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Show Summary
In this episode of the Real Estate Pros podcast, host Erika speaks with Ramon Patrick, a seasoned real estate investor and agent. Ramon shares his journey into real estate, starting from a young age, and discusses the challenges and strategies he has encountered along the way. He emphasizes the importance of time management, market understanding, and building relationships in the industry. Ramon also provides valuable advice for new investors, particularly in the multifamily space, and shares lessons learned from his experiences as a landlord and investor.
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Investor Fuel Show Transcript:
Ramon (00:00)
Yeah, so as an agent, one of the pitfalls is ⁓ as I was building up the construction company, like building up the construction company to be a little bit bigger, and then also trying to be an agent, I had a few deals going and one day it was like, I don’t know what happened. The stars might’ve aligned or something just went bad. I don’t know, but like I had four deals and I was like, okay, cool. I’m going to take a part of this investment and throw it into this deal. And all four deals fell at the same day. And it was roughly the total value ofAll of it was, I want to say it was probably like 60,000 in GCI.
just gone, in ⁓ there. So that was one of those holy shit, what am I going to do moments?
Erika (02:13)
Hey, everyone. Welcome to the Real Estate Pros podcast. I’m your host, Erika. And today I’m joined by someone that I’m excited to chat with, Ramon Patrick. He’s been making serious moves in the real estate investing space. Ramon, I’m glad to have you on the show today.Ramon (02:32)
Thank you for having me, I’m glad to be here.Erika (02:35)
Yeah, so let’s dive right in for people who may not be familiar with your world. Give us the rundown. How did you get started in the real estate world?Ramon (02:46)
Yeah, so as we talking before we got on air, I got into real estate space fairly, fairly early. My dad actually did 97 properties in Michigan and taught me kind of the game since I was eight years old. So that’s kind of how I got started and just kind of saw it from a very young age. Unfortunately, I kind of went on different paths, but then it led right back here. So it’s been a journey.Erika (03:10)
Yeah, was there a moment that drew you back to it in particular or a moment that you were like, this is my lane and I’m.Ramon (03:23)
Yeah, so I actually went to college, got my degree in finance and I ended up getting my degree in commercial real estate. Started there. Unfortunately, things kind of took a turn. My dad got sick, so I ended up coming back here and you know, not knowing exactly the whole will process and trustees and all that stuff. I didn’t know how that all of that worked. Unfortunately, my dad did pass away and everything ended up going to his wife at the time, which is, you know, not a big deal. But I.Eventually just kind of went into the corporate America space. And then one day I was like, you know what? I want to start a construction company. So I started the construction company and started doing like basements, bathrooms, kitchens. And as I was in the space, I still had my license. I would help friends and family with, you know, was a real estate agent. So I was helping friends and family find places. And then it was just, it just dawned on me. I was like, Hey, listen, I have all of the tools I need to start getting into the investment side of things really flipping. And one day just sat on it was like, Hey, let’s try to figure out seller finance one day and talk to one of my clients. And they’re like, dude, we.
do seller finance, if you can help us get this home sold too, it’s yours too. So I ended up doing the deal and also being the agent for the house. And that’s kind of what started the journey from the very beginning.
Erika (04:32)
it. fast forwarding to today, with being an investor, having the construction company, being an agent, how do you balance being hands on in those things and at the same time have a good deal flow?Ramon (04:49)
Yeah. So I actually took something from one of the mentors that I had as well as just kind of reading different books and just seeing what other people does. And one thing that I kind of took away from Elon Musk was time blocking. That was one thing that was kind of like the big thing for me was like, wait, what does this time block? You think like, got to figure it out. And it was basically setting aside time for each part of the companies to like really just focus on that. So I’ll set maybe one or two hours partial of my day to like focus on my, you know, my agent business, making sure I’m on multiple clients and things like that.And then my last part of my day is where I either do, you know, as I’m going to check on job sites, I’m going to do listing appointments or meeting with buyers and then kind of just flowing out my day that way. it’s definitely a lot of time blocking for sure.
Erika (06:19)
Yeah, that makes a lot of sense. Are there tools or systems that you’ve used that you know, helped you manage these things and not get burnt out?Ramon (06:29)
Honestly, I just have my iPhone and I just got really good with understanding how to use the calendar and notes and reminders. Like that’s been my biggest tool. Um, cause I am one, even though I invest in, I’ve done pretty well, but I am still cheap and don’t buy as many things as people think that you need. don’t need anything. As long as you know how to use the tools that you have, you can make it work.Erika (06:50)
Yep, as the saying goes, if it ain’t broke, don’t fix it. So with investing, your focus is in single family and multi-family. What have you noticed in the market lately when it comes to different opportunities and challenges?Ramon (06:53)
Don’t fix it. I learned that from my grandfather, you know?Yeah. So, you know, with everything that was going on, you know, right after COVID, it was a huge rush on real estate. So prices went through the roof. Rates still kind of went up, but things, there’s still certain pockets through there were hot markets, things like that. Recently, because people were anticipating the feds cutting rates, which they did today, all quarter basis point. There were a lot of people still jumping into the market for the multifamily stuff. So multifamily, the prices of those have even increased quite a bit too. So the ROI.
or the capital rate is not as big as it used to be. So I’ve seen cap rates come down on certain things where it’s not as much, especially in certain markets. It just really depends on what market you’re in. Chicago, for instance, still has some really good deals, but it’s still pretty hot in certain areas.
Erika (08:00)
Yeah, when you know with a market like that that can be pretty hot, there’s inventory shortages for you. How do you source those deals?Ramon (08:12)
So cold calling still works, believe it or not. Cold calling is still sitting on marketing fires. So even though I’m an agent, I kind of do a little bit of both where I’m still cold calling, seeing if people are willing to sell. I still do the, you know, driving for dollars is what they would call it. But, you know, I try to do it on different routes. So I’m not really focused solely on just, you know, driving for dollars. I really do just kind of like understand my marketplace, really get good with it.Like right now, one of my biggest focuses is Round Lake Beach area of Illinois, which is north of the city. Round Lake Beach, Round Lake, that area as a whole just really got really good with understanding what was going on in the market. Who knows who, what to do. And that was kind of one of the biggest focuses is just kind of like really getting super-nitched with the market.
Erika (08:56)
Yeah, yeah, for our listeners who are just starting out in the multifamily space, what kind of advice would you give them? So, you know, maybe they can avoid some common pitfalls that people deal with.Ramon (09:10)
Yeah, so, you know, one of the things that even though I’m a broker and I’m, you know, most brokers are probably going to say this, get with a broker. But when you hire a real estate agent or a broker, make sure they understand the multi space, the multi unit space, because if they don’t, you’re just getting a broker that just trying to get commission. ⁓ really understanding what cap rates are really understanding, like, you know, what, what’s the ROI really going to be on the property when you’re looking at the investment and they send you the rent rolls, really understanding to look at that with a lot of scrutiny when they’re sending you what they’re paying for rent.but then they’re sending you the expenses and all. Look at that with a little bit of scrutiny and just understand that their job is to make the property look as good as possible to you. So you want to make sure that you kind of really run the numbers, see if they really make sense. Are there any improvements to the property to help increase rents? What does that look like? How much is it going to cost to redo a kitchen and how much rent will you be able to get from that? Just really understanding the market of where you’re trying to buy your multifamily. it’s not as difficult as what people make it out to be. It’s just, are you ready to be a landlord? It’s real question.
Erika (10:44)
Yeah. And what was that like for you being a landlord, you know, first time around? What was that journey like?Ramon (10:52)
So my very first one was actually a single family home and it was going really well until the furnace broke, the AC broke, and the water heater broke pretty much all around the same time. And it was just, I was scrambling, trying to figure it out. I was just getting the construction company up and running. So I really didn’t have a lot of contacts like I do now, but it was still nice to see the residual income coming in and just having that little bit of a base, being able to look at it and say, hey, I’ve actually accomplished this. The first one,I tell everybody it’s the hardest one to do. So I would not recommend anybody going into like a five unit to 16 unit building right away. I will always recommend to do maybe a two unit, maybe a three unit, something that you can get your feet wet, understand how to become a landlord. What are the laws for tenants, especially like being in the city of Chicago where it is super tenant friendly. So you really need to understand the laws and what you can and cannot do as a landlord.
Erika (11:47)
Yeah, yeah. ⁓ Speaking of that story that you had with things breaking, as I’m sure you know, every real estate pro has a moment where things get real. Maybe a deal goes sideways or you had to pivot, you know, do a 180 on a project. Can you share one of those moments on your journey?Ramon (12:09)
Yeah, actually can share one. You want me to do it as an agent or as an investor or both?Erika (12:14)
You could do both.Ramon (12:16)
Yeah, so as an agent, one of the pitfalls is ⁓ as I was building up the construction company, like building up the construction company to be a little bit bigger, and then also trying to be an agent, I had a few deals going and one day it was like, I don’t know what happened. The stars might’ve aligned or something just went bad. I don’t know, but like I had four deals and I was like, okay, cool. I’m going to take a part of this investment and throw it into this deal. And all four deals fell at the same day. And it was roughly the total value ofAll of it was, I want to say it was probably like 60,000 in GCI.
just gone, in ⁓ there. So that was one of those holy shit, what am I going to do moments?
Like, what am I going to do? Because I have a company, but I was just getting it to grow, not a of money. So just having to bootstrap and just figure out how can I try to save the deals? How can I try to negotiate? What can I do? And there was nothing that I could have done to save those deals. ⁓ So you just got to be willing to understand that there’s a lot of risk and don’t.
count on the money coming in before it comes in as an agent. Don’t do that. This only is good is until the dealer side and you have the check in hand. Until that check is in hand, do not count on that money coming in at all. That’s the best advice I can give brand new agents. But from an investment side, one of the deals that kind of went sideways, it didn’t go as sideways as I thought it was gonna go, but I ended up going into a flip around the election last year and the numbers looked phenomenal. Like everything was like right where I wanted it to be.
There was a lot of wiggle room, so I thought, and the market shifted within the 30 days of us working on it, where people weren’t in the market. There was a lot of scrutiny going on, not knowing who was going to be president, not knowing a lot of things. So we ended up losing 15,000 in value that we thought we were going to get. So we had to kind of reshift exactly what we were doing with the house and just trying to get it to where we can walk out at least brick even. Thankfully.
we ended up making a little bit of money, but we didn’t make as much as we would like to make because again, that was 15,000 in value that we lost. So those are the things that you just, you you got to be able to like pivot and understand that market changes happens. You just got to be ready for it.
Erika (14:30)
Yeah, absolutely. Is there any way that you vet your deals differently having gone through that?Ramon (14:38)
Yeah, so that actually helped me put in, I have two exit strategies when I go to do a flip, for instance. One of the exit strategies that I look at is if it’s not able to sell at the value of where we need to sell it, we, you know, burn method it basically, well, how much rent can we get out of it? That’s kind of one way that we look at it. Is the rent gonna be able to afford the mortgage after we, you know, do the burn method on it? If it does, if it does make sense, then we do that.We always have some type of exit strategy.
To make sure that we’re not losing as much and though so I have had some mentor some mentees actually asked me about the whole credit card thing putting a house on a credit card and Doing that process the process of having an exit strategy may not work for that Depending on what the values looks like what the value of the house is gonna be after you’re done fixing it up How much is the rank gonna be and sometimes you get stuck with that credit card bill because you just get stuck with it So I would not recommend
listening to every guru on the internet saying, hey, just take out a 0 % interest credit card and go swipe it. Understand the risks of doing that because of the deal goes sideways, you are still responsible for them.
Erika (16:28)
Yeah, speaking of gurus, know, there’s a lot of advice out here that people can find for real estate. you know, the one thing that we like to focus on the show is building those relationships. That seems to be a common theme that really helps people level up. So for our listeners who are looking to build their network and level up that way, what kind of advice would you give them?Ramon (16:55)
Honestly, you, don’t know, depending on where you are in your investment journey. So I’m to look at it from a brand new investor, just trying to get into the market. Honestly, there are a lot of realtors that are willing to help you understand the markets. You just have to find the ones that are really good with investors. ⁓ you know, start having conversations with, you know, general contractors, just kind of like seeing what things, you know, costs are just really just understand like positioning. I’ve had people call me and be like, I’m an investor.I want to go look at a couple of places. put them under a buyer’s agreement, come to find out this is the first time they’re going to look at a house. And they had no idea what to think about when it came to how much it was going to cost to do this flip. They were like, oh, we’re going to end up putting 120,000 in this house. And I’m like, 120,000? Bro, this house is probably going to cost maybe 45,000 to do. Where are these numbers coming from? they went to places like Big Pockets, which is an amazing program, by the way. I do work with quite a few investors from there. But just understanding like,
really trying to figure out like numbers and getting in front of people that do this on a daily basis. So that way you can kind of get really good with, you know, understanding how much a floor is going to cost, how much is it going to cost to put in a fridge? Like really get into, get a realtor that you really, that you can find that you can really work with. Get the contractors, HVAC guys, subcontractors, even if you’ve got people in your family that are construction workers, like really just start asking them questions like, what is the cost of this per square foot?
And always add 10 % to every number that they give you. So when you add the 10 % that just kind of puts you into like that sweet spot of numbers. then honestly, I got really cool with an interior designer. I know it sounds really weird, but interior designers, one, helped me kind of think about what to put in my house and like how to really do things cheap. Because that’s their job is. Their job is to make the house look nice. But a lot of them, they spend a lot of time on the internet looking at things, looking at faucets, looking at all sorts of type of stuff.
And they know how to like really search for deals. So getting really cool with them and like really talk to them about finding exactly the niche of like finding things at a cheaper price. You just really have to just build your network that way.
Erika (18:58)
Yeah, that’s a that’s really great advice. And I’m sure with a lot of that, you’re referring to your interior designer that you work with now. But in general, is there kind of a blueprint that you have with flips for determining what is, you know, worth putting the top dollar in in terms of, you know, a renovation or, you know, what you’re, you know, basically doing the bare minimum.because either way you want to see that return so you got to make the right decision.
Ramon (19:30)
So it comes with experience and I know it’s kind of hard to tell like new person that’s trying to invest but it really does come with the experience to like be able to like look at a roof and be like, okay, that roof’s probably about 20 years old. So realistically, I look at, I really just look at the area of where the home is. I look at at least a five block radius. I don’t go any further than five blocks and see what kind of what those comps look like within that radius. Usually within that five blocks, you can find a house that’s like similar. ⁓And then I just kind of assess what the value of the house is going to be and how much I think I’m really going to have to put in. So I always inflate my numbers quite a bit. I do not do a deal if I think I’m to make less than 30,000. And the reason for that is I want to make sure that there’s enough money built in. So if something goes sideways, there’s still money to be had. Like I told you with the $15,000 loss that we had, because I walked, I did walk in there with, that was at 20,000. So you kind of can imagine. So of course I increased that number and saying, okay, if I can’t make 30,000, I don’t want anything to do with it.
That’s kind of how I look at it. Of course, anything over 30 is just pure gold to me, but it’s really having a bottom line number. I’ve talked to brand new investors when they come in and say, I want to make 50,000, I want to make 60,000, I want to make 70,000 on this profit. After the flip, it’s like, dude, bring that down because you’re going to end up losing deals. If you have a number that high, you’re going to end up not finding deals at all, especially in a market where interest is high, prices are high. It’s really hard to really find deals. But if you really sit down and think about what number
it’s gonna make you feel comfortable to make and just executing at that. So just making sure the numbers really bring back that return. If it does not bring back the return, if it’s 27,000, I won’t touch it. It has to be 30,000 for me in order to touch it. And that’s just kinda how I, what I tell people is just make sure when you’re looking at it, have a number in mind for you. That’s a realistic number that you’re gonna make on.
Erika (21:23)
Yeah, having that safety net there makes a lot of sense. Well, let me ask you this, Ramon, what are you most focused on solving or scaling next?Ramon (21:36)
So right now I have been in the business now 10 years and I’ve done quite a few flips, I’ve done quite a few things. So one thing that I am working on right now is new construction and really trying to look at the new construction and how to acquire the land and really build from ground up. And I noticed that in the South right now, there are a lot of hot areas, which I recently just moved to the South and the Carolinas because it’s a lot happening down there. So there are a lot of new developments, a lot of things happening.once you get into the business and you really start to understand it, you can start moving into different sections of it, as well as the mobile home space. I know a lot of people are jumping into it and they know about the mobile home space, but just being able to underwrite those deals and really being able to obtain those properties is kind of my next big thing. So new construction and mobile home developments is what I’m trying to get into next.
Erika (22:27)
That’s big, with the solid foundation that you’ve already got with what you have going on Ramon. Before we wrap up, if someone wants to connect, reach out or collaborate with you, what’s the best way for them to reach you?Ramon (22:44)
Yeah, so don’t be alarmed. My Instagram is very minimal with people right now because I really don’t post a whole bunch, but it’s a ⁓ I am Ramon Joseph or at Ramon Joseph or at I am Ramon Joseph on Instagram. ⁓ On Facebook, is Ramon Patrick. And then on YouTube, I am I think it’s at Ramon Joseph as well. So a lot of it you can just find me at I am Ramon Joseph. And that’s kind of how you can find me.Erika (23:13)
Ramon, appreciate it. yeah, go ahead.Ramon (23:13)
And then also my email. Myemail as well, sorry. So my email is Ramon, r-a-m-o-n dot Patrick, ⁓ at compass.com.
Erika (23:23)
Yeah. Well, Ramon, I appreciate having you on sharing your story, your insights. It’s awesome what you have going on in the real estate world.Ramon (23:34)
Thank you. It’s awesome being here. Thank you so much.Erika (23:37)
And for our listeners, if you got value from this episode, make sure that you’re subscribed to the Real Estate Pros podcast. We’ve got more conversations lined up with pros like Ramon, who are out there building fantastic real estate businesses. We’ll see you on the next episode.
