Flipping Malls & Warehouses: Value-Add Investing Deep Dive

Rafik Moore (00:00)
I was bankrupt, I was homeless, I was in jail for a day because I was driving recklessly. ⁓ Almost died many times. ⁓ Divorced and… ⁓

Lost money on some deals, mainly like I bought a hotel. A hotel is not real estate. Hotel is an operating business with employees and whatever. And I was so enamored by the structure. was like, oh, it’s great. But I didn’t think about second order consequences. Well, guess what? You got to have a admin person in there. You got to have systems and whatever. Lost money on that. I lost money due to my impatience. I got a building, completely remodeled. Beautiful. Took me three years to remodel this building. It was such a headache.

It was a warehouse that I redid into ⁓ artist lofts. And appraised value is three and a half, but my NOI is low. And I was so exhausted from dealing with it and the banks wouldn’t refinance it. I’m like, forget it, I’ll just sell it. So I sold a three and a half million dollar property that was appraised at three and a half, two and a half because of impatience. And my basis was 250 grand higher than the sales price. So, you know, things like that, make mistakes. But one thing that I wanna do,

personally and I want advise my coaching students is that every mistake has a lesson in it. Every mistake has a specific, like there’s a pain that’s associated with this failure that will rewire your subconscious mind to not make that mistake again.

Quentin (03:02)
I am your host, Q Edmonds, and I’m very, very, very excited today to be with you. I’m excited to bring up our next guest. Man, this guy is making, listen, he talked to me about value add real estate investment. Listen, he’s going to dive into, listen, he’s always adding value. That’s his motto. And so I know he’s going to add a ton of value to this show. So I want to introduce you to all, you all to Rafik Moore. How you doing today, sir?

Rafik Moore (03:30)
Good morning. Thank you Quentin. Very nice to meet you and thank you for inviting.

Quentin (03:38)
Absolutely, man. I can’t wait for our listeners to hear what you all involved in. So if you mind, man, I want to dive right in. So of course, people may not be familiar with you and your world and what you do. So give us a short version of what’s your main focus these days and also tell them what markets you’re operating in.

Rafik Moore (03:56)
All right, I own and manage a company called Braith Capital. It’s an investment company with a focus on value-add investments. Braith means diamond in the rough or rough diamond. And so we’re in the business of rough diamonds. We find distressed assets, industrial assets, retail, mini storage. We do some apartments.

⁓ And we are in eight states mostly in Midwest. My headquarters are in Minneapolis. We have second headquarters in Cleveland We own a manage close to a five million square feet in 73 or 75 buildings. I lost count ⁓ and our business is ⁓ Pretty straightforward. We work with brokers. We love paying brokers. We love paying wholesalers We’re all about integrity. We’re all about building long-term

meaningful relationships with our vendors and tenants and partners and ⁓ our business is ⁓ growing. ⁓ What else can I tell you about it? Ultimately, in a value-add business, your goal is to add value to properties, to tenants, to communities, and that’s how we uncover a lot of value or profits for our investors.

Quentin (05:13)
I love it, man. I love it, man. So you say you work with brokers, listen to wholesale, like it’s a lot going on. And of course it’s not always easy in this climate. So what’s the key, man, to keeping your machine running smoothly?

Rafik Moore (05:28)
I don’t know about smoothly, it’s a rocky world. But when you are in a valley, you have business, you fight to solve problems. And if you’re not careful, take on too many problems, then those problems can spill into your personal life. But no, what’s… I mean, we are a systematic… We systematically pursue distressed assets.

Bankruptcies foreclosures vacancies and as you know over the course of last five maybe ten years

Retail has been battered by e-commerce and so we buy a Sears box JC penny box We bought a mall in in Ohio to actually two of them. They don’t work and so you buy a property for six dollars a foot you re-engineer it adaptively reuse it into small Bay Industrial or

Now we’re going to do apartment development in there and unlock the value of boom. And by the way, we purchased a property and the parking lot itself, the asphalt to lay the asphalt itself is more expensive than the entire land, asphalt structures, roofs, systems. That’s the kind of deals that are out there right now because of the ⁓ changes of consumer behavior, because of the COVID-19 and now AI.

And so our goal is to keep up with the changes and keep modifying real estate to fit the specific needs of the communities so that it works. We’ve fixed broken.

Quentin (07:52)
Absolutely.

Absolutely. I love it, man. That’s big. Look, you said the asphalt costs more money than the roof and then all these other kind of things. That’s, yeah, man. So that means you guys are doing some major things, some big deals, man. And I absolutely love it. ⁓

Rafik Moore (08:01)
Yeah, yeah, that’s crazy.

yeah, we double or triple

our investors’ money on many of these deals.

Quentin (08:11)
See, that’s what I’m talking about, man. I love it. Now listen, you know, every operator I know, you know, there’s moment when things get real, right? Maybe a deal goes sideways or a time you had the pivot fast. Rafiki mind telling us about a time like that within your ⁓ journey.

Rafik Moore (08:29)
many, many problems. I’ll tell you, as I look back, I’m like, what a stupid guy. How could you make so many mistakes?

I was bankrupt, I was homeless, I was in jail for a day because I was driving recklessly. ⁓ Almost died many times. ⁓ Divorced and… ⁓

Lost money on some deals, mainly like I bought a hotel. A hotel is not real estate. Hotel is an operating business with employees and whatever. And I was so enamored by the structure. was like, oh, it’s great. But I didn’t think about second order consequences. Well, guess what? You got to have a admin person in there. You got to have systems and whatever. Lost money on that. I lost money due to my impatience. I got a building, completely remodeled. Beautiful. Took me three years to remodel this building. It was such a headache.

It was a warehouse that I redid into ⁓ artist lofts. And appraised value is three and a half, but my NOI is low. And I was so exhausted from dealing with it and the banks wouldn’t refinance it. I’m like, forget it, I’ll just sell it. So I sold a three and a half million dollar property that was appraised at three and a half, two and a half because of impatience. And my basis was 250 grand higher than the sales price. So, you know, things like that, make mistakes. But one thing that I wanna do,

personally and I want advise my coaching students is that every mistake has a lesson in it. Every mistake has a specific, like there’s a pain that’s associated with this failure that will rewire your subconscious mind to not make that mistake again.

And so I now internalize these pains into lessons and try not to dwell on them and have self pity and say, look, thank you Providence, thank you God, thank you community for

Teaching me this lesson while it was a small deal because when I do a 200 they want to do a 25 million dollar deal I’m not gonna make that mistake again

Quentin (11:04)
Yeah. Nah, man. Absolutely. Thank you for sharing. Thank you for the gift of your vulnerability, right? Like, you know, a lot of people, they’re not, they don’t free themselves to be able to talk this type of stuff, man. So thank you for your honesty. And honestly, like this was separates people, like people that just dabble from those who stay in it for the longterm, man. And so I appreciate again. Yeah. Yeah.

Rafik Moore (11:27)
Radical transparency,

radical authenticity are the values that I aspire to have. I’ve added radical because of the book called Principles by Ray Dalio. And so I don’t wanna be honest. I wanna be radically honest. I wanna be radically authentic. And then yes, I don’t have to hold back because I don’t want people to find out, ⁓ these guys, whatever, guess what? It is what it is. What happened has happened. However, I’ve extracted lessons and hopefully it will serve me better.

Quentin (11:32)
Yeah. Yeah.

Wow.

Yeah.

Rafik Moore (11:57)
in future and show me somebody who’s never had any adversity and achieved tremendous success.

Quentin (12:03)
Absolutely. You know, I hear you whenever we’re at Radical, one of the things that in my journey, what I’ve learned is to radically accept myself, right? Be honest with who I am, radically accept me. That way we can make those radical changes that we need to make. And so I am right with you, Radical honesty, authenticity, that’s right out my alley, brother. So I again, appreciate you sharing, man. So let me ask you this. What are you most focused on solving or scaling next? What’s the next real goal?

Rafik Moore (12:32)
It’s very simple. have, over the course of last 20 years, have been a ⁓ knowledge accumulation machine. I’ve read hundreds of books. I’ve visited multiple masterminds and grown my expertise, my understanding of the world, psychology, ⁓ philosophy. And so what I want to do now is I want to clone myself.

but save 20 years of pain and anguish for my coaching students. And so how do you attend X or 100 extra output? Simply by providing the knowledge, the wisdom, the experience, the capital, the relationships to a younger version of you. Hopefully he has the same or she has the same values. And why cloning myself by helping others achieve their highest potential.

I’m going to expand my influence and reach and ⁓ instead of having to fly to multiple destinations, can zoom, can do Ray-Ban glasses and go through properties with my trusted managing partner, Elite. I have a program called Elite Partner Program where these guys and gals will acquire all of my knowledge, wisdom and experience in understanding value investments and industrial and… ⁓

Apartments and retail and unlock value in their community and so that’s that’s what I think is going to create a Tremendous impact at least over the course of next 20 years

Quentin (14:12)
Yeah. Nah, Rafiq, that’s big, man. I mean, you’ve already made some amazing strides on your own, but you’re like, OK, now I want to do this coaching because I want to clone myself so I can pass on my experience that I can set up the next generation to prosper, man. That’s huge, man. That’s big. And I know you know this, man. You shared your story. You’ve been transparent. The next move can either compound things or create total chaos, depending on how you play it.

Rafik Moore (14:46)
Okay, I’ll tell you chaos comes from a misalignment Right, and how do you align? Well, that’s why in our community that I have ⁓ it’s all based on relationships and Once you have a core group of people who kind of believe in this in integrity and and humility and Consideration and contribution ⁓ other type of people they get purged right away. They just don’t fit in

Quentin (14:51)
Mmm.

Rafik Moore (15:55)
And so I think building the community and working with ⁓ individuals on a close, you know, we work, we have Zoom calls every week. We talk about deals and we raise capital for our ⁓ managing partners. It’s a pretty fun activity and I’m working on creating a, possibly creating a show, ⁓ something to the tune of Shark Tank of real estate. So imagine the five big investors with capital.

young guy comes in, so I wanna do a redevelopment of this apartment building. I wanna do this and that or the other. And then we pitch in and invest and buy the deal. Now that would be a pretty amazing show, number one, but also it will be very, very awesome way to show the values to the world of, you know what? You don’t have to be greedy. You don’t have to be selfish, right? Every deal is a down payment on the next one, right? And… ⁓

Quentin (16:43)
Yeah. Yeah.

Yeah.

Rafik Moore (16:50)
Think

of second order consequences, right? Yes, you might take a little more here, but is that person gonna work with you again tomorrow? Because our net worth is in the relationships we build with people, because money can be gone. Yeah, but relationships and opportunity to collaborate and play that proverbial ball game of life with others is so important.

Quentin (16:58)
Yeah.

Man, when I tell you, you literally set me up for my next question. And you, I mean, and you, you mentioned it. would love to, even if you can expand on it more, I mean, of course, you you got people that’s listening to early in their journey, they’re looking to level up. And I think they have been a bit hearing this and you talked about it when it comes to building relationships and growing your network, what’s made the biggest difference for you?

Rafik Moore (17:18)
and give me one.

⁓ three things Most importantly, I was super lucky to have met my mentor now I have a lot of mentors but until I met my first mentor I didn’t understand all of my mistakes all of my failures in life were byproduct of my going and Doing things without having somebody look over my shoulders, right? We all want to climb the mountain We all will make millions and millions of dollars and we’d go when we do things, right? However before I met my mentor

I applied a lot of my knowledge, experience, and not a lot of wisdom. And how do you know? Because you don’t. How do you know if that building is going to lease? How do you know if that contractor is going to pay? Because you’ve got to figure this out. So my mentor methodically said, hey, this is how you do it. Don’t do this. Treat people with respect. Be generous, Rafik. Make sure everybody makes money, because then they’ll come back for more. interesting. I would have made $100,000 here, but if I give that $100,000 to…

all these people that come back and I can make a million in the next one. Interesting, okay. And so my mentor outside of knowledge gave me so much wisdom, right? And I’m so grateful for that. so having gotten all that, I want to pay it forward. So my goal in life is to not only teach economics of deals, economics of deals are easy, one plus one equals two, cashflow, IRR. ⁓

return on investment, et cetera. But the foundation of the entire game isn’t exactly what Maya Angelou said. It’s all about how you make people feel about you and are they gonna come back for more? Are they gonna work with you after this deal, after this investment? And that, my friend, is wisdom.

Quentin (19:29)
Mic drop. Mic drop, y’all. He said it and then took a sip. That’s, man, you said it best, man. Relationships are everything in this space. so, man, I appreciate you so much. Listen, before we wrap, I know we both, I mean, you know, we both got, you know, different things that’s lined up. And so I like, I love the time we spent with each other. And I would like to know, man, if someone wanted to reach out to you, connect with you, maybe collaborate or learn more about what you’re doing, what’s the best way they can reach out to you?

Rafik Moore (19:29)
That’s

Number one, you can reach out to me on Instagram, on Facebook, Twitter, I guess, LinkedIn. My website is www.rafikmore.com. I’m sorry, no, no, no, that’s website tool. I have www.rafikmore.com, but you don’t have to go there. Go to www.braitcapital.com. That’s our business website. And my email is very simply r-a-f-i-k rafik at… ⁓

Quentin (20:06)
Yeah.

Rafik Moore (20:27)
BreakCapital.com. But if you want to learn more about what we do, if you want to learn more about how we do it, if you want to learn more about the journey and what’s behind the curtain wall, go to YouTube. Pull up a graphic, more value add investments. And I have close to 220 videos to date where I go into different towns and show how we bought the buildings and what we do, how we do improvements. On my YouTube channel, I also do case studies.

We bought this building for 1.7 million. We’re gonna spend 300 grand. It’s worth 4 million. This is how we do it. This is how we talk to the seller. This is how we negotiate with the owner, how we did zero down financing. A lot of things I teach is how to buy properties with none of your money. You see, I’m a financial engineer. I wasn’t born with a lot of money. I don’t have any money. You know, my parents were teachers. My dad was a teacher. My mom was a homemaker.

My entire life I didn’t believe that there is a transmigration of those, you know people in the society and Coming to the United States at the age of 20. I realized that you can do anything provided you put your mind to it and so ultimately If you want to learn a lot about me go to YouTube, I think it’s most comprehensive I have long format videos in there and please like and subscribe Like my my guy says like and subscribe always say that. Alright, like and subscribe because algorithm

then sees that there’s a lot of followers and your videos will be seen by Mopi. How about that?

Quentin (21:55)
Absolutely,

man. I love it. There he is, everyone. Rafiq Moore. Sir, I thank you for your time and your story and your perspective. We definitely need more people like you in this space, man. So again, thank you so much for being with us.

Rafik Moore (22:06)
Thank you. Well, that’s what I’m going to

do. Hopefully, I’m going to have 100 more by the time I’m done with this game.

Quentin (22:12)
Come on now. Absolutely, man. That’s the plan. That’s the goal. And so listen, listen, y’all heard him. If you value what you’ve heard here, like you said, we want you to subscribe. So me’s please make sure that you like and subscribe this. have ton of more conversations coming just like with Mr. Rafik Moore. So again, sir, thank you for being here. Thank you for doing business the real way and building something so substantial. I appreciate it for it.

Rafik Moore (22:16)
us.

I appreciate you very much Quentin. Thank you for inviting me and I’m looking forward to adding value to you and to your audience.

Quentin (22:45)
Absolutely, listen, y’all have a great one. Thank you so much.