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Show Summary
In this episode, Dylan Silver interviews Javier and Linda Maldonado, a husband and wife team involved in real estate flipping in San Antonio. They discuss their entry into the investment space, strategies for competing in a changing market, and the importance of understanding exit strategies. The conversation also covers the nuances of seller consultations, working with wholesalers, and the sub2 deal process, providing insights into how they navigate the complexities of real estate transactions.
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Investor Fuel Show Transcript:
Shark Fin Investments LLC (00:00)
gosh, you know, it can get tricky because you know, wholesalers have to make money, right? So it, you know, it’s a business for them as well. So it just depends. They have to be very careful because the prices from a wholesaler can be a little inflated. So they have to really know how to ⁓ assess the property, assess the value.the location, know, those type of things. Because a lot of times, you know, what wholesalers like to do is that they give you a value, a tax value, or it’s listed, you know, so many hundreds of dollars under tax value, but that really doesn’t mean anything,
Dylan Silver (02:09)
Hey folks, welcome back to the show. Today’s guests, Javier and Linda Maldonado are a husband and wife flippers in San Antonio. They buy hold, fix and flip and do sub two deals in the greater San Antonio market. Javier and Linda, welcome to the show.Shark Fin Investments LLC (02:28)
Thank you, Glad to be here. Hello.Dylan Silver (02:30)
Great to have you guys on here. And I always like to start off at the top of the show by asking folks how they got into the investment space. You guys are involved in several different segments. What was your entryway like into investing in real estate?Shark Fin Investments LLC (02:48)
Yeah, so ⁓ we started flipping back ⁓ in 2019. We just decided that we wanted to do something else. ⁓ Speaking for myself, I’ve been in retail for many, years. And so I wanted to try something different. I took some money, invested it in a property, and started flipping from there.Dylan Silver (03:13)
Now when we talk about the flipping space and specifically in Texas, it can be challenging for folks when there’s new builds going up everywhere. And so the market has changed and where you need to buy these deals at has changed over time. What’s been your strategy so that you know, hey, we’re acquiring these at a price where it makes sense and there’s enough room where we can still be competitive even with new homes going up all over the place.Shark Fin Investments LLC (03:44)
Yeah, so what we’ve done most recently with the market, like you stated, is just have a bigger presence on social media. So we’re getting our name out there and what we do. And we’ve been able to get some deals off of social media where we can ⁓ deal with the sellers one on one and are able to get better deals that way ⁓ previously. And we still do look at leads from wholesalers. ⁓as we try to get deals from straight from the seller, then we were able to negotiate better deals for us ⁓ and in turn have bigger profit margins that way.
Dylan Silver (04:23)
Now, as I mentioned at the top of the show, you’ve done several different transaction types, buy hold right now, active fix and flip sub two as well. When you’re looking at what type of exit strategy to have, does that impact, you know, the type of deals that you’re looking at, whether it be something that’s more distressed or something that’s more rental grade, or can you use some of these different strategies across, you know, multiple different.levels of property, be it something that’s more distressed or something that’s more rental grade or on market ready.
Shark Fin Investments LLC (05:47)
Yeah, so it depends right so every every deal is is you know dealt in a case-by-case situation so, know depending on the property Mostly depending on the area has a lot to do with whether we’re gonna keep it or if we just want to exit right away and flip it So it just depends. are a lot of factors that we look atthink the bottom line is really just looking at the deal as a whole and then determining what is gonna be the best strategy for us. Here lately, we’ve been really focusing on ⁓ buying some rentals and also of course the sub two method.
Dylan Silver (06:23)
Now, you guys are active in, correct me if I’m wrong, ⁓ in the universal city area, that eastern part of San Antonio. Is that accurate?Shark Fin Investments LLC (06:33)
That’s correct.Dylan Silver (06:34)
I lived over in that area, I’m familiar with it. When we talk about that area, there are actually a lot of what I would consider to be aging homes, right? And so those types of homes would be really a great opportunity for either someone to come in and fix and flip or to do some type of value add. Because those sellers, if they’re gonna go and sell that type of home, they’re competing with brand new homes that may be at almost the same price point.that they would ideally like to sell it at. So it’s difficult in some cases to be a seller right now with an aging home in that part of the city.
Shark Fin Investments LLC (07:14)
Yeah, definitely. think for us, it’s important that the centers understand the cost behind the remodels and behind the rehabs that these older homes may need. And so many times people don’t have the funds torehab their homes and bring them up to date. And so that’s where we go in and make sure that we create a win-win situation for the seller and for us, and giving them a fair offer for their home.
Dylan Silver (07:48)
Now, Linda, as a realtor, do you ever go into consultations with an approach of, we could list the home, but also if that doesn’t work, we have a cash offer option as well. Are you able to provide those two types of services for folks?Shark Fin Investments LLC (08:06)
Yes, for sure. I as I was walking the home, obviously, you know, most sellers, you know, think their home is worth more than it really is. You know, just letting them know it’s like if you want, know, the most, you know, you have to bring it up up to date like the, know, a more modern home versus a home that hasn’t been touched in 20 years or so.⁓ So I kind of give them that ⁓ scenario as if for them to understand that the new buyer is going to have to come in and put in all these new updates into the home. And that’s something that either they would want to do it their own for themselves before they list or they’re not wanting to go through that trouble of doing that.
Dylan Silver (08:59)
Now there’s so many ways where these businesses can stack on top of each other, right? So as a flipper yourself, and then as a realtor, you can say, hey, we can list a property. If not, here’s the cash offer. Do folks ever ask, hey, can we connect with someone or would you be able to rehab the property to get it to a point where it is modern? Is that ever a strategy that’s employed for you guys?Shark Fin Investments LLC (09:29)
Yeah, so we also own a contracting business. you know, sometimes when the, you know, the seller wants to ⁓ upgrade their home or do anything like that before listing it, then we’re able to provide that service for them as well. So.Dylan Silver (09:45)
Now, when folks are looking at the options that they have available to them, right, they’ve got lists, they’ve got, I could sell out, right, or I can rehab it. Do they often walk in with a sense or a general understandingof, hey, this is what it’s gonna cost in order for me to get it to that modern grade? Or is that something that in many cases you’re seeing is somewhat
blindsiding sellers, they’re not aware that there’s this much competition out there. In order for them to sell their home within a reasonable timeframe, they’re either gonna have to have reasonable expectations and maybe drop their price, or they’re gonna have to put in potentially $10,000 or more, in many cases much more than that in order to get it to that moderate grade. Are they aware of that prior to having these conversations, or is that totally ⁓ shocking to them in some cases?
Shark Fin Investments LLC (11:17)
Now they’re aware, obviously, you know, if ⁓ we have experience in both sides. So when it comes to a listing of a home, we feel that it’s just cosmetic. You know, I definitely just recommend it for them to have it repainted or, you know, smaller details versus if it’s a bigger project, you know, they’rethere, I tell them, you hey, this, this home needs ⁓ this type of remodeling, if not like foundation repair. I remember walking into into a home and I could, I could see the home right away. It was having foundation issues and I, you know, I asked him, I’m like, does the home have foundation issues? And they’re like, well, no, we’re not aware.
Well, it looks like I’m not a foundation specialist, but it looks like the home is having some foundation issues. It could happen, you know, within a year or two that you purchase a home. So, ⁓ you know, those those type of things, I do let them know, because I mean, foundation is is a big expense, right? So when it comes to that, that’s when they they start, you know, seeing that, you know, it’s it’s better to just set.
sell it to an investor where they can fix all those things because they don’t have the funds to do that.
Dylan Silver (12:43)
Yeah, mean, and folks have so much of their wealth tied up in the equity of their home. And so if you’re going to have to be fixing a foundation roof, like major ⁓ rehab or renovations to kitchen or a master bath, folks may not be able to do that. And they may be thinking, hey, I can I’m seeing what homes are selling for. I can sell my home in the condition that it’s in.and especially right now, it does feel like we’re in a buyer’s market, at least for the time being. Now, when you’re looking at deals from wholesalers specifically, right? Are you able to go out to every property? Are you making some site unseen offers? And how do you manage being able to underwrite these deals when you have so many deals that you’re looking at? And then also you might be on a job site or you might not be
physically able to be at that property right then and there. What’s your approach to underwriting?
Shark Fin Investments LLC (13:43)
Yeah, so I you know, we get leads every single day, you know, I always look at the emails right first and see, you know, I always look at location. I look at price. I look at, you know, what the potential margin could be on that property. If it’s something that I don’t think it’s going to be a good deal, then I don’t, you know, I don’t even look at it further. But, you know, just the other day,The thing with these wholesalers that you have to act quick, right? Because you’re not the only one getting the email. You know, they’re blasting it out. So you have to make a ⁓ quick decision if you really like the property. For example, we just bought one the other day where, you know, it was a great deal over in Cibolo. And we really like that area because it’s closer to home as well, ⁓ where it was at a good price. So you have to act quick. it’s like, I’m handing over there right now. You know, what’s the lockbox code?
And that’s the thing, like, you we’ve established that relationship where they don’t have to meet us out there anymore. They just give us the lockbox code and then we’re able to walk the property on our own and see what it needs. And then we’re able to make an offer right there and then ⁓ just to make sure it’s a good deal. ⁓
Dylan Silver (14:52)
Yeah,when you’re when you’re able to have that rapport with with sellers and with with wholesalers,
you become their their point of contact. And I’ve seen this as a wholesaler myself, once I found a reliable investor, they’re they’re getting first dibs on on many of my properties. Once you’ve established those relationships, do you work in many cases with the same wholesalers? Are they able to to supply a consistent stream of deals and
What would be your advice for folks who are getting into the game and considering working with wholesalers versus generating their own leads?
Shark Fin Investments LLC (16:13)
gosh, you know, it can get tricky because you know, wholesalers have to make money, right? So it, you know, it’s a business for them as well. So it just depends. They have to be very careful because the prices from a wholesaler can be a little inflated. So they have to really know how to ⁓ assess the property, assess the value.the location, know, those type of things. Because a lot of times, you know, what wholesalers like to do is that they give you a value, a tax value, or it’s listed, you know, so many hundreds of dollars under tax value, but that really doesn’t mean anything,
you know, and then they don’t tell you about closing costs, transaction fees, things like that, right? So if you’re a new buyer or getting into the game, you look at the spread and you’re like, okay, I’m gonna make 100,000 on this deal.
you know, and it looks really good on paper, but unless you really know what it takes to rehab it and to how much the closing costs are going to be, things like that, you can get yourself in a bind where you’re not going to make any money. So it’s really learning the numbers.
Dylan Silver (17:16)
What do you think about some of the other ways where people are purchasing distressed properties, know, be it, you know, on market, you know, properties that have been listed high days on market or limited photos or something like, you know, foreclosure auction first Tuesday of every month at the Bexar County Courthouse steps. And what’s your opinion on some of these other lead ⁓ avenues that folks are exploring?Shark Fin Investments LLC (17:41)
Yeah, they’re all great avenues. know, again, it’s really just getting down and learning the business and learning the deal and what it looks like and making sure that you’re going to make some money, you know, ⁓ but they’re all great avenues. You just have to kind of pick and choose on what’s going to be the best one for you.Dylan Silver (18:00)
Now I want to pivot and ask you a granular question about sub 2. ⁓ For single family especially, I’ve noticed this, sellers may or may not, in many cases are not aware of what sub 2 is, what it entails. How are you reaching that conversation with them? It’s different with every seller, right? But how are you explaining this to them in a way that they’re comfortable with it, in a way that they can understand?Shark Fin Investments LLC (18:29)
⁓ Well, first, the subchoose that we’ve obtained lately have been ⁓ from listings that I’ve had, right? So ⁓ I give them that opportunity to list the home. Some ⁓ of them have to be moving out of town and they just can’t pay the property anymore. Right now, the days on market is crazy. So they just really can’t, you know, with the payment and now they end up with two payments.Um, explaining it to them that it’s it’s making them comfortable that you know it’s done through an attorney. It’s done that you know everything is is is not something that we’re just going to go to a notary and sign. You know that they get explained everything by the attorney as well so they can, you know, feel good about it. I also kind of explained to them. Cause I mean their their main when it comes to sub 2 their main concern is like what if they don’t give the payments anymore?
Dylan Silver (19:28)
Right.Shark Fin Investments LLC (19:29)
Right? Like it’s my credit still. So I kind of, you know, explain to them that somebody that’s going to obtain a sub two is somebody that’s obviously responsible and, you know, is not going to want to lose the property. So ⁓ like I tell them, you know, it’s either way, if worst case, worst case, the, for, you know, anything happens to this person that purchases your property, they can just sell it.and not ruin your credit or anything like that. Just make them feel comfortable and for them to trust you that you’ve been doing this for some time. We kind of tell them that our history of how long we’ve been in the business and how long we’ve been doing this, it makes them feel comfortable and they trust you.
Dylan Silver (20:23)
Now, because you’re involved in these segments which are correlated, right? So you have the ability to really take them through a full cycle in multiple different segments, whether it’s sub to fix and flip, list their home, ⁓ Rehab, there are so many different ways where a deal can move. Have you had the experience where folks are coming in and maybe they are not open to it initially?But then when they’re seeing that either their home is sitting or the offers aren’t where they thought that they would be, they become maybe more open-minded about some of these other approaches or other options.
Shark Fin Investments LLC (21:03)
yes, yes, it’s happened. It happens all the time. Like I, like I mentioned, ⁓ like, they’re already moved out of town and like this last sub to that we got, they had moved out of town. Now they have, they have a payment and, you know, two payments and, and like, I kind of just, you know, I put in their ear at the beginning and they’re like, you know, no, let’s just wait to see how things go. And then another month goes by and I kind of just let them know it’s like, you’re, you’re spending like,money and electricity and utilities that you’re still paying for this property. ⁓ it never fails. It’s always towards the end of the month where they want to, before their payment is coming up, where they want to just get it over with and not worry about it. So that’s when they’re more inclined to doing it.
Dylan Silver (21:53)
Yeah.Once you see those debits coming out of your account and you’re realizing, well, I don’t know how much longer this is gonna continue for, it would certainly make me ⁓ more inclined to look at some alternative options. We are coming up on time here though, Javier and Linda, where can our audience go? Where can folks go if they’re interested in reaching out to you? Maybe they have a deal that they’d like you to take a look at, maybe they have a home.
in San Antonio that they need someone to represent them on. They’re looking at listening. How can folks reach out to you?
Shark Fin Investments LLC (22:28)
Sure, yeah, we get most of our clients through ⁓ Facebook. So ⁓ it’s my Facebook, Linda Maldonado, and he has his Facebook Javier Maldonado. And that’s where we post a lot of before and after pictures of the homes that we’re remodeling and things like that. So they can follow us there and send us a message if they’re, you know.wanting help either with the real estate side or they have a property that they want. They want for us to look at for sure.
Dylan Silver (23:02)
Javier and Linda, thank you so much for your time today. Thanks for coming on the show.
