How Alexander Gilberti Transforms Distressed Real Estate Into Investor Wealth

Alexander Gilberti (00:00)
I would say is while what makes us strong can also be a little bit of, it’s not necessarily something that slows us down, but I think our biggest challenge, it can be a challenge, and I think our biggest challenge is keeping everybody focused, right? Because we have a long journey, right?

For us, because everybody is so specialized, I’m focused as the principal. I’m focused on a lot of everything, but my primary focus lies within the actual raising of the capital, investor communications. Doing all of that is where my primary focus lies. Now we have three other general partners. We have…

five other people that are on the independent board, right? So how do we keep everybody focused? Because everybody has a job. In that journey of raising capital, my compliance officer, obviously because he deals with compliance, he’s like my right-hand man.

Quentin (02:31)
everyone. Welcome to the Real Estate Pros podcast. I am your host Q Edmonds and I’m excited. I got Savai here. This is going to be a great conversation. When I tell you this guy, he’s on his P’s and Q’s, I’m telling you. He’s on his P’s and Q’s. He got me making sure I come correct. And so I’m excited, y’all. I’m excited to have this guy here. I think you’re going to find a wealth of knowledge from this guy. He knows what he’s doing. He knows his business.

He knows what he wants to do. And so I’m just excited for you guys to get to see things from his lens. And so please y’all help me bring to the stage Mr. Alexander Gilberti. Oh man, I had it perfectly. And now I’m stumbling over it. Oh, help me out bro. I’m so sorry man. Fuck Gilberti. I’m so sorry. I had it right? Oh man. I don’t know because it’s getting late. I’m on Easter standard time. So I don’t know because it’s getting later in the day.

Alexander Gilberti (03:16)
Gilberti, Gilberti, you had it, you had it, you had it the first time.

Quentin (03:27)
I don’t know, but my tongue and my brain would not work together. I’m sorry, man. I love putting respect on people’s names, so I’m sorry, man. How you doing today,

Alexander Gilberti (03:35)
I’m doing awesome. I appreciate you having me on, Q.

Quentin (03:37)
Absolutely. No, man. I’m glad to have you here. Like I said, I know our audience is going to get just some great value from your lens and from your perspective. And so, man, listen, I want to dive right in. You know, I want you to bring people into your world, people that may not be familiar with you. I want you to give them a little bit about your background. I want you to tell them what’s your main focus these days. And if you don’t mind, tell us what markets you’re operating in as well.

Alexander Gilberti (04:02)
Yeah, absolutely. Yeah. So, so for those who don’t know me, I’m Alex Gilberti, founder and principal of Gilberti Group. My background is a little bit different. I spent over a decade, I think, in enterprise sales, selling IT solutions, SaaS products, cybersecurity. But really, real estate has always been a part of my life, been a part of my DNA. My grandfather started his own architecture firm.

I grew up around real estate my entire life and that entrepreneurial drive, I feel you Q, ⁓ that entrepreneurial drive. And eventually I started investing that money that I made in tech sales

Quentin (04:37)
Yeah.

Alexander Gilberti (05:34)
into real estate and had some absolutely awesome wins. So that’s really when I realized I wanted to build something bigger, bigger than myself, not just for myself.

but for the people who wanted access to the same kind of opportunities and buying and selling real estate, making money. But I don’t wanna necessarily manage it, find the deal, do the underwriting. We take that off your hands. And that’s really kind of our perspective is building something that for people that want those opportunities, but don’t have the time or don’t have necessarily the means or understanding.

So that’s kind of a little bit about what we’re doing. Now, at Gilberti Group, we focus on multifamily realistic. So we’re doing value add opportunistic, we’re doing distressed assets in really high growth markets. We focus on South Florida and Central Ohio, but we do a little bit of work in Central Florida as well as Northeast Ohio. So we’re not, Q, we’ve talked about this, right?

We’re not chasing shiny objects. We’re looking for properties that can be improved, repositioned, re-imagined. And in doing that, we create both returns for our investors and better communities for the people who live.

Quentin (06:49)
I love it, man. I love it. You know what you’re going after. You know what you want. You know what you’re going after. And I love that approach. I love that perspective. And I guess that brings me to this question because I know it’s not always easy, right? You say you’re not going after the shiny object. Sometimes you can get tempted, but you guys are staying focused. So what has been the key to keeping that machine running smoothly at Alexander?

Alexander Gilberti (07:13)
Ooh, I’ll tell you straight up, the firm is only as good as the people who back it and the people who run it, right? So I built Gilberty Group with the belief that our strength lies in the quality of the people that work with me. So I surrounded myself with partners who are experts in what I’m not, right? So like I mentioned earlier, legal compliance, ⁓ when we were talking, right? Legal compliance, operations, the actual management of the property, development.

We I brought a team of institutional individuals and other entrepreneurs to the table to help with the things that I’m not an expert in. Right. Like I did very well for myself but it’s different when you’re in a much larger scale when you’re doing this with other people like we need to make sure that we have our eyes dotted our T’s crossed. So that’s really what gives me the confidence when we take on projects. It’s not just me.

It’s a group of people with different skill sets all pulling in the same direction.

Quentin (08:16)
I love it, man. You’re talking about relationships and I’m gonna come back to relationships because I want to ask you this before we get there, but I love your mindset. I love you talking about bringing in the team, everybody. And you said this, I just said it just now, even before, bringing in people working towards their strengths, right? Making sure that everybody’s in position to do their strength. But I’m gonna come back to that because I want to ask you this, right? There’s moments when things get real, you know.

Alexander Gilberti (08:34)
Correct.

Quentin (08:39)
There’s moments when sometimes they’ll go sideways, moments where times you gotta pivot fast. And I just wanna know, man, if you wouldn’t mind sharing one of those stories. I talk to people all the time. We can talk about the success, but also we gotta talk about the moments that led to this success, right? And so sometimes we had to fail for it, right? And so, I would love if, just to get your perspective on having to pivot. You understand what I mean?

Alexander Gilberti (08:54)
⁓ man.

So the biggest thing for us, what

I would say is while what makes us strong can also be a little bit of, it’s not necessarily something that slows us down, but I think our biggest challenge, it can be a challenge, and I think our biggest challenge is keeping everybody focused, right? Because we have a long journey, right?

For us, because everybody is so specialized, I’m focused as the principal. I’m focused on a lot of everything, but my primary focus lies within the actual raising of the capital, investor communications. Doing all of that is where my primary focus lies. Now we have three other general partners. We have…

five other people that are on the independent board, right? So how do we keep everybody focused? Because everybody has a job. In that journey of raising capital, my compliance officer, obviously because he deals with compliance, he’s like my right-hand man.

along that journey with me. But now, what do I do with the, what happens with the asset manager, right? What happens with my underwriting team?

Quentin (10:46)
Yeah.

Alexander Gilberti (10:48)
those people, how do we keep them focused? Because I want them to be a part of the journey. And I think right now, because we’ve hand selected a very, very strong group of individuals, it’s just keeping their eye on the prize, keeping them focused, keep them believing in the dream and what we’re going to accomplish. Because once we get there, once we get past this next part, believe me, you guys are gonna be all hands on deck. ⁓

This is gonna be your show. While I’m gonna be a part of it, I’m gonna be there to assist you and help remove blockers and do all of those things. It’s gonna be like, you guys are gonna be all hands on deck. And I think, cause they’re off, hands off deck right now, they’re just like, man, how do I, how do I stay focused? So I think right now that’s probably our biggest challenge as an organization is just keeping everybody focused, on the prize.

Quentin (11:39)
Yeah, man, listen, man, you better let them know this to quiet before the storm. Let them know that y’all will be, y’all don’t get too comfortable, absolutely. Cause it’s coming and when it start coming, baby, we will be moving fast. so, man, I hear that. And man, honestly, thank you for your honesty. Thank you for sharing that perspective. Again, I always tell people, I like to hear from other people’s lens. And so I like to ask that question because I get,

Alexander Gilberti (11:43)
That’s right. That’s right. Hey, don’t get too comfortable, right? Because…

That’s right.

Quentin (12:06)
so many different answers when it comes to that question. And so I appreciate your lens, being honest with your group, being honest with us, like, hey, you know, I’m keeping it motivated, but trust and believe is coming. And so I really appreciate that from your lens, man. I really do. ⁓ Yeah, man. And so let’s go here. What are you most focused on solving or scaling next? Like, what’s the next real goal?

Alexander Gilberti (12:19)
Of

At the end of the day, our goal is pretty simple. It’s take overlooked properties and turn them something valuable for not just our investors, for our communities. The places that I invest in are close to home. I grew up in Ohio. I’m from Cleveland. I lived in South Florida. So that is a… ⁓

Quentin (12:39)
Mmm.

Alexander Gilberti (12:52)
part of our core is not just creating value for investors, but for the communities as well. I started this with my own money. Now I’m gonna open the door for others to join us, right? So we’re still early, which means people who come in now have a chance to grow with us as a firm. We have some very interesting, as an emerging fund, we have some very interesting components that you don’t typically see.

Right? So one of the things that we’re doing is, yeah, there’s a 2 % management fee. There’s a five year horizon, and there’s a 2 % management attached to that five year horizon. What we’re doing is anything that doesn’t go used with that management fee gets sent back to our investors. We’re not taking salaries. The only way we make money is if our investors make money. So from that standpoint, we’re literally saying, hey guys, there’s no other way.

unless you make money. like, believe in us, it’s a sign of good faith that we’re gonna do the right things to help you get your money and multiply that money. So that’s kind of, I think those are some of the things that excite me, right? Like the end of the day, the goal is to help people make money, improve the communities that we’re investing in,

Quentin (13:58)
Yeah.

Alexander Gilberti (14:45)
and make sure that they know that we’re the real deal. There’s gonna be no other firm that’s gonna take a 2 % management fee.

And then whatever goes unused from an operational standpoint, they’re going to send it back. Nobody else is doing so.

Quentin (14:57)
Yeah, man, that’s holding yourself to the fire. Because I mean, we ended up making money, right? But it’s like, what’s not used, I’m going to make sure it gets back to you. That’s putting yourself in a position like, we got to deliver. It’s holding yourself accountable, right?

Alexander Gilberti (15:06)
That’s right.

There’s

nothing else but winning. If we don’t win, it’s a loss, right? So we need to win because otherwise, nothing goes in our pockets, right? So we wanna make sure people know that it’s a sign of good faith. We wanna take care of people, we wanna take care of our communities, so.

Quentin (15:17)
Come on.

Yeah. Yeah.

Yeah.

Yeah, now that’s big man. And it’s built, you build and trust into your strategy. it’s like, within our strategic system, the way we do things, the way we operate, we’re gonna force y’all to trust us. We’re gonna put out money where our mouth is in a sense, you know? And so, man, I love that. And y’all making big moves and I know you know this, the next move can either compound things or create total chaos depending on how you play it. And so what I like to say, but it sounds like you got.

Alexander Gilberti (15:41)
Right. That’s right.

I think I know where you’re going

with this. Sorry, sorry,

Quentin (15:57)
Oh, come on, man. You don’t know I’m going with this. See, there you go. you, you, I’m the point guard. You don’t, don’t try, you just go to your spot. Go to your spot, Ali. Nah, nah. But no, but you

know it, man. You, you, you see it. And I told you I was going to swing back around to these relationships, man, because I can hear it in your strategy and where you position yourself. It sounds like to me you value relationships, right? And so, you know, we have people that are listening that are even early in their journey. They’re looking to level up.

Alexander Gilberti (16:21)
yeah.

Quentin (16:26)
And I think they’ll benefit from hearing this when it comes to building relationships and growing your network, what has made the biggest difference for you?

Alexander Gilberti (16:35)
Wow, all right, you did take it a little bit different than what I was gonna, I was thinking you were gonna go. So yeah, there you go. Look, I think from a relation, I think that is the number one thing in anything you do in life. I don’t think it has to do with real estate. It doesn’t have to do with sales, any of that. And look, I come from a sales background. Building trust, building rapport.

Quentin (16:41)
Told you I’m the point guard, baby. I told you I’m the point guard, baby.

Alexander Gilberti (17:01)
with your customers, I think that should be your number one goal in life, whatever your business is, is to make sure that you create and maintain those relationships from a long-term perspective. Because that’s part of the way I was able to access certain deals were based off the relationships that I’ve created over time. Specific people that I’ve worked with and then become close friends with.

I got access to off market deals down in South Florida during COVID. Those are the types of things if you develop and create relationships and take it from a lens, this is me in particular, this is how I approach it. Take it from a lens of, what am I gonna get out of it? Don’t do that. Everyone wants it. Hey, what can, instead put it a lens on of,

What can I do for you? What can I offer you? Right? If you take care of people, people want to take care of you. Right? So from that standpoint, I think one, relationships are the number one things. And again, that’s how I built my team. It’s based off of those relationships. I’ve met people over time that are institutional investors. They work for some of the very big real estate investors, investment firms. And based off of those relationships,

I was able to pull them into this journey. And so I think that’s something, and again, it was just a, we’re friends kind of situation. What can I do for you? You’re new to San Francisco. Let me introduce you to these people. And from there, we’ve developed a strong relationship and now they’re part of the journey. They’re a part of Gilberti.

Quentin (18:41)
Yeah. No, man, you said it, and I think I’m going to try to paraphrase what you said. Not just seeking a relationship about what value can you bring me. No. Let me look at it in the lens of what value I can bring you. Right? Because, yeah. Yeah.

Alexander Gilberti (18:55)
That’s, I think you said it more eloquently than I did. So that’s,

but that’s exactly how everyone should be looking at the relationships they build. Like, what can I do for you? How can I help you? And if it’s, hey, just be a good friend, that’s fine, right? Like you’re doing something for them. But like, if you can help connect dots, help with introductions, whatever it may be, that’s building relationships, building rapport, helping build that credibility and trust.

Quentin (19:11)
That’s enough. Yeah?

Alexander Gilberti (19:23)
And over time, I’ll tell you, some of the people that I work with are some of my closest friends now.

Quentin (19:29)
Yeah,

yeah, yeah. I love it, So listen, I like to ask this because I don’t have too many questions left that I want to ask. But I like to take a moment like this and just pause, especially when I’m talking to somebody like you, just to see if there’s something on your mind, particularly, that you want to share. I don’t have no necessary prompt for this, like to get it out of you. But maybe it’s something you’ve been thinking about, maybe an encouraging word, maybe some advice.

you want to give, I just want to set the stage now for you to talk to the people kind of from your heart and from your experience about maybe something that you want to offer that I haven’t said.

Alexander Gilberti (20:04)
Sure, I think there’s a handful of things that I would say. And I’m gonna relate a couple to real estate specifically, and then I’ll relay a few things to entrepreneurship. So, specifically to real estate, I would say there’s a lot of people thinking about interest rates today. That’s probably one of the biggest things that I would…

I would say don’t necessarily focus on. I have a good friend of mine that’s a real estate broker. She always says, the rate, marry the home, marry the house. And that’s because interest rates change. And that’s a philosophy that’s built into the underwriting for Gilberti Group 2. As you go through your own real estate journey, I encourage you to build that into your underwriting model as well. Because guess what?

There’s a lot of people scared right now because interest rates are high. There’s a lot of dry powder on the sideline because interest rates are high. Guess what? If you have the dry powder deployed into the market, because one of the capital events that typically happens when you do real estate transactions, when you do deals, if it’s not the actual selling of the home, it’s the refinancing of the loan that you have. And so that’s always a possibility. As you do the value add,

As you repossession it into the market as a higher end asset, you can always reset that interest rate. So I want to encourage you all, instead of thinking about, the interest rate’s too high, build it into your model so that you can circumvent that and start deploying capital today. Because guess what? Also, when interest rates are high, prices come down. So once the interest rate comes down, prices are start going up.

because people are deploying, there’s gonna be bid wars and all those things. So this is your opportunity to get assets at a discount because interest rates are high. So I’m telling you, and this is something that I did with one of my last multifamily transactions, I did exactly that and it couldn’t have worked out better for me. So that’s one thing I would say, like I encourage you not to think about too much.

And then I’ll tell you from my own journey and I’m in having these conversations with other individuals. I’ve learned that a lot of times people end up, they want to start a business. They want to get into real estate. They want to do all these things. The best form of learning is doing, right? I’m not telling you don’t know anything that you’re doing and just jump into it, but the best form of learning is actually getting out there and doing it.

I’m guilty of it myself. I spent so much time in this analysis paralysis world where I was trying to learn and understand and be an expert. But the best way to become an expert is to get out there, right? Start doing it. So my biggest recommendation for anyone listening is to make sure that you learn as much as you can, get the basics down and get out there and start doing it because I guarantee you the wealth of knowledge that you will create by doing so.

Quentin (22:46)
you

Alexander Gilberti (23:10)
is gonna far supersede what you do spending two years trying to learn everything you can about the industry, the business, whatever it is that you’re getting into. So a little bit from a real estate side and a little bit from just the entrepreneurship world. are my two words of ⁓ encouragement, long words of encouragement.

Quentin (23:31)
Well, listen, man, you understood the assignment. Fantastic words of wisdom, man. Fantastic words of wisdom. So listen, we closing out the show and I need to let you know from here on out, I will be referring to you as Mr. Gilberti. Mr. Gilberti. All right. Because I messed it up in the beginning. I’m putting some respect on your name. So Mr. Gilberti, if you allow me, sir, Mr. Gilberti, before we wrap, man, if someone wanted to reach out to you, connect with you,

Alexander Gilberti (23:47)
There we go.

Quentin (23:58)
collaborate with you or learn more about what you’re doing, what’s the best way for them to reach out to you?

Alexander Gilberti (24:03)
So ⁓ probably Instagram or what is X now. So you can reach me at A. Gilberti for I believe both. There might be a one in there. I have to confirm, but it’s A. I’m pretty confident it’s A, my first initial last name. And then you can also reach us on our corporate pages, right? Our business page, which is Gilberti Group LP for both X and Instagram.

Quentin (24:28)
Absolutely. Well, listen, Mr. Gilberti. Thank you, man. Thank you for your time. Thank you for your story. Thank you for your perspective. Thank you for your honesty. Thank you for your humility, man. I just really, really appreciate you, sir. We need more people like you in this space, and it was such a pleasure having you on.

Alexander Gilberti (24:44)
Hey Q, like I said at the top of the call, top of the podcast, I appreciate you having me on. This was awesome. I really enjoyed myself and hopefully we can do this again.

Quentin (24:54)
Absolutely, absolutely. Okay. Now I’m talking to you out there in the audience. If you got value from this, subscribe, right? I’m not going to ask you the question. I am giving you a forceful command. I don’t want, I mean, I have built all that great relationship with you. I get it, but I’m still commanding you. Subscribe, subscribe. Now, but honestly, listen, you don’t want to miss out on these great conversations. You see what Mr. Gilberti did today, right? You hear the nuggets at each drop. You do not want to miss out on these great conversations.

So again to you, Mr. Gilberti, thank you. And to the rest of you, we will see you on the next time.