors when you’re buying something from a developer? And maybe just walk through that strategy. Cause we haven’t actually spoken a lot about that on this show coming in. And I, I have a ground up development background and, and I was very close to buying a, uh, actually coming in sort of pre co and certificate occupancy. For those people who don’t know, you know, sort of nearly partnering with the developer to get to the finish line and then, you know, taking up the lease up risk. Walk us through that strategy and how you sell it to investors, because obviously, you know, I know you personally and you know, it’s the same business that we’re in, you know, we’ve always touted, we’re gonna come in, we’re gonna put lipstick on the pig and we’re gonna make it look better and gonna increase the No. Why? How do you do that when the lipstick’s already there and it’s a brand new, you know, deal And, and, and what’s the, what’s the sort of sales pitch there to those investors?

Jorge Abreu (14:35):

Yeah, so it only works on certain, certain deals, right? Certain developers, um, some developers are not good operators and mm-hmm. , all they care to do is, uh, and, and this is assuming that you’re buying it after up. So there’s also, right. The part of buying it, you know, during the lease up, which I think that one’s pretty obvious, the value add there is lease it up, right? I mean, that’s right. That’s how you’re adding value,

Reed Goossens (15:02):

Right?

Jorge Abreu (15:02):

The ones that are already leased up, those developers that are not operators, all they care about is filling the apartment and selling it. They want to take their money and their profits that they’ve built in there by developing it and go on to the next deal. So we’re finding, at least the ones we’ve closed on have been, you know, a hundred to $200 off of market rents. Uh, they’re not doing any other income. They’re not really pushing their garages or, you know, any of their other in income is, is lacking. So for us, it’s, it’s come in by this beautiful property and just make some easy tweaks and really maximize that, that noi and it, we’ve been pretty successful at it.

Reed Goossens (15:44):

Yeah. Right. Are you still getting the, the deal flow through traditional brokers? Or is, is it still in that sort of space or are you still now developing relationships with certain developers who are like, Hey, I’ve actually got three or four other deals that, you know, actually, can you come in a little bit earlier to to, to relieve us of this, this pain point? Yeah,

Jorge Abreu (16:01):

Both, both. I would say a hundred percent of the stuff we we’re looking at is off market, and we are starting to develop quite a bit of relationships straight with the developers, and then we still have some brokers that that bring us, us,

Reed Goossens (16:16):

Bring, bring the stuff. And, and what do you, what are your target markets right now? What do you see as the growth potential coming in here into 2023? As, as, you know, there’s chat about, you know, the slowing down of the multi and there’s too much multi being built and all that sort of stuff.

Jorge Abreu (16:30):

You know, we like the, the strong markets to have good fundamentals that still have not really peed if, if

Reed Goossens (16:41):

To go on, give us, give us your crystal ball. Which ones?

Jorge Abreu (16:43):

?

Reed Goossens (16:43):

.

Jorge Abreu (16:44):

So, you know, I wanna mention one, but I think you, you play in that space, so I don’t want to That’s

Reed Goossens (16:51):

All right. Go ahead. That’s all

Jorge Abreu (16:52):

Right. Go, go. So, you know, a Phoenix, I feel like Phoenix is, um, it’s peaked. Yeah. Mm-hmm. , so we we’re trying, not trying to stay away from those and, and more of the ones that are strong, but still got some room, they’re still somewhat affordable, I guess. Yep. Per se. And then we like to throw in some, some sleeper markets, some that are completely flying under the radar. Um, like northwest Arkansas was a deal that we just closed, uh, last week, and booming, booming market. Not a lot of people know about it. Not very sexy, I guess, but, um mm-hmm.

Reed Goossens (17:32):

No tech jobs or, you know, like all the, you know, the Austins of the world. Exactly. The Denver,

Jorge Abreu (17:37):

That’s another one that I would stay away from. Right. Austin, you know, feels like it’s peaked. Um, but I, like Dallas, Dallas is strong. It’s, it’s still somewhat affordable. You still got a bunch of, uh, population growth and, and jobs and, um, companies coming left and right. So, you know, we do now, it won’t be like the heart of Dallas, but, you know, one of the surrounding as

Reed Goossens (18:01):

It

Jorge Abreu (18:01):

Keeps the m MSA

Reed Goossens (18:02):

Keeps Yeah. Moving out. Yeah. Yeah, yeah. That’s right. What, what’s your, what’s your thoughts here in you with the interest rates and coming into 2023 and, you know, just we’ve had some pain in 2022 and, you know, do you see some, the trees between the forest and all that sort of stuff?

Jorge Abreu (18:19):

I, I do. You know, I do think we’re, we’re gonna stop seeing those, those hikes pretty soon. Um, I think we probably got a couple more, and then they’re gonna stabilize for a bit. I don’t think, not being unrealistic, you know, I don’t think the rates are gonna be going down, maybe not even this year. Um, I, I would hope they start going somewhat down towards the end of the year, but, um mm-hmm. , you know, I think, I think everybody’s just looking for, for it to stabilize at least, and then just stop seeing the, the hikes and, and I think that’s coming. So, you know, we still love loan assumptions right now, mm-hmm. mm-hmm. . Um, and if we get into something, we’re still gonna try to see how we can get a fixed rate versus an adjustable, but if we find a really good deal and, and, you know, adjustable is the only thing we could do, I feel comfortable now do it, taking it down. Yep.

Reed Goossens (19:14):

Yep. Yep. What’s the, uh, what’s the things keeping up at night right now?

Jorge Abreu (19:18):

Oh, things keeping me up, uh,

Reed Goossens (19:22):

The weight of the world, my friend.

Jorge Abreu (19:23):

Yeah. The, the, the government just scares the crap out of me, man. , , um, you know, the things that I,

Reed Goossens (19:30):

Every four years, it’s, it’s scaring the crap outta someone.

Jorge Abreu (19:32):

Yeah. Yeah. Um, at this point, I don’t even know if it matters which side, but ju just the stuff I can’t control. Right. You know, the, there’s certain things I can control and, and that’s what I try to focus on, but I do gotta think about, um, the outside macro. Yeah.

Reed Goossens (19:50):

For those of you who are interested in staying up to date with all the latest happenings in my business, or to learn more about passively investing directly into my multi-family value add deals, then head over to reedgoossens.com and sign up for my monthly newsletter. By signing up, you’ll automatically be notified about my new up and coming investment opportunities. You’ll be able to stay up to date with all the latest real estate news here in the United States and much, much more. So head over to reedgoossens.com and sign up to date now, back into the show.

Reed Goossens (20:25):

Right. Awesome stuff. Um, tell, tell me about, like, you know, what’s been the, probably the number one lesson as, as we pivot to now with the investors that, that you’ve coming into tw out into outta 2022, into 2023, have you seen a shift in the way invest you’re raising your capital? You know, are there, are there been people, people giving you feedback like, you know, they’re, they’re sort of sitting on the sidelines, you know, waiting for sort of more stabilized things to happen? Or are you still seeing, uh, you know, people out there wanting to deploy capital right now?

Jorge Abreu (20:54):

You know, overall, we’re seeing people still wanting to deploy capital. Yes. We’ve gotten, um, the sideline talks and, and there are investors that are, that are waiting. We have not seen that a lot with the big money for sure. They, they still got a capital to place. Um, and then our, our common equity investors, private investors, um, for the most part, you know, they’re, they still need to place their capital. Um, I think one of the things, one of the most important things coming into this year is gonna be operations. You know, everybody’s been saved by the market, uh, the past mm-hmm. , I don’t know how many years. It’s, it’s been a while.

Reed Goossens (21:33):

3, 4, 5 years. Yeah. Yeah.

Jorge Abreu (21:35):

So that’s one thing that we saw coming and, and all of last year we worked on, um, in-house management and finally launched that. So now,

Reed Goossens (21:44):

Awesome. Congratulations.

Jorge Abreu (21:46):

Yeah. So more control, right? Just like the construction company now got more control of the management. So I think, uh, the, you know, some, some syndicators are gonna get, once again, punched in the mouth because , they lack in the operations or asset management. And this is not gonna be easy. I mean, you’re gonna have to really maximize your, your profits.

Reed Goossens (22:09):

Yep. You’ll ma maximize other income and, and all that sort of stuff, as you was talking about before. And, and really I think keeping an eye on where rents are going. Yep. You know, one of the big things we’re doing on our portfolios is just, you know, how do we get pop pops without even really trying, you know, meaning, you know, everyone talks about the loss to lease, but let’s go in and look at, you know, okay, where the, where is 20 units that are rented at 900 bucks and, you know, the market might be 1400, let’s not even give them 1400, let’s just get ’em up to 1200. Right? It’s still $300 and I’ve spent $0 doing it. Yeah. Like that sort of stuff, right? That’s, that’s the thing that are where you may have overlooked that, or if you’ve got a third party property manager, you might have said, well, they’re gonna handle it.

Reed Goossens (22:52):

Right. It’s now, like, it’s really responsibilities of, of good asset managers to be like, looking at that nearly week in, week out. Like, how are you going with those renewals? And, you know, let’s, let’s talk about that. Are they good paying tenants? Okay, we don’t need to jam ’em with the market rate stuff. Well, let’s, let’s, let’s get ’em, let’s keep ’em going and still get a pop, but not have to, you know, might be not as big a pop. So I, I think that’s a, these, they’re low, you know, quote unquote low hanging fruit, but so many people just don’t even pay attention to it, you know, as an, as an example of one of the, you know, the litany of things that you can pay attention to. So, um, um, you, you mentioned big, big equity before, um, and still wanting to deploy capital. Are you thinking that at all? Is there, does that give you any solace in that the, the market isn’t gonna just fall on its because Marni still needs to be deployed and, you know, commercial real estate still seems to be a great investment, you know, long term and the fundamentals still seem to be there, at least in the multi-family.

Jorge Abreu (23:45):

Yeah, I mean, look, I was full-time real estate investor, 2008, um, went through all that and definitely feels a lot different, right? Mm-hmm. , the money just disappeared back then. Like, you could not get a loan for anything. You couldn’t, nobody wanted to invest. So this is definitely different. I think, uh, a lot of investors have seen the way multi-family has performed through recessions, through covid, through everything, right? Um mm-hmm. , so still a lot of investors looking to deploy into multi-family, especially, um mm-hmm. , you know, office and retail is still pretty scary, uh, space. Um, you know, industrials looked pretty good, but for the most part, I would say multi-family has, has stood out.

Reed Goossens (24:38):

And then, and the reason, you know, coming outta Covid is I remember when we managed through Covid, it was like, you know, are they gonna pay their rent? Right. You know, but, but, but everyone needs a roof over their head. And that’s why real estate fundamentally over the long period matter where you’re investing America, us, Australia, you know, Mexico, like people still need shelter, it’s food, shelter, and the two sort of two primary things. And I think that’s, you know, teaming up the debt in the right way, teaming up, making sure you, you know, you’ve got a good operations is really, really important to make it successful. Um, one of the things I wanna ask you about is the decision to, to bring property management in house. You know, I I, I’ve been in this space for seven or eight years. I’ve not, I’ve never done it.

Reed Goossens (25:14):

I’ve seen other companies, ashcroft, tides rise yourself, you know, they start all bringing in house for that control piece. It’s a thankless business, right? You become, it’s the epitome of HR business. How did you justify it to yourself, you know, and, and what’s been some of the challenges as you rolled that out that you maybe unexpectedly didn’t know, coming from a spot of where you just were the asset manager controlling the third party management, versus now you’re like, gotta manage everyone from the, the maintenance dude all the way through to the, to the, you know, tech, tech, uh, so the, the assistant leasing.

Jorge Abreu (25:49):

Yeah. You know, we, we, we took our time. We, we took it really slow. We brought on some, some key personnel, um, to really take the, the load, um, of the work and, and with the experience too of, of running a management company. So I think that helped. Really, the only thing that I can think of that was unexpected is, um, once we start taking over our portfolio, a lot of approvals right before we actually mm-hmm. , it’s not very instant. Um, we gotta go, uh, make sure the lender approves it, then we gotta, if there’s a private equity group, we gotta make sure they approve it. If there’s cogs on the deal, we gotta make sure they approve it. Um, so a long approval process.

Reed Goossens (26:42):

Right, right. Yeah. No, it’s, it’s interesting. It’s always something that I’ve toyed with, haven’t, haven’t, haven’t pulled the trigger yet, but maybe, you know, sometime in the future, have you seen many, much savings at all compared to you? Yeah. You have? Yeah,

Jorge Abreu (26:56):

Yeah, yeah.

Reed Goossens (26:57):

Yeah. Like, what are you talking about? 10, 15% or greater?

Jorge Abreu (27:00):

Um, it depends on the properties. I mean, there was one where instantly we came in and, and just from that experience on, on insurance, we saved, oh, God, I wanna say it was a hundred thousand dollars on insurance in that property. Big

Reed Goossens (27:17):

Property a year.

Jorge Abreu (27:19):

Yep.

Reed Goossens (27:19):

Yeah. Right. And that’s the, that’s, that’s a big number when you’re thinking on like a five cap. So,

Jorge Abreu (27:23):

And then just all the little things that management companies, which we were already starting to crack down on that, on the asset management side, but, um, obviously as we, when we step in as property managers, it makes it even easier to just get rid of mm-hmm. , there’s things that if, if you have a third party manager, there’s things you’re paying for that you don’t even know what they do and why you’re paying for it, and

Reed Goossens (27:47):

Right, right. No, I, I, yeah, I, I get, I get freaking annoyed every quarter in the Yardi, you know, charge comes in and you’re like, what the, what? Wtf? Like, you know, what is this? It’s just a pass, it’s a pass through, you know, like with all you do, it’s a fricking pass through and, you know, over time and you know, I’m paying you overtime to do your job. You know, like, not that it’s not needed or, or bonuses to do your job. Like, it’s, it becomes very, very frustrating. How, how’s been the, the morale in building a company culture around property management? Ha has that, you know, because I know just with my experience, it’s, you know, we are in the business of managing people, whether it’s investors or property management or GCs, and you’ve now got a seat at the table at all three camps, you know, it is about bringing people and, and, and incentivizing them to do, to think like you would think, right? Yeah. How important has culture been in, in, in company? Like, you know, elevate as you, as you’ve been growing and starting to delve into other, you know, other lanes, so to speak?

Jorge Abreu (28:43):

Yeah, no, I mean, I, I think it’s huge. I learned that years ago, um, with the construction company, with the investment company. Um, so we put a lot of focus on it. And same thing with the management company. We, especially with the management company, like you said, it’s a thankless . Um, you know, that goes to the onsite staff too, right? It’s, it’s usually, uh, asset managers asking them a thousand questions and nobody’s happy and , you know, it’s, it’s tough. It’s tough. So we definitely, one of the first things we did is we got everybody together and, um, took them out, went ax throwing and, and mm-hmm. . Um, and then we do meetings where we get them all together, um, on a biweekly basis. And, um, just creating that, that we’re a team right there. There’s others out here, you can count on us. Um, and then when we’re on site, we’re, we get our hands dirty, right? We, we show them, um, we need by example.

Reed Goossens (29:45):

Yeah. Yep. Yep. Are you doing management outta state or is it just within your sort of what you, what, where, where your focus, like, you know, you mentioned Northwest Arkansas. Are you doing it up there right now?

Jorge Abreu (29:56):

Not yet. So we started, we started in Dallas. Yeah. Mm-hmm. where we’re at, and we’re mm-hmm. taking over our portfolio. We’ve taken all of ’em over now that are in Dallas, and then, um, gonna start expanding from there.

Reed Goossens (30:08):

Yeah. And I think it’s also wise just to do it in your backyard so you can, you can see it and test it and then, you know, start, because as you start going remote thing, challenges are gonna come up. Yep. Right. Luke, who, who, who’s, who, who’s the regional, and how do you make sure that they’re incentivized to make sure that keep, keep the company going in the right way. So, no, mate. Very, very fascinating stuff. And, and, and congratulations for all, for all your, um, all your success. What’s the, you know, before we end the show, what’s the number one thing you are looking to do with Elevate, you know, coming here in 2023 and beyond? And, and maybe what are you doing personally? You know, on, on the personal side, I see a bunch of badges behind there. You look, I think you’re a big runner, right?

Jorge Abreu (30:45):

? Um, I am, but that’s not from, that’s not from running, those are from, oh, is it Net networking events and and

Reed Goossens (30:51):

Speaking,

Jorge Abreu (30:53):

Um, a lot of that in 2023, you know, speaking at a lot of events this year. Um, thinking about hosting one that’s,

Reed Goossens (31:03):

Oh God, yeah.

Jorge Abreu (31:03):

Good luck. We haven’t decided yet. We haven’t decided yet.

Reed Goossens (31:06):

,

Jorge Abreu (31:08):

Um, you know, we host a monthly meetup, but not Uhhuh conference or Yeah. Anything like that. Oh gosh, I, so yeah, plans for Elevate. I mean, we’ve got some, uh, personal that we wanna bring on, some, some new team members this year. We brought on, um, some key personnels last year that, that really helped us grow. And, uh, we’re gonna keep that going this year, you know, find a lot more opportunities are gonna be out there, I think. And, um, we’re just getting ready, take ’em down. Awesome.

Reed Goossens (31:40):

Awesome my friend. Well look at the end of every show. We love to dive into the top five investing tips. You ready to get into it, mate? Question number one is what’s the daily habit you practice to keep on track towards your goals?

Jorge Abreu (31:52):

So every morning I go through my top goals and I make sure that I’m doing something that day, that’s working on at least one of those goals. Mm-hmm. . Um, and I do that first thing in the morning because usually the day can come and, and kind of take over, and I try not to let the, the day run me. Right. I try to run the day , and then that’s worked pretty well.

Reed Goossens (32:20):

Awesome. Awesome stuff. Question number two is, who’s been the most influential person in your career to date?

Jorge Abreu (32:27):

Yeah. Yeah. I’ll, I’ll say something silly. Probably doesn’t, we wouldn’t hear this very often, but, uh, right now social media has been great to me and it’s been, it’s helped with a lot of the success. And the only reason I started doing social media was from, uh, watching Gary V mm-hmm. , and he kind of pushed me to look at it differently, like mm-hmm. , you know, not really the social aspect, more of the business and, and, um, that was a game changer. So I’ll, I’ll answer it with that.

Reed Goossens (33:01):

Awesome. Gary? No, he’s a got, if he’s listening, which he’s definitely not listening, , get him on the show. . Uh, question number three, mate, is, in your business, what’s the, the number one tool that you use in the business that you can’t run the business without on a day-to-day? It could be a physical tool like your phone or a journal, or it could be a piece of software that you just, you can’t run it out. What is, you can’t run the business without, what is it?

Jorge Abreu (33:23):

Oh, shoot, man. Um, yeah, it’s gotta be probably either our CRM or investor portal, um mm-hmm. ,

Reed Goossens (33:33):

We use Active, what, what do you, what do you use?

Jorge Abreu (33:34):

Yeah. Active cam campaign for our crm, and then, uh, syndication Pro for,

Reed Goossens (33:40):

Yep. Awesome. Good. Two very Jacob over at Syndication Pro, right? Yep. And, um, you know, I I, I don’t use Active Campaign, but I’ve heard very, very good things about it. We use, um, convert Kits, so, uh, for those people listening out there, take notes because they’re two very, very good pieces of software that you gotta, you can’t run the business without. Um, question number four in one sentence, what’s been the biggest failure in your career, and what’d you learn from that failure?

Jorge Abreu (34:05):

You know, I, I, I think back to when I was trying to scale a single-family and I was, uh, scaling the construction company at the same time I had started a roofing sales department as well, and that was, you know, 20 plus salesmen in there, plus all my project managers and, and supervisors, plus all the single-family homes we were buying and fixing and flipping, and also building from the ground up. Um, I, I, I got, I spread myself too thin mm-hmm. , and I wasn’t really doing any of that good or really good. Well,

Reed Goossens (34:41):

Right, right,

Jorge Abreu (34:42):

Right. Um, that was kind of where I, and that’s when I found multi-family and, and yeah. Changed everything.

Reed Goossens (34:51):

The, the, the naturalness question would, would be, you know, as you bring these other disciplines in house, you, you know, it sounds like you mentioned key personnel before, you know, really, like behind me is who not how, you know, just, and, and, but you gotta get to a point where you can afford them, right? It’s not just like, oh, I need someone to help and I just need a bum. And see. It’s like, no, go out and get the, you might have to pay more, but you get the best person who can run it and then sort of hand the reins over in that department and not have to, you know, oversee them.

Jorge Abreu (35:18):

Yes. That, that’s something that I learned around that time too, right? Mm-hmm. . Um, and, and since then I put a lot of focus on finding the

Reed Goossens (35:27):

Right person,

Jorge Abreu (35:27):

Good

Reed Goossens (35:28):

Talent, putting

Jorge Abreu (35:29):

In the right seat, and, um, paying them right too.

Reed Goossens (35:32):

Right,

Jorge Abreu (35:32):

Right,

Reed Goossens (35:32):

Right. Mate, last question. Where can people, Richard, continue the conversation that be in your sphere? Where do they go?

Jorge Abreu (35:39):

Um, you can find most of our, a lot of free content and all our contact information on website elevatecig.com. Uh, if they wanna shoot me an email, it’s Jorge or Jorge, Jorge@elevatecig.com.

Reed Goossens (35:56):

Awesome stuff, man. Well, look, I wanna thank you so much for jumping on the show today. I just wanna reflect some of the things that I think I took away from today’s, Sean. I think, you know, you’ve got a really knack for hearing your story and just hearing little bits and pieces there, roofing companies and fixing and flips and, you know, giving up the engineering degree and then, you know, wanting to come back. It’s, you seem like you’re very curious type of person, and I think that’s, you know, it’s a, no, it’s a common theme throughout a lot of successful entrepreneurs. You have to be curious, you have to be willing to pivot and, and, and as things get difficult or just not working, understand what to do and when to pivot and make the right decision. So I think kudos for that man. And, and, and now that you’re bringing it all in house and, and using past experiences or black eyes, so to speak, to, to sort of say, I’m not gonna do that with the construction company or the property management company.

Reed Goossens (36:42):

And then, and then, you know, focusing on the culture, company culture and then, and then hiring the right people. Um, you know, it, it’s, it’s, you know, very basic when you lay it out like that. But it’s also, you know, as a, as an entrepreneur, you have to sort of have those, I don’t wanna say stumbles, but you gotta have those experiences to then take it on board and say, okay, this is how I really want to go out and produce a company that, that, that will be successful over the long term. So to leave anything out,

Jorge Abreu (37:06):

I think you got it.

Reed Goossens (37:07):

. Awesome man. Awesome man. We’ll go again, wanna thank you for jumping on the show today. Enjoy the rest of your week and we’ll catch up very, very soon. Thank

Jorge Abreu (37:13):

You. You too.

Reed Goossens (37:14):

Well, there you have another cracking episode jampacked with some incredible advice from Jorge. If you’re interested to learn about what he does, check over to elevatecig.com, elevatecig.com. Um, and if you do like this show, the easiest way to give back is to give to five star review on iTunes. We’re gonna do this all again next week. So remember, be bold, be brave, and go give life a crack.