Jacksonville Real Estate Investing: Cash Flow vs. Appreciation with Ed Hubay

Edward Hubay (00:00)
you learn to wake up with challenges. And you learn to understand how you have to deal with yourself. Challenges. Not only dealing with the people, but how you’re dealing with yourself because your your attitude and your approach in problems ⁓ is is really what counts. And you always have to have a forward thinking moment. ⁓ well n not a moment, but you always have to be forward thinking. Always forward thinking.

Quentin Edmonds (00:01)
Yes.

Mm.

Yeah.

Welcome to the Real Estate Pros Podcast. I am your host, Q Edmonds, and I am excited to be here today. I am super excited about my guests. This gentleman has a story to tell. I love his authenticity. I love his journey. And I’m sure we’ll get into the story. ⁓ where he’s landed now, you know, he’s with Momentum Realty. He’s an agent there, and he wants to help investors that’s looking to find

single family homes to rent or to buy. but it’s it’s it’s it’s so much to this gentleman and I cannot wait for us to just peek through his lens and learn from his experience. And so I want to introduce you all to Mr. Ed Hubay Mr. Ed, how you doing today, sir?

Edward Hubay (02:41)
Doing real well, sir. How are you doing as well?

Quentin Edmonds (02:44)
Man, I’m doing good. I’m excited and elated that I get to spend some time with you. And so listen, sir, I’m the type I like to dive right in, right? So I would love for you to tell the people what’s your main focus these days. And Ed, give us a little origin story, kind of how you got to where you are. All right. So Ed, sir, you have the floor, my friend.

Edward Hubay (03:05)
Okay, well, thank you. I I I appreciate that ⁓ and I’m happy to be with ⁓ you and and the guests here today. ⁓ right now, my main focus is investors as a real estate agent. I deal with people that come in out of town, particularly. ⁓ people that come in out of town, they find me either through word of mouth or or whatnot, and they latch onto me to bring them into Jacksonville to let them know what the city is like, where the opportunities are.

where the city is going and how they can work best with their investments here in Jacksonville. I’ve got investors that come in from Trinidad, ⁓ from France, a big group of buying investors from France. ⁓ I also have ⁓ a lot of people from California, a few people from New York. As a matter of fact, I talked to one yesterday who was introduced to me as a referral, and he lives in New York with an AC company who wants to go ahead and start buying some properties that in 15 years they’ll be

They’ll be paid off and and he’ll have the rental income free and clear on these properties when he’s set to retire. ⁓ same with another gentleman that came in the this weekend on Saturday. I took him on my standard nickel tour dime of Jacksonville. And ⁓ he’s locating properties so that when his grandchildren become of college age, he has it figured out where he can get them tax-free these properties, so they can use them for paying college expense, they have cash flow for college, or if they want to do something else.

⁓ so I actually got into dealing with investors ⁓ kind of like ⁓ I don’t know whether it would necessarily say an accident, but it took the the crash, the market crash in 08 for me to change gears. ⁓ just just quickly, I had ⁓ I was in a previous occupation, I was in in radio here in Jacksonville for a while, and ⁓ you know, I just kind of felt getting stuck and and a

A former ⁓ sales rep that was in the radio station that I knew quite well. We hung out and ⁓ got along well. He took on another job outside of the radio station selling coupons. And so he asked me if I wanted to come along and try selling coupons on on the sides. I said, sure. And before you know it, ⁓ I’m going over to a mortgage broker to give to let know that we’re doubling the price on their on their flyer. And he didn’t

say a word and I came back to the office. I said, You’re right. He didn’t he? I don’t do it. No, they and so from there, they ⁓ the the fellow that owned this mortgage this this coupon company said he wanted to go into the mortgage business like them. Well my dad had a real estate license and I kind of hooked the two up together. ⁓ from there I got into the mortgage business and I had ended up with my own mortgage company. And then later along the road ⁓

My dad reactivated his real estate license and he opened up Bay Real Estate alongside my company proven mortgage. For 20 years, we were a father and son team. And it I would never trade those 20 years, obviously, for for anything. But in 2007, I was kind of getting a little anxious. I felt like I was selling it instead of buying it. I realized that I’m, you know, I’m seeing these people that are are doing these things right at this moment in time. And I’m saying, boy, they’re they’re I’m facilitating their wealth. ⁓

And ⁓ then ⁓ I found a lot and I got to do what I’d always wanted to do and that’s infill construction. We have a lot of that in Jacksonville and I found this wood this lot in an established neighborhood, was actually donated to a church before the person passed away. And the the youth group at the church saw my sign, we buy houses, and they prayed over it and called me up and asked me if I wanted to sell them this lot.

So they could fund a ⁓ a trip to to ⁓ seminary trip to to South A South American ⁓ country, I think Guatemala. And I said, sure. So I bought it from them and built my first infill construction and built a new house and ⁓ it was f ⁓ affordable housing and I got the picture handing it over to the gal, the key over to the gal, you know, a lot that was nothing, then a house there and handing over the key was real great. But then the market crashed.

And ⁓ that put that on on hold for a bit because you could buy houses then much cheaper than you could ever build. And I joined the local RIA and got this concept of doing infill construct not infill construction, but turnkey rentals. And ⁓ I thought, well, that’s an idea. And so I started to buy these houses, you know, at a you know, anywhere between 11 and 20 K that were foreclosed on in bad shape, rough shape. I came in.

Quentin Edmonds (08:18)
Mm-hmm.

Edward Hubay (08:31)
Bought them, renovated them, put in a tenant. And then I ⁓ I put it on the internet that they’re for sale with a fully tenanted, and my business just grew from there. I ended up with ⁓ investors coming into Jacksonville from Trinidad, ⁓ from New York, from ⁓ one of one of the other New England states, from Michigan, ⁓ some from California, and then it just expanded ⁓ from having people come in from France.

And so I decided then just I was going to deal with investors. ⁓ and what I found is when I was with my dad in the in the mortgage and real estate business, we were doing what I call regular retail real estate, you know, people buying property for homestead. What I liked about dealing with investors, when you’re dealing with somebody that’s buying homestead, it’s a pure emotional process.

And you bring people out to could be five properties, could be 20 properties before you open the door and the epiphany comes down. And ⁓ and then you have to go through the process of closing, which they’ve not experienced with first time a lot of times, maybe even second time or third time, but still it’s a emotional process. The that this has got to be repaired. No, it shouldn’t have, you know, and you get all that with investors.

It’s all about the numbers. It either works or it doesn’t. All of the emotional process is taken out. And that I really enjoyed because it really kind of frees your time up to really look at anything else you want to do. It’s just a much easier process. You don’t have to hold anybody’s hand doing anything. You go into a house and yeah, it needs repairs, but hey, that’s great. I can try, I can buy it for less. It’s not quite

Quentin Edmonds (09:57)
Yeah.

That

was

Edward Hubay (10:24)
So ⁓ so that’s that’s that’s that’s what I currently do now. ⁓ however I was able to just recently ⁓ I I wanted to get into that infidel thing. I really enjoyed that. That was really nice.

Quentin Edmonds (10:37)
Yeah, so listen, before we go there, because I I I I know that in field, that’s gonna be a whole nother story, a whole nother transition, kind of where you are. And and so I I I love how you told us where you are. I love how you took us on the journey. I want to actually we’re gonna come right, we’re gonna come back down back to the infield, I promise you. Yeah, but I have so I I want to peek into your mindset a little bit, right? And so I often say, Ed, destiny has no wasted moments.

Edward Hubay (10:43)
Okay.

Quentin Edmonds (11:05)
Right? Destiny has no wasted moments, meaning that there’s no random moments. We’re borrowing from each part of our journey. We’re borrowing from the success. We’re borrowing from the failures. We’re borrowing from the hurt, from the pain, we’re borrowing from it all. So you’ve been through some transitions when it comes to real estate. I would love to know throughout your journey, what has the moments taught you about yourself? Has it made you resilient? Has it taught you disciplined? Has it made you humble? Like what has the journey taught you about yourself, Ed?

Edward Hubay (11:34)
Well, the biggest thing is actually how to deal with with people. ⁓ I don’t ⁓ kind of unique. I grew up as an only child, ⁓ and we moved around quite a bit. My dad, but for my dad’s profession, it was not military, was shi the shipping industry. So we was going from port to port setting things up that time in container as shipping was coming in.

so I moved around a lot and ⁓ then when I went to work in in radio, you think that you know you have interaction. No, it’s it’s a cold medium. You’re sitting in a room and all you’re doing is playing music and talking to people. You’re not having any real interaction. Every once in a while on the phone you get some buzz, whatnot, but that wasn’t my necessarily my thing. It wasn’t talk radio I was doing. So getting into the business was really a learning experience about talking to people.

having disagreements, coming to a solution, working around problems, ⁓ being motivated to make things happen. ⁓ you know, you’re not you’re you’re it’s it’s not like, you know, when you’re in sales, ⁓ when when you’re in sales, you know, like my mom was in furniture sales. Well, yeah, well the store was there, the advertisements were there, she had to show up. You create your own box. You have to do everything to make it

Quentin Edmonds (13:07)
Yeah.

Edward Hubay (13:29)
And ⁓ that’s the one thing do you learn about being I had a I had an employee, he was new to the business and he he was he was funny he would come and say, boy, when when you’re self-employed, you wake up every day unemployed. ⁓ and ⁓ he had another one. he had another one. You know how good you are?

Quentin Edmonds (13:47)
That’s good.

Edward Hubay (13:56)
You’re only as good as your last closing.

Quentin Edmonds (13:58)
Mm. Mm. Mm. Come on. These are these are so true. These are so true. ⁓ man.

Edward Hubay (14:05)
You you wear

you learn to wake up with challenges. And you learn to understand how you have to deal with yourself. Challenges. Not only dealing with the people, but how you’re dealing with yourself because your your attitude and your approach in problems ⁓ is is really what counts. And you always have to have a forward thinking moment. ⁓ well n not a moment, but you always have to be forward thinking. Always forward thinking.

Quentin Edmonds (14:08)
Yes.

Mm.

Yeah.

Edward Hubay (14:33)
Yes, sir. And because you’re only as good as you were last closing. So you have to think forward. you know, and you and you have to and for me it was understanding people and not taking things personal as well. That was that was a that was a big part of it. Yeah. so yeah, it’s a matter of was understanding myself and understanding people and interacting with people. you know, I I I and understanding too.

⁓ when you’re in into investment and I’ve been dealing with a lot of investors and I’ve seen the success and I’ve also seen the failures too. And very sad. Very sad. ⁓ that ⁓ you know ⁓ that ⁓ y you I there I I do believe in the expression that you have to have a certain cloth. Gotcha. You can you can you can take this you can take this this calculator and run those numbers all you want.

Quentin Edmonds (15:14)
Yeah.

Edward Hubay (15:30)
But there’s a certain cloth to dealing with this business too. And ⁓ this is really the easy part, you know. Yeah. ⁓ from anything from, you know, ⁓ well particularly once you get your tenants in, ⁓ figuring out how you’re going to make sure that you think ahead so that your tenancy is is good tenancy. you know, dealing with tenants. ⁓

Quentin Edmonds (15:38)
Yeah.

Edward Hubay (15:56)
know one one fellow you have to stay away from that expression one said with tenants you either you you’re you’re either bringing groceries or you wanna kick out. Yeah. Yeah. ⁓ so you have to be, you know, ⁓ and not you know and and and think about ⁓ and also trust in this something I’ve seen

Quentin Edmonds (16:16)
Yeah.

Edward Hubay (16:18)
I seems evidently they must have had some sort of big thing in California where people were going to the seminars on building ⁓ syndications. And they were getting professional people from professional companies that were managing other people’s money, whatnot. And they thought, well, hey, I could do this. I can gather the money. So this is real and unfortunately, ⁓

Quentin Edmonds (16:28)
Yeah.

Yeah.

Edward Hubay (16:42)
They they just didn’t understand. I mean, they just went into a full force and then just bought all these and and it did not work out for them because they just didn’t know to understand what kind of things they’re going to be coming up against. And what was this thing they do? They say what other thing they do? The first thing you do is you leverage. You’re leveraging from 70% to 80%. Then you’re leveraging if you can get 85% to keep things afloat, and then all of a sudden it’s breaking down.

Quentin Edmonds (16:54)
Yeah, yeah.

Yeah.

Yeah.

Edward Hubay (17:10)
And you can’t sell them because your mortgage is higher than than the condition of the property. it’s a it’s a terrible situation. I hope nobody gets into that and they they you know they they they if there’s any new people starting out, you’ve just got to be very careful and and follow your suggestion. Make sure you have ⁓ good people standing beside you to say, Hey, you’re doing this right or you’re doing this wrong or you’re doing this right, but be careful this your mentors, your coaches, if you’re starting out.

Quentin Edmonds (17:15)
Yeah.

Edward Hubay (17:39)
is so so important because yes, there is a lot of things that that are just systematic things that you can do and you feel like you’re you got it. All those other ancillary things around it are a matter of whether or not it’s going to really take form or not.

Quentin Edmonds (18:36)
I mean, that’s great, great advice. And I’m so glad you brought up like systems, systematic things are important. So I want you to tell me, what’s one operational thing that you’ve put in place the last two years that’s made the biggest difference in how you run deals?

Edward Hubay (18:52)
Well, you know, that’s that’s that’s really a hard one because I’ve been really flying by the seat of my pants. ⁓ I’m not one that kind of really set up the the traditional funnel system of things. But I can tell you what I plan on doing. Number I plan on contacting all of my investors because I just had people coming in, you know. Person comes in, you take care of them, they take up your time. Another person comes in and and with investors the

Quentin Edmonds (19:07)
Yes.

Edward Hubay (19:20)
difference between again investors and retail is your investors are coming back in to buy property. It’s not like a one and done, we’ll see you in in, you know, maybe 10, 15 years. And ⁓ if I keep remembering you, I might I might, you know, give you a referral from somebody else that I know. Yeah. You know, and and you get involved with each investor as you go and you forget about staying in contact with with the others. And that was my biggest downfall. So I’m putting that back into place to making sure and and to ⁓ let people know what I do.

⁓ you know what I do. ⁓ you know, and that I’m here and that I have more experience than I did the last time I talked to him. Yes. So to anyone. ⁓ But if I was to really say anything in particular, ⁓ I would I would have to say is to devise the market as to what somebody is looking for when they first come in and to how to handle not so much continuing the

the ⁓ the the the the the the the the the clientele product the clientele coming in but how I handle the clientele. Yes ⁓ my system on that is number one I I want to know what are they what are they in for it. Yeah are they in it for it for cash flow or are they in for it for appreciation? You know, because your cash flow here in Jacksonville, you buying anywhere between

Quentin Edmonds (20:35)
Mm-hmm.

Edward Hubay (20:41)
you know, and eighty thousand to maybe a hundred and ten, hundred and twenty at the most for your maximum cash flow. ⁓ you know, and and you try to get that one one to one rule, or you can get that one to one rule or better. So you’re making 10 to 15% rate of return on the high side, 15%, but you try to get that 10%. And that’s what they want. They want the cash flow. Well you’re buying in those properties

⁓ there ⁓ and and believe me, when I go to these properties and I show these properties to people, we’re looking around and I’m saying there is when we talk about neighborhood, we’re talking about pride of ownership. Yeah. And that is what determines a neighborhood for me. As long as the people it doesn’t matter what the what the what the price range, the asset class, whether it be, you know, ⁓

Quentin Edmonds (21:22)
Yeah.

Edward Hubay (21:29)
Middle class, lower middle class, upper middle class, what you know, whatever the content may be, if I may. ⁓ it’s the pride of ownership. And when you see the pride of ownership, you’re in a good neighborhood. That’s what I look at. And so, ⁓ you know, so but now if they don’t, I have well an investor out of California. He sold a $1.5 million piece of property, placed it in 1031 exchange, yeah, wanted to come to Jacksonville, and he did not want to go.

For a bunch of 110,000, 125,000. And we have properties 150, 170, but your cash flow isn’t gonna be as much as 10% or whatever. Start to, you know, he he wasn’t in he wasn’t interested in cash flow. He wanted ⁓ four $350,000 houses in the Mandarin area. Well, he got them, but he was also very good at seeing what other little upgrades he can do. He these properties were not in bad shape at all. Yeah, they were rentable.

livable whatnot, but you know, if he could put on a you know maybe a a countertop, ⁓ you know, or something, maybe a little upgrade here in in in in ceiling fans, whatnot. But he was able to command himself on most of his properties to get above average rent of $2,500 each. Now, yeah, he spent $1.5 million, but he is happy having that $2,500 each on four houses coming in every day or every month.

Quentin Edmonds (22:39)
Yeah.

Edward Hubay (22:50)
Yeah. And now his three hundred and fifty thousand dollar houses are worth four hundred and ten.

Quentin Edmonds (22:55)
Yeah. Yeah.

Edward Hubay (22:56)
So it’s it’s, you know, ⁓ I really wish there were more people with that kind of mindset. But everybody, of course, is looking for the the ⁓ for the for the cash flow. And and I have to disappoint, I want cash flow and appreciation. Well, there’s a little sliding scale here. A little sliding scale. And it’s not that these pre properties don’t appreciate. I bought one house, I I got the tax roll on it because I was showing off because there’s another property in the same, love this Magnolia Gardens area.

Really nice concrete block houses, nice pride of ownership. ⁓ I bought this one ⁓ on Belafonte Drive for eleven thousand, concrete blockhouse. I needed to put a roof on it, I think, and ⁓ had to really work I had to tear out the bathrooms, whatnot, ⁓ but bought it for eleven thousand. And I sold it to a father and daughter investment team. And the team is a father and daughter going out investment properties.

Quentin Edmonds (23:42)
Yeah.

⁓ wow.

Boy, yeah.

Edward Hubay (23:52)
I

sold that eleven thousand dollar property to them for forty-five thousand dollars. And I was happy that, you know, I probably maybe put in fifteen thousand dollars. So I’m I’m probably at twenty-five, so I’m making twenty thousand. Well, he called me up ⁓ earlier this month and said, Ed, I’m you know, I’m I’m living in the Orlando area. It’s just too much to go up there and and whatnot. I want to go ahead and sell it. Okay. So he sold the house that he bought for $45,000.

Quentin Edmonds (23:57)
Wow. Yeah.

Yeah.

Yeah.

Edward Hubay (24:20)
He sold it for a hundred and thirty thousand. He bought the house in twenty I bought the house in twenty fifteen. I sold it to him in twenty seventeen. And nine years later, he sold it for a hundred and thirty. Yeah. So, you know, again you talk about appreciation, but you’re talking about buying properties at value add areas. Yeah. Yeah. Now somebody who buys that property for a hundred and thirty, in in in nine years from now, it’s not they’re not gonna ⁓

Quentin Edmonds (24:22)
that

No.

Edward Hubay (24:48)
you know, make sixty thousand. Just like he did, or better boy, what did he make? He made not almost ninety thousand.

Quentin Edmonds (24:49)
Yeah.

Yeah.

Ed, I love it, man. Yeah, ⁓ this is so phenomenal and I’m so glad you’re taking us through this. I gotta ask you before we get out of here though, what’s next for you, man? What’s the next real goal? What are you looking to solve a scale next, Ed?

Edward Hubay (25:08)
Sure. I really, really, really enjoy that infill construction. Yes, sir. I’ve got two lots. ⁓ somebody came by an ⁓ wholesaler and I picked up just, you know, they come passing through all the time. And saw this guy that had a a concrete blockhouse just like the ones that I’ve been doing, and it had two buildable lots with it. So I said, bingo. And so I I bought that in the tube for I think it was like for 45, 65,000.

Quentin Edmonds (25:10)
And true.

Yeah.

Edward Hubay (25:37)
And my plan was to renovate the house. Maybe I bought it from I forget. If we renovate the house, which I did. It was a two-bedroom. And the one thing I did with the two-bedroom is I put in a walk and shower because I know with my parents, walk and shower was real important for an older generation. And I figured for a two-bedroom, what I wanted was an older generation that had the, you know, that had the grands that would come over, you know. And and and you wouldn’t believe that two bedroom house was very popular.

I I did I did get to sell it, but I should have scraped it. I should have scraped it and just built. But I’m I’m going to be building on these two lots. I’m looking for a JV partner. I think I have one, but I’m still looking for a JV partner. I want to go ahead and build on these these lots. ⁓ it’s so much nicer than than renovating. ⁓ once you get the crew and everything else like that, it just moves along. You you you see something that comes up out of the ground and ⁓

You do real well on them. ⁓ in this particular one, I’ve got a builder that will build me a four-bedroom, two-bath, nearly fourteen hundred square foot house with a garage for a hundred and twenty-five thousand dollars. And all the houses across the street are also infill new builds, and none of them sold for less than two twenty-five.

Quentin Edmonds (26:54)
⁓ Well, well, wow.

Edward Hubay (26:57)
Yeah. So and I would like and and possibly even build to rent. And with Jacksonville, we have this this land situation to where you can buy an acre of land and maybe put up a not that you’re making a subdivision, but you’re you can put like, you know, maybe about four or five townhouses in Yeah. You know? That’s that’s where I’m that’s where my goal is right now.

Quentin Edmonds (27:15)
I love it. Ed man, I’ve so thoroughly enjoyed this conversation, sir. I’ve thoroughly enjoyed you. If someone wanted to reach out to you, connect with you, collaborate with you, learn more about what you’re doing, how can they get in contact with you, sir?

Edward Hubay (27:29)
Sure, sure. First off, ⁓ I am with Momentum Realty, but my direct phone number is 904-612-2674. And my name is Ed Hubay. That’s H-U-B as in Boat A-Y, Ed Hubay. My email address is [email protected]

And you can go ahead and contact me. ⁓ let me know what you’re thinking and ⁓ you know, love to collaborate, ⁓ talk about what you do. You I’ve talked about myself, be interested to hear about some other people and what other people do. And if anybody has thoughts about Jacksonville, ⁓ I’m your guy. I’m your guy.

Quentin Edmonds (28:16)
Yeah. Well, Ed, let me say three things to you sincerely. One, thank you for your time. I appreciate your time. I value people time. I think time’s our most precious commodity. So thank you. Secondly, sir, thank you for your story. ⁓ thank you for the gift of your vulnerability and transparency, the gift of your integrity. I appreciate you coming on and planting seeds for people. And I think those seeds, you know, they can grow at any given time. And we just don’t know when. So I think you planted some real seeds.

And lastly, sir, thank you for your mindset, Ed. Thank you for the way you think and bringing that mindset to this platform. I appreciate you coming on, sir.

Edward Hubay (28:50)
Well, I I appreciate being here. Thank you so much. I really enjoyed it. This has been great. And and and ⁓ all the success. God bless and all the success to you and and God blessing all the success to the people out there as well.

Quentin Edmonds (29:01)
Absolutely. Well listen, y’all heard y’all heard Ed. His information is in the show notes. So please get in contact with him. And whatever you do, definitely make sure you’re subscribed here because we’re going to continue to bring up amazing people, just like Mr. Ed. So, sir, I say thank you again. And everyone else, y’all have a fantastic day.