Category: Investments
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Since 1993, Jerome Maldonado has been a self-employed Entrepreneur. Inspired by his parents’ dedicated work-ethic, Jerome has always had a hunger for success and a willingness to do whatever it took to make his vision for his life a reality.
Jerome began his career in direct sales, where he was first introduced to team building, sales techniques, and real estate concepts. After years of hard-work with minimal return, Jerome hit success – big time. By his mid-20’s Jerome moved from making close to nothing to managing his own six-figure business.
Over the course of his career, Jerome has founded multiple highly successful businesses. In 2003, Jerome Maldonado founded J. Jacob Realty, LLC., which he is still currently the active Qualifying Broker. J. Jacob Realty, LLC was put into place to complement its sister company J. Jacob Enterprises, Inc, which was founded by Jerome Maldonado in 2000. He is still the active President and CEO of J. Jacob Enterprises, Inc. and the Qualifying Broker for J. Jacob Realty, LLC. Additionally, he is the founder of several other corporations and an investor and equity owner in several diverse companies and industries.
Today, Jerome is excited to bring over 20 years of professional experience to the world’s business owners and entrepreneurs. He can’t wait to share his knowledge to help other hungry people take their lives to the next level.
Key Points From The Episode:
- Positioning yourself with stable assets in a foreseeable economic crash.
- Entering the market based on the people you’re working with.
- Having good faith in business partners.
- Understanding being an active-passive investor.
- Finding your niche in your market.
- Scaling your business through good partnership.
- Being proactive in the game.
- Starting small, growing fast is good but growing smart is even more important.
- Understanding where your money is coming from and how it’s working for you.
Books mentioned:
- The Power of Positive Thinking by Norman Vincent Peale
- The Holy Bible
Transcript:
[0.00:00.0] JM
Don’t look for areas to look for partners, what we’re doing is viable nationwide. I mean, you can go into any of the 50 states, and there’s a need for what we’re doing. It doesn’t matter where you live. So if you’re investing People ask me all the time, you know what markets are the best to invest in all of them. You just have to find your niche and in your market, but all 50 states are good markets to invest in.
[0.00:20.0] KR
Welcome to read around real estate, the show about how to passively invest like a pro. On each episode, I interview real estate experts to give their top investing advice, strategies, and tools, they break down the insights into practical steps to avoid the pitfalls and make better investments. I want to help you passively invest like a pro. This is “Ritter On Real Estate”. I’m your host, Kent Ritter.
Hello fellow investors. Welcome to another episode of “Ritter On Real Estate” where we teach you how to passively invest like a pro. Today, my guest is Jerome Maldonado. And Jerome has had quite an illustrious career. He’s done a little bit of everything. And over his career and 20 years in real estate, he’s done over 200 million in transactions with another 52 million alone in 2021. And it’s anything from multifamily to hotel conversions into multifamily to warehouses, and looks like maybe a few other things. And then outside of that you, you’ve got some really interesting kind of business ideas where you’re buying some brick and mortars and turning them into e-commerce and building out your warehouses. So excited to just dig into a lot of what you’re doing today and hear your story. So let’s start there, Jerome with you know, tell the folks who you are and how you got to be where you are today.
[0.01:42.0] JM
Thank you. Good morning, Kent, thank you for having me on the show, first and foremost, and thank you for all you listeners that are out there, either aspiring to invest or investing right now. So I know the show primarily is focused on people that are passively investing, which is great. I kind of started that way back in 1999. I went through some business hiccups in the mid-90s. And I was in multilevel marketing, the FTC shut us down in 1997. And in 1998, I found myself opening up a construction company didn’t have any experience of construction can’t it was merely a survival means at the time, my brother in law was in need of having a company to work for because his other company went out of business for tax evasion. And ironically enough knew how to sell and build a business because of my extensive five-year career in direct sales and network marketing. And so that’s what I did, I went off in, I got my contractor’s license, really to help my brother in law, he didn’t show up for the test I did. So I bought my first rental home passively just to have an asset to invest in and have a solid brick and mortar type of asset that in spite of things falling apart if they ever did again, I had something to show for it. And that went to two rental homes. I didn’t like the single-family rental home deal after only two of them. And because I have a construction company, I got into retail, and I start buying land and building houses and subdivisions and the money I put there, I needed to diversify it so that I could have a tax write-off. So I started building out retail centers. And then I started building out office 2008. And so things changed obviously tremendously in 2008. And that’s what got me into multifamily was in 2010. I found myself in Phoenix, purchasing small fourplexes. And doing massive rehabs on these distressed assets. But we are picking them up for pennies on the dollar. And in all honesty, no one ever sat down with me Can’t teach me about real estate and what to invest in, I had to just make common sense out of it. I was kind of my own mentor in the real estate space. And I never really considered myself a real estate professional, it just kind of grew that way. And that portfolio that I bought in Phoenix went from a $500,000 investment to what’s now over $15 million just on that one little sector of investment that I made in 2010. And it still sits all in multifamily. And because there’s a housing shortage now, as things evolved in his life has evolved over the course of the last 25 plus years of my career. As you mentioned, I’ve kind of moonlighted in a lot of different areas of real estate. I feel like I’ve just pivoted when I felt that when I’ve needed to because of economic changes, life circumstance changes. And I’m excited to be in the multifamily space aggressively now. We’re building affordable housing. And, you know, we actually when we wrote that bio at 50 million words $68 million on our books for 2021. It’s been a great career. It’s been a great ride, somehow Good to be here.
[0.05:01.0] KR
Yeah, and we’re happy to have you. I think there’s a lot we can learn through all the different things you’ve done. So, yeah, so, So the Phoenix portfolio. I mean, that’s, that’s great. I mean, Phoenix has seen nothing but growth since then I was just out there a couple of weeks ago. And I mean, the place is just booming. So I can imagine that’s going to continue to do very well for you. But you’ve since then, you’re expanding into a few other different areas, a few other asset classes, right, but you come back to multifamily. And now you said your focus is on building affordable housing is that really the focus at this point?
[0.05:40.0] JM
It is so we are building single-family residences in Washington State down in Palm Springs, California, here in New Mexico. But we’re deploying all that into multifamily. So I see affordable housing I should say affordable rooftops because we’re taking but most people go and develop as class A real estate. for investors, they go into these large portfolios with all the bells and whistles, the swimming pools, the gyms, all the amenities all decked out, and just that typical, a plus class investment property that is being built new, well, we’re taking that model and because when I look at things I went through so much of my career candidate, I look at things in a perspective, in a worst-case scenario I always try to purchase in with an exit strategy and this is great for investors. So if you’re a passive investor listening to this, one thing that you look for when you’re investing with a group of people, is what is their risk tolerance, right? And you got to evaluate that based on your age, based on your own personal, your personality, you know, and in my stock guy has done that with me said, you know, drone, we got it, we got to buy stuff based on your risk tolerance, and people investing need to do the same. And so when we got into building affordable rooftops, it was more so as a worst-case scenario. And we’re just happening to hit an aspect that the US American investors need to be focused on right now because we’re underbuilt by over 7 million rooftops right now. And so we need to find a solution to that. decade wise we only build about every 10 years since the 70s we only build about 10,000 rooftops per year. And so we need right now today, 7 million. I mean, there are only 10 million that are built out per decade, we need 7 million today. So with that said, we said I said to myself, okay, I didn’t want to build Class A real estate, and then if the market tanks What is my viability of that asset? If I looked at it in perspective like, what happened in 2008? I said I want to position myself where if, excuse my language, but it’s also it hits the fan in the economy crashes? Where am I at rental wise Can I keep Can I stabilize these assets, keep them stabilized. And without having to fork out money. My wife and I call it trash can money to service debt. And so what we did is go into we went into affordable housing, we stripped out all the amenities we, we have a brand new build, so we’re building it just like any other class, a piece of real estate, but no swimming pools, three storeys, no elevators, garden-style apartments, and we’re going in and they’ve been a home run, we’re able to build them for a lot less money, we’re so hence we’re able to lease them for less money. And we can also see the growth of appreciation over the course of time. But what people love about them is they’re new, there’s no maintenance to them. There’s not a lot of landscaping to them, they’re a very simple build. So they’ve been home runs. For us, we’ve been focusing on that we’re able to build them quicker than municipalities. They love us. They love the idea. They’re embracing us in multiple areas. And we’re going into redevelopment areas getting tax abatements on property taxes. So a lot of positive sides to it for investors and for your investors and for us, you know, so it’s a win-win situation.
[0.09:14.0] KR
Yeah, absolutely. And you’re just you’re filling an obvious need there, right? I mean, people like you said we’re short. Anywhere, what 7 million-plus rooftops Yeah, filling that need and, and allowing given people a good place to live as well as creating some value for investors. So are you building and then selling these and moving on are you building and holding on to them for the long term,
[0.09:38.0] JM
a little bit of both. So we’re holding on to a lot of them, and so we’ll refinance them and once they’re done, we’re walking into them because some of them on the general contractor so I’m the CO general contractor, meaning that I hire a GC, but I hire I don’t hire the quote-unquote big-name GCS because I’ve been in construction my whole life. I have the Smaller GCS, and we micromanage from our office, what they’re doing. And so we’re able to, it’s a little bit more work on our part, but we’re able to stabilize and build them for less money per square foot. And so we walk in with a lot more equity in our projects. So it’s been great. It’s a great business model. I don’t know that I want to exercise it forever, because it is a little bit more work. But well, I got the energy, the time, and the ability to do so I think we’ll continue doing it that way because it makes the projects more viable and a lot more lucrative as well.
[0.10:33.0] KR
Sure. So you mentioned a few different markets you guys are working in any kind of diverse. You said, wash your stay. You said Palm Springs, yeah, maybe some others. So what is it that you look for when you’re looking to enter a market,
[0.10:45.0] JM
A good partner, a good partner, I enter markets based on the people I’m working with. So when I say I, it’s weaving I in 2016, I started embracing the fact that I’ll do stuff with partners in 2018, I took on my first partner, which was actually Tai Lopez if people are familiar with who he is. He’s a big e-commerce name. But I don’t look for areas, I look for partners, the areas, what we’re doing is viable nationwide. I mean, you can go into any of the 50 states, and there’s a need for what we’re doing. It doesn’t matter where you live. So if you’re investing, people ask me all the time, you know what markets are the best to invest in all of them. You just have to find your niche and in your market, but all 50 states are good markets to invest in. I look for partners, or people are good in or I have a good partner that I trust I liked or wise. And it just happens in Washington State was a good state to go in and build residential subdivisions. The all the e-commerce companies, they’re Google, Facebook, LinkedIn, they’re all there. And so Remez Dabbs is one of my business partners. He lived there. He worked for Microsoft, he was building homes. And I went in and told him Look, let’s scale this let’s go into multifamily. There’s a need for affordable housing. And so we went in and we started building subdivisions and then deploying that capital tax-deferred into multifamily. So it just worked out. Phoenix is a market I love. I probably have close to $100 million total in that market, between office retail multifamily, and, and everything else that we were doing. Kyle Mitchell, he’s a big Rei guy in multifamily. You know, we became good friends several years back, I highly respect him as an asset manager. He’s been great in syndication, asset management. And he happens to have boots on the ground in Phoenix, so a market that I love. So we continue focusing on that market, we’re doing a lot of hotel conversions, office conversions into multifamily. And, and so Kyle helps us with boots on the ground in that market. The same thing with Palm Springs, I got David Carr Bohol, he was big, he was an owner’s rep for a big billion dollar a year development company. And in that development company, he worked side by side with the owner. So he learned the logistics of large, multi 100 million dollar builds and billion-dollar with a billion-dollar a year company. And so we took it on a smaller scale and gone, we’re doing housing developments. And then we’re deploying that capital tax-deferred into multifamily developments up in the Palm Springs area. So same thing, and then I got boots on the ground here in New Mexico. That’s why develop here ties up in Puerto Rico. And so that’s why we were doing stuff in Puerto Rico. And he also has his farm in Virginia. So we’re also doing a lot of warehouse purchasing in Virginia, and also in Chicago. So that’s where we decided to invest in it. The reason why is because of partners, good partners.
[0.13:46.0] KR
Gotcha. So you’ve been able to scale all over the country, including Puerto Rico, through good partnerships.
[0.13:53.0] JM
Yep, that’s it good partnerships. And my partnerships are different. So I always urge people I know a lot of people on this podcast are looking at their passive investors, right? So this even holds true for the people that you’re investing with. And the asset managers that are actually taking down your projects. One you want to know right, you want to know him for a while. know their character, the personalities. All of my partners are in a different place in life and most people getting started in the business. Early years I hated partners, I never did partners all the way until 2018 everything was so low and all our developments were 100% in-house through our companies. And the reason why is because I had bad experiences like most people hear nightmare stories about dealing with partners, one partner taking on more work and the other. I don’t mind taking on a little more work than that. Then a partner sometimes you know just really depends on what they’re bringing to the table. At the end of the day. You got to make a project go and there’s a lot of people involved. But for most of my partners are they’re not trying to pay a mortgage. They’re not trying to pay a light bill. They’re not trying to pay a car payment. The past that, so my partners are, we’re creating generational wealth at this point in time in our life. And so I don’t want to call it a game, but it’s kind of a game, right? Like, they’re in a different mental place. So we’re not fighting over, over $100 $1,000, we’re trying to make changes in, in our future generation lives and people’s lives around us. So our partnerships work, there’s not a lot of greed in our, in our relationships, we just got to make projects go. So whatever it takes to make projects go, all my partners have been very good, and very diligent in helping do so. So those are good partners to have people that aren’t trying to pay a mortgage but are really trying to just build something and grow something that is bigger and greater than just us individually, and our personal lives and our personal bills. So those are what I look for in partners.
[0.15:53.0] KR
Yeah, I mean, I think that’s a great point. So I mean, it sounds like what you’re looking for folks that have similar goals to you, right, similar goals, similar vision. Similar drive, right? So I think that’s really important to, to bring up is like when you’re talking, I mean, a lot of people in real estate look to partner. And I think a lot of people enter into partnerships too fast because they feel like they have to have a partner, kind of as a support system to get going. But I think oftentimes, that’s missed is that upfront conversation? I mean, I look at it as like you’re getting married, married, right? You’re not gonna get to marry not gonna get married to somebody unless you’ve had conversations about what are your goals? Right? What are your finances? Like, you know, and what are you trying to achieve, ultimately? And are we aligned? So I think that’s great advice,
[0.16:40.0] JM
bro, that’s exactly a candid you are, you’re entering into almost like a marriage with these people, you know. So yeah, you got to see inline. And there are moments like I remember, it’s funny when Ty and I started doing business together, his attorney sent me over a partnership agreement. And I obviously took it, sent it to my attorney, and my attorney looked at it, and my attorney comes back with it all redlined. And he said, there’s no exit. There’s no exit clause in here in case one of the guys needs to exit. And he said, I don’t like that, you know, you need to have an exit strategy. Otherwise, if you don’t, one person or the other Gaza with all the assets. So I took it back to ty and said, Hey, Ty, there’s no exit closet here, we need an exit clause. And he goes, we don’t do exit clauses. And, and I said, why is that he goes well because, in partnerships, we got to work through it, even if we want to if there are moments in time, we want to kill each other. That forces us, it makes us work on things. And so I saw his perspective on it. And even though I do put exit clauses in a lot of my contracts, that was one that I went in, and I had been doing business with him for over four years. We own a lot of other distressed retail brands together, that I’m an equity owner in. And, and so I trusted him enough to say, Okay, I know this guy’s intent. If we get added to each other, we’re just gonna have to figure it out. And we have we’ve all we’ve had our moments like I think most people do, like Well, good husbands and wives Do you know we all have our car squirrels or corals and disagreements and how we view and see things. But at the end of the day, we work through them. And so I signed the agreement with no exit clause. So you know, we tie in I, we don’t have an exit clause, it’s like, Look, you know, we’re gonna build this. We’re gonna have we have to blow each other up. Before we get out of this. You know, it’s all or none, you know.
[0.18:28.0] KR
So, you guys are beyond married?
[0.18:30.0] JM
Yeah, we’re, like Siamese twins now.
[0.18:34.0] KR
That’s right. Because of right. Well, I think that’s really interesting. And that’s a great message for folks. I want to dig in a little bit into a couple of the strategies that you’re deploying, because I think it is really interesting and very relevant right now one of them is hotel conversions into multifamily, to tell us a little bit more about what you’re doing there. And you know, why you see the opportunity there? And then kind of how do you go about making that conversion?
[0.19:02.0] JM
So I’ve kind of become a master of finding opportunity before it exists. And I don’t know if I call myself a master, but I’ve gotten really good at finding opportunities between the cracks. And I tell people, you know, there’s opportunity everywhere and when there are times of financial distress, there’s opportunity. And so we were working on converting distressed retail because there’s a mass. I mean, you guys see, there are malls and distressed retail all over the country. Retail has slowed and died. The office has slowed and died. And there’s a market sector on the larger square footage, right, the smaller retail smaller office hasn’t. They’re still in need. But the larger square footage ones have. And so immediately when COVID hit there was shut down. So I sat back and said, Oh my god, we’re looking at retail, the cities and municipalities If you follow me here, you’ll understand the course my brain took, we were going in, like after these 450,000 square foot malls to buy them, tear parts of them down, convert part of them to warehouse distribution centers, and then build out multifamily on the 45 acres of parking lot space that you have out there. And so it was gonna be a mixed-use of mixed-use development. Well, we were getting a lot of friction from the cities, it was taken as a lot of time, it was very stressful. And we were it was taken us years to be able to get this whole business model implemented. And cities still weren’t seeing the attraction to three years ago, in spite of the mass distress retail that was happening in their own cities, they had blinders on. And so we were fighting with municipalities trying to get them to give us approval or attorneys with their attorneys. And it was taken an abundance of time and money and law are risk factors that the longer you have these projects opened up, the higher the larger, the higher your risk factors rise, right. And so when COVID hit, we sat back and said, okay, distressed assets, who are getting hit the hardest with closed definitely was shutdowns. People, the hospitality industry, people weren’t traveling. So we sat down, I started doing some market research, they said, the travel is not going to resume the way it normally did until 2023. This is back in 2019. So we started looking at distressed hotel brands, I started taking plane flights, it’s the best time to fly, you’re on COVID, the plane, airports ramp the plane. And I was flying all over the country with my mask on my hand sanitizer. And we went out this. And we started exploring markets, and we started seeing which markets were going to take to it and like anything in life can’t. Those who are the most assertive and the most devoted to what they’re doing are going to get the deals right. People so quickly, investors quickly grasped onto this. And so we were lucky enough to be at the forefront of it. So we were able to take down a good person a good amount of hotel brands that were in distress and converted no family, there are some key components and zoning and repositioning of the users that have to take place. But we’ve gotten good at it. We know what do we need to look for quickly now. And so we’re successful, we’re underwriting a motel six right now, which seems to be a nice viable deal. And I won’t tell you guys where until we haven’t tied up, but it’s in the southwest someplace. And you know, so we’re still doing it, there’s less of these deals available now that a lot of people have grabbed on to it. So now that everybody’s kind of grabbed on board. We’re fortunate to have a business plan that works beat so we’re still able to find them. But there’s less of them available now than there was two years ago. So sure,
[0.22:55.0] KR
sure. So you guys are at the forefront of this, which Yeah, has become a reality, I guess, common strategy at this point. So when you’re looking at, I guess what, what are some of the key things that need to be in place that you look for, in a hotel to say, you know, that could be a great multifamily property?
[0.23:16.0] JM
So we look at the zoning first, like you could with construction, since I’ve been in it, I look at every asset like there’s feasibility, and every asset depends on how much you want to put into it, right? So the first thing that we look at, we’ll look at the asset and say, Okay, if we bought this, like, what would our business model be? And so if the units are smaller, do we have to combine them and make bigger units? Or can the market bear studio apartments? Like is there a need for studio apartments in a given market, like we looked at some stuff up in the Seattle market, and right around Seattle, it would work but as you get into like Tacoma in the outskirts areas, less so you know, there’s less of a market multifamily brokers don’t really like to see those assets that much, because they’re hard to feel and who needs 120 Studios, right? Unless you’re around a university or something. So you got to be wise in regards to the type of assets that you bind, and can you fill them so what we look for is we’ll send them over to a multifamily broker, and we get their professional opinion on it, we tell them hey, if we do X, Y, and Z on this asset, because all of them are different, right each hotel-motel whatever it is, they’re different. And so we put a business strategy that we think makes sense together and then we take it to a multifamily broker and say, Does this make sense to you can you feel this What’s it worth if we fill it and what are comps? Right, so we want to be proactive and know that we have a viable product that I’m that a respected multifamily broker can realistically fill up for us and sell for us. If we decide to sell it. What’s our exit strategy again, and then we go to the city or municipality if we see a business model that is feasible, then we’ll go and we’ll hire an attorney that works with the city municipality. And we asked them, you know, Hey, can we get zoning changes? It’s going to have a lot of friction, what’s, what’s going to be our requirements? Can we really make this work? And then if we sit down and we say, yeah, it’s viable, we can make this work, the cost of construction to fulfill the zoning requirements are very feasible. And so let’s roll with it. And so those two factors are really big. Those are the two things that we do is preliminary research to find out if that hotel is viable for repositioning.
[0.25:36.0] KR
Gotcha. Now I think that that’s really interesting. How do you find the hotels? Is it working with brokers, like you’d find a normal property? Or is it kind of the direct to the owner strategy? Or is it is that the secret sauce?
[0.25:51.0] JM
We’ll call it a secret sauce. It’s worth buying. And I’ll tell you guys when I do, I mean, I mean, is there a secret sauce to it, I guess it’s the secret sauce. I mean, we just plant seeds I was I tell people finding Real Estate’s like planting a garden, you know, you don’t go out to a garden and plant one carrot seed and say, hey, I want to garden carrots or one, one a, you know, one seed of corn and say, I’m gonna have a harvest of corn, you go out and plant a bunch of seeds. And then ironically enough, some of them don’t come in, and a lot of them do. And the same thing with with with any guard, same thing with multifamily. The same thing with any type of real estate, you got to plant seeds, you got to be out there, you got to be active in the game. If you’re looking for deals, you got to be planting seeds in the years have a lot of respect to professionals, from people that are wholesalers, that you know a lot we’ve obviously have a lot of relationships. Now there’s a way that we build relationships when we go into new cities. When you’re new, it’s a little bit tougher, because these guys want to make sure that aren’t wasting your time. So in the early years, when I started doing this, I had to kind of sugar coat things a little bit to make myself look a little bit more fluent and more well respected. So that they would bring me deals. And now it’s a little easier because we have the deals, they, they can Google us and they can easily find out who I am and what we’re doing. And so they say hey, I want to do business with this guy and they bring us deals. But I plant seeds I go to cities, I talked to multifamily brokers, I talked to hotel brokers, I’ve gotten in with the American Indian hotel Owners Association, just different stuff in different contacts that have they’re well versed in the areas that we want. And then when they’re in town, we moonlighter you know, we wind them, we dine them, we take them to Starbucks, whatever it is, and we build relationships. Everything that we do is relationship-based. A lot of it’s off-market. We do a lot with wholesalers in different markets that know us and get learn to respect us. Some deals work on deals don’t we sell? We were very honest and upfront with them. If they don’t work, we just tell them no. And we go on to the next deal.
[0.27:52.0] KR
Yeah, just like everything else, it comes down to relationships, right? So you guys are building strong relationships, you’re planting those seeds. And then and then the deal starts coming in. Oh, Jerome makes a ton of sense. I appreciate that. And before I let you go, I mean, you’ve done so many things here, you know, you’ve had built multiple businesses, you’ve obviously had a tremendous amount of success. I mean, what are some of the key takeaways you would give to our listeners and ways that they can, you know, follow you or kind of match some of your success that you’ve had, what are some of the things you can share with them,
[0.28:28.0] JM
too, when I got into multifamily, I started buying small, right, I bought small fourplexes I mean Phoenix in a time of distress. That was one way that I got into the multifamily sector and pulled myself out of financial distress. We almost lost everything in 2008 Kent, I’m not gonna sit here and joke with you, we didn’t lose anything. Thank God, we didn’t, we didn’t go to have any bankruptcies we didn’t have any foreclosures we got through it was a lot of work. But we rekindled a lot of stuff ourselves by buying small assets small fourplexes. And we accumulated 64 units of fourplexes over the course of two years. So starting small, growing fast is good. But growing smart is even more important. But even more so than that, you know, I was willing to invest in myself. And in my education, I’m in 2016 can’t a great idea for most investors wanting to do what I did, is to invest in their future in educating themselves in 2016 when I first started thinking about partnering with people and syndicating and, and becoming an asset manager and starting to grow my portfolio to where it’s going now like how do we go from $100 million over the course of 20 years, to almost $70 million. In just one year or next year, we’ll put over $100 million. It’s because I invested in my future I took 100 that $200,000 I invested in syndication I wanted to poach legal paperwork I didn’t understand. 506 C’s, 506 B’s, I didn’t understand the legalities of that stuff I had never been introduced to it. Even though I’ve been in the industry for so long, I never raised capital, I did it all my own capital and institutional money. But I knew if I wanted to grow, I had to take other people’s money and protect it. So I took, I put my money where my mouth was, I knew I was gonna make less money as an investor, but I’ll tell you, it made me more money. And so you got to look at things in perspective, right? People sometimes think that they’re investing passively. And you can be an active-passive investor. And so I was an active, passive investor, I put $200,000 to work passively, I made checks, but actively I was learning what they were doing so that I could duplicate the process that they were doing. So it was methodical, I knew what I was doing. I knew what I was going after. And if that’s what your desires are, are to become an asset manager or to be able to do withdrawal Maldonado’s doing, you have to do a draw Maldonado kind of did you know, you got to be willing to put your money where your mouth is. And if you have the capital, I invested it, and I invested with other people paid smaller returns, in lieu of learning. And education is huge. Kent, the topic that you got to take the time to educate yourself, it took me two full years of like, full-time commitment to understanding this game. And I’m still learning so here I sit five years later, and in Can’t I don’t think there’s a day that goes by that I learned something I can’t believe I didn’t know that, you know, so I’m still learning every day.
[0.31:34.0] KR
Yeah, now that really resonates with me, because I’ve got a similar story. I mean, that was my approach to learn as well as invest passively with others and learn from them and learn the process. And so I think, personally, that that is probably the best way you can take so many courses and listen to so many podcasts and books, and those are great places to start. But until you’re actually in a deal. I think it’s it’s just another level of learning. So yeah, I love hearing that. Well, great, Jerome, and appreciate you being here. I want to take you Lastly, through our keys to success route, I got four questions I want to ask you. And the first one is, put your passive investor hat on, right. So back when you invest in that the $200,000. Right? If you could only ask that sponsor, one question, what should that question be?
[0.32:29.0] JM
I’ll ask is a question I asked them. I wanted to know what the cash flow was on it. And I wanted to understand how they got there, right? That was a big question for me. Like I wanted to understand the underwriting. As a passive investor, I wanted to see, I’m a hands-on type of person. So I have I’m a numbers guy. And I just don’t feel comfortable unless I know where things are coming from, I have to visually be able to see it, it has to resonate with me. And I have to know in my brain like okay, where is that money coming from? So that when, if things go bad, you know what needs to be fixed or where you have to go to fix something. But I mean, know that money’s coming in from so what I asked, initially, when I first invested was, I wanted to see how the underwrote the deal, and I wanted to see the financials of the property, the trailing 12 of what they were doing, which is the 12 months of financials, and I wanted to see how the underwrote it, I didn’t understand steel, how to underwrite things entirely yet, I understood the nuts and bolts, but I didn’t understand everything in detail. So that’s one thing as an investor understands where your money’s coming from, and how your money is actually working for you don’t go in completely blind, and just say, Okay, here’s a couple $100,000 and keep your fingers crossed and hope that things work out. If you’re with a good asset manager, the chances of them working out pretty damn good, even if you don’t know what the heck you’re doing. But that would be my first question is okay, what, what is the potential upside here? How are we going to get there? What’s the business plan? And where is the money coming from? Like, where are you guys seeing this money and capital? And how is this going to grow? Like, how are we all going to get benefit from this?
[0.34:12.0] KR
Yeah, great, great questions. Great questions. And, yeah, I mean, going back to I tell my listeners all the time, like even though, it’s called being a passive investor, I mean, there’s a lot of activity involved, you know, you got to be active, especially on the front end, right? That’s when you do the work because the investor is vetting out that sponsor and vetting out that deal. And making sure that you understand the details. And it’s trust, but verify, right, you get to verify what’s going on and where their numbers are coming from. So yeah, I like that a lot. Jerome, what are you most proud of in your career?
[0.34:50.0] JM
I’m most proud of the security that I give to my kid, my family, my kids. I mean, the career is great. You know, in all reality, you go out, I think once you get I’ve had success in since my young 20s, I came from just a medium family background, my parents are not impressed by my success, by the way, you know, even to this day, they’re, they’re happy that I do well. But I could be working as an accountant and put a roof over my head, and my parents will be just as happy, right? So I think I look at things in perspective. This is a business, I thrive on the challenges of being in business, I don’t pride myself and pat my back on those. When I succeed on those, I feel like, God gave us those abilities, we should be moving forward and baking ourselves better and, doing bigger things in life. I really pride myself more so in my family, every day, I tried to just become a better dad a better husband. I make mistakes every day. You know, it’s a little hard on my son last night, even when we were going to bed. And I was thinking about that this morning when I woke up. And it was the first thing that I thought about not business, it wasn’t like, Hey, I’m going to go do this with my multifamily stuff. It was my son that I thought about first this morning. So what I pride myself on is the fact that we don’t have to worry about money, as most families do. So I’m thankful to God for that. And, and I just pray to God that the deals I make always continue to go the weapon fashion that I have propelled them because I never want to put my family ever at risk. And so I think about them first and foremost. So I pride myself more around, really, my wife, my kids, my family more so than anything, the deals come and go, right? The adrenaline of a deal comes and goes, you got to set yourself up for security in life. But truly, you know, you got to ask yourself what really matters. And to me, more so than anything now that we’ve gotten money out of the way, my family is my first priority. So I pride myself less so in my business achievements than I do in trying to be a good dad. Because I’m not a great dad, I try to be a better dad and better husband every single day. And just a better person more than anything.
[0.36:55.0] KR
Yeah, that. Again, that’s a great message. I think that I think you’re exactly right. You know, the deals will come and go. And you know, and I think oftentimes we can get caught up, caught up in that I don’t know what’s going on and trying to get to the next level or do the next thing. But like you said, Man, at the end of the day, it comes back to family and you can have all the riches in the world. But if you don’t have that, think you know, you don’t have anything. So that’s fantastic. What’s a book that everybody should read?
[0.37:28.0] JM
Do you know that? I’m going to tell you guys this. There’s a lot of good books, I get this question a lot, and depending on the listener class that I’m talking to will be picked the book that
[0.37:39.0] KR
I lost your audio man, I’m not hearing Yeah.
[0.37:43.0] JM
Did you lose me there or my back on? My shows on
[0.37:48.0] KR
Okay, I got you back. I don’t know, I just, I just cut out for a second
[0.37:53.0] JM
glitch and Wi-Fi. Yeah. So I, get that question a lot. And depending on the type of person in the group of people that I’m talking about would be is what I will recommend as far as his books. And so I’m going to tell you, I’m going to go back to old school here. And I’m going to recommend a book that we all know it’s the Holy Bible. And here’s why. There’s a reason behind this, right? So if you’re not a religious person, there’s still it’s still the best book written on success. I read a lot of successful books, girls going through the process. And there was one book called The power of positive thinking by Norman Vincent Peale. And I remember in my young 20s in the 90s, when I read this book, I got in touch it was a second or third chapter. And in that in the book, it said, the best book ever written on success was the Holy Bible. And so I remember reading that I went back and read it again. I said, Well, holy shit, if I’m, if I’m if the best book read on success of the Holy Bible, why am I reading this book, and I literally closed the book. And that second third chapter, I did go back, I finished the book, and I’ve read it multiple times since then. But I closed the book, I went down to the local bookstore, Barnes and Nobles, or whatever it was at the time, and I was living in Jacksonville, Florida that time, I still remember going down to the mall and going into a bookstore and purchasing a holy bible that fit, you know, closer to the Catholic religion, because that’s what I am, in whatever you like, you know, you get one that resonates with you, but I went and bought a Catholic Bible, and I still have that Bible. It’s all highlighted. And there are so many good business messages in there. And you know, in every book, every success book really hones in on different parts of the Bible. And so I went back and I read the Bible, and I still highlight and still open it up. Each morning, I read a little passage, just a small passage each day is in addition to everything else that I do, I think it’s a kind of a cool way. I don’t consider myself to be a highly religious person. But I do pride myself in just trying to always be better at what I do and I think that’s a good little means to try to fine-tune you to find excuse me to fine-tune us each day. Because I think each day, depending on what we go through and our levels of stress, we find ourselves doing less than perfect things in our life. So to me, it helps me just fine to me before I leave, leave my house each day. So that’s my tip of the day for books and what I think is good, a good read referenceable book to go out and buy and read.
[0.40:18.0] KR
Perfect, that’s great advice. And last but not least, Jerome. What is your number one key to success?
[0.40:25.0] JM
consistency for sure. key to success is consistency. I tell my kids all the time. It’s not talent, it’s consistency over talent wins. Obviously, you want to continue getting smarter and learning all the time. But the true key to success for anybody is is consistency. Because if you’re consistent, and even if you’re horrible at what you do, over the course of time, you’ll find your means and you will succeed. I’ve just been the most consistent, there’s not there’s no more consistent than me, I tell my kids that in sports, I tell them my wife that and his parents, you know, consistency wins. I’ll put consistency up against anything in the world. But consistency is my key to success.
[0.41:09.0] KR
Yeah, I love that. And that that actually, I mean, I’d have to get I need to go back to do the numbers because like that’s definitely the number one response that people have that successful person have the people on this show and I think it’s my own experience too. And you’re 100% right, like so much of it is just showing up and continuing to show upright, and because so many people just don’t they just don’t want to put in the effort. You know, you maybe do it once or twice that doesn’t work and you move on to something else or you go back to the couch and turn on the TV. You know it’s those people that continue to show up and even when you get knocked down like he said No way, you know, you guys had a tough time, but you’ve come back stronger than ever. And I think that’s a fantastic message for folks to hear. And I think that’s a great place. Great place to end it as well. And so Jerome as we wrap up the show if people want to learn more about you want to learn more about what you have going on, how can folks get ahold of you?
[0.42:04.0] JM
So I’m really easy to find. I know my name is in the video. But just Google me, Jerome Maldonado, I mean, I’m on every social media platform from LinkedIn to Instagram to tik tok and Facebook. And in all of them, I’m the only one that’s slightly different is on Instagram. It’s Jerome Maldonado and the number one you go to our straight to our website at jeromemaldonado.com, we’ve got a lot of stuff going on got you to know, you can edit this out or let people in November we have real estate domination 2021 we do the event every year, it’s a no sales event all information content and educational event. They can if you go to real estate domination.co you can register for it. I can even send that to you can’t if you’re okay with that. Yeah, put that in the show notes. And but, you know, continue following us. A lot of our stuff, our educational stuff is, is built entirely around education, and educating the investors because we’re looking for good partners, you know, good areas. And so the only way we’re going to meet them is through the means of doing business together in some small or large fashion over the course of time. So reach out to us, we’d like to meet you, and anyway, we can help any of you guys we’re happy to do so as well.
[0.43:22.0] KR
Absolutely. And yeah, do send that to me and we’ll make sure everything’s listed in the show notes so folks can just scroll down and click on it and sounds like a great event to check out in November. So Jerome, thank you so much for being here today. You brought a ton of value to the audience. really inspiring story and I think some great practical tips. So thanks again have a great rest of the day.
[0.43:41.0] JM
Yeah, Kent thank you. Thank you really appreciate you having me and you have a great day as well.
Thanks for listening to another great episode of Ritter On Real Estate. Hit the subscribe button and make sure you don’t miss out on the content that will make you a better investor. Also visit kentritter.com for articles, videos, and tools curated just for passive investors. From next time. This is Kent Ritter with Ritter On Real Estate and go out and invest like a pro.