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Show Summary
In this conversation, Alejandro shares his journey in real estate, starting from their initial experiences in 2005, through the challenges faced during the 2008 crash, to their current strategies in acquiring distressed properties. They discuss the importance of learning from past mistakes, the dual approach of managing long-term and short-term rentals, and the unique challenges of working with Section 8 tenants. The conversation also touches on scaling the business and adapting to market changes, particularly in the context of new construction and development.
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Investor Fuel Show Transcript:
Alejandro Maya (00:00)
95 % of our portfolio, it’s comprised in three zip codes. If you search them, they’re the zip codes with the highest crime rate in the city. But also they are boxed in between areas that are becoming or have become very affluent, very trendy, very hipster, very expensive. SoMy entire portfolio is in four seedcots. 33127, 33142, 33147, and 33150. I think that I get the most rent for my money. I found the most properties with problems. And basically, I like to find blood on the ocean. If I see blood, I buy it. I only buy when there’s a problem.
Dylan (02:27)
Hey folks, welcome back to the show. Today’s guest Alejandro Maya is an investor in emerging neighborhoods in Miami.It’s great to have you on here, Alejandro.
Dylan (02:37)
I always like to start off at the top of the show by asking guests how they got started in real estate.Alejandro Maya (02:44)
I guess started by chance, I guess in 2005, I was off the boat, as you would say, I just got here in 2003. And I got my license in 2003. At the moment you buy something and the next two months after you would sell it for a profit. And I saw there was a hundred percent financing. So I started buying some units, a hundred percent financing, getting them rented and with the rent, would go to the mortgage.Maybe it was a little upside down. I was buying mostly for speculation purposes until I accrued a vast portfolio. up until the crash of 2008, when really got burned, when kind of bankrupt, lost all the properties, lost all my money, was left with literally $500 in my bank again.
Dylan (03:39)
So when we talk about that timeframe, I’m curious to get your perspective. So there’s a lot of people who went through that. Do you think that was good experience to have that pre 2008 market? Or is it almost like irrelevant now because it’s such a different market now?Alejandro Maya (03:57)
I I have gray hair, so all experience is good experience. The bad experiences is what teaches us what not to do in the future. So I did learn a lot from my mistakes. I don’t buy anymore for speculation. I only buy today, something that I know I could sell tomorrow in the open market for more money. It’s like…Very basic, but before you buy, bought thinking that you will sell for more money. You will buy a market price and you would sell for more money in six months. I only buy distress. I only buy properties that are distressed, broken with paper problems, liens, violations, things that I know I’m getting a probate or a divorce. I only buy some something I know there’s a problem behind it.
So I know I’m getting some percentage points below a few, many percentage points below market price.
Dylan (05:46)
Right, right. When we talk about the distressed space and people, you know, unfamiliar with Miami may say, well, where’s the distress in Miami? But when you’re when you’re looking at some of some of these areas, you mentioned a couple, you know, foreclosure, physical distress probate. Do you have one area that that you prefer to find this distress or are you looking at, you know, multiple and it’s whatever the deal comes?Alejandro Maya (06:12)
95 % of our portfolio, it’s comprised in three zip codes. If you search them, they’re the zip codes with the highest crime rate in the city. But also they are boxed in between areas that are becoming or have become very affluent, very trendy, very hipster, very expensive. SoMy entire portfolio is in four seedcots. 33127, 33142, 33147, and 33150. I think that I get the most rent for my money. I found the most properties with problems. And basically, I like to find blood on the ocean. If I see blood, I buy it. I only buy when there’s a problem.
Dylan (07:08)
When we talk about the distressed space, there’s of course so many reasons why these properties can become distressed. It could be people falling behind on bills, could be probate, it could be divorce, death in the family, et cetera. Has your approach to acquisitions changed over the years? Do you have a preferred acquisition method? Some people will go to the foreclosure auction, for instance.Alejandro Maya (07:32)
Well, we started this year, I started this year buying through foreclosure, but it’s a very, very tricky and difficult process. The first one I bought, I didn’t do my homework. I did not do very well and I’m trying to get out of the mess. So the lesson is regardless of having 20 plus years of experience, you still make mistakes. So I focused on…Listen, wholesalers, properties that have been on the market for a while. And then I go in, oh, I also buy from my neighbors. know us. I’m very hands on, very hands on. I visit my areas and my properties maybe twice a week, three times a week. I’m always there. So there’s always somebody telling me, such and such wants to sell the property. They think they need to sell. They want so much. I go there and they say, listen.
This is the reality. I can pay this much, but we can close it a week. I get deals and leads from wholesalers because it’s been 15 years doing this. I clearly, I got burned in 2008. So I took a hiatus of five years. I was in the restaurant business. I saw a brick and I ran. I got burned so much, so hard during the crisis.
I got back into it in 2013. then I will only buy houses that I would get positive cashflow from day one and even pay my mortgage. would use our money, fix them, sell them, get more money, buy two more, fix them, sell them. and then in 2019, I stopped selling. I started using the BRRRR method. I started using
financing. So I buy her money, fix, stabilize rent and refinance and buy again.
Dylan (09:38)
Now, when we talk about, you know, being able to accumulate a large personal portfolio, you know, you might have folks who say, okay, all of these properties are going to be long term rentals. Some people might say, okay, I’m going to have a mix kind of diversifying my cash flow, if you will. Are you all in the long term rental space? Do you do any short term rental as well?Alejandro Maya (10:35)
Well, it’s funny you ask. We have a team. This is a family business. My wife works with me. My sister works with me. have two really close friends that work with me. We have two separate management companies. One, it’s, and we are the management companies. I don’t trust management companies. I think that’s a key. If somebody wants to learn something from this, manage your own properties. At least.works in our case. We have one area that’s long-term property management and 95 % of our tenants are Section 8, which is a whole different world in itself. And a second portfolio, we have short-term rentals. They’re also in emerging areas. We have two deals, one bedroom, two bedrooms, three bedrooms, and four bedrooms. We make them beautiful. We furnish them.
We set up furnishing patio and we have them when they’re not rented with section 8 tenants or whether they’re rented with a long term tenant, mean properties get vacant. So in the meantime, I bought them on Airbnb. So at any time we will have a certain number of houses on Airbnb that helps us with the cash flow because a house could be on the market for a few months, especially in this market. This year has been very challenging.
in terms of renting properties, I guess it’s because there’s been so many people moving out of Miami due to political reasons, deportations, a lot of inventory, new inventory. So I became very aggressive trying to rent properties, offering incentives, offering secure security deposits, offering a gift card, offering, we helped with the moving.
We give them the furniture for free. A lot of incentives in order to fill the houses long-term. But in the meantime, we do RV &B and they’re the same areas. They’re the same emerging, bad neighborhoods. Yeah. I guess that we have tenants, we have guests, not tenants, we call the tenants long-term tenants and the RV &B guests. We have guests that stay for a week in a beautiful house of three bedrooms for $800.
Dylan (12:55)
Right. It’s a good deal for them. Pretty deal. In the Airbnb space, you know, what would be your guidance and feedback to folks who may be looking at getting into Airbnb in a potentially very competitive market? Maybe maybe they’re not in Miami, but they might be in another major metro.Alejandro Maya (13:13)
Well, in various city by city, I mean, there’s some areas in Miami which is very profitable to do Airbnb. Some areas like mine, it’s not very profitable. For me, it works because I have a team, we have the structure and it helps me keep the properties occupied while I’m trying to rent them. Or eventually sometimes we want to sell something while I have it the market for sale. I have the flexibility to…have them occupied and get revenue off them. For people that want to get into a V &B, I would be very careful on how much they pay for the asset and where they buy it and make sure, at least in Miami, I’m not going to speak about cities, I don’t know. We were involved very heavily in Detroit from 2017 until currently, but only long-term, only low income, only Section 8.
I didn’t do RVMB over there. I would be very careful in where you buy in Miami to do RVMB. Don’t believe what people on Instagram or the gurus tell you. It’s not magic.
Dylan (14:28)
The Section 8 space is interesting because you’re working with local governments in order to set this up. So how did you get into the Section 8 space?Alejandro Maya (14:39)
It’s a way to have your rent somewhat guaranteed. You have to get the tennis portion that sometimes they don’t pay it. And a lot of times we’re very lenient about it because people are really having, I mean, I’m not gonna try to be portrayalist saying, but it’s a business decision. I don’t evict somebody for being behind on their own.and I’m still getting my Section 8 rental. You know what I mean? So it’s a segment, the low income segment for me is where you get the best rent for your money and it’s where the property long term appreciates the highest percentage. That said, it’s a very difficult need to manage. So I only do Section 8, 90%. The people that are not Section 8, we…
really screen them. We have some good tenants, but according to my experience, most of my evictions have been by non-sectional tenants. So it’s a segment that I got into because I realized if I want to be in this segment, I want to be with people with guaranteed rent and the government guarantees the rent.
Dylan (16:37)
When we talk about Section 8, what are some of the issues that can come up and what are some of the difficulties that people face either getting started or scaling their business?Alejandro Maya (16:50)
Well, to scale your business, you got to use debt a lot. That’s the only way to scale your business. Be aggressive, be hands on, be on by. I would advise against the chunky properties. I mean, you got to really be involved, at least in my experience. This is what I do for a living.I’m very involved. So my giveaway would be buy properties that need fixing. Fix them. I mean, not yourself. Hire somebody to fix them. Oversee what they do. Don’t go over budget. And try to skin your tenants as good as possible. Last year, I would lease a property. I would have five applications within three days. This year, I am taking what I get. I’m trying to…
trust the people, see how they speak on the phone, check they don’t have evictions, check that they don’t have criminal record. We accept some criminal record. are very against what most people, most property management companies, we’re very lenient in order to fill out the houses because we need the revenue. That’s our only source of income. We had more good experiences than bad experiences.
I guess with the volume that we have, you’re to have some bad apple here and there. But for the most part, the Section 8 tenant is a very grateful tenant. We provide a very nice, clean, safe house. If a roof is leaking, I don’t fix, I don’t put a patch. Usually, I change the roof. And I know that I have a roof for 10 years.
If the AC is not working properly, more likely than not, I would change the AC and put a new unit. So then I don’t have a problem for the next five years. I make sure that my team changes the filters so we don’t rely on the tenants changing the filters. We do proactive maintenance rather than reactive maintenance.
Dylan (19:07)
I want to ask you specifically about the difficulties that people will face in finding these properties to then fix them up. I’m seeing right now, for instance, I’m a Texas licensed drifter. It’s becoming more and more challenging to do fix and flip. That’s not to say that it’s impossible, but even to fix and hold is becoming more and more challenging. How have you been able to navigate this whenyou know, new construction seems to be very popular. And then also, too, when people may be looking at, well, you know, I have this option here, but I could go rent an apartment. How are you navigating that?
Alejandro Maya (19:44)
Well, funny you ask, in terms of this year, we’ve been more actively seeking properties in the zip codes that I like that I could tear down and build townhouses. So we are focusing into new developments. We’re not doing fix and flips anymore. The margin are too small. So we are adding value.by doing construction. for people that looking to move into an apartment rather than a house, apartments are typically, especially these new constructions, are very strict when it comes to accepting a tenant. For instance, I rented a duplex unit at 201 yesterday for the same amount of money that they would have paid at a new construction. And this is a very old, remote construction.
It’s a sectional tenant, but I let her move in with a big dog. She has a small criminal record, very bad credit and serious security deposit. So in my head, by renting the house today, rather than two months, okay, I use these two months for a mental security deposit. It’s a very, we are a family-owned business. We’re not a corporation. So.
It’s done by me, my sister, my wife.
the rent of properties is becoming very in this market, which then nine out of 10 people have a criminal record on eviction of out-credit. So you’re going to be very, very critical.
Dylan (21:34)
But yeah, if you’re being ultra picky and who you’re not going to rent, especially when you’re doing it at volume, we are coming up on time here though, Alejandro, where can folks go to reach out to you? Maybe they have a deal and maybe they have a distressed property in the Miami area, one of the zip codes that you’re buying in, or maybe they just like to reach out to you and your team and get something they’re looking at.Alejandro Maya (21:37)
Wait, picky! You’re not gonna run.I’m always eager to make new connections. We use Instagram. It’s called Maya Capital Ventures. Maya, like Maya’s name, Maya Capital Ventures. I’ll text it so you can put it on the link below.
Dylan (22:10)
Right,Alejandro, thank you so much for coming on the show today.
Alejandro Maya (22:14)
Thank you for having me. Hope to see you again.
