How Gary Massari Turned Bay Area Luxury Flips Into Million-Dollar Real Estate Profits

Gary Massari (00:00)
You know why

it’s the graveyard? Because it was a song that was never written. It was a violin that was never played. Am I right? It was a home that was never built, a business that was never achieved. Because what I’m saying is people take their dreams to the graveyard. They never fulfill it. Why? Fear of failure, fear of success. I don’t know all that fear stuff. All I know is if you’re passionate about it, the facts don’t count, fear goes away, and you’re going to do it, and you’re going to feel destined by God to do it.

Cody Crabb (00:15)
Mm-hmm.

Welcome back to the Real Estate Pros podcast by Investor Fuel. I’m your host, Cody Crabb. And today I’ve got Gary Massari owner of REI Signature Homes in the San Francisco Bay area. He works on high-end residential projects, luxury flips, SB nine lot splits, ADUs and ground up development. So we’re to get into what it actually takes to build and renovate in one of the toughest markets in the country. ⁓ now when you said Bay area that I was immediately like, that’s scary. But like you, you figured out some

Gary Massari (02:07)
Yeah, yeah, well.

Cody Crabb (02:29)
some ways to make that work. I’m excited to get into it. Thanks for joining us today, Gary.

Gary Massari (02:35)
Cody, ⁓ first I want to start out because I know not everybody lives in an area that offers this type of high-end profitability and opportunity to build these big homes and sell them for $4 to $6 million. So I’m sure that lot of the audience here that you have is saying, how would you do the same thing in whatever market that they’re in? And I had a radio show called The Bridge. ⁓ I had names like Robert Kiyosaki on my show.

and people are very familiar with that, Greg Waugh. And we learned a lot from that radio show. A person I mentored was Kathy Fettke. She’s pretty big in real estate today. She’s who’s who in real estate. She’s on all the broadcast, all the news medias, giving forecast of what’s going on. One of the things that Robert said to me, he said, financial independence is nothing more than creating enough passive residual income.

to cover your monthly obligations. Now when he said that, the bill kind of rang for Kathy and I because we always think that to create wealth you had to really have either a IPO coming out with a great company or a great product or invention, right? But what Robert was saying is that you can be free financially if you just leverage your time and money. And when we heard that, we thought, well, gee, at the time I only needed $5,000 a month to be free financially.

And so both Kathy and I took that approach of investing in buying real estate and learning about real estate and gaining the knowledge that we needed. I went into Fortune Builders for two years with my wife, who now is another person who’s my general manager of my company.

And we were hungry at that time to learn about real estate investing, about systems, know, and what is it going to cost, how to hire contractors, how to build your team, how do you trust these people, you know? And that really, and the systems around that, you I mean, you got to know your market and then you got to know your cost. it took a long time. I mean, we traveled to Atlanta, Georgia. We went down to San Diego. We went through boot camp academies. We learned commercial real estate.

It was like, you just can’t do that. Now the difference is…

Because we took that time to learn it and go to meetup groups and study it, we became experts in our field.

And we were able to

on a piece of property and see the vision of what we can do with that property and turn it into like what I like right now. I walked on a property that, you know, and I look at a lot of properties and this guy wanted $2.6 million for this one property, but we can split the lot off. But I saw it. It was a beautiful piece of property, an acre and a quarter.

200 year old oak trees and had a creek flowing through it. And I said, oh my gosh, what if I took that home from 3,000 to 4,500 square feet and then I put an ADU across the bridge, you know, and then you drive a little golf cart across the bridge to get there. And then we had a little barn that we could extend a porch. So you just step out of the porch. You walk into the porch of the ADU and never get wet. And then we would say, well, yeah.

Cody Crabb (06:29)
Just the the imagery of like the getting the

golf cart and crest that that shows me like your vision of like I you can just see it like already there. Yeah

Gary Massari (06:38)
You can see it.

You can see it. And the thing about it is our ⁓ business model is very, simple. I invest a lot of my own money into my own projects.

So I’m on the line just like my investors are. So we set up LLCs. We invite investors that come on as partners. I never take on more than five in a project. And we create an LLC for that project. And that what we do is we give them an investment summary, which analyzes all the cost and the potential projection of what the market’s going to do and what the profit’s going to be. And they come on and sometimes they make 20 to 50 % on their money.

It’s not, you know, I’m not gonna tell you much about who’s on it and everything, but they make better returns and it’s secured by real estate, which is really nice. They’re part of ownership in a managing LLC. So they got say in the decisions that they make. Well, these guys can write me a check between 100,000 to a million. And we partner and we do this.

and then we go on and look for other properties. But the key here is knowing your market, knowing your cost, having the right team that you can trust. And I’m gonna say something openly to people, okay? And I know we’re in a country that’s divided right now, it’s crazy. But man, I’m telling you, when I walk on a property that I don’t feel is right, I feel it inside.

When I walk on a property where I know it’s right, it’s like the Holy Spirit is just talking to me. And I feel this joy and peace come over me. And it isn’t about the money, I just spent $2.7 million on a property. So God and the Lord Jesus Christ are a big part of my business. I committed my business to the Lord. I’ll be sleeping at night and he’ll wake me up and I can see the design of the home.

It’s crazy. And then I go out there and I talk to my architect and my engineers and I say, this is what I want. Bah bah bah bah bah bah bah bah bah bah bah bah bah. And you know, we sell all our homes before they’re finished or right when they’re finished at full price. We don’t negotiate them.

We sell at full price. And I really believe it’s a lot of us because we’re committed to God and we believe and have faith and trust in him that we’re gonna make the right decisions and buy the right properties at the right time.

And there’s times where, you know, I’d look at 30, 40 properties and say, no, no, no, no, no. Of course I pissed off a lot of realtors because they wouldn’t get their commission, but you know, it had to be the right property. And I remember an occasion where I was gonna buy a property in Silverado Country Club, you know, where they have the senior.

tournament in Napa and for some reason I couldn’t sleep at night and that property actually turned down I finally turned it down and told my partners I said I don’t feel right about this well somebody else bought that property they fixed it up and they did a beautiful job that property stood on the market for over a year wouldn’t sell how would I know that perfect

Cody Crabb (10:22)
Yeah, I was waiting for

you to say there was radon in the ground or something, but no, yeah, yeah.

Gary Massari (10:27)
I know it’s in the country club. You

you think, how can you make a mistake like that? Right? And it backs to open space. It’s very private, but there’s just something about, you know, making decisions that you know, that you know, that you know. So along with our training and our knowledge and our experience, then we have what I feel is a divine, you know, connection with God that helps us make these decisions correctly. And I know that’s weird, probably to some people. Some people are going,

somebody finally tells the truth, you know? So I don’t hold back my faith when I do these meetings and I coach. I had a wealth building radio show. I was open about it to everybody if they want to know what success is. So here’s my advice to people. I don’t care if you’re flipping $50,000 homes or $5 million homes. If you will honestly take the time to learn the industry, go to school on rehabbing.

Go to the meetup groups, learn the industry, get the knowledge behind you. Knowledge is powerful. You can do this anywhere in the United States. And here’s the key. And Robert Kiyosaki said this on my show. He said, build it in your backyard. Know your market intimately.

Cody Crabb (11:46)
That’s something that

comes up often on this show. I mean, we hear about people that have these platforms to like invest in the middle of nowhere, Tennessee or something. And there is there is like some argument for that in terms of market things and finance and whatever. But like you said, I mean, there’s something about, you know, sometimes there’s a neighborhood that is looks beautiful. And if you talk to a local, they are saying, do not even come close to this neighborhood. ⁓

Gary Massari (11:49)
He’s right.

Yeah.

Yeah.

Cody Crabb (12:15)
It’s just something

you can’t know unless you know the area. So I totally know what you mean.

Gary Massari (12:19)
There’s a street

in Dandle called Love Lane. On one side of the street, you have the school. And believe it or not, on the other side of the street, you’ve got really high-end, beautiful properties. And the difference between that one street divides out probably about $200,000 $300,000 in property value. Can you believe that? One street!

Cody Crabb (12:42)
with such

a lovely name too, I know.

Gary Massari (12:43)
Knowing your market internally,

Robert was right. You have to know your market. If I’m building at $500 a square foot, I know that’s crazy, that’s probably most markets what they sell for, but I’m building at $500 a square foot and I’m selling for $1,000 to $1,200 a square foot. So obviously, if I pick the right location,

and I’ve got the right systems to analyze what it’s really gonna cost to, you know, to either build it from round up or to, you know, add in a big addition to it. If I know those costs, and I’m saying that sometimes they don’t come out always right, but I know what it’s gonna take to build a foundation on a 4,000 square foot home. I know exactly what it’s gonna take. I know what it’s gonna cost to do the subfloor and the framing, the rough electrical, the rough electrical.

intimate about cost and I’m intimate about market so if somebody comes into play in real estate you’ve got to learn the cost and you’ve got to learn the market but that’s my advice and you can’t be afraid to buy a home and start out I mean my first flip was a wreck I wanted to

Cody Crabb (13:53)
That was gonna be my next question for you actually. So tell me about that kind of first

jump

Gary Massari (13:57)
Yeah, my first one, living in California, I went through school and, you know, and they were teaching us out of state because they’re so expensive in California. And I bought a home in Atlanta, Georgia for like $45,000 or some stupid thing. That was the worst. I lost a hundred thousand dollars on that property. My first one, it was a nightmare. mean, the contractor lied about their license and was taking people, you know, taking people’s money. And it was basically a scam. And I was working with the attorney general.

finest person who took all our money and ⁓ my God. That was my first flip and I mean it was a flip. ⁓ All my other part is that they ran. They’re never gonna do anything with real estate, right? And it was just like when, when Kathy first started, she bought 15 properties, you know, she wrote the book, Retired Rich with Rentals. And ⁓ then we had that 206, 207, 208 where we had that in our.

Cody Crabb (14:29)
cow. That was your first one and you kept doing it.

Gary Massari (14:55)
you know, the subprime bust they call it. And she lost all her properties except for the ones in Dallas.

And the Dallas saved her.

Now she’s one of the, you know, she’s got what, over 85,000 followers and she’s got one of the top shows. If you go to my website, you can see a video where she says, I was the seed that started the fire for her. know? So again, there’s so much you can do in real estate. Once you create the income, you know, start looking at passive income. know, don’t want to do multi-families. You can do commercial buildings, R &D buildings. You know, you can do

warehousing, trailer parks. mean, there’s so much. Small shopping strips, you can do so much by keeping that, if you have the knowledge, reinvesting that money until you could create passive type income from it, and then you just have to put it under management. So in my position at my age, at 80 years old, I’ve got two sharp…

general managers for two of my companies. And you know what? I spend most of my time ⁓ in the streets of San Francisco on the Tenderloin feeding like 100 homeless people every week. And so I don’t have to, I don’t have, my time is leveraged to other people and I don’t make as much money, but you know what? I certainly have much more fulfillment.

And I’ve got two great managers that I just absolutely, and they’re both Christians, and I just love them to death. I trust them. They’re great people. And I got a great team.

Cody Crabb (17:10)
Well, you know that what you just said speaks to

speaks to me a little bit because I think some people when they think of passive income or retiring or kind of just being like making enough money to just be done and not worry about money anymore. Sometimes what people well, but also like you’re you it’s a trade off like if you do want to spend your time doing something else, then you kind of have to be able to do that. You kind of have to be able to retire in a way that.

Gary Massari (17:24)
We have to manage it.

Cody Crabb (17:38)
allows you to spend your time somewhere completely different. Maybe it’s not as big of a deal to you and you’re okay making some less money and you can kind of retire on less. that’s a big, I think that’s a big thing that people miss is that retirement’s different for everybody.

Gary Massari (17:49)
Yeah, you think about it.

Yeah, know, Jay Paul Getty said it best. I mean, he said, I would rather have 100%, you know, or 10%. I forgot how he said it. Of 100 people’s time.

100 % of his own time. What do mean by that? Well, if he got more people, there’s only eight hours in a day that you can contribute, but if you have 100 people contributing eight hours, well, you compound that, right? So I think that leveraging time and money is very, powerful, but leveraging people is too. People could bring you financial freedom if you know how to train them. What was that famous book that was written? The E-Myth? Remember that book, The E-Myth?

Cody Crabb (18:05)
Hmm.

I don’t know. I

haven’t heard of it.

Gary Massari (18:31)
No,

E-Myth, that’s a famous book. mean, E-Myth, it talks about, you you start out doing it yourself, then you train somebody else to do it, and then your job is to hire the right people to do it. And so you leverage your time through people, and you learn to trust. I had the worst partnership starting out with this, because I trusted everybody, right? I got screwed so many times, it’s pretty soon I knew, and somebody even talked to me in an interview when I was running these companies. You know, I built about four five companies.

Cody Crabb (18:43)
huh. Yeah.

Gary Massari (19:00)
The minute they sat down and started bragging about how great they were and how wonderful they were and you know and they’re just gonna do this and do that and immediately I would just stop the interview right there and escort them to the door because I know they’re full of crap.

Cody Crabb (19:11)
Well, see, I think that’s that right

there. You’re saying a lot of things that are just so they become innate to you because it’s just you can’t maybe even articulate everything, but it’s just like you can just feel it. The good example of this is someone recently on an interview used the words commission breath. Like you said, yeah, I didn’t know that was a widely used phrase.

Gary Massari (19:18)
Yeah.

Oh yeah, I use that all the time. They do have that. I know the commission’s got

first and bad, you know.

Cody Crabb (19:36)
Yeah, well, but like that when you step into like, don’t know, Best Buy and you’re like, I need to buy a fridge and they’re like, okay, well, let me sell you this super, super high end fridge that has way more features than you need. You’re immediately like, is this for me or is this? So I know what you mean. How do you go about finding people that you can trust and that you can rely on?

Gary Massari (19:55)
Well, I look for their passion.

If they’re passionate about what they’re doing and what they want, they show it. They’re willing to in 200 % and work overtime. They never complain. They’re happy about the opportunity. Those are the kind of people I like to work around. People that are passionate.

You know, a lot of people come to me and they go, know, God, I don’t know what my plan is for my life. I don’t know what I should be doing, you know. I mean, in all professions, some people just, should I be a doctor or a dentist or postman or, you know, or journeyman electric, electrician?

And I always tell people this, God gives everybody talents and gifts. And then he helps you. If you commit to him and trust in him, he’s gonna help you find that in your heart. And when you find that passion, it’s not about the money. The money will follow the passion. But what I do, what I do, and I love to do it, is because I know I can design a beautiful home that’s gonna make a family very happy.

And I’m passionate about that. I love it. When my designs come out, I win awards on them. So it’s not the money, it’s the passion that drives me. Plus I’m a little competitive, I admit that. But I love the passion. And when you find passion in people, you usually find success. And if you find people wondering, well, what’s my calling or what should I be doing and so forth, they’ll talk to 50,000 friends and they usually get influenced by either family and friends. What I tell old people is this, what’s in your heart?

Is it music? Is it art? You know, is it medical? You know, this is crazy. The greatest treasure house in the world. You want to know what it is? It’s the graveyard.

Cody Crabb (21:38)
Hmm.

Gary Massari (21:40)
You know why

it’s the graveyard? Because it was a song that was never written. It was a violin that was never played. Am I right? It was a home that was never built, a business that was never achieved. Because what I’m saying is people take their dreams to the graveyard. They never fulfill it. Why? Fear of failure, fear of success. I don’t know all that fear stuff. All I know is if you’re passionate about it, the facts don’t count, fear goes away, and you’re going to do it, and you’re going to feel destined by God to do it.

Cody Crabb (21:55)
Mm-hmm.

Gary Massari (22:10)
and then the money will follow that. You know, I never worked a day of my life to be honest with you. I’ve been free financially almost all my life. And why? It’s not because I, and of course I enjoy that, but it’s because I love what I do. Yeah, that’s what makes a difference. I don’t know if I can help anybody more than that. If you want to invest with me, know, go to me, they can get a hold of you, they can get a hold of me, you know.

Cody Crabb (22:13)
Yeah.

you

Yeah.

Gary Massari (22:36)
Our bottom investors are $100,000. And then we give you a percentage of the profit, usually like 5 % or something like that. usually, and my profits really are out there. mean, we’re talking seven digit profits. So usually people get started with me, they learn from that. And we do have programs where we start out on little flips with them. We don’t put them into the great big, you know.

Cody Crabb (22:51)
Wow.

Gary Massari (23:02)
luxury homes. put them into, we’ll buy a home here, it’s a lot. know a million dollar home here is a cheap home. So we usually put them into a million to a million five home. We spend about two or three thousand dollars on flipping that home, making it beautiful. And we usually make, I’ll be honest, we usually make probably somewhere between 300 to 500 thousand on a little flip. And somebody can invest in that and take a hundred to maybe 125 and then the next time it goes up to takes that 125 to maybe 150, 175 and then

Two or three years later, they got two, $300,000 to invest. We let people just beginning start with us, but only we allow maybe one or two at a time. People come to me, I got $50,000, I got $100,000. No, no, no, no. We work with qualified investors, but we gotta know that you’re serious about long-term and building.

Cody Crabb (23:35)
Yeah.

Yeah.

Gary Massari (23:58)
your real estate wealth long term, not short term.

Cody Crabb (24:01)
Yeah, I love that. Like you’re even

you’re even kind of vetting the people that want to work with you, like on the other side, like one that want to work with you. And I think that that’s another big deal thing.

Gary Massari (24:09)
yeah, got another, yeah, yeah. Cause I don’t want somebody

calling me up three times, I need my money back. know, I guess, no, no, no, no, no, no. So we, we’re very careful, you know, when we, when we start people, but I do teach, you know, not as much now, but as I used to, but I, used to teach seminars and workshops. And if you go on my website, you’ll see some of them. used to carry, you know, 6,200 people in my workshops. And, you know, and we’ve helped a few people.

Cody Crabb (24:14)
Right, yeah.

Gary Massari (24:37)
become very financially well off and Cathy Fecke is one of them. And Ginger, ⁓ Crystal Faith, she’s our general manager. She’s been with me seven years. She’s another one. She can write a check, right up to seven digits. So, you know.

Cody Crabb (24:54)
Well,

this has been really like honestly, I love hearing stories like this. It’s it really reminds you that like, you know, it is some of these things are actually possible instead of just it being this out there. You know, you hear the word millionaire passive income. You hear words like that and it’s just words. like when you hear someone’s story and saying, no, really, like here’s what you can focus on that’s in your control. You know, so I that’s that’s.

huge for people when they’re especially when they’re when they’re desperate for a change or when they want to be you know they want to change their life for freedom or whatever.

Gary Massari (25:21)
You got to change your inf-

Your influences are going to, you know, the law of the lid. What’s the law of the lid? The law of the lid simply is that you’re going to cap your thinking. But if you’re around people, you know, your influences are maybe the books you read, the people you know, your influences change that. If you’re around people that are buying, you know, million dollar, $10 million homes, why, you want to know how to do that.

And then that fear kind of goes down because you’re around those influences. So I would say influences have a big, big, big, you know, big part of who you are and how you think.

Cody Crabb (26:05)
Yeah, that saying you’re

the average of the five people you spend the most time with or whatever. Like, I really believe that. I do.

Gary Massari (26:12)
That’s That

is so true. The books you read, the people you know, your influences. So you want to learn real estate, get around real estate people, you know? And maybe you can do a small flip, you know, in joint venture with somebody to get going. You know, look, I went to a real estate meeting and these guys were talking about making three, four, or $5 million a year.

Cody Crabb (26:19)
Yeah.

Gary Massari (26:37)
And they brought up this thing called OPM. Well, I thought they were talking about dope. And they’re really talking about other people’s money. This is the first one I went to. And I’m looking at that speaker and I’m going, yeah, I have other people’s money. What are they talking about? And they’re making $3 to $5 million a year. And I go, what is going on here? And so I went up to the

Cody Crabb (26:44)
OPM.

You’re like, that’s the secret after all this. Wow. I didn’t, I couldn’t have guessed.

I didn’t know I was in with drug

kingpins. Yeah, no.

Gary Massari (27:01)
I did. I

cracked up. said, they’re selling dope. They must be selling dope. I told the person I went to brought me. Why did you bring me here? I mean, I’m not getting a dope. All right.

Cody Crabb (27:08)
You said you wanted to earn money. I I suppose that’s there’s worse ways.

Yeah

Gary Massari (27:13)
So that’s how I started. took me to one of these network marketing meetings in our area, it’s called the Meetup Group, right? And they have tons of them. And I listened to those guys and I thought, my God, he’s not any better than I am. He’s not any smarter than I am. If he’s making that kind of money and I’m struggling, why am I struggling when he’s making that kind of money? So I had to… Yeah.

Cody Crabb (27:31)
Yeah, I love hearing that thing of like, someone

inspired somebody and they’re like, well, he’s way dumber than me. So I surely I must be able to really do well in this. Yeah.

Gary Massari (27:37)
Yeah. Yeah, you know, it’d be so,

so I went up and then.

Well, how did you, how did you start? You know, how did you get going on this? You know, and that’s what I learned about Fortune Builders. was one of the largest training programs in the United States, you know, and, uh, you know, and they said, well, it costs $50,000. I didn’t have $50,000, but the guy took me aside and said, yeah, but you could bring your team. said, what do you mean? He says, well, you you can sell it to them for 10,000 and get five people and you can go through. So I went out and told my real estate, my realtors at the time, said, look,

Cody Crabb (27:49)
Yeah.

Gary Massari (28:12)
I even I said hey for 15 because I don’t want to pay anything I said for $15,000 you could these guys are making three million dollars a year would you would you you know and it’s a two-year program would you like to learn how to Leverage your time and build her you know and flip homes and you know and invest in real estate now I It was the easiest sell I’ve ever had so they said yes. I said okay. Well Transfer fifteen thousand dollars into this account. Let’s get going and so

Cody Crabb (28:42)
Yeah, it just it seems like it’s really is just like finding what getting getting this is my this is my sub

Gary Massari (28:43)
I found the people to do that. then, yeah. I put $10,000 on a credit card. was it. I

had to pay off that $10,000 on a credit card. And my first flip was I lost money in Atlanta, Georgia. And then the second one, I made $155,000 in a partnership. And I said, oh, OK, it works. I was able to do it again, right?

Cody Crabb (29:07)
It’s above zero.

Yeah, that’s good. It’s a good sign. Yeah.

Gary Massari (29:09)
Yeah, and

in the third one, I made over $2 million on one flip.

Cody Crabb (29:14)
Well, there you go. That must have been

the one where you’re like, OK, yeah, this this works. This we’re going to keep doing this. Yeah. Well, this has been great. Thank you so much for sharing all this. If someone wants to get in touch with you or find out more about what you do or or work with you, how can they do that? How can they find you online?

Gary Massari (29:18)
Then I, yeah, okay.

Yeah. Well, if they

go to my website, if they want to get on my list and be a partner with us and invest in us, I need to have an interview with them. That’s number one. OK? I want to know what their financial goals are and why. Their why is big to me. What’s their vision? And then if I put them on the list, I will send them an investment summary.

Okay, which includes a whole write-up about the next investment plus a deal analyzer showing all the cost and then also all the marketing materials to show what the price would be. So you get an investment summary from us and they have to decide whether they want to get involved or not get involved because we do have a list of people that want to work with us. That’s how you do it. So they can go to my website and find me at REISignatureHomes.com. It’s that easy. I’m not hard to find.

Cody Crabb (30:20)
Fantastic.

Yeah.

Gary Massari (30:22)
You can Google

my name. promise I’ll show up. All right.

Cody Crabb (30:25)
Well, thanks so much, Gary. This has been really informative and great.

It’s great conversation too. It’s been a delight. Thanks so much for your time and thank you listeners for your time as well. If you like what you heard today, go ahead and give us a like, subscribe, follow all the things so you don’t miss another conversation like this one. It’s been a pleasure. Thank you so much for hopping on with me today.