How He Went From Zero to 50 Units in Six Years While Working a W-2 | Nathan Fernandez

Nathan Fernandez (00:00)

My parents were against it. They’re like, “Are you sure you want to take a 401(k) loan to buy real estate?” Because that’s what I was doing. I didn’t have a hundred K in cash, so I had to take a 401(k) loan. And that goes against the traditional thought process of most of our parents’ generation, which is just put it in the 401(k), retire, be comfortable. And I’m like, “No, I’m gonna take out half my 401(k) so I can buy this apartment.” And that turned out to be one of our best deals ever. It was a four-unit and it’s appreciated very well, it’s given us cash flow, and it’s really what started the gears going. And I would say I had no clue it was going to evolve this quickly, but in six years I went from zero to 50 units.

Issa Hanna (01:14)

Welcome back to another episode of the Real Estate Pros Show. I’m your host, Issa Hanna, and today we have real estate Nate—Nate Fernandez. Welcome to the show.

Nathan Fernandez (01:22)

Hey, how’s it going? Thanks for having me on.

Issa Hanna (01:24)

Super excited to have you. You’re from a city that’s near and dear to my heart, a city that built my real estate career personally: Chicago, Illinois. You’re killing it in the real estate game. But before we get into that, can you kind of give my viewers a day-to-day in Nate’s world?

Nathan Fernandez (01:38)

Yeah. So I’ll say my day-to-day tends to start out with being woken up by one of my three kids. I have a two-, four-, and six-year-old, so they’re always ready to start playing at 5:00 AM, and that kind of starts my day off. And then I actually work a W-2 full-time, so I’m kind of jumping right into meetings after we get them off to school. And then throughout the day I’m getting texts from tenants, I’m getting calls, and I kind of ignore the calls and just immediately text them back, say, “Hey, how can I help you? What’s going on?” They’ll text me their issue. I’ll text my handyman and we kinda go from there. But try and be hands-off as possible with everything I got going on, and then just spend a lot of time with my family after the day’s over and just relax into the evening. But yeah, it’s pretty go, go, go around here.

Issa Hanna (02:23)

Sure, man, especially when you have young kids. I could definitely relate to that. And then I love that you said, “I got that W-2 job, you’re killing it.” You’ve got 46 units in Chicagoland, so you’re not just dabbling; you’re actually building a serious portfolio, serious generational wealth, so that when those kids do become of age, man, they’re gonna inherit so much from what their dad’s doing. And I love that.

You said, “I got a W-2 job.” I asked you before we went live, I said, “Give me a strength. What are you bringing into our industry?” And because you are a manager, because you do have that W-2 job, you’re super efficient. Your strength is efficiency and operations. So can you kind of give my viewers more about how you’ve been able to refine your operation over the years and how it’s translated with your W-2 job?

Nathan Fernandez (03:08)

Yeah, so over the years, I’ve gone from everything to a master key. I have an online property management portal I use. Everyone texts me because it’s still just me running the show, but I just take a screenshot of the text, send it to my handyman with their number. He schedules everything. I don’t even have to follow up. He texts me a picture when it’s done and we’re good to go.

A lot of the times the tenants aren’t there, they just say, “Yeah, enter my house.” So it’s just trying to be as hands-off as possible, but also knowing when you gotta show up in person, right? If you have a sewer backed up and they’re calling three or four times, that might be a good time to show up to make sure that they’re not gonna be moving out. So it’s a balancing act, but I would say just trying to lean into the technology and the operations we have nowadays.

Another good example is instead of doing individual showings for everyone that wants one and half of them don’t show up, I just do open house blocks, right? I know it’s not fancy or anything, but hey, I do two open houses on the week of. If I don’t rent it out by then, I know it’s priced too high. I’m not gonna keep chasing it; I’m gonna cut ties and I’m gonna drop it fifty bucks, right? Get the right tenant in there so I don’t have the headaches.

So those are a few of the ways that I just try and lean into the operational efficiencies. The automated rent collection’s huge so I don’t have to go pick up the checks. But yeah, just always trying to improve and find additional ways to make it so I don’t have to spend as much time on the business.

Issa Hanna (04:31)

I love that, man. And that’s why we buy real estate, right? So that in the future we can do the one thing people say you can’t do, and buy ourselves time and spend it with the family. As somebody who self-manages my portfolio, and I have quite a large portfolio, a lot of tenants, I think we’re kind of like mirror images in our philosophies, man. I do exactly the same thing, all the way to the open house. For people at home, if you guys are like, “Hey, I’m sick of paying somebody to show my units one by one or me showing up myself,” do an open house. Have 20 people show up within two hours, and Nate says, if nobody rents it, your price is too high.

So, man, amazing, amazing knowledge you’re bringing to the viewers already. That’s why I bring people like you on the show, man, because you guys just drop little tidbits of gold that somebody else who’s sitting at home—dude, “I never thought of that. Why don’t I do that?” They try it, they put these strategies into effect. Fun fact: I’m in Cleveland, Ohio right now dealing with my rental property, so sometimes you do gotta know when to show up. This is a time for me where I want to show up.

Good, good segue into my next question, right? So we are investors. It’s good, right? But we all have it, right? We all encounter this at least once in our career, and that’s the real estate nightmare. So can you give my viewers one thing that sticks out in your mind, one time that sticks out in your mind?

Nathan Fernandez (05:46)

Yeah, so there was this time where, again, I’m a small shop, it’s just me running it. I decided to go to Puerto Rico in January. And anyone in the Midwest knows, that’s when it tends to get cold. So we’re getting ready to leave and we see the weather, it’s looking bad. And I transfer all of the information to my wife, all the Google phone and everything, and we get a cold snap, right? And it’s negative ten degrees out. I’m worried. I’m texting everyone: “Run your faucets. If anything happens, let me know.”

And I’m out scuba diving and the electricity goes out in one of my buildings, right? And she’s at home with the three kids, so it’s not like she can really go over there too much or do anything. So she’s trying to call ComEd. I get done scuba diving and I come back to like 30 text messages, missed calls. Luckily, ComEd got that up and everything worked, the boiler kicked on.

I get home, I land, I walk in the door. Ten minutes after I set down my bags, I get a text from someone: “There’s water leaking out of my cabinet.” Come on, it’s eight o’clock at night. I just got off a flight. But that’s one of the times you show up, right? So I hopped in my car, drove over there immediately. I tried telling her how to shut off the water; she has no clue, right? So go over there, shut off the water, say, “Hey, we’ll be back tomorrow.” We got a plumber over there at 9:00 AM, fixed the pipe.

But it was my first burst pipe, right? And I’m like, “I don’t even know what to do here. I just got home.” And so we ended up solving it for like five or six hundred dollars. But that’s one of those things where you’re like: burst pipe, water coming out, your mind just starts going, “This is gonna be five thousand, this is gonna be my whole cash flow,” right? But luckily I was able to limit the damage. I got there in time. And then again, just having a good plumber who could get there the next day, even though everyone’s calling him with burst pipes.

So I’d say that was one of the nightmare scenarios that happened where you’re just like, “Man, when people say they don’t want to be unclogging toilets, like, this is the stuff they’re talking about.” But in the long run, on the first of the month, it’s always worth it, right?

Issa Hanna (08:24)

One hundred percent, man. That cash flow, that freedom that it affords you—as somebody who’s dealt with those late-night calls, the burst pipes, the water, man, when you’re in that fire, when you’re in that problem, it seems like the worst thing ever. You’re freaking out: “What do I do? I’m gonna lose the property. I lost all this money,” whatever it is. You get through to the other side of the problem, it’s not that big of a deal anymore. The next time you encounter it, you’re like, “No big deal. I’ll go there, I’ll shut it off.”

And then another thing I want to touch on, and you’ve made that point a lot, and I want to highlight it. First you said you’ve got a guy: you’ve got your maintenance guy. You manage the properties yourself, but you got a maintenance guy, you’ve got a plumbing guy. So you gotta have that team where you could be like, “Hey, get out there tomorrow,” no matter how busy they are, because you do treat them well, because you do bring them so much business. They’re gonna jump for you; they’re gonna take care of that problem for you. Because not every plumber is created the same, and you’ll see not every quote for every problem is going to be the same. Some plumbers will quote you three times what another one would quote you. So when you find that right team member, treat them right.

So man, like I said, golden knowledge, Nate. I want to get your five-year plan, right? So you’ve built up a beautiful portfolio, you’re working the W-2 job. I go, I interview you in five years. Where am I gonna see you at? How many units? Are we still on the W-2? What’s the plan?

Nathan Fernandez (09:41)

Yeah, so I’m hoping in five years I have a hundred plus units and I have the choice to work or not. I kind of have it now, but things would be really tight. But I’m thinking in five years, I’m hoping to have a hundred plus units, approaching what I call FatFIRE where I’m not penny-pinching. I’m able to live an abundant lifestyle and give back where we want to and spend our time where we want to, and be able to say, “Hey kids, we’re just gonna take the summer and go travel the United States,” right?

A hundred plus units, have enough cash flow to cover everything and then some, have a property manager in place who I can trust to get everything done, and just really having the time to do what we want to, right? Not have to worry about the mortgage payment: “Now I gotta get this call and I gotta work.” Like just having the freedom to choose what we do and when we do it is what I’m looking for.

I think my low target is a hundred, but ideally, if we could get to a hundred and fifty by then, I think that would be a really good target for me, especially in this area that provides me the money to do what I want when I want and help out the people around me that I care about, right? If someone’s car breaks down: “Hey, you’re my brother, I’m gonna help you out with this,” or whatever it may be. The people close to me in my circle that I care about, we can just cover, right, and not even worry about it.

Issa Hanna (11:38)

I love that, dude. And people at home, they’re hearing the numbers, right? A hundred, a hundred and fifty. They’re like, “How do you get to that many?” Nate started with zero, right? We all started with zero units. He works a W-2 job—a good W-2 job, I might add. He’s a manager for a very prestigious company, but he’s over here building. I bet you when he first started, he thought forty-six sounded like a lot. But then you get to that number and you’re like, “Let me push it farther.”

So let’s rewind it. I asked you the five-year plan. Let’s go all the way back to what made you decide, “You know what, I’m gonna take this leap into real estate. I’m gonna buy my first property.” What was the spark?

Nathan Fernandez (12:18)

I would say I saw my parents have to deal with 2008 and saw some of the impacts of that: the stress that brought, the not understanding or feeling if you would ever be able to retire. And I saw how that impacted the family, right? And as I started in the corporate world, I realized almost all my money’s tied up in a 401(k) that I can’t touch until I’m 65. So I want cash flow now. I don’t wanna have to always—”Hey, my boss just told me I’m a janitor now. I gotta go clean toilets,” right, cause I don’t have any other option.

So I really started researching and followed the BiggerPockets movement for two years. I was analyzing deals, looking at everything for two years, and then I finally was like, “Okay, we’re ready to go.” I found the right realtor who had all the connections. And within two weeks of working with him, I found a deal. It was in the middle of COVID; it was 2020. And I looked at my wife. I was like, “Should we do this?” She was pregnant with our first child; it was her due date. And I’m like, “Are we ready to buy this?” She’s like, “Yeah, let’s do it. You’ve done your research. You’ve seen what’s out there. Let’s go for it.”

And I’ll tell you, my parents were against it. They’re like, “Are you sure you want to take a 401(k) loan to buy real estate?” Because that’s what I was doing. I didn’t have a hundred K in cash, so I had to take a 401(k) loan. And that goes against the traditional thought process of most of our parents’ generation, which is just put it in the 401(k), retire, be comfortable. And I’m like, “No, I’m gonna take out half my 401(k) so I can buy this apartment.” And that turned out to be one of our best deals ever, right? It was a four-unit and it’s appreciated very well, it’s given us cash flow, and it’s really what started the gears going.

And I would say I had no clue it was going to evolve this quickly, but in six years I went from zero to 50 units. And now it’s like, sure, if a six-unit comes on, I can take that down in my sleep, right? Find me—my last deal was 18 units, right? Like, let’s just do it, right? Now I built that muscle and it’s almost just easy nowadays. It’s hard to find the right deal, but once you find the deal, it’s pretty much a repeat after that.

Issa Hanna (14:24)

One hundred percent. Once you have that team in place, once you’ve done it the first time—it’s the scariest thing in the world. You’re putting all your money up, you’ve never been a landlord, you’ve never unclogged toilets, right? But you jump into the water and, okay, you learn how to swim, you learn how to build that team, and then you’re like, “Okay, this is just normal everyday business. Let’s go, let’s keep rolling, let’s build this thing up.” And that’s how it’s done, you guys. Perfect.

And I love that you said, “I found a good—realtor, excuse me. I found a good realtor. He had all the connections.” And now it’s just like, let’s go, let’s rock and roll, I’m ready. Super, super inspiring. I know people at home are gonna be like, “Man, he started in 2020.” And another thing you said: you do your research because you do have that infrastructure in place. People at home, you guys watch this show all the time. You hear me say it all the time: if it makes dollars, it makes sense. And that’s all you need to know. Don’t be afraid. You do your research, you underwrite, it still makes dollars at the end of the expenses—rock and roll with it. It’s never gonna fall in your lap; you’ve got to actually jump into it.

Man, and I hope and I know that you’re gonna give some people at home a lot of inspiration to jump into investing in real estate, because it is one of the only fields where you can go from zero to, like I said before, generational wealth for the children, for the family, help people out with repairs, donate to charities. You could build the life that you want. There is no glass ceiling like there is in a W-2 job. You can go as high as you want to push it.

So, man, I’m getting super excited. I love it. My Chicago guys, we’re a different type of real estate investor. It’s a lot more competitive in the Chicago market, so you’ve been in it since COVID, but being in it in Chicago since COVID is a 20-year veteran in the game, man. So that’s why you’re over here just dropping knowledge bombs on everybody.

And I want to get one piece of advice from you, one piece of knowledge for my new guys, right? My new investors, the people at home that are a little bit afraid to make that first investment. If you had to give them one piece of advice on where to start building that team—find the realtor, find the contractor—how to start building that team, what would you tell them?

Nathan Fernandez (16:27)

I would say it starts with the realtor. So my realtor—I’ll give him a shout-out: John Warren of Forte Properties. He’s great. He manages over 200 units. Any problem I have, he’s like, “Here’s three guys. This guy’s cheap, this guy’s pretty expensive, but he’ll do the job, and this is who I use because he’s middle of the pack and he’ll show up.” So any issue I have, he’s sending me three or four guys. And what’s great is now I’m helping him find guys, too, so now I’ve gotten to give back to him, and it’s been nice to have that relationship.

I would say it’s the realtor, and make sure it’s someone who also invests and owns real estate, because you need someone who has a Rolodex. If you’re starting off from scratch, you’re going to go to Google and look up the plumber, and who’s going to show up? The most expensive marketer, whoever has the best branding, right? You’re not going to get the guy in his truck who rods on the weekend, right? So you want to get a good realtor who can give you the tactical of how it’s really done, not someone who’s like, “Yeah, just go to Google, go to Thumbtack and find someone.” No, you’re gonna get charged triple and have terrible service. So I would say start with the realtor.

Issa Hanna (17:31)

Hundred percent, man. As a former Chicagoland realtor, over two hundred and fifty first-time homebuyers, let alone buyers, you’ve got to be a good connector, right? You’ve got to know people. You’ve got to trust the people you vouch for. You’ve seen it in that movie—what is it, Donnie Brasco, right? When you vouch for somebody, your name is on that person. So that person that you’re referring better be top-notch. When you have a bunch of people you could—”Hey, Nate, here’s a plumber that I know. He’s not gonna take your arm off. He’s gonna do a good job.” Man, it goes such a long way.

And shout out one more time. What’s his name?

Nathan Fernandez (18:03)

John Warren of Forte Properties.

Issa Hanna (18:05)

John Warren of Forte Properties. Professional to professional, realtor to realtor, man, you’re the guy that makes our business what it is. You’re the guy that gives us a good name. Keep doing your thing, man; I love to hear it.

And now I want to give you the floor. We plugged John; I want you to plug something, right? You’ve got a business, you’ve got something that you want people to check out. So you got the floor. Tell my viewers whatever it is you want to plug.

Nathan Fernandez (18:28)

Yeah, so I’m running a little consulting business. It’s called Optimum Process Partners, and what we do is we specialize in CRMs and property management. So I’ve implemented CRMs for multiple nonprofit companies, and I’ve also connected a few property managers. They have AppFolio for most of them, and I’ve been able to connect that directly to Claude and work in some of the AI functionality in there.

So I’m happy to sit down, have a call. Again, I have a lot of experience from my daytime job building analytics, automating reports, as well as just overall workflow functionality. So Optimum Process Partners is the company name. And we can sit down and talk and see what you need, but we try and do really well. We’ll tell you what’s in our wheelhouse, what’s not, how we’re—if we’ve done it before or not.

And that’s my third business, I guess, my third job on the side. But yeah, we’re trying to grow that and see what we can do and how we can help other property managers or anyone, really. I’ll look at anyone’s CRM. I’ve done CRMs, marketing campaigns, websites, all the above.

Issa Hanna (19:33)

Super exciting, man. And like you said before, your strength is operations. Your strength is improving CRM, doing all this stuff. I know personally, landlords, I’m speaking directly to you right now at home: a lot of us don’t have the cleanest processes. Somebody like Nate could come in, really clean up your business, and keep that thing moving like a well-oiled machine. We don’t reinvent the wheel, right? He’s not reinventing the wheel; he’s just making the wheel turn more efficiently, better, smoother.

So make sure you guys check him out. Super personable guy, holds himself to the utmost integrity, and very knowledgeable in our space, which is exactly what you need to grow your real estate business. Exactly the type of guy you need consulting with you. So make sure you guys check out Nate, check out Optimum Process Partners, right? Optimum Process Partners—super good name, gets right down to the point. What the name is, is exactly what it is: the optimal process that you could possibly have. So check them out.

Nate, man, it was super, super refreshing to have you on the show. I want to invite you back on, man. I do want to check your progress maybe next year if you’ll have us.

Nathan Fernandez (20:38)

Yeah, I’d love to. And I appreciate you taking the time to have me on your podcast, and looking forward to hearing it go live. This has been great.

Issa Hanna (20:45)

I can’t wait, man, to interview again. I really, really enjoyed our conversation. Like I said, I always enjoyed my Chicago guys coming on and spotlighting their businesses. And to my viewers at home, if you enjoyed this conversation with Nate and want to see more like it, make sure to hit like and subscribe. I talk to people every day that could bring us different knowledge on every aspect of real estate investing. Until next time, the Real Estate Pros are out.