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Show Summary
In this episode of the Investor Fuel Podcast, host Michelle Kesil speaks with Jesus Garay, a general contractor and real estate investor. Jesus shares his journey from military service to becoming a successful entrepreneur in real estate and logistics. He emphasizes the importance of understanding the market from a unique perspective, particularly for first-time homeowners and those from lower-income backgrounds. Jesus discusses his approach to flipping houses, mentoring others, and the current challenges in the real estate market. He also highlights the distinction between the economy and the market, urging listeners to focus on empowering the next generation of entrepreneurs.
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Investor Fuel Show Transcript:
Jesus Garay (00:00)
This is a clear indicator that you’ve never been poor. Because if you’ve never been poor, for poor people, this is typically the only time they’re going to make a 20, 25, 30, $40,000 check. And they don’t typically have the skill set to do it in any other market. So to tell the people who are first generation homeowners or first time homeowners that your house is not an asset, that’s not necessarily true. If we can teach them how to get into the house the right way and not buy houses at the top of the market, not buy houses that are completely finished,get into the house with some equity, sit on it two or three years, that person can turn around and sell their first house and make their first $30,000 check.
Michelle Kesil (02:07)
Hey everybody, welcome to the Investor Fuel Podcast. I’m your host, Michelle Kesil, and today I’m joined by someone that I’m looking forward to chatting with, Jesus Garay, who has been really making moves as a general contractor and flipping houses. So, excited to have you on the show today.Jesus Garay (02:28)
Hey, thanks a lot. Thanks for having me.Michelle Kesil (02:29)
Of course, I think our listeners are going to take something away from how you’re approaching your knowledge and expertise as both a contractor and an investor, so let’s dive in. First off, for those not yet familiar with you and your world, can you give the short version of what your main focus is?Jesus Garay (02:51)
I mean, focus right now is kind of growing what I call an army of elite entrepreneurs. So just do what we do and I can do my background or well, why it makes sense.Michelle Kesil (03:02)
Yeah, go for it.Jesus Garay (03:03)
Okay, all right, so Hayses Gray retired, he was starting a combat vet. Like halfway through my career, I ended up buying one house and came down on orders for deployment and I made 30 grand on that house. And I tell everybody that was like a pivot for me because I’d never really even thought about being a real estate investor. While I did that, I was actually still in the military. So I went ahead and deployed and I came back and I dipped my toe in real estate investing. My first eight or 10 houses, I didn’t really make any money, but I had a general contractor that was doing all of my work on every one. I was getting the funding for the remodels. He’s making money and I’m not. So I ended up…started working with him. took a test. I really got certified myself in the state of Oklahoma. I became a general contractor and I never lost money in real estate again. I’ve done hundreds and hundreds of deals. But I was in the army, so I had a lot of friends. So I started teaching my friends how to do this too, how to get in real estate. And even if they, a lot of them didn’t turn into investors, but at least they bought like one house the right way. And most of them would buy houses and have a lot of equity into them. And then quite a few became investors themselves. One of my most famous
mentees. has about 35 properties right now. He retired four years ago. He does it full time. He got married. His wife became a realtor and she became a real estate investor. so anyway, um, so for, so the whole time I’ve been doing this, I’ve been also trying to help. grew up poor, so I have a, I have this really big urge to help first generation people understand this is one of the main ways we can, can have your first windfall is, is, is the real estate market. And so for a lot of people, a lot of current investors that say the house is not an asset.
The house is not an asset.
This is a clear indicator that you’ve never been poor. Because if you’ve never been poor, for poor people, this is typically the only time they’re going to make a 20, 25, 30, $40,000 check. And they don’t typically have the skill set to do it in any other market. So to tell the people who are first generation homeowners or first time homeowners that your house is not an asset, that’s not necessarily true. If we can teach them how to get into the house the right way and not buy houses at the top of the market, not buy houses that are completely finished,
get into the house with some equity, sit on it two or three years, that person can turn around and sell their first house and make their first $30,000 check.
So I approach real estate from a poor people’s perspective, because I know for a lot of people that grew up first generation, there aren’t many ways to make that first 20, 30, $40,000.
Michelle Kesil (05:58)
Yeah, absolutely. That’s incredible that you were able to do that. So what are you focusing on now when it comes to your business and investing?Jesus Garay (06:07)
Yeah. So, in addition to on the real estate side, I’m actually, I grew a pretty big trucking company, like a nationwide award-winning recognized trucking company. I’m kind of big in logistics industry. But on the real estate side, I’ve had a roofing company on and off for like the last 12, 13 years. And I’m actually a consultant with two really big, one of them being USAA, two really big insurance companies and banks, oh, I’m sorry, insurance companies in conjunction with banks.In particular, I do a lot on the legislation for tort reform. So, I know this is a real estate show, but I’m also a consultant that helps with the roofing, the roofing tort, like the frivolous lawsuits in the roofing industry, which add to housing costs by increasing your insurance. So I’m in the state of Florida. had three years ago, we had a big bill called HB 837. I was one of the 10 primary or principal business owners that went and lobbied for that bill.
and it’s actually a tort reform bill. And what was happening is because we have a lot of inflated roofing claims and these roofing companies are partnering with lawyers and they’re submitting 80, 90, $100,000 claims on $30,000 roofs. Roofs where I’m gonna subject matter expert in it and I can actually break those claims. I go back and I do like what they call a pre-review and I go back and I explain to them, there’s already 35, 40 % margin in this roof. don’t have to have 360 % margin in the roof.
because just because you want on that one roof or these 20 or 30 roofs, what happens is insurance companies aren’t set up to be making those kinds of payments and they’ll leave the state. And once they leave the state, the natural order of supply and demand kicks in. And this is why everybody’s insurance in the country has damn near doubled like in the last half decade, right? So I spent actually a good amount of time in that space by going back and doing peer reviews and participating in legislation, or I’m sorry, litigation.
to help control the costs of these roofs, roofs in particular. So while doing that, I also have like a big kind of a legion of mentees that I’m helping get. And the thing about what’s good about this market is that a lot of the people that are real estate investors, they kind of left. This isn’t for the average person’s real estate market. Well, I’m really showing them how to turn a profit in this market. When the market forces align, you can go to 20, 25 a year. But if you could get one or two under your belt in this market, or at a minimum, buy your house the right way,
You know you’ve actually created margin, or you’ve created a profit margin in the toughest of markets. So when the market opens up, things like inventory hitting the market, or the rates dropping, actually right now, currently there are 500,000 more sellers than there are buyers in the current real estate market in America. read that today. So there’s currently 500,000 more people trying to buy a house than there are people looking for a house. And so that is inventory.
But as soon as those rates drop, think a lot of that inventory now, what hasn’t happened is we haven’t had a price correction. That’s a little, that’s a little, I’m curious about that because if there are that many homes sitting on the market, typically the natural forces of supply and demand will kick in and those rates will start dropping. But for now, we’re not seeing it in my area. We’re not seeing a lot of rates dropping in my area, but people also aren’t selling those houses and buying something else, which would cause them to drop that house.
So they’re staying in the house and waiting till they sell that. Typically you’d leapfrog into another house and then this one’s already for sale, but you can’t maintain two mortgages. Well, people stop doing that. They’re in their house and then once they sell their house, then they’ll move out.
Michelle Kesil (09:29)
Yeah, absolutely. That’s really good advice for people to think about and understand.So I know you mentioned that you flip houses. Can you share more about that journey?
Jesus Garay (10:15)
Yeah. So, ⁓ when I was, so I was telling about how about my first house on a VA loan, knowing nothing about real estate, but I thought I saw had already had three deployments and I actually thought the war was over. This was back in 06 and then, I had just came from overseas. So we bought a house and, we’re just straightening it up a little bit, not doing too much, just putting our taste, taste on it. And I came down on orders again and I didn’t really want to, I wasn’t an investor, so I didn’t want to go back overseas and have this house. So I actually just put some lipstick on it. We put a, we poured a pad in the back.just some paints and minor stuff we sold in May 30 grand. I mean, we didn’t have it that long. And that kind of piqued my curiosity, right? So when I got back, I started flipping a lot, a ton of homes, and then I became a general contractor, which helped me see these projects differently. Like, wow, this is why people, I don’t care how big, how good your flyers are. I don’t care. A lot of the other stuff doesn’t matter. If you’re not controlling the remodel budget, the real estate investing is about controlling the remodel budget. almost every, lead, gin, all that stuff is cool, but it doesn’t matter.
if you’re not controlling the remodel budget. So taking over as many phases of construction as you can. Now, some things you’re to have to have a GC sign off on, but taking over as many phases of construction as you can, I’m telling you, it has everything to do with whether or not you win in the market and whether you don’t win in the market, right? And so right now we’re just focusing on having as many people buy or attempt to sell, flip or buy and sell one house in this market.
the exact way that I help and teach them do that. cause part of my journey in this thing is creating an army of elite entrepreneurs. I got a company called Spartan CEO. And right now we have a program called Spartan 360. 360 is like taking a person a lot. What this is precipitated for me is because of the job market. I have a lot, I know a lot of people that are out here looking for jobs and have been out there for quite some time. And my thing to them is like, why are you depending on someone else as smart?
and as capable as you are, why would you be depending on putting all your eggs in someone else’s basket? And so teaching the blue collar economy as a like, hey, this is kind of a necessity right now. And I’m going to, I’m going to caveat that the CEO of Nvidia. So Nvidia is the most, is the, it’s a multi-trillion dollar company right now. It’s the, it’s the, what, what, what, what, what, what,
And that’s he literally said that last week, right? And so it’s kind of a thing that I’ve been doing for a decade is trying to get people, young people into the blue collar economy, into the trades, showing them where the actual money is. If you’re sending emails for a living, I’m nervous for you. Part of doing that is the allure of being in these young people can’t buy a house. We kind of screwed the housing market up for the entire Gen Z. It’s why they’re looking at the country the way they are. And then we’re blaming them for looking at the country the way they are. Meanwhile, my first house was a hundred grand. I made a 30,000 on it.
The median household price in America is 454,000. What 27-year-old kid with $100,000 in debt, working at a flower shop, living in the mom’s basement is going to buy a $500,000 house for their first house. This thing isn’t set up for them the right way. So part of what we’re trying to do, or what I’m trying to do is go back and show them the opportunities in the market. Hey, look, well, if you just don’t approach the house by, let’s get a realtor, let me go with my parents and go house hunting like you’re about to go to college.
And you really dig deep and find and totally show you how to target certain kind of neighborhoods, teach you how to negotiate your own deals, your own contracts. I know a lot of people are either nervous or whatever about subject two. I was one of the subject two. I did my first subject two deal like 13 years ago. Right. And so there’s some creative financing things going on. You got 10,000 baby boomers retiring every day. A thousand of them or 10 % of them of them have businesses that they can’t sell. And a lot of them have already cashed out 401ks.
and they’ve already sold that house, that house that they bought for $24,000 30 years ago and they’ve sold it for $600,000, right? So that boomer generation is doing great. We gotta be able to get these Gen Zers to come in here and start figuring out how to get some of these houses in a decent margin in the market and maybe turn around and start flipping those houses as well. And even if not flipping, cash flowing on them. The biggest thing with the market is you don’t have to flip everything. You can buy and hold some of these houses, but when you’re getting $220 margin on a house, that is not worth it. You’re gonna ever make enough money.
for you to be able to maintain that house, off of the rental income or do anything or have enough rental income to leverage into other lines of credit to do more deals. So this whole effort is to get people to understand and look at the market and make the market affordable. That’s currently not affordable for them.
Michelle Kesil (14:33)
Yeah, absolutely. I think it’s a challenge right now and I love that you are wanting to support people through that.What are you most focused on scaling to next in your business? it this education piece? Yeah, kind of where do you see your business heading?
Jesus Garay (15:30)
Um,yeah. Yeah. Just wait. I’m not also, I actually own a couple of logistics companies. So right now my main, main focus is that, um, there are, there are, like I was just saying earlier, there are years where I might do 10, 12, 15 flips. And then there are years where I do one. All right. And so I’m not, I’ll get on 53. I may be doing this another 20, 25 years. And I try to tell people to have discipline and tactical patience in the market. You don’t always have to be in growth mode. Anytime I’ve gotten hit is when I’ve been in growth mode and I got caught with too much, too much in assets. Right.
And so, ⁓ tactical patience is really kind of a strength for me. But I think in the new year, I may be looking to partner with maybe people that have some kind of a fund or are managing some kind of a fund, because I know they’re just buying up, they do a lot of bulk REOs and they bid on a lot of houses and they overbid for them. They pay too much for the remodel, but just because they’re private equity, I mean, like, hey, there’s a smarter way to do it. Because if you think about it, if you control the, if you get the house at the right number and you control the remodel budget.
Every five houses you can get, you got enough money to do another house. You’re just overpaying for the house. You’re open paying for the remodel and you’re dominating the market. You’re actually the one pushing the price up because you’re paying too much for these houses and you’re paying too much for these remodels. Right? So if I could partner with the right kind of people that understand real estate and maybe we go go out and do a thing. My whole thing again, I was saying earlier, like I grew up poor. So my whole thing is making these really nice houses affordable for regular people. People shouldn’t have to spend 50 and 60 percent of their income to live. Right. And then what about those student loans?
about the $700 mini van payment you got. And then you wonder why everybody is in the mood and stressed and pissed off the way they are, right? Nothing’s affordable. And this isn’t the America that we grew up in. And we’re wondering why these kids are looking at America the way they are.
Michelle Kesil (17:08)
Yeah, totally. What are some suggestions that you have for people that are in that position? Like, how are you supporting them? What’s some advice that you give?Jesus Garay (17:17)
Well, I’ll tell you one thing I do. I do free training every 6 a.m. Eastern Standard Time on TikTok. It’s called The Spartan CEO. One word, The Spartan, S-P-A-R-T-A-N, CEO. Join me on TikTok. I usually sometimes go live on IG, but at 6 a.m., Monday through Friday, we do business courses. We talk about real estate. We talk about the market. We talk about the economy, the difference in the markets and the economy. People don’t realize this difference. And this is why you can have like just yesterday.the S &P had like a record, but that’s the markets and not the economy. People don’t realize that. when maybe the older generation is like, what’s wrong with the economy? What’s wrong with the economy? No, you’re talking about the markets. Just because you’re S &P and your 401k is up, your 401k is up because they are old. Let me explain real quick what that means. When you are of the generation that are participating in the markets, right? The NASDAQ, the New York Stock Exchange, S &P 500, and all your money is derived from investment money.
What happens is typically those companies, those public companies have to announce or have to have predictions on what they’re going to do in a bad that year in volume and revenue. When in a bad economy. So those are the markets, but in a bad economy, sometimes small businesses get crushed when small businesses get crushed. No matter what market sector you’re in. When a small business gets crushed and goes away, that capacity gets sucked up by typically bigger, stronger companies. So this is how they can have projections.
outperform their projections because when a public company, a big strong public company outperforms what they thought they were going to do, that’s an indicator that someone lost capacity in the market. So as your numbers are going up in your 401k in your stock portfolio, understand what that means. Somebody is getting crushed at the bottom and a hundred years ago, 92 % of people were entrepreneurs in America and now we’re down to six.
So you could keep going of working for everybody else. We’re all going to work for Jeff Bezos and have Amazon stock, or we got to have some kind of, we have to have some kind of a reckoning in the economy, not the markets. And I think that what we’re doing with the tariffs, we’re heading in the right direction, but that’s furthering, that’s kind of pre or elongating the kind of the pain that we’re seeing on the ground. But I’m more focused on the economy and not the markets and it’s not the same. So if you’re just because your stock portfolio is up, you cannot say that we have a good economy.
The markets are good and the markets are good because public companies are outperforming the market. When small businesses close, they gobble up small businesses market segment. That’s the only reason why the markets are up and the economy is down.
Anyway, if you want more game like that, every Monday through Friday, 6 a.m. Eastern Standard Time, I drop nukes. We got a couple of hundred people in there. I drop nukes on them. We go back, we’re talking about this, just this morning, we’re talking about Adam Smith from, he wrote that book, Wealth of Nations in 1776. You should read that book. That’s the God, that’s all of our Godfather. We’re talking about, yesterday we were talking about tulip mania. People need to understand the historical context behind what actually is inflation. Because you can go to the grocery store, pay $8 for peanut butter,
your rent doubled, your insurance doubled, and then they just, and you’re still saying you’re not in inflation. Your body’s telling you you’re in inflation. We’ve been in an inflationary economy for two and a half years. Everything in your body, your mind, your stress level, the dollar bill, that doesn’t mean anything anymore. You’re in a freaking recession. We’ve been in a recession. But because we have this lopsided thing where the markets are good and the economy is bad, it’s the only thing kind of propping up the American economy right now. Right? And so we got to, we got to have a reckoning because we got tons of kids.
coming out into this economy and coming out into these markets and what is the long-term prognosis for them? And then, oh, by the way, we got this tidal wave called AI coming. This is why I’m 53, I’m retired military, I’ve done $100 million in business, but now, although I’m still in business every single day, I really have fiduciary responsibility to bring the next generation up. My main focus is to grow an army of entrepreneurs.
Because I’m actually glad that a lot of young kids are going through this shit because I don’t want you to forget how it feels. I don’t want you to start getting money and forget how it feels. Most of you have never really been poor. So most of us that have, we already know how it feels. already, we kind of wake up with a chip on our shoulder every single day. But for the first time, even kids from these middle income homes and these middle-class homes are feeling it. They’re feeling it. And that doesn’t feel good. And it’s causing them more stress because they never had to live like that. Right? And that’s, you know, I don’t.
I hate that the kids have to go through that, but it’s kind of good for you. You need to never forget how you feel right now. Never forget the hopelessness you feel about having a hundred grand in debt. You can’t buy a house and you’re living in your mom’s house. You can barely make your car rental and your cell phone note. You should never forget that dynamic. So as you get older, you need to elect the kind of people that understand what you’re going through. You need to elect the kind of people that are going to be strong in ways that were, were, were, ⁓
where we’re not always ⁓ cutting the dollar in half and causing inflation. And you need to probably get involved in politics and take that same energy and that excitement, but with your market and economic knowledge and go make a change. You can start by coming to my free training on 6 a.m. Monday through Friday on TikTok, the Spartan CEO. We have a good time too. We talk a lot of shit. We have a good time.
Michelle Kesil (22:19)
Sounds amazing. Wow, you’re doing so much. I love it. ⁓ Where else can people find you? If people want to reach out, connect, learn more.Jesus Garay (22:28)
Yeah, two platforms really, ⁓ TikTok and ⁓ IG. It sounds weird. I’ve only been on like a year and a half. TikTok is a great platform for business. ⁓ And so there’s a lot of hungry people on there. And so I’m on IG and I’m on TikTok, the Spartan CEO. I probably should have had my, I should have signed on with that as my name, but you’ll find me, it’s easy. I got a silly video that went nuclear viral at the top of my page. But other than that, I dropped nukes. I dropped nukes on a daily basis.I drop nukes and I’m trying to help people understand what this thing is and so they can arm themselves about the economy and about the markets.
Michelle Kesil (23:02)
Perfect. Well, I appreciate your time, your story, and your perspective. Thank you for being here.Jesus Garay (23:07)
Thank you. Appreciate it. Thank you.Michelle Kesil (23:08)
Yeah, of course. And for the listeners tuning in, you got a value, make sure you’ve subscribed. We’ve got more conversations with operators like Jesus who are building real businesses. See you on the next episode.
