Real Estate Isn’t Get Rich Quick: How Investors Build Wealth Over Time

Javorn Farrell (00:00)
So the advice that I’ll give ⁓ anyone getting into real estate, clients, investors, ⁓ it’s a long game. It’s not like you won’t get, yes, there are times where you might hit the jackpot on us one particular deal, but that’s rare. And those days, I feel like they’re behind us. And so I would, the advice is that, hey, this is a long game. ⁓

you make your money when you buy.

Michelle Kesil (02:00)
Hey everybody, welcome to the Real Estate Pros Podcast. I’m your host, Michelle Kesil. Today, I’m joined by someone I’m looking forward to chatting with, Javorn Farrell, who is part of NEWMONTIS Real Estate Investments, working with as a developer and broker, helping investors and help with managing.

There are properties, investments, and finding deals, so really excited to have you here today.

Javorn Farrell (02:33)
Thanks for having me. I appreciate it.

Michelle Kesil (02:36)
Sure. So let’s dive in. First off, for those not familiar with You and Your World yet, can you share what your main focus is?

Javorn Farrell (02:46)
Yeah, so we have two main focuses and you touched on it. One brokerage, so we effectively help high net worth individuals and family offices with their needs. So we do quite a few 1031 exchanges. And then on the, ⁓ we do development as well. So on the development side, we do single family built to rent. So those are two main focuses. ⁓ And on the brokerage side, we mainly focus on retail and multifamily.

Michelle Kesil (03:16)
Awesome, and which markets do you operate in?

Javorn Farrell (03:20)
Funny enough, we’re based in Los Angeles, but we operate nationwide ⁓ When it comes to the built-to-rent communities that we’re developing ⁓ we early on we focus heavily on Texas and like within a 45-minute radius of the Central Business District of Austin And then we then moved to like Montana. We started looking at Montana and then ⁓ as of late

Funny enough, we don’t really do much in California, but we have two current projects taking place in California. One in up in Palmdale, California, which is gonna be an 80 unit development and then ⁓ a 280 unit development up in Fresno, California as well. we’re stretched across the country when it comes to development, but when it comes to brokerage, same thing. Most of our clients are based here in California, but…

We help them source property or sell property for them in other markets. We’ve been in Chicago, Texas, Kansas City, Florida, South Carolina. We’re all over ⁓ Seattle. So yeah, we’re all over.

Michelle Kesil (04:33)
Awesome. And how did you get into real estate?

Javorn Farrell (04:37)
That is a loaded question and I’ll be as succinct as possible because I’m a former athlete. I played professionally over in Europe. played basketball.

Michelle Kesil (04:39)
Hehehe

Javorn Farrell (04:51)
And I have a heart of impact. want to create impact. want to help people so after I was done playing I was working at a nonprofit and I understood that the salary that I was making there wasn’t enough to impact people so Funny enough. I like googled a fastest way to become a millionaire in real estate was the first thing that came up and in doing that I Then started like doing a lot of research on real estate started going to a bunch of different symposiums

And then I got into the residential side of real estate. was doing flips and wholesales. I was working with people going through pre-foreclosure. And I did that in the DC area. That’s where I’m from, the Washington DC metro area.

did that there for about a year and a half and then decided to move to LA because of SoFi Stadium at the time was being built and I thought that I could replicate the same business plan that I had on the East Coast over in LA. ⁓ while I was here, I got introduced to commercial real estate through my first actual job and then ⁓ from there just started applying to different commercial real estate jobs. And I’ve been with NEWMONTIS for the past seven years, started out as a ⁓

associate then work my way up and now I’m the vice president here at NEWMONTIS.

Michelle Kesil (06:59)
Amazing. What a beautiful story and exciting that you were able to achieve what you wanted.

Javorn Farrell (07:06)
Thank you.

Michelle Kesil (07:09)
And what have been some of the main keys that have allowed your business to grow and run successfully?

Javorn Farrell (07:18)
think the keys that allow us to grow and run successfully is just the amount of, ⁓ we joke with our clients all the time that we do a lot of work for free. We’ll do virtually anything for our client. ⁓

Whether it, like we do a lot of the due diligence. We’re very communicative with our clients. We hold their hand even after they’re done purchasing the property, even after our commission’s made. We do the asset management free of charge a lot of times. ⁓

We constantly give them suggestions from an operator’s perspective. We educate them on the market. all of the, I guess you would call them like lot of soft skills, right? Like just like nurturing that relationship with the client. That’s allowed us to be super successful and we don’t do any advertising. So a lot of our growth has happened from referrals. You know, we’ve worked with a high net worth individual and they tell a friend in their circle and they refer them.

them

to us and you know we get the business that way but that’s really been it just you know just going above and beyond and ⁓

And not just going above it, but also being competent. We have some sophisticated people in our office. Our team is really small. It’s only six of us. But we have some sophisticated people in our office. And we generally know what we’re talking about. So that level of sophistication plus handholding and education, I think that allows us to grow and continue to be successful.

Michelle Kesil (08:52)
Yeah, absolutely. And when you say high net worth individuals, are these like investors or like what kind of people do you work with?

Javorn Farrell (09:04)
Yeah, some are investors, some are in the entertainment industry, some are in the tech space, like tech CEOs, founders of different tech companies or gaming companies. ⁓

not studio executives. you know, we a bunch of different ⁓ individuals. have individuals who were who are developers who are just high-net-worth individuals who have been developing since the 70s and 80s who work with us. yeah, it’s it that is it varies and it’s we have a broad range of different high-net-worth individuals and we work with, you know, family offices as well. So, yeah, a lot of it’s a broad range of some

athletes as well so it’s a bunch of different clientele we’re not like a one size well I guess we’re like a one size fits all it’s not like hey we only work with this particular client we work with everyone ⁓ that wants to be helped

Michelle Kesil (10:04)
Yeah, absolutely. And what does the process look like when you work with people?

Javorn Farrell (10:45)
That also varies depending on the client. Some clients that we have, they don’t know anything about real estate. They just have a lot of money because whether they inherited it or they’re in a completely different field and they’ve been told by a financial advisor that, maybe you should invest in real estate. So for those clients, ⁓ the first step in engagement is one, understanding what it is that their goals are.

Right? Often times when you don’t know anything about real estate, ⁓ people think that real estate is like get rich quick and it’s not. It’s get wealthy over time. So just one, ⁓ managing their expectations of what their returns are going to be based on the asset class that, know, based on the different asset classes. So we educate them on return metrics per asset class. We educate them on the risk profile of different asset classes. And then from that education piece,

You know we understand from them like hey what what seems most interesting to you and then from that then we go ahead and We go ahead to begin to source properties for them and then from the sourcing part we you know, we normally narrow it down to a few properties and Prior to all that they let us know how much equity that they have available to them So when they tell us, know, I have three million dollars cash or I have five million dollars then we let them know

Let them know about the… ⁓

asset classes we let them know what type of loan they might be able to get with in each asset class and yeah we just educate them on effectively the whole process and we hold their hand again as if we were the operator and we’re just telling them step by step especially going through like the due diligence phase and while we’re in escrow and you know helping them with through the loan and helping them get a real estate attorney a preferred real estate attorney we again property

management company hold their hand through the whole process. So that’s what it looks like from someone who knows absolutely nothing about real estate but for someone that knows about real estate and they’re educated in real estate we they tell us pretty much hey like these are the returns that I want this is the asset class that I’m looking at value add multifamily for example and then we go and source that property for them we

So we ⁓ obviously get the third party vendors and we help them interview property management companies and then purchase, obviously help them with the sale, purchase and sell and then moving forward we oversee their property management companies for them. So, you know, we just like to take as much off of our clients plate as possible and help them as much as we can.

Michelle Kesil (13:28)
Yeah, amazing. And what are you most focused on solving or scaling to next?

Javorn Farrell (13:35)
Oh, that’s a good question. I think in terms of what we’re most focused on in terms of scaling to next is more built to rent communities. We got into the built to rent space when it was relatively new, like in the 2019, 2020, where most of the built to rent projects at the time was in Phoenix, Arizona. But now you’re seeing more and more built to rent projects come up.

But we, so since 2020 we’ve, you know, we’ve had a couple of sites that we’ve closed on and we’re in the, I think we have around 600 or so units in the pipeline in terms of.

development for built-to-rent. So ⁓ after we break ground on either Fresno or Palmdale, the two that I mentioned here in California, then we’ll begin ⁓ looking to purchase more land to do another built-to-rent community. So I think scaling and figuring out, so we do a lot of research on the front end to figure out which markets we’ll go into. So obviously that research and ⁓ figuring out what market makes the most sense next.

for us to build one of these communities because we don’t ever want to saturate a market with our product. It’s like, hey, we could do one or two projects here and then we could go to another market.

Michelle Kesil (14:59)
Absolutely. And what have been some obstacles or challenges that you’ve had to overcome in this role?

Javorn Farrell (15:49)
think the biggest obstacle was post-COVID and I don’t know if you remember when the when interest rates spiked and we you know we had

Like I said, a lot of our clients are high net worth individuals and at that time 95 % of our clients were just high net worth individuals. So a lot of those clients, they didn’t have to buy anything. They were just waiting on the sidelines. like, yeah, we’ll wait until interest rates go down. ⁓

But obviously we’re a business and we needed to make money. So we had to go and find a new client base. And that’s why we started working with different private equity firms as well, because at that time they had capital that they had to deploy. ⁓ So that was a challenge and just finding clients. And then also another challenge that we had was prior to COVID, we ⁓ were doing value add student housing in hotel.

So prior to COVID, you know, that was a great world and even now it’s still a good world. But when COVID happened, there was a lot of uncertainty around student housing, around hospitality. So that’s when we actually made the pivot. We, as an office, we brainstormed and we were looking at ⁓ what other asset classes we should invest in or what other asset classes we should.

⁓ look into as an operator and that’s how we got to the single-family build to rent. So our ⁓ niche product is apartment sized houses, effectively run as like a class A apartment building with you know all the amenities but everyone has their own front yard, backyard and two car garage.

Michelle Kesil (17:40)
Yeah, amazing. And what advice do you give to like your clients and investors that are looking to get into real estate?

Javorn Farrell (17:50)
that’s good. That’s a good question. So the advice that I’ll give ⁓ anyone getting into real estate, clients, investors, ⁓ it’s a long game. It’s not like you won’t get, yes, there are times where you might hit the jackpot on us one particular deal, but that’s rare. And those days, I feel like they’re behind us. And so I would, the advice is that, hey, this is a long game. ⁓

you make your money when you buy.

Right? So what I mean by that is you like your basis that you the basis that you buy into the property. ⁓ You know, you can’t expect to you can’t expect to purchase a property ⁓ and get tech returns or get venture capital returns because the industry just doesn’t work like that. But you know, there’s a lot of there’s a lot of ⁓

tax laws and tax benefits to owning real estate and it’s something that you know that you can like I said get wealthy over time and it’s not a today or tomorrow thing but definitely a generational thing.

Michelle Kesil (18:57)
Absolutely. And what are some opportunities that you’re excited about?

Javorn Farrell (19:07)
I’m really really excited about working with these developments that we have in our pipeline right now. ⁓ Because I don’t know if you know or not but in California the time that it takes to get developments underway and to break ground like the Fresno site that I mentioned to you we closed on that property back in

2025 but we opened escrow on that thing in 2024 so we’ve been working on that property for two years and we’re still probably about a year out from breaking ground so just breaking ground on those properties i’m really excited about that and then also on the broker side i mentioned to you that like i have a heart of wanting to create impact and i’m currently working with some non-profits

who are looking to purchase, like, ⁓ so one of them, I’ll just say, one of them is Color Compton and the Compton Art and History Museum. And they’re looking for a building to house their new museum, which is the first museum in Compton, California. ⁓ And we’re working with them right now to purchase that. I’m really looking forward to that. And hopefully that gets across to the finish line, because we’ve been working with them for a couple of years. And the owner of the museum is actually a childhood friend

mind. that would be really special if we could get that thing closed.

Michelle Kesil (20:30)
Yeah, amazing that you’re able to work on some projects that are in service as well.

Yeah, and so where do you kind of see the market shifting or turning into? Are there any things that you see on the horizon or envision?

Javorn Farrell (20:48)
In terms of market, where do I see it shifting to? think that we are in for… I feel like we’ve been over the past few years in a market of uncertainty. But I do think that things have stabilized a bit in terms of interest rates. But when you look and see how cheap things were back in… ⁓

When I say things, mean like materials, money, how cheap it was to get financing back in 2021. And you see a lot of projects, especially in the markets that I some of the markets that I mentioned like in Texas and in Phoenix. A lot of these places have been overbuilt. So one thing that we’re seeing in the Texas and in Phoenix and

you know a lot of play even here in LA the one thing that you’re seeing is you’re seeing a lot of multifamily apartment buildings not have ⁓ they’re struggling to lease up or they’re having to give a bunch of concessions because they can’t fill these buildings up and that ultimately ⁓ trickles down to some of these ⁓ class B and C apartment buildings because they can’t raise their rents the reason they can’t raise their rents is because the brand new product is also charging the same thing that

charging so you know it’s it’s just a it’s difficult I mean I think that places like Austin Texas have been overbuilt over the past few years and yes you had an influx of people moving in and ⁓

rent skyrocketed year over year for three years but those are now falling and normalizing and stabilizing and I think you’ll see people moving out of certain markets because of it because of properties being overbuilt and the rent demand being too high because I saw people leaving California or Los Angeles going to Texas and some of those people have come back because they’re like hey I’m $3,000 for one bedroom in Texas in Austin

I pay $3,200 here in LA for it. ⁓ So I see people ⁓ going back to some of the cities that they left. But I also see, just with politics and everything going on and different ⁓ tenant laws and things, especially here in LA, we have the mayoral races happening in November. And depending on who gets elected, you can see investors pulling out. ⁓

We had the mansion tax get passed a year or two ago that you know that really bothered investors so different things like that It will definitely affect where developers and investors are putting their money, but on a macro level obviously globally I guess globally politically ⁓ Wars and things of that nature like that’ll cause uncertainty in the

in the finance and marketing and debt markets. So yeah, I I feel like we’re going to be in a state of uncertainty again for like the next two to three years, but…

One thing that I’m looking forward to is ⁓ seeing how like because in every in every moment of uncertainty something good happens out of it right and I just want to see what what new thing or what whether it’s people moving to a new city that is now discovered because like Austin Texas is now like a real hub and many years ago it wasn’t like no one was moving to Austin so I’m curious to see what emerges out of this time of uncertainty.

Michelle Kesil (24:36)
Yeah, absolutely. Thank you so much for sharing that.

So before we wrap up here, someone wants to reach out, connect, learn more, where can people find you?

Javorn Farrell (24:48)
They can find me on Instagram, first name, last name, so at J-A-V-O-R-N and last name, F-A-R-R-E-L-L. They can find us at www.newmontis.com. So www.newmontis.com. And then…

Yeah, like I mean, I’m on LinkedIn as well. Again, first name, last name, all the social media’s first name, last name. I talk real estate and I talk about real estate and impact. Those are the things that I really talk about.

Michelle Kesil (25:30)
Perfect. Well, appreciate your time and your story. Thank you so much for being here.

Javorn Farrell (25:35)
For sure, thanks for having me.

Michelle Kesil (25:37)
And for the listeners tuning in, you got value, make sure you’ve subscribed. We have more conversations with operators who are building real businesses and we’ll see you on our next episode.