Welcome back to the show! I’m really excited to have my friend, Carlos Del Rio, here today! He’s an active investor and an Investor Fuel member. He started 37 years ago and has a tremendous amount of experience in lots of up and down cycles. In his words, “I have never seen a market like this before”. That’s what we are going to talk about today. How to maximize your profits in today’s market and minimize your risk. Let’s get started!
Resources and Links from this show:
- Investor Fuel Real Estate Mastermind
- FlipNerd Facebook Group: Join for Free!
- Investor Machine Real Estate Lead Generation
- Carlos Del Rio’s Website
Listen to the Audio Version of this Episode
FlipNerd Show Transcript:
Professional real estate investors know that it’s not really about the real estate back real estate is just a vehicle of freedom. A group of over a hundred of a nation’s leading real estate investors from across the country. Meet several times a year at the investor, fuel your state mastermind to share ideas on how to strengthen each other’s businesses, but also to come together as friends.
And build more fulfilling lives for all of those around us on today’s show, we’re going to continue our conversations of fueling our businesses [00:01:00] and our lives. I’m glad you’re here.
Hey Carlos. Welcome to the show,
Carlos: Mike, how you doing?
Mike: Good. Great. Great to see you as always, uh, Carlos have been friends for a lot of years. We we’ve kind of been through. Uh, a couple of different, uh, systems together and known each other for a while now. Um, and I know you’ve got a ton of experience. Uh, I’ve been investing for about 37 years.
You said you bought your first house about 37 years ago. And, um, we were talking about use of the market’s crazy right now. I know you have a lot of experience as an agent and a broker as well. And you basically, you know, in your words, you said you had never seen anything like this before, where you’re selling houses for 60, 80, a hundred thousand dollars.
More than what you thought you would. Right. We should kind of say you’re in the Denver market, but pretty crazy times, right?
Carlos: Yes. I mean, amazing. Never seen anything like that in 37 [00:02:00] years.
Mike: Yeah. I know that you have a lot, you had a lot of experience, uh, during the last downturn with short sales and things like that.
So, you know, some of our discussion upfront is like, well, where do you think the market is going? And I think you maybe said a couple of things and you said, well, what do you think? And they’re just kind of, kind of leads to like, None of us know. Right. Who has any idea where we’re going, but, uh, I think the point of this show is to talk about, well, let’s, let’s, uh, let’s kind of.
Take advantage of it as much as we can while we can, until the market shifts, right? Yes.
Carlos: I mean, we, we, we don’t know what what’s going to happen and uh, how long can this stay? It could be, uh, a reason that some cities are growing or the ones people are leaving. So, you know, a re reshuffle of people maybe, but whatever it is, um, you know, how long can it be?
And that’s one thing that we have to take into consideration. Yup.
Mike: Hey, before you have such an amazing and rich background, would you mind just taking a couple minutes and just kind of sharing your, your background and how you got to where you are today?[00:03:00] Carlos: Oh, well, uh, thank you. I mean, uh, it’s all been, uh, a little progression.
Uh, I, uh, been always interested in, in real estate and, uh, when I was in my twenties, I went to my first seminar about how to buy houses with no money down, eh, assuming. Non-qualifying FHA loans, which they don’t exist now, because at that time, I guess they were abused. And, uh, yeah, that’s when I bought my first house.
And, um, you know, it was a moment of a downturn in the market. There were a lot of, uh, hot properties. I’ve seen that a couple of times in my life. Um, and you know, there’s always opportunity. So that’s the first time I did that, then, uh, I became a realtor in my thirties and, uh, eh, I was one of the first, uh, eh, realtors that created a team.
Um, within a [00:04:00] day I became one of the biggest teams in rematch. Uh, we were doing like, Close to 500 transactions a year and more than 70 million in sales. But, uh, at that time, just because of, of being on doing that kind of volume, I always, uh, found opportunities to buy. So, uh, that’s basically what it did.
And, uh, then, uh, the market crashed and I became, uh, an expert in short shells and, uh, I completed, uh, 800. Successful short shells and without also opportunities came and, uh, you were able to buy properties as well. Uh, and then I became money in best in 2013. Full-time investor, uh, ultra now.
Mike: Yeah. Yeah.
Awesome. Awesome. And you’re in the Denver market, which I know has been on fire, got a lot of friends that live in Denver and you know, I don’t know if there’s any markets right now that aren’t, that aren’t on fire, but I know Denver is a, is [00:05:00] even, uh, seems to be one of those that’s. It kind of at the high level of craziness in terms of a price appreciation and
Carlos: things like that.
Yes. I mean, your son and last month we had a 10% appreciation in one month. That’s crazy fishy shit.
Mike: Yeah. Yeah. And as an investor, you know, the challenges I remember during the last downturn, there were people that were buying, but they would anticipate additional appreciation, which is, uh, is, is going to hurt you really bad.
Eventually. Like you might look like a genius for a little while, but eventually the rug is gonna get pulled out from under you. So I think that’s what we want to talk about today is like how to maximize your profits, but how to like, try to stay safe. And, uh, you know, probably not anticipate additional appreciation and try to minimize your whole times and stuff like that.
So w you know, one of the things we talked about is just kind of staying lean, right? I know during the last downturn building up to it, a lot of investors were. You know, building big teams, having [00:06:00] fancy offices, wrapped Hummers, like all sorts of, I know a bunch of people that had, you know, really big overhead so that when the market shifted, they had a huge expense.
They had to cover for a while until they could unwind that. And so part of it, part of it is staying lean. Right.
Carlos: Exactly and unstained Lena, I would say more on the inventory side. Don’t don’t hold such a huge inventory. All of a sudden, I remember in 2008, I saw a lot of investors that cut inventory that had to short shell.
Right because, you know, they got, they, they, they found themselves caught up on that kind of situation. Cause they were more speculators and investors. I think they were just seeking that everything was going to continue going
Mike: on. Yeah. And one of the things I know we’re gonna talk about is, is actually.
You’re doing more whole tailing or light rehabs because that’s how you maximize your profit in this market. For sure. And it’s a little counterintuitive to being lean because, you know, if you want to be really lean, you can just assign stuff and never take control, but there’s a balance [00:07:00] there. Right?
Carlos: Exactly. I mean, right now, what I’m seeing is that hearing the number of market, you can wholesale anything, you know, uh, you know, profits probably. Bubble of 30,000, you know, even 50,000, uh, and then some other properties even more. But the point is, uh, in order to maximize the profit right now, if you can.
Purchase a property on hotel it quickly, I mean, in a couple of weeks, put it back on the market. You may double that, you know? So that’s why I’m saying that hoteling is a definitely a very, very good strategy right now because there’s no inventory, anything that comes out as long as it’s functional. You can sell it.
And then, you know, if you have nicer properties or with better margins and you can do some fixing and flipping, but, uh, that’s [00:08:00] what I would, you know, focus on right now. Try to maintain a low inventory. Um, dispose of properties as fast as possible, but without, uh, the wholesale anchors, you know, we would be leaving a lot of the problem is that we are not buying as many as we would like.
Right. So you got
Mike: to squeeze more, more juice out of that fruit that you have, right.
Carlos: Exactly. Now if I had more than I would definitely be wholesaling
Mike: more. Yeah. So what are some ways let’s talk about? Uh, so in one instance, I we’ll talk about what you can do to kind of stay safe and try to anticipate, because you’ve been through this, a down swing in the market before is what do you kind of monitor to see?
Cause right now it seems like. You could do no wrong with retailing, but the market will slow down at some point. But right now, you know, I don’t know what it is in Denver, but average days on market has gotta be low single digits. Right. You post stuff and you’re getting dozens [00:09:00] of offers in the first few days,
Oh yeah, no, no. It’s I mean, Put on a property on the market and he goes, it goes,
Mike: so what would you recommend kind of keeping an eye on days on market to see once those start to get longer. That’s an indicator
Carlos: exactly. On inventory inventory. If inventory starts going off for some reason, then, you know, Watch it, I mean, inventories are the lowest ever, we brought in 3000 properties or less on the market at one point.
And that is your complete immediate absorption absorption. So I would say, uh, watch that and, uh, you know, to see, so now market really didn’t. Do anything last year. I mean, we show property selling, uh, very, very fast in November, December, January, February. I mean, there was no most [00:10:00] seasonal adjustment. So I would also watch watch the season on our judgment and see if it goes back to normal where we, uh, September or October, you start seeing a drop a little bit of the market and, uh, Yeah, that’s what I would probably recommend.
Just watch those. Those moments, uh, that these friends she has to stop.
Mike: Right. It’s going to stop eventually. Yeah. And I know that, um, you know, if you’re, if you’re kind of a data geek, what some people are doing is pulling their MLS data and looking at, uh, not just days on market across the market, but looking at it on a form, you know, kind of houses that are at, or below the median price point.
Because I think, uh, if you say there’s 3000 in Denver, my guess is. That whatever your median price point is. And below that a disproportionate amount of the inventory is above that. Like there’s a lot of luxury homes and stuff that are sitting around a little bit longer, but in terms of affordable housing, like that’s, that’s even lower on [00:11:00] average than your total days on market for the marketplace.
Carlos: Canada. And that’s a market that we specialized the 500,000 and below. And, uh, I mean, it’s on fire. There’s knowing the terrier whatsoever, even on, uh, an apartment. I mean, a condominium or, or townhome are sailing, uh, insane. I mean, 50,000 above France, it’s just insane. Yeah.
Mike: Yeah. And what are kind of whole tale and, you know, I’ve, I’ve been wholesaling.
We, we were wholesaling before it was kind of called wholesaling. Um, but I’ve been wholesaling here for eight or 10 years for the, for the most part, but what’s, um, what, uh, What are some things that you do to make it, cause what you really are aiming for is that retail buyer, right? Sometimes when you wholesale, you pull in like, but you’re going to make the most money by selling to a retail buyer, which means you need to make it livable.
Right. So what are some things that you do at a minimum to make it kind of livable? Even though it’s, it’s a, it’s a house that’s in need of
Carlos: work. Uh, [00:12:00] more than anything, uh, you know, if you felt tile floors are cracked, of course you replace that, uh, plumbing, repairs, small plumbing, repairs, like leaks in the kitchen or bath.
Uh, if the tops are chipped, you’ll fix him up. Eh, carpet paint. Sometimes the carpet may be. You know, washable. So wash the carpet. I mean, it’s, uh, it’s amazing that properties are selling easy. So just doing a functional property, just so you can pass FHA guidelines. Uh it’s. It’s enough to. To sell a house,
Mike: even though you’re turning them really fast, you’re still allowing FHA loans on your property.
Carlos: Yes I am. Uh, I mean, one day once we turned fast, no, we were doing conventionals [00:13:00] and everything you’re selling conventional people are out there. There’s plenty of programs that are conventional that, uh, for the first time home buyers.
Mike: Yeah. And I know some markets here in the Dallas market, even hearing stories of people that are selling it, you know, Three four or $500,000 houses for 50, a hundred thousand dollars above asking price and all cash, just because like buyers are want, the house is so bad that they basically know that, uh, that’s attractive to sellers, right?
Carlos: There are some programs that came out, uh, that are qualifying people and they are buying the houses and then selling them to them, to the, to the people for the precious that, so th their, their programs or, or. That came out that are doing that. I’m seeing people that are coming from California. So they’re showing houses and golf for coming to Denver and they have a lot of money.
So they come. By cash. And there’s a lot of cash offers on the table because yeah,
Mike: for retail, what’s typical for your deals right now [00:14:00] you list a house and you’re, you know, how many showings and offers are you getting within the first kind of couple of days of, of listing? Gosh,
Carlos: you know, I sell everything staged.
So, I, I don’t put anything on the market that is not stage. I have it all ready to go. I don’t do a coming soon or anything like that. I just put it on the market. And in a couple of days I have about 80 offers. I mean about 80 showings, about 10 offers. And then, you know, uh, is coming above 50,000, you know?
Amazing. So when you calculate an Airbnb, Uh, because you’re going to fix your house. You’re going to fix it in a month. You calculate an error, be, uh, let’s say four 80. And uh, you put the property on the market and you sell it on five 50. It’s just something I never seen before.
Mike: Yeah, no, it was pretty [00:15:00] crazy.
And the staging part is, is always an interesting conversation. And some people will say the houses are selling so fast. I don’t have to stage them. But at the other time, if you’re whole tailing and the houses are in need of work, it’s not like you’re staging it to, to, uh, fleet anybody. But I think sometimes if you come into a house it’s not stage and it’s imperfect, people will focus on what they can see.
And so if they see. That the colors, the colors are outdated, or they see the appliances are outdated or whatever. They focus on that. And if you can distract and say, Hey, this is a nice house. It needs some work, but you try to make it feel like it’s homey, right? The staging kind of distracts from the fact that it’s less than less than perfect,
Carlos: more than anything.
I think that, uh, staging for me is understanding that real estate is an emotional buy. Yeah, and you buy it with your heart. So you have to have a feeling and staging creates that feeling. You staging gives that person. That’s why [00:16:00] new homes are old stage. Right. And they’re beautiful because when you come in, you, you can see yourself there and you can feel the house.
So that’s why I stage and I, I, I don’t care what I. Where do I sell? Or where are the houses? I stage everything.
Mike: Okay. It’s interesting that you said that. Cause my wife and I, we kind of got the bug here over the past year about moving into a nicer house where we’re actually looking to move into a different market.
Even we decided not to, but some of the houses we were looking at were like, these are like our dream homes, you know? And honestly we would talk, we like, if we buy this, we need to figure out a way these were new builds, by the way. But we were like, we were like, literally we want this house and we want all the staging.
Like we just want to move into this house because it looks so perfect
Carlos: know. And that’s the magic. I mean, our, the lady that does our staging, she’s amazing. And she, you know, she does it with a really, when you look at what she puts in their house, if you really analyze it is very inexpensive. And, uh, you know, [00:17:00] it’s just a way that she’s a designer and she makes that feeling.
So I, you know, I I’ve done houses would know staging and staging and, uh, you know, staging just bring so many people and, uh, they, they bring the, I think that it raises that price.
Mike: That’s hopefully the goal is it easily pays for itself. Right. Yeah, exactly. Awesome. Um, so Carlos, you, you and I have been friends for a long time.
You’ve been an investor fuel for a little while now. And, um, and we’re excited to have you in w would you mind just kinda sharing your experience of being a member of investor fuel, maybe a, maybe a short testimonial of what the group’s done for you?
Carlos: Oh, absolutely. I always look forward to the quarterly meetings because of, uh, the content of the, the senior year and what’s going on.
Right. You, you have a mastermind of, uh, Well, if, uh, you [00:18:00] know, you know, hundred investors are there and you’re talking to everybody, you know, a lot of them because you talk to them all the time. Uh, they’re always willing to share. And, uh, I use, see what’s going on on the market. You get new ideas, you see what’s going on.
And also you can focus because, uh, you know, we talk about art. Numbers and that makes you focus and see what’s possible, eh, as well as, uh, bring you, you know, you’re always focused on, on the station. So that’s what I like about fuel is that, is that, you know, you have created, uh, a very good, uh, group of people that, uh, they, they share.
Uh, there are. Like a family, right. I mean, and then not only that, but, uh, all the, you always, uh, fuel is, uh, a [00:19:00] great, uh, great, uh, pace to meet. And, uh, it’s also also quality, you know, because it’s quality people, quality places, eh, you get to. She older places. Um, but what can I tell you? I mean, I love it. I look forward every quarter to be there when I cannot be there.
I I’m, I’m mad because I want to be there.
Mike: I appreciate that. Yeah. We’ve got a good group and I think, uh, you know, the accountability stuff you’re talking about really has helped a lot of people, um, You know, start to hold themselves accountable more. Cause they know they’re going to have to come be accountable in front of their brothers and sisters.
And, and this, this it’s not designed to, uh, hurt anybody. It’s, it’s designed to put some account it’s this face that a lot of us entrepreneurs, you know, sometimes you don’t want to be held accountable. So we’re able to kind of shirk those things. When we go back home to our own business. We get to decide if we work today or we don’t and stuff like that.
And when, [00:20:00] when you start to wrap accountability around it, which is the best thing for your business,
Carlos: exactly. The training, the training that you do online is very good. And, uh, you know, that, I know that I’ve seen it evolve. Uh, you know, as a, you’re always thinking about how to bring more value on any chose.
Mike: I appreciate that, Carlos, so awesome. Well, Hey, thanks for sharing your insights today on the retail market. If folks wanted to connect with you, you’re out, you’re out in the Denver market, you’ve got 37 years of experience. What’s a good way for them to connect or, or, uh, kind of,
Carlos: yes. I mean, they usually go to Carlos Del rio.com and that’s my, my website.
And, uh, you know, you can call me or you can, uh, There there’s some links there for Facebook or, you know, other, uh, or email me, you
Mike: know? Okay. Yeah, we’ll add, uh, we’ll have the link, Carlos Del rio.com. We’ll add that down below in the show notes here. Um, and it sounds like you got links to all your social media there [00:21:00] as well, so good stuff.
You’ve got a wealth of experience and a wealth of knowledge, and I appreciate you sharing your thoughts today. I think the role we’re really kind of telling everybody is like, stay lean. Try to do. If you’re going to rehab, get in and out of stuff as quickly as possible, don’t have a bunch of inventory buildup, but take advantage of the retail market.
That’s hotter than ever as much as you, right?
Carlos: Absolutely. I mean, you were going to be delays right now. You stay, stay cash rich and wait for the next downturn
Mike: and which is another opportunity. Or you just have to, you just have to prepare for it. I think. Shocking. Exactly. Awesome. Well, Carlos, thanks again for sharing with us today, buddy.
Carlos: Take your mind for coming me and enjoy. Of
Mike: course, of course. And everybody, I hope you got some value from today. Just know that, uh, there’s opportunities to make money in this market, which is on fire. For sure. And in down markets are usually where we tend to thrive. The biggest thing is being prepared, uh, when the sale occurs, it’s like for us, it’s like black Friday.
Everything’s going to go on sale at [00:22:00] some point. So you just have to be ready to take advantage of that. So appreciate you a bunch. Hope you got some bites from today’s show. We’ll see you next time.
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