From Corporate to Real Estate Success

James Doren (00:00)
We actually ended up finding a single family residence that was zoned properly for an ADU. So we actually built an ADU on top of the garage unit and we rented out the main house. lived in the ADU for about two years. That allowed us to save all of our money pretty much. We didn’t have any living costs. The rent covered the mortgage plus a little extra from the main house. We paid off almost $200,000 worth of

student

loan debt in those two years, we became completely debt free. And since we had this recently renovated ADU, we realized, hey, this is a pretty powerful tool. We’re going to do it again. So we tried to continue the trend of basically specializing and focusing in small multifamily properties, living in one, renting out the other.

Erika (02:21)
Hey everyone, welcome to the Real Estate Pro Show. I’m your host, Erika, and today I’m thrilled to be joined by James Doren, who’s been carving out a strong presence in the residential real estate investing space with his company, Rise Up Capital. James, it’s awesome to have you on the show today.

James Doren (02:40)
Yeah, my pleasure to be here. Thanks, Erika.

Erika (02:42)
James, for those who aren’t familiar with your world, give us the rundown. How did you get started in investing?

James Doren (02:49)
Yeah, it’s probably a story that’s becoming more more common, at least lately. ⁓ My wife and I had corporate jobs, student loan debt. We were renting and we were looking to just make a move to try to better ourselves. So we decided we were going to purchase a house and we were going to house hack. We were going to live in one unit, rent out the other and try to cut our living costs as much as possible.

We actually ended up finding a single family residence that was zoned properly for an ADU. So we actually built an ADU on top of the garage unit and we rented out the main house. lived in the ADU for about two years. That allowed us to save all of our money pretty much. We didn’t have any living costs. The rent covered the mortgage plus a little extra from the main house. We paid off almost $200,000 worth of

student

loan debt in those two years, we became completely debt free. And since we had this recently renovated ADU, we realized, hey, this is a pretty powerful tool. We’re going to do it again. So we tried to continue the trend of basically specializing and focusing in small multifamily properties, living in one, renting out the other.

Erika (04:03)
on?

James Doren (04:04)
That’s a great question. We specialize in finding undervalued properties. We’ve gotten plenty of deals off of the MLS that doesn’t necessarily have to be off market or anything like that. maybe properties that have been neglected or have the opportunity to build an additional unit like the first one that we did, add an ADU on, any way you can really add value to it.

Erika (04:29)
Are there any unique opportunities or challenges you’re seeing in those markets?

James Doren (05:21)
The challenges I think are people are holding on to to multifamilies at least in our our market specifically so their opportunities are kind of few and far between and Sometimes it feels like you know when one pops up. It’s not necessarily a great opportunity, so there’s definitely some tactics that we’ve we’ve implemented as far as negotiation strategies and creative financing to get these these deals under

Erika (05:48)
So James, I was checking out your website, RiseUp.Capital, and it’s clear that you’re focused on creating value for both investors and clients. How do you balance both of those things while maintaining good margins?

James Doren (06:03)
Yeah, really great question. We basically were founded on the principle that

everybody can win, everybody can get a piece of the pie. the way that just to answer your question very directly, the way that we can do that is by not being greedy, right? Not trying to take all of the profits available for ourselves, understanding that somebody else helping us to get ahead or get a really good deal on a property by having a cash offer, right? Let’s say if it’s a private lender, we can help them out the same way by giving them a great return on their investment. And that’s really what we try to stick

true to and that’s the reason we’ve been successful so far and that’s the reason that people that have worked with us want to continue working with us.

Erika (06:42)
That’s great, James. Hey, given your experience, what would you say is one thing that newer investors often get wrong? But how can they avoid that mistake?

James Doren (06:52)
I think we fell prey to the same type of thing of really just overly analyzing everything, trying to make sure that we were the most absolute experts before taking any step forward, paying for classes and researching and talking to many different realtors and investors, especially the first time that we used somebody else’s money on a deal, we wanted to make sure.

we were able to deliver 100%. So I think taking action is an important step. If you’ve done your homework and you’ve learned how to run the numbers and you are confident that you have a good deal in front of you, go for it, give it a try. And make sure you’re prepared, but don’t be afraid to take action either. Don’t wait and sit on the sideline for years at a time.

Erika (07:40)
James, every real estate investor has a moment where things get real. Can you share one of those moments on your journey?

James Doren (07:47)
Yeah, absolutely. ⁓ There’s plenty. ⁓ Just like any investment medium, really, there’s risk. And we always try to make sure, because a little bit ties into that kind of analysis paralysis we had to overcome, but we always make sure there’s a plan B, a plan C, and a plan D. We don’t do anything without knowing.

what we’re gonna do if things go south in three different ways. So really having those exit strategies laid out and having them be tangible, not just the general idea, right? If my goal is to rent this property out and cash out refinance it and have it as a long-term rental, but it doesn’t get appraised for what we thought it was gonna get appraised for, then what are we gonna sell it for, right? And we have to know that number as well.

just having that full.

There’s definitely been a time where we’ve had to resort to Plan B. Never Plan C so far. Hopefully we keep it that way. But we’re not doing high volume deals either. not, you know, some people are out there doing 25, 30, flipping 25, 30 houses at a time. We look for really one to two high impact deals per year and make up for the lack of quantity and the quality.

Erika (09:33)
Yeah, that’s great. You know, our community, we thrive off of building relationships, right? So for you, James, what’s been the biggest game changer in terms of building relationships and growing your network in real estate?

James Doren (09:49)
It’s a little cliche I would say, but we’ve kind of made our circle people that are interested in doing the same thing. And I know I actually hated when people gave me that advice, but we did that by accident and it became extremely valuable. Now I’m on the other side of that and I get it. But just surrounded ourselves with people that are doing the same things. We’re still always trying to expand that and be with people that are doing what we want to be doing, not even what we’re doing now.

learning from them, getting better, talking about those things. When you’re living and breathing that and your social circles are doing the same thing and you have friends that are looking for places to invest their money and people that are looking to learn from you on how to get involved in real estate, it kind of you up.

Erika (10:33)
Yeah, yeah, looking ahead, what do you see on the horizon? What are you looking to grow or scale?

James Doren (10:39)
So we definitely seem to be doing really well in the small multifamily space, two to four units. I think we have kind of found our niche there. We’d like to continue in that space. We’re really looking to take on some private lenders, additional private lenders, to continue delivering those high-impact deals. So we’ve done…

about one a year and we want to get that to two to three a year. Now that we have the experience, now that we’ve had the success with it and we’ve gone through the process using other people’s money to purchase these properties. So really just building out that network, building out that private lender list and helping other people earn passive income alongside us.

Erika (11:22)
Yeah, yeah, that’s awesome. Speaking of building relationships in the investor space, you you need to build long-term relationships for these deals to be successful. How do you flesh that out? And like, what are you looking for in someone when you’re determining if they’re a good partner or not?

James Doren (11:38)
Yeah, think it’s really…

one of the key determining factors for us is that they’re they’re like minded. They’re they’re not I mean, of course, everybody wants to get his most bang for their buck or the biggest return that they can. And and that’s that’s fair. And I wouldn’t expect anything less, but also not trying to get greedy and, you know, screw people over and really get more than what was agreed upon. And trying to try to sniff that out early on in a relationship is very difficult. But

We believe in giving people a chance and giving them the benefit of the doubt and letting them prove us wrong if they’re going to do that. So we haven’t really had any cases where we had trouble or…

relationship go south because of any of those types of things and 100 % of the people that have either lent their money with us or worked with us contractor wise or real estate agent wise ⁓ have come back to work with us again. So we’re very proud of that and we want to be the people that people want to work with.

Erika (12:35)
That’s awesome. And earlier when we were talking, James, before you recorded, I know you had said that you guys are very risk averse and that can be a downside. But you the positive is you probably kind of know how to calculate things and you don’t have as many crazy bad stories because of that. The point I’m getting at is

How do you assess and mitigate risks when evaluating a new property? Because there’s probably something in there that our listeners would love to learn.

James Doren (13:47)
Yeah, yeah, exactly. do that. That’s part of the reason that we have such a low quantity of deal flow and also part of the reason that, you know, the one or two deals that we do a year are bringing in, you know, $2,000 a month instead of $200 a month. So we’d rather focus on that. You know, I think having the exit strategies laid out, like I said, is a huge one.

running your numbers extremely conservatively I think is very important. It’s very easy, especially early on, to look at it say, if I could just get a little bit extra here, or if the percentage was just a little bit lower, then this would work out. But you have to be realistic about it, and you have to build in a little bit of a cushion because things are not going to come out or play out exactly the way you drew them up on paper ever. So especially in this

industry, I think just being conservative, expecting things to go a little bit wrong or a little bit differently than you planned, then if they go very differently, having those those alternative plans and not just one but two or three.

Erika (14:48)
Yeah, yeah, totally. Would you mind kind of walking through that a little bit? Like, can you just kind of give us an example of, you know, what those alternative plans are since, you you guys are what I’m going to say are the experts on avoiding any risk because you carefully plan things out.

James Doren (15:05)
Yeah, yeah, absolutely. So I’ll give you the most recent example for a deal that we were analyzing.

submitted an offer on actually so we weren’t sure it was was listed for about 300,000 we weren’t sure of the zoning so we were trying to confirm with the town before we submitted an offer but the deadline was coming up if we were going to be able to add a unit on there or not so we chose to run all of our numbers without being able to add that unit

And if we are able to, great. If it works still without it, then it’s worth submitting an offer. we weren’t sure, we found out a little bit later that it was in a zone A flood zone. we had to add a significant amount to our insurance costs each month. We were playing around with different…

different lenders from the banks, what were we gonna be able to land a rate at, know, 15 days from now exactly we weren’t sure. So we ran the numbers with the absolute highest option that was out there. We had a couple of private lenders that were kind of fighting to get in on the deal and they were kind of competing for rates. We ran it assuming we were gonna pay the highest amount to them. So it doesn’t leave a lot of room for

finding a lot of deals, Like I mentioned, I feel like I keep coming back to that, but it does make sure that in the worst case scenario, you’re still coming out on top. And that’s just one example of how to run those numbers and how to look at it. And you really have to make a conscious effort to take the emotional aspect out of it because there’s part of you that’s like, well, I can make this work if just a few things go right. And I always try to assume that almost everything is going to go a little bit wrong.

Erika (16:40)
Yeah, yeah, that makes so much sense. James, thanks so much for sharing your insights and your journey. And it’s exciting to see you wanting to build your business the right way.

James Doren (16:50)
Yeah, I appreciate that. We’re having a great time doing it. We’re still learning along the way.

Erika (16:54)
Awesome. And for our listeners who want to connect with you or learn more, James, what’s the best way for them to reach you?

James Doren (17:01)
Yeah, we have our website, riseup.capital. It’s got all of our information on there. There’s a form on there you can fill out that would get us your information. We also just started our social media journey. Admittedly, it’s not very robust at the moment, but invest with Rise Up is our ⁓ Instagram hit.

Erika (17:19)
So, well, thanks so much for being on the show, James.

James Doren (17:21)
Yeah, thanks for having me. It’s been a pleasure.

Erika (17:24)
everyone tuning in. If you got value from this episode, make sure you’re subscribed to the Real Estate Pro Show. We’ve got more conversations like this one with operators like James who are out there building fantastic real estate businesses. Check out RiseUp.Capital to learn more and we’ll see you on the next episode.

James Doren (17:42)
Thanks Erika.