Building Wealth & Creating Cash Flow: Real Estate Strategies with Jesse Trujillo

Christian (00:00.829)
Hey everybody. Welcome back to the show. I have here my special friend Jesse and he’s got a wealth of experience. He is actually an investor, a motivational speaker and the CEO of Ajax capital and Ajax homes. Jesse, welcome to the show. My friend, why don’t you introduce to the audience who you are, how you got here and just a little bit of your background.

Jesse Trujillo (00:20.6)
Yeah, thanks for having me on. I truly appreciate it. Again, I’m Jess Trujillo. I’m out of San Diego, California. Just overall, we’ve done about 1,000 flips since 2010, and we currently have about 1,100 rental units. 200 of those single family, and about 900 of those are apartment buildings.

Christian (00:38.055)
Wow, wow, that’s awesome, man. So what inspired you to get into real estate investing? I know me and you, Jesse, we’re talking a little bit offline. You’ve had quite a story. So I’m really interested to know how did Ajax Capital come to life and Ajax Homes? What’s the history on that?

Jesse Trujillo (00:53.954)
Yeah, so I was actually studying to be a doctor. My goal was to be a trauma surgeon and started at UCSD, was as an undergraduate, worked my way up at a laboratory, became a head surgeon for a perinatal research laboratory there, was working with doctors, but on the side, my sister had graduated from San Diego State and was gonna move out of her house with my parents and she’s like, I’m gonna go to an apartment. I was like, you should.

you should buy, don’t rent, you know, and not really knowing what I was saying, I just kind of just ran with it and she said, well, if you could figure it out, you know, I’ll do it. So I started studying it, of learning how to fix her credit, learning how to get approved. Long story short, we got a three-bedroom condo down the street from my parents. I figured she could rent two rooms and really only pay a couple hundred bucks a month and she’d be, you know, owning her own place. Long story short, we closed and I think I was…

I was more excited than her and it was her condo. So I just found a love for it. It was super exciting. was in a, it became a hobby, right? So we started buying more more rentals with her and I saw the power of what she was doing. And then by, you know, by the time I knew it, just I was still in school and she came to me and I said, Hey, you know, I’m kind of too busy studying. So you got to go to a property manager or you sell them. And she’s like, you know what? Just sell them. And so, you know, got a realtor and we started selling them. And I started seeing the profits that were being made by her.

when we were selling all her rentals. And technically, I guess you could say that’s kind of where I saw, that’s a business, that’s flipping, right? And so that’s kind of where it took off. I did my first flip and I made $5,000 as a starving student and that was exciting for me and that’s all it took and now we’re at 1,000.

Christian (02:37.373)
That’s incredible. You definitely got the itch from that start, right? That’s awesome, man. So I mean, what strategies do you recommend for creating steady cashflow in this real estate market right now? As you know, there’s a lot of noise right now saying, it’s not the best time to invest. You know, so I’m interested based on your expertise and your experience, you know, what do you recommend right now?

Jesse Trujillo (02:40.61)
Yep, exactly.

Jesse Trujillo (02:56.526)
You know, so we jumped into single family rentals and apartment buildings, right, for passive income. I truly am doubling down more on the multifamily side. There’s a lot of opportunities that are gonna be coming this way, obviously with the changes in the interest rates and everything and people that bought and might not have bought the correctly and the underwriting’s changed since then, right? So the opportunity right now to buy some apartments, my team is gearing up for that. They’re really, you know,

We created a fund on purpose because we really want to be ready to go to take down some of these assets. mean, people need a place to live, right? I mean, it’s doing your due diligence, making sure the market is strong. You know, what’s there? You know, is there businesses there? What are, you know, how many, how many businesses are there? What type of businesses? I love, you know, following like, especially like military towns. Like I’m in San Diego, San Antonio, I’m in Tampa, right? All those towns are military. I love that.

plus other businesses that are big businesses that are there, it just makes me feel comfortable that people need to live somewhere. So knowing that, it’s kind of following that transition. I don’t buy class A, I buy more middle kind of class properties for that same reason that if the market does change, people usually go from an A to B, or B to C. So it’s kind of going with that mind frame for us and our investors that we’ve just been, it’s.

It’s growing slowly but surely. I think that’s one of the biggest thing in this market is being smart on what you buy. I mean, even though we have 900 units, right now we put in, we do due diligence and underwrite so many apartment buildings. And I’m okay with saying that, that we hardly buy any because I’d rather know we’re buying a great deal. Like, we’re in Nesco right now for an 11 unit, right? We bought over 200 units at a time. But we have an 11 unit that cash flows from day one. We love it. We’ve done underwriting on it. Even though it’s an 11 unit.

It doesn’t matter, right? It’s knowing that it’s a great asset and it’s something that really protects us in the market it’s in and also just for the future.

Christian (04:58.151)
Sure, well obviously you scale a large portfolio, right? That’s for certain. So I’m curious to know, you know, what type of systems operations have you built and put in place to manage that many amount of units, right? I mean, I know, do you have any headaches that are involved with that process? I mean, how do you streamline the whole process and manage that?

Jesse Trujillo (05:16.62)
Yeah, I mean, it’s about building a team. You know, I couldn’t be where I’m at without building a team. You know, back in the day, I love to say I am that guy that tries to do everything, you know, at once and there’s no way I could scale to where we’ve scaled without building a team. Right? It’s you got to hire, right? You know, you got to sometimes you will go through some employees and until you find the right person. But when you do and you really have that system in place, it allows you to scale like we have a full time asset manager at this at this point.

Christian (05:18.941)
Mm-hmm.

Christian (05:25.725)
Yeah.

Jesse Trujillo (05:44.302)
We don’t do our own property management. We hire out the property management, but our asset managers on our team and just that’s what they focus on all day long and making sure that our assets are in control and our property manager is doing what we ask them to and there’s nothing, you we try to make it where minimal things fall through the cracks, if none, right? So having a team member to do that gives us less headaches, right? That’s the way to be able to do it. If you have a small portfolio,

you you could probably manage it yourself, but as you get bigger, you gotta just kind of put in that budget to have someone truly looking out to it, especially if you have investors behind you. You wanna make sure that you are doing everything in your power to make sure that that investment is going as planned.

Christian (06:27.899)
I that. I love that. So let’s talk about maybe some tax advantages, right? I mean, what are some of the biggest tax advantages that real estate investors and including yourself should be and are taking advantage of right now in the market?

Jesse Trujillo (06:40.14)
Yeah, so kind of knowing here in my story, right, doing over a thousand flips, a lot of that’s active, right? That’s active income coming in. It’s not something that you get a bunch of write-offs on. But so, the way we’ve done it, as we’ve grown the company, is kind of in between, right? So you have active income and then you have passive income. And when we get the passive income, especially with our apartments in particular, we use a cost segregation, right? If you’re familiar with that, with the tax code, cost segregation allows you to write off, you know, especially year one.

Christian (06:44.547)
Mm-hmm.

Jesse Trujillo (07:09.582)
know, a dramatic amount of write-offs. So that helps us really bring down our costs, our taxes, and tax savings. I mean, we make a lot of money on the active side, and we get to write it off on the apartment side through our investments in there, right, and doing our cost segregations at tax time. So for me, that’s been the biggest game changer of knowing how to manage both, right? It’s because active, a lot of fast money coming in.

passively, maybe a little slower, but it’s long term and then also it’s giving you those tax advantages. know, the whole thing about a penny saved is a penny earned. I mean, it’s so true, right? I mean, if we’re giving all this money back in the tax and stuff that we legally can write off, why wouldn’t we, right? That’s extra money. You could be making extra money on that money, right? So it’s going with that mind frame. It’s just been a game changer. That’s why I love, for us, we’re diversified between active and passive income and doing both at the same time.

Christian (08:04.733)
I love that. I love that. So what trends are you currently seeing in the real estate market? Right. And how do you think that’s going to evolve in the next five to 10 years? Like, what is your vision on that? Do you have any goals that you’re looking to hit in the next five to 10 years for your companies?

Jesse Trujillo (08:18.638)
Yeah, so I mean, a lot of goals, right? Sometimes a little too many for sure, but as a visionary, yeah. For us, it’s really creating something long-term, right? I’m gonna sound like I’m getting older here, but it’s really creating something not only for me, but for my family and my team. I mean, there’s 40 of us on my team currently, and it’s not just about me, it’s about all of us, right? All of us winning at the same time. We’re all working hard to get what we wanna do, so.

Christian (08:23.003)
Yeah, never a bad thing.

Jesse Trujillo (08:45.996)
Really the goals right now is we’re really growing our flipping business. We feel comfortable doing it for so long and we have good systems in place. And it’s being careful, even though like I said, the market we’re in today is not the market we were in yesterday, right? I mean now, the market would save you sometimes in the past. That for me is gone right now. I don’t think that way. We gotta think that whatever we’re buying it at, we gotta hit our numbers exactly as we planned. If not, it’s not gonna go to plan. So it’s being conservative.

Christian (09:11.133)
Mm-hmm.

Jesse Trujillo (09:13.806)
Even though I might do 100 to 200 flips this year, I’d rather do less than that. Just give me an example, like 50 flips, but they’re good flips. Things that I feel comfortable at. Things that I feel are no brainers than doing 100 flips that were just going too fast and rolling the dice. That’s not the mentality me and my team hit. We’re not even trying to hit a certain number, we’re trying to hit a certain profit number. So I’d rather do less properties with more profit, but.

we have profit goals instead of property goals. So that’s kind of how we’ve changed up recently with me and my team to really hit that, have that mentality as we’re going forward. Let’s buy safe, right? Let’s buy things that we know are not gonna give us headaches. You know, we’re in real estate. To say everything goes perfect and we win on every property, I’d be lying to you, right? So it’s done a thousand flips, that hasn’t been the case, but I’ve won more than I’ve lost, right? And it’s a very rare occasion when we do lose.

And that’s a great thing that I’m able to say, but we do lose sometimes, right? But the fact that we’re winning more than we’re losing and we’re still growing and it doesn’t affect our business, it’s just kind of part of the business and people knowing that if you’re in this business, that it’s gonna happen. So that’s where for me, I believe in, it didn’t have to do with the amount of volume that I do, but it’s nice to be diversified and keep doing different things, right? Try to buy a couple, don’t put all your eggs in one basket. And so I think that has been.

Christian (10:15.069)
Mm-hmm.

Jesse Trujillo (10:38.798)
where we wanna go and then for what our goals are, yes, the 100, 200 a year in flips, but it’s more again, more of a profit margin and then apartments is the same thing. We wanna keep growing that. I do really feel there’s gonna be a big wave of good opportunities there. So I just tell people, learn your underwriting right now. Learn your apartment underwriting. That is the biggest thing. I don’t know if you know the story, but I’ve been teaching my kids, they literally were in an adult.

adult mastermind of apartments and they’ve been in there and they’ve been learning how to underwrite apartments and they’re looking, they haven’t found their first deal in the apartments, but they know how to underwrite. And that’s one of the biggest things that if you can know, if you can find a good deal and underwrite and know it’s a good deal, that’s the first step because I feel like a lot of mistakes happen when you underwrite it wrong and you end up buying it and too late at that point. Now you’re stuck with it, right? And those are long-term plays usually. So that for me is, the team’s goal is to get to that

Christian (11:30.663)
Mm.

Jesse Trujillo (11:36.312)
you know, next level of just keeping, getting apartments. Same thing, we don’t really have a number, but we are raising through our AJAX capital and bringing in investors to, we’re ready to go get them, right? We’re underwriting every day, and as we find them, we’re just gonna be opening the door for our investors to come in and let’s take some great assets down.

Christian (11:55.325)
That’s incredible. Well, let’s talk about Ajax capital. Jesse, I know that you’re doing a lot of stuff right there, guiding people on how to grow their net worth, create steady cashflow. Why don’t you talk a little bit about that?

Jesse Trujillo (12:04.558)
Yeah, so recently we started AJ Capital, which is a 506C. It’s an evergreen fund. What I loved about it is that we actually, it’s one fund, it’s one PPM, and then people could come in and they invest with us minimum 50,000 for one year minimum. After that, it’s up to them if they want to keep it in or not. And they get to pick and choose. I wanted to give our investors an opportunity.

If you want to invest in one flip in San Diego and one flip in San Antonio, one flip in Tampa, or a rental, or even an apartment building, you have the choice through our fund to pick and choose on each one. Everyone has different goals of building wealth or their money making money for them. I have investors that they love just seeing that money come in really quick and they love investing in our flips. Then I have other people that have the 401ks and they switch them at self-directed IRAs and they’re like, Jesse,

I don’t get it, you know, we’re not getting the money back. Take it as long as you want. Put them in a longer term asset. So we might put them in a single family rental. And then I have people that they want the tax write off. So they’ll join us on these apartments where they can get the benefits of the cost segregation and save money in their taxes. So that’s kind of the biggest thing. I get excited about it just because it’s opening the door for so many investors that, you know, I believe in giving back and I just feel like it’s a win win, right? Obviously they’re helping AJX grow.

Christian (13:20.637)
Yeah.

Jesse Trujillo (13:29.528)
But to see people, I’ve had investors for so many years and I’ve seen them where they’re just thankful, like, you know, one, depending on what they’re doing and it’s our track record, right? Our track record is great and it’s, you know, it’s been, you know, I make sure, with all our investors, we’re nothing. And I think that’s what, it’s so important, whatever operators you work with, you gotta, they have to understand that they are making, putting you first because they have to. Because if you are helping them grow, like,

Christian (13:39.301)
Mm-hmm. Everything.

Jesse Trujillo (13:58.444)
My investors, I wouldn’t be where I’m at without them. So I always look at their money and think of it like it’s my money and I make sure that they get paid first. A lot of my, like I said, we’ve lost on some deals in the past. My investors never even felt it, right? Because they got their money back no matter what. So it’s again, there’s no guarantees in real estate, there’s nothing like there, but I’m just saying our ethically with our volume, our diversification allows us to be able to move on things that.

if needed for our investors to keep their money safe as much as we can.

Christian (14:29.885)
I love that, I love that. So I know you mentioned, you you wouldn’t be here without your investors and your partners and stuff, right? So I couldn’t agree anymore. I mean, what should investors though, new investors look for in a trusted partner when they’re just starting out, maybe looking to grow their portfolio.

Jesse Trujillo (14:46.252)
You know, I call it the trust kind of verification, right? There’s a couple things you want to do. One, your due diligence on them. Two, what a lot of people don’t do, I mean, they might do due diligence, but they need to hold them, they obviously have expectations from them. Make sure that they have that upfront and make sure they’re keeping them. And then, three, is holding them accountable, right? It’s really holding your, it’s trust but verify.

Right, so you’re, yes, you’re trusting them and you build that trust. Like even people I’ve known for years, I love like verify me. Like come verify that your asset, where your money’s at is really doing what it’s doing. Verify that, you the asset that you invested in is going the way it’s going. Like I wanna have communication. Communication is the key of who you invested. They gotta be communicative with you because it’s, you never know when something could be going wrong and then when there’s doubt,

that’s what causes the biggest, you know, it doesn’t let you sleep at night, right? And I want my investors to know everything I know, especially on what we’re doing and what we’re doing with their money. it’s again, due diligence, holding them accountable, and really just staying on top of them of everything that they promised, making sure that they’re doing what they promised.

Christian (16:00.829)
That’s awesome. That’s awesome. Jesse, I could definitely tell you have a strong passion for helping other people, which leads me to asking you, I know you’re a motivational speaker for those that don’t know. So I’m really interested to know, know, how did that start? What got you just fired up and started to build a passion for wanting to do motivational speaking? Is there a story behind that?

Jesse Trujillo (16:23.33)
Yeah, Christian, you kind of cut out a little bit. know.

Christian (16:26.535)
We’ll edit that part out, Jesse. It’s no big deal. Yep.

Jesse Trujillo (16:28.3)
Okay. Did you, asked, you asked, can you ask the question again?

Christian (16:31.889)
Yeah, so Jesse, what kind of motivated you to become a motivational speaker as well? Right? I know you are a motivational speaker, so I’m interested to know what’s the backstory behind that.

Jesse Trujillo (16:41.666)
Yeah, you know, it’s my personal story. know, people might hear of my track record and everything we’ve done, and you you see these gray hairs and stuff, but a lot of people don’t know how I got them. And it hasn’t been easy. It’s been a rough ride, not only in business, but personally. And when you’re in real estate, you take risks, right? You’re putting yourself out there. And we talk about having a trusted partner. And so what I’ve decided to share on stage,

It’s just kind of how I got there. I wanted to show people that it’s not easy, that adversity’s happened personally and in business all the time. And it’s how you deal with them, right? How do you pick yourself up when you’re at your worst? And for me, it’s kind of a story that some people ask me to start sharing and I said, it’s helped some people and they’ve come up to me and I go share on stages now and if I help one person, it’s worth it for me. But I share a story about when I was…

when I was flipping, when the market was about to downturn, we had sold two properties, lender someone that I knew came to us and said, hey, we wanna buy those two properties you have for sale and we wanna go ahead and have a renter, pretty much like a client that’s gonna be renting these and making me the landlord. And so they came up to us and were like, sure, that’s great. He’s like, man, can you help us with closing costs? Sure, we were appreciative just unloading those at that point. We weren’t making any profit, we were just.

Happy to move on. Well, long story short, goes, Jesse, you know what, can you help us rent them so that when we close, we’ll be cash flowing from day one for our clients? said, sure, no problem. I’m a go getter. And long story short, I get a knock on my door in 2012, they’re putting me in handcuffs and taking me away. And I didn’t know why. We find out that those two properties that we had sold four years before,

Those lenders were using stolen identities to buy those properties in a couple counties here in California. And my luck is that two of them were mine. But because I rented them to those tenants, I became involved in it, right? So, you know, here I am just not knowing what was happening and, you know, they’re taking me away. And then they came up and pretty much they were trying to send me away for five years. And I hired an attorney and …

Jesse Trujillo (19:02.21)
Sadly, the attorney was a friend of mine that I knew for many years from USD. He actually, supposedly represented me and never turned the evidence to show my innocence. I was taken away for five years, but I ended up doing two years in prison because of it. He was actually money laundering for the Mexican mafia and he went to jail himself in federal prison. I was wrongfully imprisoned and I just kind of

I talk about life’s adversity, right? was one thing after another, one thing after another. know, sadly while I was in there, I lost my mother to ALS, Lou Gehris disease. And it was just one thing after another that was piling up on me. And I could tell you when I came out, like I came out of there, out of jail in 2016, and I was just super ready to go, ready to win. I didn’t let any of that stuff hold me down. I got two kids, you know, and my wife, and I just wanted to show them that that doesn’t stop me. All those things in life.

So literally 2016, I came out broke again and I just wanted to make sure that I just took us to the top. So I fought for the next five years and I say fought because I fought for the next five years to just work in your real estate. And I pushed myself and again, we start back to flipping, went back to getting these rental portfolio and I took us to a, sorry, a $15 million net worth within five years by pushing myself to that limit.

And that’s what I share on stage, right? I want people to understand that life’s adversities do not define you. You can’t give up. You gotta keep pushing yourself. And when you get to that like mind frame, it’s not easy. you need, like, it’s about finding those trusted partners, especially in real estate. Like do your due diligence. That’s why, you you hear me. If I would have, could I have found more due diligence on the guys? Maybe, you know, it’s sometimes hard, but it’s just.

do your background checks, make sure you know who you’re dealing with and stuff. And that’s where for me, that was one of the, actually another reason why joining Ajax Capital, creating it was just, God, I want people to know that they can come in and feel comfortable and with us and at least I could be someone. And if they don’t invest with me, that’s fine. But if I can help them understand how to do due diligence on other people they invest in, then for me that’s a win. Just because again, I’ve been through it and it’s not a good feeling and we wanna make sure that these.

Jesse Trujillo (21:24.354)
These people are learning how to go invest, you know, smartly.

Christian (21:28.135)
Wow, as much as adversity as you went through, Jesse, I mean, is it fair to say that what you went through, I think definitely gave you more drive and fire to build what you have now, right? It gave you a different perspective on life. I mean, not many people can go through something like that and bounce back as quickly as you did. Most would just throw in the towel and say, it’s over, my life’s over, I can’t rebound, I can’t bounce back.

but you had your family depending on you. And I think that that is something that is a driving force that a lot of people are out there are on the grind as well, right? Maybe not the same story, but at the day to day grind, they’re trying to build a portfolio for themselves. They’re trying to build a business. And I just think it’s so important to where, like you’re saying, it doesn’t matter what you’re going through. Everything happens for you, not to you, right? So you just have to keep a very positive mindset, a very still cage mindset at that. So.

Kudos to you for bouncing back and building what you have now. It’s definitely remarkable.

Jesse Trujillo (22:28.248)
Thank you. Yeah, and again, that was the biggest thing. I mean, it’s pushing yourself. It wasn’t easy, you know? Of course, there were days you don’t want to wake up. You don’t want to get out of bed and just you want to stay there and not do anything because you’re kind of, you’re in your head, right? You got to change. Like I say, for this year, my biggest thing I was telling my kids yesterday as we going for a walk, I told them, they’re 15 and 17 year old now, and I told them this year is all about, you know, strong body.

Christian (22:33.35)
Mm-hmm. Yeah.

Sure.

Christian (22:43.483)
Yeah.

Christian (22:47.485)
Mm-hmm.

Jesse Trujillo (22:57.91)
strong mind, strong business. You do those three, you’re on your way to health and, well, health, wealth and happiness, right? So for me, it’s pushing those things and sharing that, not only with me, but with my kids. My kids, they’re in the business now and they’ve been growing. They’re actually coming out on a show called Kids Who Flip. It’ll be out this year.

Christian (23:18.897)
No kidding. Wow.

Jesse Trujillo (23:20.054)
It’s picked up, know, by already a TV station and we’re done filming it and they’re following my footsteps, right? I’m so proud of them and excited to see what they’re gonna do and you know, they’re flipping their first house in the show and it’s just exciting to see and teaching them the power of active and passive income is just amazing. And to be honest, seeing that, it’s really like gearing us up to like, do we show more people this, right? How do we get more people to understand you can do this? I mean, if I could teach

Christian (23:46.706)
Yeah.

Jesse Trujillo (23:49.868)
my kids to do this that they’re teenagers, they’re jokesters, and they’re still running their same lives, playing sports, doing homework and stuff. And if I could show them how to do this, how do we show more people invest? You can create wealth in real estate. Just do it smartly. Find yourself a good mentor. Find yourself a good mastermind like your guys. Just really doing things that really can help you out. And almost get those mentors, surround yourself with the right people to get there.

Christian (24:19.249)
I love that. Your network is your net worth, right? Jesse, I wish we had another hour to speak, my friend, but where can people find you? How can people work with you? Because they definitely need to. Because I mean, with the wealth of experience you have, they got to jump on.

Jesse Trujillo (24:21.358)
100 %

you

Jesse Trujillo (24:29.538)
Yeah, I appreciate that.

Yeah, so the easiest thing, just, you know, I created a website, investwithjesse.com. Again, investwithjesse.com, go on there. You can click, you can set up a meeting with me and my team. If you have questions about, you know, real estate or investing, you know, I’d love to talk to you and just, yeah, feel free to go there.

Christian (24:49.861)
Awesome, awesome man. Well Jesse, thank you so much for your time today. Your story is again, remarkable in every single way. And I’m really looking forward to seeing what you continue to do next. You got a lot of goals ahead and I’m really excited to see what you do. So awesome guys. Well, I appreciate you guys jumping in and tuning in. And as always, we will see you on the next episode. Take care everybody.

Jesse Trujillo (24:59.918)
I appreciate it.

All right, thank you.