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Show Summary
In this episode of the Real Estate Pros podcast, host Micah Johnson interviews Hugi C, a successful real estate investor who shares his journey from wanting a home to becoming a multifaceted investor. Hugi discusses the importance of mentorship, learning from mistakes, and empowering W-2 earners to invest in real estate. He emphasizes the significance of mindset and personal development in navigating the challenges of the real estate market. The conversation also touches on the evolving nature of the American dream and the various avenues within real estate investment.
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Investor Fuel Show Transcript:
Hugueth Contreras (00:00)
my second investment that I purchased cash, I paid one, I think it was 128 for it. I could have financed that and split it into four,deals and my net worth at that time, I could have split it into a million dollar portfolio just with that $128,000, right? Instead, I did it in one deal and like it was just looking back, I mean, I’m glad I made that mistake, but I could have really accelerated my journey. so having someone to mentor you and give you their mistakes and outline things for you really just
cuts time, ⁓ so you’re collapsing time, you’re saving a lot of mistakes, money, time, right? Which time really has, you you learn over time that it’s your most valuable asset that you have. You can never get it back. Money, you can find ways of bringing it back and generating income, but your time is so valuable and we don’t know what age we’re gonna be here.
Micah Johnson (02:30)
Welcome to the Real Estate Pros podcast. I’m your host, Micah Johnson. And today, I am joined by Hugi who’s been making serious moves in the real estate space. Hugi, glad to have you.Hugueth Contreras (02:39)
Thank you. Thank you so much for having me, Micah.Micah Johnson (02:42)
I’m excited for you to be here. I think our listeners are gonna take something away from really how you’ve approached real estate in general. So what I’d love to do is dive in and hear your story on how you got to real estate and what all you’ve used it for.Hugueth Contreras (02:54)
Thank you. ⁓ So I ended up really like my story’s not very unique or special in the sense that my first goal was to live in a house, right? I grew up in an apartment always with my mom and sister and grandmother. And so I just wanted the idea of being in a home, having a garden or backyard and not having to take an elevator, right? Something that simple. So I, ⁓went to college, I got my doctorate degree, I had a few jobs, and I started saving a lot of money with the goal to pay off my student loans and then buy my first home, which was eventually my first investment down the road. But I went the traditional route, I just got an FHA, 3.5 % down, and that was it. That was really the start of my journey. I didn’t house hack, I didn’t do anything special.
Micah Johnson (03:45)
And so what led you to the next one then? So you grew up in that kind of house that I want my own house. You were able to do that. And then what kind of got that bug go for you to, okay, I want to do more of this. I want to see what this has to offer.Hugueth Contreras (03:56)
Yeah, so I started reading a lot. ⁓ My first book was Robert Kiyosaki’s. I think a lot of people start there, The ⁓ Rich Dad Poor Dad. And I was motivated and I was like, all right, well, back then, back in 2012, the rates were super low, prices were really low. And so I picked up on the idea. like, all right, well, I can get financing through my income. I just have to pay 20 % down. And so I did that.And I made the first mistake of buying it cash, the second deal that I got into. And I didn’t know better at the time. And so I just started doing that successfully for like three, four deals. And then I was tapping out. like, all right, I’m working way too much. And I had to start getting creative because I’m like, I don’t want to keep working six, seven days a week just to save 20%. And that’s all I knew back then. And so it got me, you know, the wheels turning in the sense of
You know, I was making, you know, five, six, maybe up to 700 max in the properties passively that I was ⁓ purchasing. And so I was like, all right, if I continue to do this, I can eventually leave my job. But then I got stuck, right? Because I was burnt out. So, ⁓ yeah, that led me to other creative financing. And then eventually I got a mentorship and, you know, things went. I collapsed time once I did that.
Micah Johnson (05:19)
That is not an uncommon story or not uncommon. Yeah, I said that right story either. How much just working with somebody who knows can help because you don’t even know what you don’t know when you get into this business.Hugueth Contreras (05:26)
my god.Exactly. And I was so stubborn starting on like, especially and I can imagine if I were to start now how it can get even more confusing because there’s so many different strategies. Everybody’s saying one way is the wrong way. The other is the right way. And, know, but you have success stories and each strategy in real estate. That’s the beauty of it. So, ⁓ you know, I always try to encourage people that you have to look at your scenario, your risk tolerance. You know, there’s a lot of things that you have to look at. The idea is just to get started.
Micah Johnson (06:45)
It’s that what is it you’re trying to do? So what methods of real estate have you used to help you be successful? What all have you done?Hugueth Contreras (06:53)
I’ve doubled in a little bit of everything. My portfolio though that led me to the success was the buying holds. But really I’ve done ⁓ flips, I’ve been a funding partner, I’ve done wholesale, I’ve done some short term Airbnb. I’ve done a little bit of everything. Most recently I got into commercial real estate. And so that’s been a whole different journey in itself because it’s different. It’s more like a business once you get into commercial real estate.Their financing part is totally, it’s night and day than residential. So it’s been fun learning that route.
Micah Johnson (07:28)
Gotcha. Yeah, it is. It’s funny how people graduate. They get started in single family. They mess with those. They make some money and they realize, oh, this bigger deal could pay off for more. But I agree with what you said just a second ago where in our current social media world, there’s so many gurus about everything and each one’s saying, this is the right way. This is the right way. real estate is such a big term. It’s a huge umbrella. And one of the things I enjoy about it is if you will just get started in it, pick one thing, get started.Hugueth Contreras (07:36)
Uh-huh.Mm-hmm. Right.
Micah Johnson (07:56)
and be open. It doesn’t mean that you don’t get to pivot to other things as you grow because that’s when the door really start to open is as you keep exploring. So let me ask this, was there a moment where things got real for you, where a deal went sideways or a time where you had to pivot fast?Hugueth Contreras (08:00)
right.Mm-hmm.
Oh yeah, actually it was a deal that I was a funding partner in and I can’t remember the year, but I want to say it was like 2017, 2018. And, you know, I went against my traditional gut, you know, which it was an opportunity and it was presented very nicely and it was a three bedroom. was, back then I was only doing single families or the small residential multifamily.
And it was a three ones and I never do three ones at bare minimum. It’s either one one or if it’s a two bedroom, I try to go for a two bath, but it was a three one home in sunrise Florida. ⁓ we flipped, we tried flipping it and never sold it held on the market. We decided to rent it for a year. And that deal just went sour really quick. mean, by the end of it, we had to.
vacate ⁓ the tenant, we had to put them up in a hotel for like a week. And ⁓ we ended up selling and we took a loss. ⁓ And so it was like a learning experience for me. And I always tell people, every real estate investor has lost at some point in their journey, right? And the idea is that you learn from it and move on and do better next time. And so I didn’t get discouraged to do it, but I did learn a lot in that whole process.
⁓ I’ve still done business with the person because it was the way that they handled the situation and they were very transparent during the process and kept me in the loop. didn’t have to hunt them down and say what happened. And so it was just one of those unfortunate deals that didn’t work out.
Micah Johnson (09:52)
would you say that you learned most from that experience?Hugueth Contreras (09:55)
Trusting my gut. I knew off the bat and it was just one of those, know, like as you become an investor, you start learning your style, right? Again, there’s not one right way or whatever, but you know your style, whether it’s when you flip, you know the colors that you’re going with, whatever. ⁓ And so it was just a criteria for me, ⁓ you know, and…Micah Johnson (09:57)
Mmm.Hugueth Contreras (10:17)
I just got sold the vision and even though it was something like your buy box kind of, I kind of went against what I traditionally invest in. ⁓ you know, it was just, I guess, a muscle that I had to keep exercising to learn from. And so that was one. And then the other is to do better due diligence. ⁓ Because I could have done my own underwriting and, I kind of just briefly.overlooked it. It was an investor that’s far more experienced at that time than I was.
Micah Johnson (10:46)
So just kind of assuming they were gonna take care of it and it turned around again.Hugueth Contreras (10:49)
Right.Right.
Micah Johnson (11:25)
I think what’s really important you said there is you mentioned the term buy box. And if you’re listening and haven’t heard that term before, I think it’s very useful in this industry, especially just to create yourself some guidelines. Because one thing you always hear about saying yes to an entrepreneurship, be open, be open, be open. At some point you do have to learn how to say no, because opportunities start coming in from everywhere. And if you really don’t know what you’re trying to do, you’ll end up doing a bunch of different things thatHugueth Contreras (11:45)
Right.Okay.
Micah Johnson (11:55)
may ormost likely may not work out for you.
Hugueth Contreras (11:57)
Very true. And real estate is one of those things that you can have a plan A and plan B, but sometimes none of them work, right? And so you have to get ultra creative at that point. And sometimes it means taking a loss.Micah Johnson (12:10)
It it does. just learning, I heard a quote earlier, the lessons we remember the most are the ones we pay for in cash. yeah, those ones tend to stick. It’s like, it’s like you went to college, you wouldn’t got a PhD, you went and paid for that information. Same kind of concept, I guess, just in a little more painful way of learning, most likely.Hugueth Contreras (12:17)
Ooh, I love that. So true.Yeah.
Right,
right, exactly.
Micah Johnson (12:34)
So looking ahead, what are you most focused on solving or scaling next?Hugueth Contreras (12:38)
So I’m very passionate about getting people to start investing, specifically the W-2 earners, because I worked the hospital setting for 12 years. And around high income earners, you have nurses, doctors, therapists. ⁓ And so we are not really taught how to invest. Barely even save, but once you save, that money needs to grow. Just with inflation in general, your money is at a loss every year.That idea of just saving is really outdated, right? And so I really like to get people to learn about even how to get their 401ks invested in real estate. It’s an avenue that they can take. And a lot of people don’t know about it. And so it’s like really inspiring people to take action now and kind of make it urgent, right? Because I think we got into the misconception that we want that instant gratification, right? And
Real estate can be that, There’s, you if you’re on short cash, whatever, you can do arbitrage, right? Airbnb, that’s still possible to do. ⁓ But longer term, you know, like your retirement, if you’re relying on your retirement, especially if you’re younger, there’s not gonna be any social security. Pensions have far been out of the picture for some time. And so it’s really ⁓ educating people on how real estate
can really be beneficial to you as a W-2 earner with tax benefits, especially if you’re a single person paying 20, 30 % tax bracket, how you can leverage real estate to have these deductions, especially now with this beautiful bill acts that we’re bringing back bonus, 100 % bonus depreciation, right? And other things that are very favorable if you’re a real estate investor, you can learn about how to become a real estate professional.
⁓ And so just giving people the opportunity to set themselves up for success through the vehicle of real estate.
Micah Johnson (14:36)
What’s been that lesson for you that made people go into action? Has there been one particular thing that you’ve noticed when you’re talking or working with somebody where it just clicks for them and they start taking those moves?Hugueth Contreras (14:47)
Yeah, so I did one-to-one coaching last year and I had a few high-income earners, know, in the six, six figure income and they were just shocked to see how much they’re paying in taxes. think people were just getting paid on autopilot working and don’t ever take a chance to look at what they’re for, what they have in 401k. I would have them like, take a look at their finances, how much they’re spending each month. A lot of people.didn’t even know the amount of subscriptions that they’re on. People don’t take the time to look at their financial health. so once people took a look, a deep dive of their finances and their paychecks, it was like a big red flashing light, like, OK, I need to do something. And so they took action. And then if you multiply that, if they’ve been in the workforce for 10, 20 years,
and still have another 20 years, like what that could look like if they were to start taking action now. And so I think people start to realize, okay, time is very valuable and I really need to start now.
Micah Johnson (16:29)
And I think you said this part earlier where the American dream’s shifting a little bit. You know, we were, I turned 40 a couple of days ago. I remember being taught, you know, grow up, get an education, get a job, work hard, then retire. And it’s just kind of this, what seemed like this very predictable path that you would go on. And I can say my journey through life has been anything but that predictable path. And our generation is one whereHugueth Contreras (16:54)
Okay.Micah Johnson (16:56)
having to look and see, what does it look like for us? What is different about our world that make our dreams come true? And I definitely believe real estate is one of those things that can do that. So you mentioned mentorship. How big of a difference has that made for you in building relationships and growing your network in this industry?Hugueth Contreras (16:59)
Mm-hmm.I am a full stand on mentorships. I wasn’t always there. I always felt like it’s a waste of money and there’s so many resources out there for you to self, you know, educate yourself. And it is true, but that can take you years and a lot of mistakes. if I can, like going back to what I mentioned earlier, like my first, well,
my second investment that I purchased cash, I paid one, I think it was 128 for it. I could have financed that and split it into four,
deals and my net worth at that time, I could have split it into a million dollar portfolio just with that $128,000, right? Instead, I did it in one deal and like it was just looking back, I mean, I’m glad I made that mistake, but I could have really accelerated my journey. so having someone to mentor you and give you their mistakes and outline things for you really just
cuts time, ⁓ so you’re collapsing time, you’re saving a lot of mistakes, money, time, right? Which time really has, you you learn over time that it’s your most valuable asset that you have. You can never get it back. Money, you can find ways of bringing it back and generating income, but your time is so valuable and we don’t know what age we’re gonna be here.
We wanna say we’re gonna grow old, but you know, we don’t know. And so.
Micah Johnson (18:37)
Yeah. Everybodygets to be young, not everybody gets to be old. We don’t know that point. It’s so true. I fully believe real estate is a relationship business because it’s such a big term and there’s so many little nuances like you were talking about where just one little thing that seems obvious now, if I would have just done this then I could have had a million dollar portfolio off the 128 grand that I spent.
Hugueth Contreras (18:40)
Exactly.Right.
Mm-hmm.
Micah Johnson (19:04)
I like to say this too, we all know much how much money we’re saving, but we never know how much money we’re losing when we don’t invest in those kinds of opportunities for someone to teach us because that’s what I’ve seen time and time again is you do cut off time, you do cut off mistakes and those mistakes, they are very valuable. They keep tons of money in your pocket by just not making.Hugueth Contreras (19:10)
Mmm.man.
Yeah, and I love that you said that because ⁓ one of the students that I just helped now, ⁓ she’s house hacking. And so something as simple as that, if she didn’t have that mentorship to guide her, she was looking at double, you know, $800,000 proper single families, you know, and then now she cut back her mortgage. She’s barely paying, you know, she’s paying much less. And so again,
There’s so many ways that I can go back, like even me being single back then, I could have house hacked too. And so between my house hacking and that second deal, I could have had eight units in two years, you know? And so again, only mentorship would have allowed me to do that, but, and it’s okay. I’m not trying to, regret, but it’s just, you know, ⁓ another reason why mentorship, I strongly believe in them, right? They’re a great way for you to.
fast forward and into success.
Micah Johnson (20:21)
And you mentioned you were doing some coaching. And one thing I’ve noticed about people who have invested in mentors, they do get so much value out of it. They typically become them. It kind of has a natural progression of really it’s the abundance mindset going forward. That’s something I like about real estate too, is when you start working with the higher level people in it, you get out of those free sources, you do start to run into people where they are willing to show you. If you’re willing to do what it takes to get through the door, then you get accessHugueth Contreras (20:29)
Yeah.Mm-hmm.
right.
Micah Johnson (20:47)
to all the information. Because one thing, there is so much free info out there, but you can’t ask that free info questions. You can rewind the video and you can watch it again, but those really particular questions that you start to run into in the middle of a deal, being able to just pick up the phone and call somebody, it’s the difference of getting a deal or not. I mean, it’s the difference of being successful or not.Hugueth Contreras (20:54)
no, to have that person.Thank
100%.
I agree. I agree that alone. And honestly, when you look at it, the return on investment, when you pay for mentorship, you get it immediately, right? ⁓ For many reasons, especially what you said, the mindset, right? I heard someone tell, I wish I remembered who said it, but it stuck to me till this day. And they say that the biggest real estate is your mind. and I, and I thought of it, I’m like, my God, I love that. It’s so true.
It all starts in your mindset, right? It’s like kind of re-changing the way that we see things, right? And seeing the opportunity of real estate rather than like the burden or like analysis process, like all these things that we get into, but really it’s just a mindset thing.
Micah Johnson (21:51)
And it’s funny how much you run into personal development, especially in the real estate and entrepreneurship space. You realize that if I’m not getting my mind stronger, I’m not getting anywhere. Because it’s not that our problems or challenges don’t stop. They only get bigger. They’re only worth more money. And if your mind is not able to handle that and adjust for that, that’s when you start to lose. And that’s when you typically see folks make their big mistakes.Hugueth Contreras (21:56)
Mm-hmm.Mmm.
yeah.
You’re right.
Micah Johnson (22:17)
is theygot out of that space. They got ahead of themselves in a sense where, oh shoot, I’m here now and I didn’t mean to get here. And that there’s truly nothing like it. And it reverberates through your whole life. That’s what I’ve enjoyed about it is it’s not just real estate lessons you’re learning when you work with them. You’re learning all of life lessons. You’ll see so many things that cross into being a parent, being a good friend, being a good spouse, whatever it is where it’s just that.
Hugueth Contreras (22:20)
Mmm.Thanks.
Micah Johnson (22:42)
how you handle the problem in front of you, how you handle the communication, how you, all of it, because you can’t just freak out. You can’t just turn off. There’s a quote is from, actually it’s from the last Hunger Games. One of the guys says this, and I don’t know why I stuck with him, but he looked at one of the characters and he said, it’s 10 times easier to keep yourself together now when it’s hard than it is to put yourself back together if you fall apart. And I was just like, wow, that’s…Hugueth Contreras (22:45)
Hmm.Oh no. Oh no.
Ooh, they love that.
I’m gonna have to remember that.
Micah Johnson (23:09)
powerfulbecause it’s in that moment of hard work, feels so easy just to let it go, like just stop or tap out or whatever it is. And we all go through that in our real estate journey, but having that mental fortitude, say, okay, deep breath. I don’t have to solve the whole problem today, just this little piece and then solve that little piece and that little piece. then like you were saying, our time’s coming. I view time as it adds up. Like if you get to enjoy some,
Hugueth Contreras (23:15)
Hmm.We
Right.
Mm-hmm.
Micah Johnson (23:34)
It’s adding up. And if you can keep stacking it in a way where the lessons compound, that’s where as we get older into our upper years, if you make it, it’s where, how’s my dad say it’s where everything you learn starts to become wisdom. You get to use it in life and you start to see, wow, that’s how people made it where they made it. Look how it’s not that they were super geniuses. They just kept learning. They didn’t stop.Hugueth Contreras (23:39)
Bye.right.
Right.
Right. And I love that you say that because it’s so true. Like my story is not anything special. I didn’t come from money. You know, I didn’t have like the leg up or like right off the bat. Like I worked my way through. And so if I can do it, anybody can do it. Right. It’s it’s really just a mental fortitude to just challenge yourself and commit. Right. When I first started, I was in focus on like, ⁓ you know, just two, three hundred dollars for my first home.
No, I’m like, all right, well, I’ll do it with this one and then we’ll see. Like my next one may be more. And so I just one deal at a time. And I didn’t overwhelm myself with like, okay, I have to be able to retire in three years or I didn’t set myself up like that. just kind of went at my own pace and it worked out. Right? Like I never knew I’d be mentoring and getting into commercial. It’s like you start exploring all these different avenues down the road and you.
evolved throughout the process.
Micah Johnson (24:53)
Again, another reason I love real estate is if you do get a little bit bored with one of the avenues you’re on, adjust. It’s huge. You can go find that space that you really enjoy where I would say it pays your emotional paycheck too. Cause that’s what keeps us going is it’s fun to make a lot of money, but you came from a world where people make a ton of money and are still burnout. So it’s like, it’s not just the money that does it. Like if what you’re doing isn’t paying you emotionally as well, you won’t keep going.Hugueth Contreras (24:59)
Mm-hmm. Right. ⁓Mm. Yes.
yeah.
Micah Johnson (25:22)
and to be in an industry that lets you adjust or that moves with your life. Because we all have different things. I think you mentioned before, you just had a brand new child. So we have a new baby that’s in the world and you still have all these options on, okay, how do I want to adjust my life right now so I have time to be right here? And real estate is one of the things that lets you do that.Hugueth Contreras (25:30)
Mm-hmm.Mmm.
Absolutely. And I think for my background being a healthcare professional and during COVID, I think that really, really changed the healthcare world in general. And a lot of people got burnt out and early on when COVID, we had no idea what it was and we were still trying to figure it out. A lot of people left the profession and so it’s like another idea. Like if you start now,
You can piggyback off of this and you can make it a business. again, it’s very vast. Real estate is a beautiful career to get into. it can be as quick as a wholesale deal, right? ⁓ If you don’t have a lot of money to start with too, that’s another option. And it can get very complicated. If you want something a little bit more longer term, you can get into commercial.
I know people eventually get into the lending space after a while. They become private lenders, they become the banks. So it’s like you steal. Right. Yeah.
Micah Johnson (26:43)
It’s where you graduateto. What I see is it’s where it becomes more passive. A lot of folks get into real estate to be passive income, but in the early years, it is not passive at all. It is far from it. I heard somebody say the other day, real estate is a get rich slow scheme, and it’s almost guaranteed to work if you’re willing to do the work. And I was like, that’s a fascinating way to think about it. Yeah, people have their home runs and those things, but that true generational wealth,
Hugueth Contreras (26:56)
Active.Mm-hmm.
Micah Johnson (27:12)
That is a dedication to the industry over a long period of time and constantly learning and unlearning.Hugueth Contreras (27:13)
yeah.Mm-hmm, right.
And the market, like I said, it’s constantly shifting too. And so being able to adjust and pivot when needed. ⁓ And again, you know, a lot of times it’s a mindset. Like people are so hesitant. They’re saying that the rates are so high, you know, and it’s like, all right, well, back in the late 90s and 2000s, was higher. was actually even in the 90s. My mom, remember when she purchased her condo, she paid, I think it was 8%.
She had a variable interest back then. And so it just kind of, I think we got so lucky for so many years in the low fours and fives that people forgot that it’s still relatively low being in the six.
Micah Johnson (28:01)
Iwas on, I was doing a call the other day with a gentleman. He’s been investing for like 45 years and he was like, yeah, I remember when they were 15%. So people complaining right now, it’s like, it’s really just, we grew up kind of in an era where it was lower and we just naturally experienced this lower interest. And now it comes out and it’s like, well, why is it so high? And other people are like, it ain’t that high. Compared to what I’ve been through for this, it’s not that high. The houses might be a little more expensive, but the money.
Hugueth Contreras (28:08)
Yeah, in the 80s.Right. We got lucky.
No, it’s not.
Right.
Micah Johnson (28:28)
The interest rate ain’t that high. OK.Hugueth Contreras (28:30)
No, and to be honest, if you get into fix and flips and you’re doing hard money lend, you’re at the 12%. So again, it’s all perspective. I was one of those early on, like I said, that I was like, I’m not going to pay 12%, you know, what I, and then it’s like what I tell people, real estate is a math game. Like it’s a numbers game. If you’re underwriting calls,for still having profits at 12%, then do it. It’s a no-brainer. These people are willing to loan you. You don’t have to come out of pocket. You it’s like you learn to use other people’s money to scale. so, yeah, it’s again, it winds down back to the mindset.
Micah Johnson (29:04)
and being able to willing to take that risk. Cause there’s, there’s just things that come along with it. And the ones I see that are super successful, they’re okay with risk. They can stomach that well, right? And if you’re someone who can do that, this is an excellent industry to be in. Okay, before we wrap up, if someone wanted to reach out and connect with you, maybe collaborate to learn more about what you’re doing, what is the best way for them to reach you?Hugueth Contreras (29:12)
right.Through Instagram, my handle is ⁓ H-u-g-i-C, at Hugi C or Facebook too. ⁓ Hugi Cee it’s H-u-g-i, and then C-e-e. ⁓ Both of those are good options.
Micah Johnson (29:40)
We’ll make sure that those are in the description on the show so that you all have easy access to that. Hugi I appreciate your time, your story and perspective. Thanks for being with me today. I think we need more people in space. Yeah, like you, that’s doing it. Like getting out there and building a real business. So for those of you tuning in, if you enjoyed today’s episode, please like it, subscribe to our podcast. We have more operators coming up just like Hugi who are out there building real businesses. Thanks for joining us. We’ll see you on the next show.Hugueth Contreras (29:45)
Awesome. you for having me.awesome
Thank you. Bye bye.
