Transform Your Real Estate Game

Dylan Silver (00:00.918)
Hey everybody, welcome back to another episode of the Real Estate Pros podcast. I’m your host Dylan Silver. And today I’m here with Luis Chavarriaga. And Luis is a single family investor, creative finance. He’s also in the commercial space and he is a master plumber in Florida. He’s done fix and flipping there for eight years. Luis, welcome to the show.

Luis F Chavarriaga (00:27.352)
Dylan, thank you very much. Glad to be here.

Dylan Silver (00:29.843)
Yeah, Lewis, tell us a little bit about your background and how you ended up getting into the real estate space.

Luis F Chavarriaga (00:38.648)
Well, Dylan, like I mentioned before, I came to this country in the 90s from Colombia, South America. I came here for the American dream. Because this is a great country. That’s what everybody’s dream is to be in this country. I had the opportunity to be here. I came to New Jersey, went to MacLare State University, which I’m familiar with, which is very nice. I was there and I got a degree in finance and international business.

and went to work for a paint weaver as a broker in New York. I didn’t like him much because I was just selling stocks, bonds, things that didn’t actually work with their clients, but it worked very well for the bank, for the bank itself. I didn’t like that. I wanted to do something different. And I moved down, I mean, I went to work for the bank. It was the same thing. And I was looking to do something for myself. So I got into real estate as a…

Dylan Silver (01:20.425)
Yeah.

Luis F Chavarriaga (01:34.99)
Something I’ll be able to help a lot of people find in their house or at least find a rental. I worked there for a while in New Jersey until I had my first boy, Greco, and I find out that the school system was not the best in New Jersey, at least where I was staying at. And we were looking for a place, a better place, and we found the Naples. Naples, Florida had a great school system, and it was actually not private, but public school system, and it was A+. So we moved here for the school system.

here, but the industry here is not, is there’s doesn’t have much industry. So that thing that moved the most was construction in real estate. So, okay, that’s what I have to be. I went to get, I went to school, I got my license as a general contractor. Then I started, continued studying. I got my master’s diploma license. I got into, I needed to get those licenses in order to bring down the cost of the remodeling. Cause I figured.

If you buy a property and you have to pay a contractor, the contractor makes a profit from 20 to 30 % profit. I buy from the contractor. I’ll make the profit myself and I keep everything in house. my ROI will be a lot higher. And that’s what I did. I got my licenses and my wife got the license as a realtor. So we’ll be able to buy a property. We fixed it up and my wife will list it and she will sell it. So it was a teamwork.

And from doing that flipping, fixing, fixing, flipping, it worked out very well. But we thought, we saw that there was a bigger opportunity by building the property from scratch, from zero. When you buy a property and you estimate the cost of renovations, it’s just an estimate. Because once you break down that wall, you find out what’s behind that wall. There’s those rusted pipes, the electrical, the AC, it’s a headache.

Dylan Silver (03:17.722)
Yeah.

Sometimes you don’t want to know what’s behind that wall.

Luis F Chavarriaga (03:24.334)
But your money’s on the line, so you have to find out. You have to know, so you have to know. So we decided to, when you buy something to fix a clip, you know 80 % to 90 % of what might go wrong, but the other 10 to 20 % might take over, you might cost you everything. Your profit will be out the door. So it’s unpredictable. We wanted to do something more predictable, which was building from zero, new family, building single family homes.

Dylan Silver (03:26.728)
You have to know.

Luis F Chavarriaga (03:54.272)
in an area that’s up and coming. And that’s what we started to do. Because you’d be able to predict, well, the cost of construction, the material, the time frame, when you’re going to be finished, and get a very good estimate of how much you’d be able to sell it for. And so we did that for about five years, building new houses and selling. And now the market, the market’s unpredictable now with the tariffs, with labor shortage. It’s very, very tough for new construction, at least for in the area we are in.

It’s unpredictable. So now we are switching transparent to multi-family, multi-family and everybody needs a place to stay. Everybody needs to play a place to live, families. And if the properties are very high, very high, very costly because the interest rates are very high, what do you have to do? You have to rent properties. You have to rent. And this country is becoming a renting nation. Everybody’s renting properties right now.

Dylan Silver (04:42.931)
Thank

Luis F Chavarriaga (04:54.976)
And so the best way to be for us is by multifamily rental properties. And that’s what we’re doing. We’re buying a hundred to 150 doors at a time to rent. We might not cash flow that as well right now, but in a year to two years from now, it’s going to be fantastic.

Dylan Silver (05:16.625)
Man, to our listeners who are listening to this, they probably are as inspired by this as I am because just the journey that you’ve been on and the growth is remarkable. Really starting from scratch, truly, to now commercial investing. And everyone would love, I think, I’m an aspiring real estate investor. I’m getting actually my real estate license, hopefully, God willing, the beginning of April. And

Luis F Chavarriaga (05:45.335)
Nice!

Dylan Silver (05:46.29)
I’ve done wholesaling, but everyone who is attending these classes, the real estate classes, how do I get into the commercial space? It doesn’t just drop in your lap, right? You kind of got to earn your stripes and talk about earning your stripes. So after I’m going to take it back a little bit after graduating from Montclair State University, which we talked about this before hopping out of the podcast here, I said Montclair State University. I’m from call. I’m a New Jersey native. It’s crazy. You’re right there. You know what I mean?

Luis F Chavarriaga (06:11.662)
Right there, yes.

Dylan Silver (06:14.672)
And I was mentioning to you there was this baseball team aside to our listeners don’t know about this, but the Jackals were a non major league team, not AAA. They weren’t any A’s, but they were a team out there that we would go watch as a kid. So I was always out at Montclair State University probably once every two months. how did you go from graduating from Montclair State University to the finance field to then deciding, you know what, I’m going to try to

try my hand at real estate. Was that a natural switch to you? Did you know that this was going to be something that was going to be a lifelong passion or was it, I’m just going to try this out.

Luis F Chavarriaga (06:55.83)
You what it was actually? I saw a movie which was Wall Street. Wall Street, the first movie, not that second one like everybody knows, the first one with the old actors. And that was incredible. The movie changed my mind. I could be a broker in New York and here in this country. I’m gonna go for it. I’m gonna go for it. It was so nice that the movie, it shows that you could be the hero that’s being a broker.

And so I that’s what I wanted to be until I became a broker for pain, whatever. I realized that you just, you just another sales person. You’re just selling the box product is not, is that not taking into consideration your brains? As a matter of fact, they tried to, you know, give some ideas to, to the company. Hey, how about we sell this one? This one has a better return for the client. This one is better for, for, for these people and the Lord. They say, no, we don’t pay you. We’re not paying you to analyze the stock. We’re paying you to sell.

Dylan Silver (07:26.343)
Hmm.

Luis F Chavarriaga (07:53.742)
I’m like, what do mean? I went to school, I studied this, I’m good at this, everything, you know, to analyze the stock. Please take me, take into consideration what I’m trying to tell you. And no, they say, no, no, no. I say, no, because they’re trying to make money. I mean, I’m not putting them down. It’s just that you become just an salesperson. I say, no, I cannot help the people working with this company. So I went to work for the bank and it was the same thing. The bank was doing the same thing. So I decided, let me look into something that I’m able to influence.

Dylan Silver (08:03.195)
Nope.

Dylan Silver (08:10.576)
Yeah.

Luis F Chavarriaga (08:23.022)
somebody else. And as a matter of fact, during that time, I found a house in New Jersey, in Englewood, New Jersey, and they were selling it to be fixed, you know, fixed a bit. But I went to, you know, I had, let’s try, let’s see if we could get it instead of paying rent, let’s see if we could buy the house. And long story short, I was able to buy that house and they paid me to take over the house. Instead of me, instead of me paying for the house, they paid me. And what happened was,

Dylan Silver (08:37.552)
Yeah.

Dylan Silver (08:44.891)
Wow.

Luis F Chavarriaga (08:50.69)
I a contract for the house at X price, but I went to do, had an inspector inspect the house and we found out that the boiler has some problems and the boiler was about $11,000 to change the boiler. Then we have to do some other repairs in the house. The lady that needed to sell the house, that was selling the house, she needed to sell the house because she was moving to another state. And so she needed to get rid of the house and the house was in inheritance. She inherited the house from somebody else.

So she was not, she didn’t have any attachment to the house. She just wanted, she needed the money. She wanted the money to move to another house. So she needed to sell, you know, within a month. So I made an offer and I said, listen, I buy the house, but you have to pay for, to fix the boiler. You have to fix this, this and that. I buy the house. If not, then I cannot buy. Cause I knew the problem that she had. She needed to sell right away. She ended up, she ended up low in the price as a credit.

Dylan Silver (09:43.172)
Yeah.

Luis F Chavarriaga (09:46.774)
of the day of closing. The day of closing, instead of me bringing money to the bank, she gave me a credit of about, I think it was like $14,000. And I only have to to the bank about, to the closing $9,000. So I ended up working with a check in my hand from the closing post.

Dylan Silver (10:03.588)
Wait, wait a minute. So for our listeners who are just as amazed by this, did you end up paying money out of pocket for this home or did you receive money?

Luis F Chavarriaga (10:15.598)
I received money, $5,800 worked out of that the closing of that deal. They paid me $5,800 to take over this property.

Dylan Silver (10:24.196)
Wow, was there delinquent mortgage on it or anything like this?

Luis F Chavarriaga (10:27.598)
No, no, it so happened that the lady that inherited the property, she needed to move out of state. She had a job in another state. I think it was in Georgia. And she needed to get rid of the property right away. If she went to sell it with a regular, know, a regular realtor, would be maybe 60 days, 90 days, plus closing costs, 120 days. She needed to take that job ASAP. And so that’s what I, in a way, I find out what was the problem. She had a problem. She needed to get rid of the property right away.

Dylan Silver (10:33.509)
Mm-hmm.

Dylan Silver (10:47.78)
This is amazing.

Luis F Chavarriaga (10:57.518)
I needed a house, I wasn’t desperate. So I asked her, can you work with me? If you work with me, I work with you. I’ll buy, I take over your problem, just work with me. I need some funds. And instead of having to bring money to the closing, she gave me $5,800 back.

Dylan Silver (11:13.664)
Unbelievable for for our listeners. Most our average listener is doing 50 plus deals per year. But we also have some listeners who are brand new. And for the brand new people, this sounds incredible and almost almost like how does this even happen? Lewis, what what year was this when this deal went down?

Luis F Chavarriaga (11:38.635)
This deal went down in 1999.

Dylan Silver (11:42.768)
99. So this was before the education that we have out there now. How did you how did you educate yourself on this process?

Luis F Chavarriaga (11:48.012)
Yes.

Luis F Chavarriaga (11:53.014)
Well, I didn’t, basically it was nature. I mean, I find out that you have to buy, don’t actually buy, you’re not buying an asset. You’re you’re helping people out. You have to find out if the seller has a problem. What is the problem that they have? If the problem, can you help them with their problem? If you’ll be able to help them with their problem and at the same time benefit yourself, then it’s a win-win for everybody. It’s a win-win. I find out that the lady, I actually put three more offers for another three other houses.

Dylan Silver (12:17.999)
Mm-hmm.

Luis F Chavarriaga (12:23.726)
They were not desperate to sell. They didn’t have a problem. They could wait. They could wait out. You know, the market. This lady happened to be in a problem that she needed to get rid of her house. So she had a problem. And I was a hero to her. I was able to take over her problem. Her problem was… I’m sorry?

Dylan Silver (12:28.536)
Yeah.

Dylan Silver (12:40.09)
did you sorry for cutting you off how did you come across her

Luis F Chavarriaga (12:45.646)
to a realtor, to a realtor, a realtor. And the realtor, because when I speak to a realtor, find out what’s the reason they’re looking to sell. How soon are they looking to sell? How flexible are they to sell? So, and the realtor told me, she’s very motivated. She’s very motivated. She’s open to suggestions. She’s open. So said, okay, this is good. Check, check, check. Okay, perfect. So how about this?

Dylan Silver (12:47.457)
Okay, okay.

Dylan Silver (12:54.371)
Yeah.

Luis F Chavarriaga (13:10.254)
Are you able to finance it? They didn’t want to the bank to finance me the bill. Why? Because she needed the money to move to another place, to Georgia, I think it was. I remember she inherited the property. So she was not attached to the property. She didn’t work for the property. She didn’t pay the mortgage. So there was nothing. If she makes 70 cents of the dollar, she’d be happy. I mean, you there was no attachment to that. And that’s where I capitalized on that. And she needed to get rid of that.

Dylan Silver (13:35.928)
This is a Hall of Fame deal. On the Hall of Fame deals that I’ve heard of, this is like up there. This is fantastic stuff.

Luis F Chavarriaga (13:44.11)
It worked out, I I didn’t have anything to lose. I made the offer and they take it fine. If not, then we can just go back and forth and it happened to work out.

Dylan Silver (13:48.247)
Yeah.

Dylan Silver (13:53.496)
So from there, was that an aha moment? Like, wow, I just bought a property and got paid for it. There’s something here. And did you repeat that process, rinse and repeat, or at that point in time, did you still kind of put that on the back burner while doing other things?

Luis F Chavarriaga (14:11.042)
Actually, to be honest with you, Dylan, it worked out so well, but I didn’t realize how fortunate I was or the opportunity that was there. And I didn’t do anything for a lot of years. I just continued doing my work and working for the bank, living in that same house. Actually, I house hacking in the property. I made it into a studio and rented another four bedrooms in the property. So it would pay for itself while living for free. So I didn’t have, there was no incentive to.

to find another property for me. So it was a great opportunity and I didn’t do anything with that until further down the line.

Dylan Silver (14:41.888)
Interesting.

Dylan Silver (14:47.15)
So you’re living in New Jersey at that point in time. It’s 99, 98, 99. And then after your son is born, you moved to Florida. That’s when you started getting into fix and flipping, is that right? Okay, so what year did you move down to Florida?

Luis F Chavarriaga (14:59.502)
Correct, yes.

I moved down to Florida in 2000.

Dylan Silver (15:07.789)
Okay, so 2005. So for our listeners, I can relate to this. You tend to get spurts of inspiration and motivation when it comes to doing something outside of your job. And we have a lot of people who are probably listening who are saying, how can I get into the real estate space if I’m a teacher? know, something unrelated. I’m a firefighter. I don’t have any of these.

skill sets, you I’m not a realtor, I don’t have a finance background, how do I get in, you know, you just start with one, you know, in this instance, 99, 98 to 2005, that’s a half decade, you know, and then once you got down there, it seems like things took off, is that accurate? Once you got down to Florida.

Luis F Chavarriaga (15:55.014)
No, actually not so accurate. That particular house that I mentioned in the past before, I found this person doing investors, doing investment, investing property, investing money and getting a great return. And so my wife brought this person to the house and he promised us a lot of returns and we ended up giving him money. He will give us a return, a good return. And back and forth for about a year.

Dylan Silver (15:56.941)
Hahaha

Dylan Silver (16:05.227)
Mm-hmm.

Luis F Chavarriaga (16:24.27)
And so we said, okay, this is going to be great. If we give this gentleman money, he needs to work for a big bank in New York. I don’t want to mention the bank. And so we were getting some very good return. We ended up selling the house that we had purchased at a great, we actually made a good 300 % return on the money that we invested. The money that the purchase price, not because we remember, we didn’t have to any money down. So we made about 300 % of the cost of the property.

So we sold it and we based, we cash out my poor 1K, cash out everything invested with this gentleman and we lost everything. Cause he started, he lost everything from us. That’s the reason we moved to Florida and in Florida, little money that we had left over, we bought a couple of properties in the area. Then 2007 and 2008 came around and we lost everything again. So that took everything from us.

Dylan Silver (17:05.075)
Ugh.

Dylan Silver (17:15.753)
Mm-hmm.

Luis F Chavarriaga (17:23.47)
And so that’s what we decided to get the license for construction. And we started working in roofing and plumbing and construction. we ended up getting back in our feet in 2013. That’s when we purchased another property. Credit financing again, we bought the property creditably and helped us buy another one and another one. then we started going up.

Dylan Silver (17:51.564)
Wow. So two things I want to touch on here is number one, the agility in New Jersey going from finance to then finding that that property to cashing out on it having this huge return on it. But then really being humbled on an awful level, like losing everything. I don’t think a lot of people would come back from that, but probably because of your your your background and your journey, you knew I got here.

to this point, I can do it again. Where some other people might not have that drive, that grit, because I know some people who have been burnt on their first deal, and that was it for them. They’re like, I’m not doing this again. This is too risky. But I also want to, the second part of this that I thought was something to touch on is, when you get down to Florida, both you and your wife,

get into real estate. How was that conversation with her? she on board with was she was it like, hey, let’s both go jump into this? Or was this like, hey, there’s something here. You know, let’s try it out and see what happens.

Luis F Chavarriaga (19:03.854)
I was, I mean, let me go back a little bit. One of the reasons we were able to get back on our feet, I mean, try it again, is the fact that we live in this country, United States of America, which is the best country in the world. I’ve been all over the world, a lot of countries, but out of all the countries, this is the best country. We are here already. I mean, just being here, you’re rich, you’re ready, you made it, being in this country. How am I gonna say I’m not gonna start all over again since I’m here?

Dylan Silver (19:26.932)
Amen.

Luis F Chavarriaga (19:32.27)
This is fantastic. I mean, this is like land of opportunity. And so it was hard for us losing all the money to this gentleman. And then it was hard for the market to crash and we lose everything in that market. It was hard. But then the life that I have is incredible. We decided, okay, we could either both of us go into real estate, but the market is tough. And so we might suffer. How about if we divide ourselves to do different things? And so we decided, okay, everything that’s working here in Florida is construction.

Dylan Silver (19:41.963)
Mmm.

Luis F Chavarriaga (20:01.55)
I’m trying to get the license as a general contractor or roofing contractor, which was wants to go to school and I don’t want to support the family. And so we came to the conclusion, I’m good at school, at books. I go to school, get the license while she works and supports the family. And that’s what we did. For a full year, she worked her tail off supporting the family and I studied my tail off to get the licenses. And that’s what we did. So we became, you know, we made it into a team. I got the license. Once I got the license, I started working with my license. She didn’t have to work.

two full-time jobs. Now she was working only one full-time and then went down to part-time and now she didn’t have to work because now I’m the one providing for the family with the license that I got. And so that’s how the transition into real estate.

Dylan Silver (20:46.738)
What was she doing at the time? She was a realtor and she had one other job. What was she doing?

Luis F Chavarriaga (20:50.786)
Yes,

Dylan Silver (20:54.74)
Wow, so talk about having the right partner, amazing. You went, it sounds like two or three different fields. You went to finance, did real estate, then went to, was it plumbing at that time in Florida?

Luis F Chavarriaga (21:00.195)
Yes.

Luis F Chavarriaga (21:15.692)
The first thing I was general contractualizing, then plumbing and then roofing.

Dylan Silver (21:17.713)
General Contractor.

Dylan Silver (21:21.862)
And did you just know, hey, I can do this? Or was it like, I’m going to take a shot at it?

Luis F Chavarriaga (21:28.782)
Actually guys, in this country is whatever you say you mind to do. I mean, this country is the best country. I mean, there’s no excuses. you put, if you’re willing to pay the price with the work, you’re gonna make it. You’re gonna make it. I had ideas how to be a plumber because my dad, my stepdad was a plumber in New Jersey, in New Jersey. So I learned my life from him. And when I came here, I realized that plumbing might not be the best, but construction is. Construction is the best thing.

Dylan Silver (21:55.017)
Yeah.

Luis F Chavarriaga (21:56.366)
Having the license as a contractor, helps a lot. And that’s what we did. We went to school for that, for the license. And just with the license, you don’t actually have to build, but you can find some other people that they know how to build, but they don’t have the skills to get the license. So you could work, could get a joint, you know, unite forces. He brings the labor force and you bring the license and the insurances. You unite forces and then you make, both of you are owners of this company that is giving profit for all of you. And so that’s what we did.

Dylan Silver (22:26.345)
Wow. So from there, I imagine you’re a general contractor, you get the master plumber, and then during that time period, at some point in time, you start fixing flipping, right?

Luis F Chavarriaga (22:37.336)
Correct. Yes.

Dylan Silver (22:39.267)
And in that process with the fix and flipping, because your wife is a realtor, you’re fixing, flipping, and she’s selling the properties. And at that point, it was a after the crash, it was a good market in Florida, right?

Luis F Chavarriaga (22:48.824)
Correct. Yes.

Luis F Chavarriaga (22:56.846)
It was an okay market. mean, if you had money to buy properties and you had the foresight to see that the market would take off, have fortunate a lot more properties. But we were buying, fixing, and making so many enough to live. We would buy and make eight, 10, 15 thousand dollars. That’s what we needed for us to be able to live. We didn’t keep any of those properties.

Dylan Silver (22:59.782)
Okay.

Dylan Silver (23:04.38)
Yeah.

Dylan Silver (23:10.28)
Yeah.

Dylan Silver (23:18.782)
Right.

Jeff, everyone says this. And I know when I start doing this, I have to keep at least a couple because it’s interesting, the one regret of the real estate investors, almost all of them who get into the fix and flip space that I wished I kept a couple because you don’t realize and maybe this will change. We’re seeing for sure a change now in Texas specifically, but it does seem like looking back that it’s unlikely that they’re going to go down in price, you know.

Luis F Chavarriaga (23:28.215)
Yes.

Dylan Silver (23:51.965)
So keep a couple. But after this point in time, you do the fix and flipping for eight years. Fast forward a little bit to today where you’re now involved in creative finance and the commercial space, really from what it sounds like because the fix and flipping, the margins are getting smaller with everything the way it is. So talk about the transition to the creative finance and the commercial space.

Luis F Chavarriaga (24:22.4)
Okay, the creative finance. Usually when you buy a house, have to have everything the bank’s asking you for. You have to have a great credit. You have to have a good down payment. You have to have been employed for X amount of years. That’s for everything. mean, the finance used to say no to you. So if you play their game, then you are set by their rules. You have no control over anything. Like before, when I was working for paying for the bank, I have no control.

over what if I wanted to help that client, couldn’t because I was forced to sell whatever the bank will tell me to sell. The same thing with if you’re to buy a house, you play like everybody else is playing with all the other regulations the bank is telling you, then you limit it to the people that have more money, they’ll be able to buy more of a house. People that have more credit, they’ll be able to buy all this. Now, if you create your own game like creative financing, what’s creative financing? Let’s give you an example. Somebody’s selling a house.

Dylan Silver (25:17.576)
you

Luis F Chavarriaga (25:20.494)
And they have, they bought the house for let’s say $400,000. And that was last year. Now they owe, let’s say 390. If you go sell the house the regular way, the cost of selling the house is going to be about 10%. It’s going to be 6 % for realtor costs, 2 % for closing costs, and maybe you have to fix the house a little bit to be able to sell it. So on average in the, on average in this country to sell a house, you have to pay about 10%. So if you sell the house for $400,000.

10 % is what $40,000 meaning the time of closing you have to have you only going to get $360,000 back. Remember you owe the bank what $390,000? That means the time of closing you have to come up with $30,000 to give to the bank instead of getting money back. You actually have to pay the bank those $30,000. All right, we created financing. I’ll take over your mortgage meaning

Dylan Silver (25:50.615)
Yep.

Dylan Silver (26:01.01)
Yep.

Dylan Silver (26:10.279)
Mm-hmm.

Luis F Chavarriaga (26:14.99)
You have a mortgage of 390 right now and you’re paying an interest rate of 275. For me, makes sense for me to take over your interest rate, your house, your interest rate, since I don’t have to go apply for, go to the bank, a great down payment, I don’t have to provide credit to the bank, I don’t have to be sure that I’ve been working for this company for X mile years. I’ll just take over your headache, your problem. I take over your problem, I continue making the payment, your credit will be saved.

And then you can move out of, you know, move wherever you want to move and you don’t have to come up with the $30,000 to give to the bank. I’ll take over your head.

Dylan Silver (26:51.867)
Now for, I’m very interested in this because I’m gonna be a realtor for the realtors out there and the aspiring realtors. This process is, you’re assuming the loan, right?

Luis F Chavarriaga (27:04.408)
Correct. Correct.

Dylan Silver (27:05.489)
You’re assuming the loan. And I think I just went to a real estate school out here, Champion School in Fort Worth. And I will say that there was a lot of people afraid of this process as a realtor. And so how are you navigating that? And do you have any advice to realtors who are maybe interested in creative finance?

Luis F Chavarriaga (27:33.07)
Okay, basically, the first thing that I do, if there’s a realtor involved, I’ll talk to the realtor and let him know that they’re going to get paid regardless. Because now it’s not going to be the seller paying them, it’s going to be me paying them. So I make sure that the realtor is going to be compensated. Now, what I tell them, listen, how about this? If you know how the system works, then you’ll be able to tell your client how much of a benefit it is for the client.

to do the deal with me in the regular market, to do the numbers, to do the numbers, just to sit down and do the numbers. If they sell the regular way with a realtor, how much are they gonna have in their pocket at the end of the closing? When they do the numbers and they realize that they actually, they’re not gonna get any money back, but instead they have to pay money to the bank, compared to me, which they don’t have to provide any money to the bank, they don’t have to pay anything back.

If anything, have, if I’m buying the house for three nine, you know, they sell it for 390, I will fight the price. All I want is terms. I won’t ask you to sell it to me for 360, for 370. I’ll pay you 390. I just take over your mortgage. See? A closing, will take, instead of taking 60 days for closing right now, it will take maybe two weeks. You don’t have to, you don’t have to bother by showing the property to all these people that are going to go see that property.

Dylan Silver (28:39.642)
Mm-hmm.

Luis F Chavarriaga (28:59.906)
Then I interest to buy, they just want to take a look what’s out there. We don’t, we no longer have to go with all that. I make sure I’ll buy. I’ll go to the house and take a look. How can I improve the property? So it becomes a lot simpler working with me than working with you in the market out there. So how can I help by teaching the realtor, the benefit, how beneficial it is for that seller to work with me then in the market itself.

Dylan Silver (29:25.831)
having that agility and also being able to educate people when they might not be aware of what’s going on or might have maybe even a negative connotation in their minds. What is this? I’ve heard things. I don’t know, but you build and nurture that relationship. You educate them and it’s it is truly a win-win talking talking about win-wins the commercial space, which I know you’ve been doing for the past couple of months. How did you get into that? And I know you mentioned their their

buying large numbers of doors. Talk a little bit about that.

Luis F Chavarriaga (30:00.398)
Well, when I used to buy a property to fix and flip, I will have to do the research in the market. have to call people. have to send a LOIs. I mean, I’m interested in buying the property. I’ll have to do all this work, all this work to get the property. Once I purchase the property, then I will have to fix it. It will take me a month to two months to fix it. And then I have to put it in the market and find out that the market has gone down. There’s not that many buyers.

So the process will be ahead. I would make some profit, at least so far I haven’t made profit. But it’s something, it’s so unpredictable when I finish fixing the property, if I’m gonna make that profit. So I would have to do all this process for every particular house. And by the time I sell it, I will have to start all over again the process to buy another property. So I to look into something that I’m able to do that hard work right now at the beginning. And then I the rewards for years to come. Not just one year, two years, but.

Dylan Silver (30:56.816)
Mmm.

Luis F Chavarriaga (30:57.976)
for years to come and use that leverage, use a vehicle that will allow me to use little, put in a little money as I can and get a big reward. What will be the vehicle? Commercial, commercial multifamily. How does that work? Let’s say I buy a 150 unit apartment complex. The complex doesn’t have a pool. So I’m charging $1,500 in rent for every apartment. Now when I buy the property and I make,

a pool, might cost me $400,000. By now, I’m able to bring the property rental maybe to $1,700. See, I’m increasing only $200. $200 for 150 units, what is that? That’s a pretty penny multiplied by 12 months. It brings the ROI so much higher. And what’s the commercial real estate, they base it on what? The cap rate. And the cap rate is based in the returns, the ROI, return on investment.

So the return is a lot higher than what you have purchased a port and you multiply it by 150 units. That means one pool that you build, one pool, you benefit 150 people. And benefiting 150 clients, you’re benefiting yourself by 150 times. So before I used to buy a house, I’ll spend 80,000 dollars to build a pool, but I can only bring the rent.

up for that property just one pump one family i can only bring the rent up for one family now i’m making the same pool and i’m benefiting 150 that’s beautiful see

Dylan Silver (32:28.749)
Yeah.

Dylan Silver (32:32.516)
150.

Dylan Silver (32:36.406)
Man, we’re coming up on time here, but I want to just give some bullet points to our listeners here. You know, we’re as Lewis said, we’re living in the greatest country with the greatest opportunity. And Lewis’s story is incredible, but also highlights how you can come back from, you know, having to being humble to coming back multiple times.

and also having the agility. The thing I got out of this is really just continual seek of knowledge and education and being able to transition from, you know, schooling to finance to real estate to general contracting, plumbing, fixing and flipping, now creative finance and the commercial space, just continuous seek of knowledge and that hunger eventually

lands you in a space where you’re in the commercial space. So congratulations on all your success. And Lewis, if people want to get a hold of you, how can they get a hold of you?

Luis F Chavarriaga (33:42.104)
Well, look at my name actually is Louis F. Chavarriaga and they’ll able to, know, probably, you know, send me a message there or, you know, send something to my email. My email is dlgflorida, like the state spelled out, at yahoo.com and I’ll respond to any emails that you send me. there’s anything I could help you with, I’d be more than happy to provide any help.

Dylan Silver (33:51.204)
Mm-hmm.

Dylan Silver (34:11.448)
Well, folks, that wraps up this episode of the Real Estate Pros podcast brought to you by investor, Fuel Lewis. Thank you for being on until next time. Thank you, guys.

Luis F Chavarriaga (34:23.085)
Thank you.