How to Seize Real Estate Opportunities: Insights from Robert Fragoso

Dylan Silver (00:00.953)
Hey folks, welcome back to the show. I’m your host, Dylan Silver. And today on the show we have Robert Fragoso from beautiful Orange County, California, who is a full cycle real estate investor, has been involved in the hard money side and is now focused primarily on fix and flips. Robert, welcome to the show.

Robert Fragoso (00:16.106)
Thank

Robert Fragoso (00:21.742)
Hey, thank you for having me. I appreciate it, Dylan.

Dylan Silver (00:23.939)
Absolutely. know, before we hopped on here, we were amusing about tornadoes in Denton, which I’m grateful. I don’t have to be a part of, you forever indefinitely. But you are in Orange County and you have ties to DFW, but you’ve really done real estate in many different areas. How did you originally get into the real estate space?

Robert Fragoso (00:49.166)
So, you know, it’s a funny story in that I was really, I was a senior in high school. And what happened was I was just sitting at the ball, kind of people watching with a friend of mine, one of my best friends, and this guy next to me, sitting at a Burger King, just watching people walk by the mall, right? And these, one of the flyers that he had said, buy real estate for no money down. And so I made a joke. I’m like, hey, you I’m a high school kid, I’m a little bit of a smart ass. And I just said, I’m like, hey, well, I have no money, sell me a house. Right? We laugh.

And he laughs and he’s like, he’s like, you know, it’s actually easier to like buy a house than a car right now. And this was back in 1989. And he, uh, and he was stone cold serious. I had just bought a car. So I know I had to like the save up and my parents helped me buy a car and all those. And, and, so I knew how tough that was. Right. And so I, um, I listened to him. told me what he did. He was basically turned out to be like one these guys that was a guru teaching retired folks how to invest their retirement for extra income.

And buying houses with no money down kind of helped that. Right. And so he’s like, he’s like, you know, come on down to the seminar. So what I didn’t notice about the flyer was at the bottom. This is back in 89. It was $2,995 to go to a seminar. And I remember, and I remember I had just paid $3,200 for my car. Right. So I’m like, well, I can tell you right now, I’m not going to pay that. And he’s like, well, listen, come help me set up, show up at like 6 a.m. Saturday morning.

Dylan Silver (02:01.061)
Mmm.

Robert Fragoso (02:14.189)
and I’ll let you stay and you can learn everything for free. So I said, all right. So I showed up early and helped them set up and do all this stuff. And he had a bunch of people there and everybody’s kind of getting into it, right, and understanding. But I kind of got the understanding of it. And back then what they were doing, they were buying houses subject to, which meant that they were leaving the existing mortgage on, people were either wrapping the mortgage or they were getting that. was during the…

Dylan Silver (02:19.225)
That’s a deal.

Robert Fragoso (02:40.621)
You know, for many of you guys who saw the great recession here in 2005, back in 1990, they had another recession that was also banking related, which was the savings and loan crisis. All these SNLs that went under that were funding all the commercial kind of were having issues. So it created a turmoil in that financing side. So that’s why the subject to financing became very attractive. So he showed me how to do different things, door knock, find houses, essentially became a wholesaler for him.

You know, didn’t know that they didn’t call it wholesaling back then, but I was just finding houses for him. Then I asked him if I could be part of one of the flips and help him fix it up and do all that stuff. And he let me participate in the profit. And then from there just kind of grew. I ended up figuring out that he wasn’t paying me enough for the houses that I was bringing. And it was his own fault. Actually, I would have never figured it out if he was bragging one day. And, you know, I figured I figured it out. And so I decided to meet more investors. Yeah. And then expanded my reach, started networking and.

Dylan Silver (03:33.669)
Build the veins.

Robert Fragoso (03:39.732)
It eventually started putting a syndicate together for buying apartment buildings after the savings and loans crashed because we figured out we could buy these buildings for less than what they could be built for. But at that time, California had a like net negative migration for people that were moving into the state. The vacancy rate was very high. And managing those buildings was a challenge. bought, I think we had about 103 doors or something like that, a hundred and

100, right around a hundred doors. And, you know, you’re young kind of trying to manage all this stuff. You’re making a little bit of money through the cashflow. you know, we did have all the buildings for in clear, cause we had investors. So, you know, the cashflow was basically paying interest and we were getting some of our percentage of profit from it. and then selling some of those buildings and we were flipping apart buildings essentially, cause we would stabilize them and then sell them in hindsight should have kept all of those. Right. But,

Dylan Silver (04:36.005)
Yeah.

Robert Fragoso (04:37.317)
But you know, I mean, the time you’re making, you know, two or $3,000 a month, or you can make, you know, 300,000 at one lump sum, it’s like, well, that’s 100 months worth of, you know, income we can, we can do better. Right. Yeah. So you take that. You take, you take the bigger money. So anyhow, so I, fast forward, you know, economy changed. A lot of our investors were already investing with us. at the time we’d be rearing a lot of the property that we were wholesaling to a hard-money lender.

Dylan Silver (04:47.781)
Yeah.

Robert Fragoso (05:06.529)
who, you know, it’s getting tougher and tougher to find these deals. And he brags again, one day he just brags and he’s like, man, you guys made me a hundred thousand dollars last month. And we looked at each other we’re like, we’re in the wrong business. Right? So started, started getting the investors together. You know, they were, they weren’t getting enough syndication deals from us because the deals were tougher to find as the market got better and financing had kind of stabilized a little bit more. So we, I met some other investors.

who had more money than loans. And we started lending to investors who would buy, fix and flip. And we started a company called Anchor Loans that is nationally now one of the largest companies in the country. We sold that to a hedge fund and exited that some, I don’t know, 10 years ago now. think I to look at the actual dates, but it’s time I retire because you have a non-compete for a while and then you get back into the business, which is where I’m at now. But now I’m basically…

doing fix and flips, some development projects that are, you new construction. We’ve got a few of those going, whether it’s an ADU or house. And then I’m coaching, you know, people who want to get into the business, because that’s kind of the way I learned was through just doing, and you know, I had a mentor who was a real estate investor, and that’s, I think the best way to learn is just to get out there and start doing it. And so we’re very action-based and that’s kind of what we promote. So.

Dylan Silver (06:32.099)
Yeah.

Robert Fragoso (06:32.171)
I don’t want you sitting just watching videos because that’s great for a little bit, but you got to do it. It’s much easier than you think it is.

Dylan Silver (06:37.573)
It’s a contact sport. is a contact sport. you know what you what you said Robert at the top about going from wholesaling to if I heard you correctly commercial real estate syndicate is very unique. I think most people do not graduate immediately from wholesaling to commercial real estate syndicates. But you basically done everything at this point.

Robert Fragoso (06:40.887)
Yeah, yeah, for sure.

Robert Fragoso (06:51.565)
Alright.

Robert Fragoso (07:03.661)
Yeah, I mean, listen, I’ve had my contractor’s license at DFW, had my contractor’s license here in California because I wanted to understand what I was getting charged for and understand that business while you’re doing the fix and flips. And it’s great experience. I figured out very quickly, I never wanted to fix other people’s homes and dealing with consumers was just a giant pain in the butt. So didn’t do that. But from the syndicate side, I will say this, it’s just the opportunity that presented itself. Right. And so just capturing. So what happened was

Dylan Silver (07:24.409)
Yeah.

Robert Fragoso (07:32.494)
We were wholesaling these houses, right? We were fixing and flipping some. And then the market had changed where we were buying these houses. You’re making a little bit of money here and there. And, you know, somebody approaches you about an apartment building and, you know, not knowing enough that there wasn’t enough financing or you couldn’t get financing for it. And, you know, back then, the prices for these apartment buildings were really cheap. So it wasn’t like you had to put together a lot of money. So my partner at the time, his family were the largest ARCO dealers in the Western U.S.

He had ties and their family had a lot of money, their friends and family also had money. so we went out to, you know, we actually spent the money to go out and put together a syndication. And in going out and raising money, the first investor we met with, he’s like, sounds like a good deal. I’ll just fund the whole thing. It wasn’t very much of a syndication because the first guy recognized the opportunity, said it was really good. And he’s like, I’ll take it all. It’s like, okay.

So, you know, that was our first syndication deal was like, we’re like, this is really easy to do. So. Twenty.

Dylan Silver (08:33.861)
How old are you at this time?

Robert Fragoso (08:40.205)
Three, I’m gonna say, that’s all I got.

Dylan Silver (08:41.637)
Okay, so you’re at 23, you’re manning the front for a commercial real estate syndicate, you know, lots of responsibility, lots of money exchanging hands here. What was your feeling at the time? Were you like, wow, we’re doing this or was it?

Robert Fragoso (08:46.029)
24, yeah.

Robert Fragoso (08:52.107)
Yep.

Robert Fragoso (08:56.205)
So, but Dylan, wasn’t even that much money. I mean, we bought the first 16 unit building for $225,000. It was nothing. Yeah, it was in Long Beach, California. was all two bedrooms, three story, $19.72. I still remember the address. can look it up. It’s 1720 Chestnut in Long Beach. 93. They were all like that. It was during the time where like you have 15 % like net negative migration. was trough.

Dylan Silver (09:01.477)
No kidding

Dylan Silver (09:14.629)
How did you get a deal like that?

Robert Fragoso (09:24.341)
like basically trauma in the street because the SNLs just crashed and that’s who was financing all these commercial deals. So you couldn’t get financing for it. And then at the same time, you had all of the base closures in California, right? You were in a recession, right? 1990 was a recession. Values were dropping. They couldn’t get financing. And so what happened was these buildings were basically being either foreclosed on by the banks, right? That had gone under.

Dylan Silver (09:30.745)
Yeah.

Robert Fragoso (09:52.75)
And then they were just trying, because the banks had gone under, the FDIC and the people, they were ensuring that the losses that were happening. And so you could buy these buildings for almost nothing, whatever you made the offer. fact here, our rule at the time was we would pay no more than three times gross. That was the max. And we’re trying to get them for two times the gross multiplier of the year, which gave you a cap rate of like 14 or 16%, right?

Dylan Silver (10:19.055)
Now, money in the bank.

Robert Fragoso (10:20.055)
So these things, I’m just thinking that this was a 16,000 square foot building. was three stories with an elevator. You can’t build that for 225 even back then, right? And so we’re like, okay, in order for our investors to make money, we need to rent out like half of the building, right? So the vacancy rate was 15%. So we figured out it’s like, we can be at that 15 % vacancy rate and be making more money than we need to make and our investors will be happy. And so that’s kind of the opportunity that we realized. So we had to spend some money fixing up the building.

Dylan Silver (10:25.957)
Yeah, that’s a sure game.

Robert Fragoso (10:50.445)
We fixed it up, rented it out, or rented some units out. We figured out that when there’s a 15 % vacancy, nobody’s moving and nobody really wants to rent yours. So after sitting there and the tenants you get, you’re competing against people that are like, no deposit, first month free, last month free. So basically you’re paying for 10 months out of 12 out of the year, right? And then the people that come, ended up naming them jumpers, right? So what happened is that they’ll come, they’ve got good credit, there’s no deposit.

Dylan Silver (11:10.17)
Yeah.

Dylan Silver (11:15.847)
Robert Fragoso (11:20.353)
They just move in. The first month is free. The second month they don’t But before you evict them, they leave. Right. And so they leave. you’re not going to spend the money to go after them once they’re gone. Right. Because you have a vacant building and you’re trying to fill it up. So that’s bad money after. So their credit doesn’t get affected and they keep doing this month after month. So we figured out it’s OK. All these jumpers have something in common. They don’t have a lot of furniture. They they sit there and they’ve got

Dylan Silver (11:33.273)
Huh, get new tenants.

Robert Fragoso (11:50.114)
like a lawn chair, a TV, and a cooler. Maybe they got a couch or something like that, but they’re very like, they have to be able to move very quickly, right? And so what we decided to do was hire some door knockers and go and door knock the neighborhood for for families who are living in units that maybe haven’t been well taken care of or the landlord hasn’t upgraded them, which nobody had because the market was down, right? We’re like, look, our units have new appliances, new carpet, new paint. You’ll get no deposit. First month is free.

and we’ll rent you a truck. right. And so our guys were trained to basically find out and peek in their units. If they looked like they’ve lived there for how long have you lived here? Five years. Great. You qualify. Right. three months. fantastic. Here’s the application. It’s a $50 charge and then nobody would apply. So they would. And so basically we went around and we’ve got the other buildings best long term tenants and move them into our building. And that’s how we ended up filling up the buildings. And we told the brokers about this and they’re like, it’s a genius idea. That’s a great way when nobody can get it.

Dylan Silver (12:35.428)
Wow.

Dylan Silver (12:47.863)
In yes.

Robert Fragoso (12:49.631)
And so, you know, it’s funny because I’d read a book called the guerrilla marketing. And that’s the book that gave me this idea to like, like, okay, if when things aren’t working, what are you going to do differently? And we’re like, all right, this is what we need. We need to find these tenants. How do we get directly to them? And so that program worked really well. And, and, and so, you know, our investors were putting out more money to buy more buildings. We were buying, I mean, we bought a nine unit building for 104,000 on Magnolia.

Dylan Silver (12:53.049)
I love that.

Dylan Silver (13:06.095)
the doors.

Robert Fragoso (13:17.101)
Basically we were buying everything in this little area that was kind of the hood of Long Beach called Wrigley. And we were buying a lot of buildings in that area. We can get things really cheap. Long Beach was very undervalued. Aerospace had moved out, so there was even a larger like vacancy rate there so you can buy these buildings for nothing. And then we started, you know, we were kind of managing them. At the time I’m living on the beach in DuPort and we’re like, man, this is the pain in the butt. You got to go all the way to Long Beach every so often. You know, when you’re 24 at this point, probably.

You know, you just don’t want to leave because you live in a beautiful spot and, know, and, um, you get a little lazy and, know, we just, figure out we could sell this building that we paid to 25 for. put like 80,000 into fixing it up and somebody offered a 680 and we’re like, Oh, we got to take that. Right. So we sold it. The building was cashflow. You know, it was doing great, but you know, we took the short buddy and, uh, you know, our investors got a lot of that money. got our portion and, and, and so it turned out well. And then we started doing this.

We sold that nine unit building that I mentioned that was on Magnolia. we thought we maxed out in value. We sold it for. remember. Let’s see. We bought it for a hundred and something. We probably sold it for three something. This guy turned around. We had just remodeled it by the way. This guy turned around, and then got rid of some of the kitchens, combined some of the units, sold it as a four unit for twice as much as we had sold it to him for. We’re like, how do you take nine units? You take nine units that has more income, right?

Dylan Silver (14:26.468)
Mm.

Yeah.

Dylan Silver (14:39.245)
What in the world?

Robert Fragoso (14:45.355)
You shrink it down to four units and he sells it for more and we’re like baffled. And you were like, how did he do that? How did he do that? And so what he, what he, what he figured out was this is that you can’t do this right now, right? Because there’s a moratorium on doing it. It’s the shortage of housing, right? But back then what happened was this was we, we, figured out that the reason he did that is because there’s still no financing. It’s very tough to get financing for apartment buildings. You had to have 30 % down.

Dylan Silver (14:52.357)
Yeah.

Dylan Silver (15:00.739)
huh.

Robert Fragoso (15:14.381)
But if you shrunk it down to four units, you can get FHA financing for 3 % down. And so they could pay more, right? Leverage it for more. Yeah, leverage it for more, live in one unit for free and rent out the other three. And the people that were buying these early on were basically, it’s like a house hack. They would rent out the other three and live for free. And so people started doing this and they’d pay twice as much as we could sell the units for. we’re like, oh.

Dylan Silver (15:18.501)
Mmm.

without coming out of pocket.

Dylan Silver (15:36.761)
Wow.

Robert Fragoso (15:42.306)
We’re idiots. This guy’s a genius. And so we had other buildings that were six units. We’re like, convert it down to four and do that. And so that was kind of the goal that we were doing. And so that turned out well. And then that market, course, the market, here’s the thing about real estate, right? It’s a cycle and you have to figure out there’s this like window of opportunity that gets created and every window has a timeline on it. And your job as this real estate investor is to then figure this out, go out.

take maximize that opportunity as much as you can during that time. And then once it starts to close, look for the other thing. Every time there’s a turmoil in the marketplace, financing gets tougher, something changes, a rule changes. It means it’s created an opportunity somewhere else. And if you’re looking for it, sometimes you can find it and then really, really capture or even build a business around it.

Dylan Silver (16:30.915)
Robert, you seem to have this incredible agility and ability to seize opportunity, which I tend to think is a hallmark of a real estate entrepreneur, right? So you have to be able to adapt with changing conditions and going from wholesaling to then this commercial real estate syndicate to then seeing that you could take out FHA loans, you’re seeing, okay, there’s an opportunity here. Let me seize on this.

Robert Fragoso (16:50.541)
Dylan Silver (16:59.147)
And are you aware at this point in time that you’re uniquely skilled in this regard and that this is really propelling you towards success?

Robert Fragoso (17:08.205)
Absolutely not. had no idea. Cause you know, you’re still young and you’re focused on the weekends more so than like the business, but you know, it’s, it is, you know, you’re having a lot of fun cause you’re making some money. And what you think is a lot of money until you really get into scaling. it really wasn’t, we didn’t scale until we started anchor. And that was more of a loan, hard money company. What most people didn’t realize is that while most people recognize anchor loans as a hard money company, they didn’t realize that we were also an equity company. And so we were doing about.

Dylan Silver (17:10.725)
I

Robert Fragoso (17:37.772)
the equal amounts of buying via that trustee sale. Here’s another opportunity that rose. Post 2008, the market crashed. You have a solid year that’s horrible year. And then the second year, 2009, opportunities start to rise. So there’s a saying when the market’s falling and is crashing that you can’t catch a falling knife. You got to let it drop first. And so you’re trying to sit tight and just survive that rough year.

right before you can spot the opportunities and that’s what happens, right? And so then all of a sudden you realize, okay, the dust is settling, all these banks went out of business, right? Or they need money or they’re getting ready to go out of business, right? And so they start discounting properties in bulk. So usually these bulk, you know, deals aren’t going to trickle down to consumers like us, right? They’re going to go to the big hedge funds. They’re going to go to, at the time, the Lehman Brothers and the, know, Goldman Sachs and these guys.

you know, they’re going to get the deals, right? Intra-bank deals that kind of come from bank to bank. If we’re getting them, they’re in trouble, right? We started noticing Washington Mutual start to build like new banks everywhere. And we’re like, that’s a bad sign, right? So banks, when you see banks like really starting to open up new locations like crazy, usually it’s that they’re seeking capital, right? So for every branch that they build, they get new deposits.

And so when you’re desperate for deposits, you build more branches. And we figured this out, right? And so we started, we’re like Washington Mutual, they got problems. Of course they were the first bank to go under. Right? And so you start to notice this trend and you see these other banks that they start to do that, or they start to like offer unreasonable discounts because they’re seeking deposits, right? Hey, if you bring back, if you bring your deposits, we’ll give you a higher yield or whatever it is. They’re seeking deposits, right?

Dylan Silver (19:30.319)
Hmm, yeah.

Robert Fragoso (19:32.298)
And so when you’re in a time during turmoil that’s happening, you know, this is happening, right? And you see the writing on the wall. You start to see, okay, what’s the opportunity? Well, when the dust started to settle, you start to see that, okay, we can buy these buildings. They need capital. The capital they need supersedes the amount of losses that they can take because those losses won’t get reported till, you know, like, let’s say they get reported. They’re not going to get really seen for 30 days. So if they can raise enough capital during that time.

then all of sudden they’re kind of, they’re prolonging essentially in some cases the inevitable. And so we would do that. We had a relationship with someone at H or GMAC who also went under and you’re sitting there and you’re looking at the opportunities that they’re giving you and you’re like, look, I can pay more for some of these houses if you guys just give us, know, like take your time. And they’re like, and I remember the guy telling me, he’s like, I’m being told.

sell the houses for get as much as you can as fast as you can. And the emphasis is as fast as you can. And he’s like, and he literally told me, he goes, look, just make money on our mistakes. We’re comfortable with where we’re at. And we’re like, okay, let’s go. And so, so, so we bought, uh, two, two, I think two bulk purchaser from them. And what happens with these bulk purchases, they don’t happen like normally, but what happens is that

Dylan Silver (20:47.343)
Wow. Wow.

Robert Fragoso (20:58.113)
You it’s kind of a trade, a cash for deed situation. There’s no escrow. There’s no nothing. You start off with like, let’s say the first one we started off with, 36 properties. They’re not a huge one. And, but by the time you close, when you’re going to wire, you’ll, only closed on like 12 or 14. Some have title issues. Others have, others they sell because as soon as you tell them, yes, we’ll pay it. They tell their department, their dispositions department, here’s what we’re getting. If you can get more, get it.

because they don’t have a commitment to sell all of them until we’ve wired our money. And so all of sudden, the list starts dwindling down because they can sell, because we’ve already figured out their mistakes. And so they’re figuring them out because we’ve already said yes to these deals. So now it’s that kind of cat and mouse game. So the next one we figured out, all right, we have to act quicker. And so I tell them, I’m like, look.

Dylan Silver (21:43.715)
Wow. Wow.

Robert Fragoso (21:51.47)
Like, why are you being so like, you want us to wire, it’s no problem, we’re gonna wire you. I’m like, it’s like, yeah, he’s like, look, he told me in confidence once. He’s like, look, we don’t know for like, so the FDIC goes in generally, unless it’s like a public like issue, they don’t usually take over banks on Mondays, Tuesdays, Wednesdays or Thursdays, it’s always a Friday. And the reason they do it on Fridays is that they have, they can shut it down Friday, right? Close the doors.

It’s closed Saturday and Sunday, and usually by Sunday, they’ve already got another bank willing to take over that bank. And so the people then have access to their deposit fund Monday. So it doesn’t create a bank run. Whereas if they do it on Tuesday, all the banks are open, right? And so it creates a bank run. so they, right. And so they figured out, okay, take over banks on Fridays. So I remember him telling me, like, look, I don’t know if we’re gonna be open Friday. Like we need deposits. Like we need your money. Like blah, blah, blah, get it in here. And so all this stuff.

Dylan Silver (22:35.173)
You don’t want that.

Robert Fragoso (22:48.085)
The second one, I remember I was in Dallas and their office was in Dallas and we go and I tell him, I’m like, hey, okay, we’re wiring you today. And I’m sitting in his office. I’m like, I need the deeds. And this is a Wednesday. He’s laughing and he’s like, why are you here? I’m like, well, I need to take the deeds because we wired you the money. He’s like, what, you think we’re not good for it? I’m like, you literally told me you might not be around Friday. So I need the deeds.

He laughs and he’s like, you know what? You’re right. He’s like, stick around. We’ll get all the deeds, grant deeds, because they hadn’t even drawn them yet. And they were already telling us to wire. So we had to wire them their money. We were waiting for the deeds. I just waited there. was there. the grant, well, the grant deeds and warranty deeds, depending on where the properties were. And so, you know, I wait. I’m there for hours. And, you know, we go out to lunch. We come back. The deeds are ready. I’m like, all right, I’ll see you later.

Dylan Silver (23:16.995)
Yeah!

Dylan Silver (23:27.791)
needs. Yeah.

Dylan Silver (23:34.787)
Right.

Robert Fragoso (23:42.51)
And I literally take possession, I walk over to a title company, they go and then they record it the next day and that’s it. And so, but that was, was a weird time. And we had another bulk that we were buying from them. And then I remember Bush going onto the TV and saying, he’s going to bail out AEG and bail out the banks and do all that stuff. And then they canceled that sale because they no longer needed our money. They were going to get bailed out. So they survived during that time. Ultimately, I think they went on.

Dylan Silver (23:43.129)
Hahaha!

Dylan Silver (23:48.3)
Wow.

Dylan Silver (24:07.397)
So Robert, as you’re, as you’re seeing all this, and I’m here you talk, it’s your passion is apparent just through the screen here. I still hear and correct me if I’m wrong, I still hear a type of problem solving that I feel like I got on a much smaller level and still am as a wholesaler. Because you’re thinking about these different ways to piece a deal together creatively, identifying trends.

And then where other people might not see real urgency, you’re seeing urgency or whether other people might be maybe maybe not seeing any change. You’re seeing this change in this opportunity. Did you did you feel that way? Did you feel like at heart there was still a wholesaler within you?

Robert Fragoso (24:51.917)
You know, it’s funny because I never thought of myself as a wholesaler until like years later when it became in vogue, right? I mean, it really wasn’t the trend. The trend was always to become the investor, right? It’s because they were making most of the money and it’s shifted a little bit to where, some of the wholesalers that are out there, right? They take a little bit of advantage. You know, it’s a little bit of a, it’s become unfortunate, a little bit of a soft con, right? Where they in fate.

Dylan Silver (24:59.322)
Yeah.

Robert Fragoso (25:18.881)
they inflate the ARV, they deflate the repairs, and then they’re trying to make the spread, right? And so in many cases, like I work with a lot of great wholesalers that bring me deals and it’s great, right? But most of them are very transparent. It’s one thing that I kind of demand of the people that I work with is I want transparency because oftentimes, we’ve spotted a lot of fraud that happens, right? And through no fault of the wholesaler, but they get brought a deal and they’re trying, it’s such a good deal that.

When all of you see this opportunity that you’re going to make so much money, you overlook some obvious signs. Right. And so I, so I require kind of transparency. I don’t really care how much somebody’s making, right? If it’s a good deal for me, it’s a good deal for me. I’m happy with that. I’ll play ball with that. In fact, you know, I mean, I had a deal that I passed on. Actually, I shouldn’t say I didn’t pass on it. I tried negotiating it it went to the next guy and it was a good deal where I got it. But the wholesaler was making a million dollars. Yeah. And, and I’m like,

Dylan Silver (26:14.445)
What? my god.

Robert Fragoso (26:17.581)
Here, wait, wait. And I’m like, he’s going to be happy with 800,000. I’m going to offer him 800,000. Right. It’s a good deal at a million. It’s not fraud. It’s a good deal, but it was for a building in downtown LA. You know, and it was an eight story building by the Staples Center. wasn’t the Staples Center yet, but you knew it was, it was in the process of being built. You knew this thing was going to be worth like a lot more money. And he’s like, I’ll call you back. And he didn’t call me back. And I’m like, I called him back later, later that afternoon, by the way, same day.

I’m like, hey, what’s up? We’re to do this. He’s like, no, I sold it already. It’s like, like, yeah, I’m like, I missed out on that deal over 200,000, right? That probably had a $5 million profit plus on it because I tried to negotiate for 200,000 and this guy, but you you talk to the guy and I didn’t think he knew what he had. So it was just a matter of like, all right. mean, it was, was still at $800,000. thought that was pretty good. He was going to be like, it’s an easy phone call. Yeah.

Dylan Silver (27:03.919)
Yeah.

Dylan Silver (27:08.495)
Come on, assignment? That’s incredible!

Robert Fragoso (27:12.353)
So he did really well. if you’re assigning deals, right, commercials better, but I will tell you those guys are sharks, right? I mean, if you’re dealing with commercial, they will try to go around you if they can, a hundred percent will. And I don’t care what you think you’ve got signed. They will, they got, they got you, you know, they have so many different entities, so many different ways, structures, so many different ways. mean, it’s just, it’s so, so it’s very much, it’s much more difficult to do that. But I will say with the, you know, again, changes in more efficiency and a lot of people who’ve come in.

Dylan Silver (27:17.604)
Yeah.

Robert Fragoso (27:42.104)
There has been a time, and I think that time’s kind of coming to an end with wholesaling, where it was more lucrative to wholesale in volume than it was to fix and flip. Now the deals that I’m doing now, we get from wholesalers and we spot unique opportunities. It’s kind of what we look for. I’m much pickier on the deals that I’m doing right now than I used to be. But they do make a lot more money instead of being…

Dylan Silver (27:51.877)
100 %

Robert Fragoso (28:10.349)
You know, I know a lot of guys who do deals for, you know, 30, $50,000 and they’re fixing and flipping them. And it’s the three, four, five, six month process. In my mind, that’s just not enough money. I mean, we’ve got deals now that will make, you know, five to 600,000 on a flip. And so.

Dylan Silver (28:25.125)
Robert, are coming up on time here. We can probably spend a whole other episode talking about fixing and flipping and the ins and outs of commercial wholesale deals. But where can folks go to get a hold of you?

Robert Fragoso (28:39.373)
Sure, so I mean on Instagram, my full name is Robert underscore Fragoso, F-R-A-G-O-S-O underscore J-R for junior. Or you can either email or I guess call me at 949-572-4468. It’s probably the two best ways to reach me.

Dylan Silver (28:59.717)
If someone’s got a deal, where are you buying it?

Robert Fragoso (29:02.711)
So I buy local now, I’m not buying in multiple states. It’s all Southern California, LA and Orange County. That’s really the two markets that I work in. I do have clients that buy in other areas, so if you’ve got other stuff, I’m happy to talk to you. I still do loans, I act more like a private investor, some of our old investors, so we still do hard money loans. In a lot of states, I won’t say all the states, but some of the major states that are active, we’re active in as well.

Dylan Silver (29:28.217)
Hey folks, if you’re in Orange County area and you’ve got a deal, out to Robert. Robert, thank you so much for your time today.

Robert Fragoso (29:36.237)
Hey, thanks for having me. It was great meeting you.

Dylan Silver (29:38.437)
Absolutely.