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Show Summary
In this conversation, Mauro Ben Alvarez shares his extensive experience in wholesaling and flipping properties in Las Vegas and beyond. He discusses the dynamics of the real estate market, effective lead generation strategies, and the importance of understanding local market conditions. Mauro emphasizes the significance of seller financing as a viable option for both buyers and sellers, especially in a market where properties may sit for extended periods. He also provides valuable insights into managing flips, highlighting the need for thorough due diligence and conservative financial planning.
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Investor Fuel Show Transcript:
Mauro Ben Alvarez (00:00)
I had an agent come to me and say, Hey, he’s like, I’ve got this lady. She’s 80 years old. She wants to sell her property and needs work.She wants 200. I haven’t listed for 265. I’ve got nobody looking at it. I asked her if she’ll do seller finance and she said yes, but if she’s going to do seller finance, she wants 10,000 extra for the price. Okay. Hold on. Let me go ahead and get this for you. Now. Let me pencil it out. Okay. You know what?
Yes, we can go ahead and give her that extra 10,000, but I need an interest rate of 2 % to go ahead and make that payment work long term. She says, yes. Cool, we got it figured out.
She’s carrying a seller finance because she owns it outright, right? She owns it. All right. She started being a landlord She’s not hurting for money because she only asked us for 15,000 down payment. So she asked us for 5 % down gave us 2 % interest rate And she’s carrying the note for five years
Dylan Silver (02:29)
Hey folks, welcome back to the show. Today’s guest, Mauro Ben Alvarez, is a wholesaler and flipper in Las Vegas, Nevada, with 75 flips completed between himself and projects that he’s managed. Mauro, thanks for taking the time today.Mauro Ben Alvarez (02:44)
Hey brother, nice to meet you. How are you doing today?Dylan Silver (02:46)
doing well, doing well. And when we talk about wholesaling and flipping, I think a lot of people would love to be in a market like Vegas, but also they might not be sure what the market really is like, because you think of Vegas and you think of really a tourist destination. So you’re imagining a lot of maybe newer properties, but is there also an opportunity for distressed property acquisition out there as well?Mauro Ben Alvarez (03:11)
Just like with every market they all have their areas. Yes It is a highly touristic area, but you know the people have to live somewhere So that’s where the opportunity, you know, the opportunity is and Vegas has been The biggest has a lot of older parts and a lot of newer parts So there’s definitely areas where you could go in and really focus on you know, doing some fix and flippingDylan Silver (03:36)
Now, when folks are looking at, let’s take wholesale specifically, there’s so many ways to get leads. know, could door knock, you could find, you know, probate lists, death, know, pre foreclosure, divorce, really any type of, you know, personal distress. But then of course you could drive for dollars and find properties that are physically distressed. Do you have one main lead source that has worked really well?Mauro Ben Alvarez (04:00)
So my main lead source has really been direct to agent. So I actually wholesale from Vegas. I’ve wholesale in Houston, in DFW, in Florida, here in Vegas and Arizona, and actually California as well during that time, all from Vegas from my computer, just reaching out to agents. So just reaching out to agents.Dylan Silver (04:24)
Now, I think that’s probably the dream fora lot of people is to do ⁓ remote wholesaling. I also know from my personal experience that ⁓ there’s a learning curve there, right? Because now you’re inserting yourself into other markets and as well, you know, you have to acclimate yourself with what the average housing price is. Like I can talk for Dallas and San Antonio. I can’t necessarily talk for Vegas. So for folks who are looking at maybe getting started in remote wholesale, what
Mauro Ben Alvarez (04:36)
Here it is.Dylan Silver (04:52)
Feedback what you have for them.Mauro Ben Alvarez (05:41)
Pick a market. So for me, once I was in five markets, it wasn’t that I initially went into five markets. ⁓ I started with one market, which was Vegas first, then went to DFW, then added Houston, then added Florida. ⁓And California, I’ve always just kind of because I’m from California, I’ve always just sent stuff out over there anyways, right? So ⁓ getting familiar with one market, right? Because I can get, I mean, well, at end of the day, if I’m taking over, you know, something 60 cents on the dollar, I can sell that in Florida and California in, you know, Vegas, wherever it is, right? But depending on the time ⁓ of year,
the area that you’re working in, like right now I can sell stuff in Vegas closer to 75 cents on the dollar. can sell stuff in California, depending on where it is, closer to 80 cents on the dollar, right? And that’s still enough for somebody to go in and make a profit. So, and that I’m talking about wholesaling, fixing flip deals, right? ⁓ For the…
Dylan Silver (06:50)
Yeah. Yeah.Mauro Ben Alvarez (06:52)
For wholesaling ⁓ creative deals, ⁓ that’s a whole other animal. You gotta know what the rent is. Is there short-term rental restrictions? Is there an HOA that doesn’t allow short-term rentals? Is there ⁓ an HOA that only allows you to have your property rented three months at a time? Or does the city prohibit this? There’s a lot of great opportunity to take over properties with low interest rates.turn them into businesses ⁓ via creative finance. However, you just got to be knowledgeable of each particular market because what would work here in Vegas doesn’t work in North Houston, but will work in Fort Worth. what, you know what I mean? So like there’s so many variables that you’re just like, you know, but at the end of the day, if you’re going to wholesale something that it pencils out long-term,
means month to month you’ve got yourself a deal anyway
Dylan Silver (07:47)
Imean, when we talk specifically about underwriting these deals, it seemed like for a minute there, at least while I was doing it, that the arithmetic was changing because repair costs were going up. at one point I was like, you know, 75 % of ARV minus repairs and then maybe with some buffer. And then at the end of it, I’m like, do I need to be getting these deals out like 50 % of ARV minus repairs? Because I felt like buyers were drying up. Have you experienced any of that? Or has your experience been maybe totally different?
Mauro Ben Alvarez (08:17)
So ⁓ again, for each avenue that you’re unloading, there’s different buyers. For the fix and flips, ⁓ I would say probably around October, November, I did see kind of a slowdown of everybody weary. ⁓ I saw a lot of people that just weren’t pulling the trigger at all during that time. ⁓And usually that’s when you look for your bigger guys, right? You look for your new Westerns, you look for other guys that, you know, that are maybe in buyers, ⁓ that are bigger guys that are, you know, Hey, they’ve got crews all the time. They adjust a little bit for their price per square foot to rehab it. But you know, their, labor costs aren’t, you know, changing as much. So, ⁓ they’re, they’re willing to keep moving. You know what I mean? There’s always a buyer if you’re, if you’re at a good enough discount.
Dylan Silver (09:09)
I mean, that’s exactly right. One of the things that I’ve noticed from my time as a wholesale and then still following the space is that you do have to have the ability to pivot. So mean, so you’re in a number of different markets, which gives you the advantage of, hey, you maybe when one strategy is working really well in this one market, you can dig in there and you don’t have to rely so much on another market. actually physically moved myself from San Antonio to Dallas, Texas, because I felt like the strategy that I wasdoing was not working very well in San Antonio and then it ended up working better in Dallas. But being able to do it remotely gives you that ability to take advantage of several markets.
Mauro Ben Alvarez (09:43)
Hmm.Yep. Yep. Yep. I mean, you’re, you should, I mean, as a beginner, you need to find one avenue and stick to that avenue and find a mentor, find a mentor, find somebody that you can go and, Hey, you know what? Can I go be your cold collar for three months?
Dylan Silver (10:34)
Yeah.Mauro Ben Alvarez (10:41)
And will you teach me the business? You know, I’ve, I’ve, I’ve done that with several people where they’re like, Hey, you know what? Can I come in, step into your business? You know, we usually offer a 10%, you know, training during, know, during training, Hey, 10%, you’re going to work all our leads. Here’s what you’re going to do. I’m going to plug you into my system. Just go ahead and make the calls to the agents and have discussions. Period. You know, that’s it. So.Dylan Silver (10:43)
Burn the ropes.I do want to ask
you about seller financing. This is something that I think everyone is seeing, even people on the traditional side, because properties are sitting in some markets. I can speak for Texas. Properties are sitting. I was speaking to a realtor in North Padre and Port Arantes who is telling me that there’s like a 220 day supply of homes, which sounds nuts. But I mean, I can speak for Dallas as well, where I would see
Mauro Ben Alvarez (11:08)
Okay.Dylan Silver (11:32)
you know, flipped homes potentially sitting and same thing in San Antonio for several months. So when that when that happens and when you might be a seller and your home is not flipped, right, it’s not like an HGTV level flip grade home and you’re seeing your property sit on market, you might start to think about some other options, whether that’s rent the property out, whether that’s take the property, you know, off of market or reduce the listing price. And to me, as an outsider looking in, that also givesan opportunity for investors and wholesalers to make seller finance offers to those people as well.
Mauro Ben Alvarez (12:07)
So, so kind of give you an example. ⁓ We last year ⁓ out of all the flips we did, we ended up having a whole three of the flips. One of them is rented because it was bought in with creative finance. It’s penciling out as a long-term. We’re breaking even. There’s a hundred and something thousand dollars sitting in that property. ⁓ But we’re not losing by keeping it and, you know, it’s paying for itself. It’s just sitting there out of sight, out of mind.We have two properties that we bought with hard money ⁓ that the market shifted on us around August. And ⁓ it basically left us in a situation where we’re going to sell these for a loss.
We’re going to go ahead and take the hit. We’re going to go out and sell them for a loss. Now for a loss doesn’t mean we’re bringing in money to the table. It means we put in the down payment and everything else, the payments that we’ve made along the way and everything. They are going to, you we’re going to sell them. We’re going to get some cash back, but you know, nowhere of what it was left in there. Now we would love to have the opportunity to do something creative like you’re mentioning, right? Like, Hey, you know what? You want to buy our house? It’s perfect. It’s pretty. It’s everything it’s got.
Dylan Silver (13:09)
Yeah.Mauro Ben Alvarez (13:18)
And we would love to finance it for you. However, the financing that we have, the hard money loan, it’s due in a year, it’s 12%. So it’s not going to be worth it for you as an empire. Now I had a lady come to us in, I believe it was the end of September.Dylan Silver (13:26)
Right.Yeah.
Mauro Ben Alvarez (13:35)
I had an agent come to me and say, Hey, he’s like, I’ve got this lady. She’s 80 years old. She wants to sell her property and needs work.She wants 200. I haven’t listed for 265. I’ve got nobody looking at it. I asked her if she’ll do seller finance and she said yes, but if she’s going to do seller finance, she wants 10,000 extra for the price. Okay. Hold on. Let me go ahead and get this for you. Now. Let me pencil it out. Okay. You know what?
Yes, we can go ahead and give her that extra 10,000, but I need an interest rate of 2 % to go ahead and make that payment work long term. She says, yes. Cool, we got it figured out.
She’s carrying a seller finance because she owns it outright, right? She owns it. All right. She started being a landlord She’s not hurting for money because she only asked us for 15,000 down payment. So she asked us for 5 % down gave us 2 % interest rate And she’s carrying the note for five years
Dylan Silver (15:14)
I mean,hey, that seems like a win, win, win. She gets $10,000 extra. You you get the low rate ⁓ and, no banks involved. I almost I’m almost bullish on seller finance, except the thing is, is there’s such a high learning curve for people in general. And plus, you get a lot of even even realtors who I’ll go to who may think, you know, no exposure to it and not understanding what’s quite happening. But but really, when we think about how homes are being sold in general,
At this point, people need a blood test practically to get a ⁓ loan, a mortgage. But I do think that there’s really a place for more seller financing. It’s just that issue of, hey, you’ve gotta educate potentially buyer, seller, and even professionals who are in this space.
Mauro Ben Alvarez (15:49)
Yep.Yeah, it is because it does cause some liability for realtors, right? And the realtor that did the transaction, if we don’t perform on that note, there’s a possibility that the owner might come back and say, Hey, you sold it to somebody and you didn’t, you know, take the extra steps to protect it.
You didn’t tell me that there was a potential liability. know, our contract states it, right? Our, you know, our contract through sub two states, you know, all of everything that needs to go ahead and help us stay protected. ⁓ but from an agent standpoint, I don’t know that they’ve done everything they need to protect themselves, right? Because they don’t necessarily disclose everything and it’s, and it’s not something that they’re in all the time, you know,
Dylan Silver (16:39)
Yeah.You know, then follow up on that is that I think the ideal situation is when there’s a very low balance or no balance on the mortgage and you know, they, you know, are trying to get that top dollar and are willing to wait, right? And so they’re saying, well, look, if I don’t sell this home right now, I’ll list it again in a year. To me, that makes perfect sense to do a seller finance situation. Cause like what’s the worst case scenario? Let’s say that buyer doesn’t make the payment. It goes back to
Mauro Ben Alvarez (17:06)
Yep. Yep.Dylan Silver (17:12)
the seller, can list the home in a year and now they’ve got like free quote unquote free money lying around. So, you know, to me, when when there is a low very low balance or no balance, I mean, I would definitely consider seller financing unless I was like, Hey, I need this windfall of cash now.Mauro Ben Alvarez (17:29)
Yeah, I get it.Dylan Silver (17:30)
You know, I do want to, I do want to pivot a bit here though, Mauro, and ask you about managing these flips. Cause I know you’ve been a part of 75 plus flips, many of which that you’ve managed. And from, from being on sites myself, I was a part of a demo crew, a demolition crew in DFW. I certainly know that there’s a lot of moving pieces in a flip and everyone’s going to do things differently. But as soon as you start taking up, ⁓ pulling up floors and taking down walls, you kind of start to see each flip isis different. Well, what’s been your experience? then also follow up to that is what advice would you have for maybe newer flippers?
Mauro Ben Alvarez (18:06)
My experience with flips is that there’s no two flips alike, no matter what, man, on the same street, same year bill, you know, same number of people in it. There’s no two, same because somebody brought in one guy to help them do something and somebody else brought somebody else to help them do something. And it’s a whole mess. So, um, my advice, you know, and honestly, we had gotten away from this and we’re actually going to be going back to this just because, know, I’ve been doing it so long. We’re good.is if you’re gonna do a flip, run your numbers three times, four times, five times, as many times as you need. Shoot for a conservative number.
Be happy with the number that you’re gonna make. And then on the numbers that you’re taking into consideration for your expenses to rehab the property, add another 10%, you know. ⁓ And have a couple other people look at the numbers for you besides yourself. Have somebody that you can shadow off of.
Dylan Silver (18:55)
Yeah.Mauro Ben Alvarez (19:03)
Find that person, you know, that, you know, has been in the business that will look at it and tell, yeah, this is a great deal. No, it’s not a good deal. And especially if you’ve got all the numbers already plugged in, you know, if, if I’ve got guys that come to me, Hey, what do think of this flip? ⁓ I’ll say, Hey, can I partner in with you on it? You know, that means that’s a really good flip, right? You know, if I’m just like, you, this one’sWhen is it is it you know, are you buying it in February which means it’ll be ready by March April, which is right the perfect timing Okay, yeah, you should be good Versus you know, are you buying something in September and it’s really tight and you don’t know if you’ll have it on market and then have people looking at it, know during the winter so ⁓ I would say definitely Check your numbers three times Throw in a buffer ⁓ and
double check your numbers with somebody.
Dylan Silver (19:52)
Yeah, I mean, you probably can’t say that enough, right? Because ⁓ you think everything’s right until there’s a foundation issue that you didn’t see. you’re like, how is this even here? Like, home look perfect from… Right. You know what I mean?Mauro Ben Alvarez (20:03)
Home inspection, home inspection, home inspection.Spend the, once you know that you’re moving ahead, spend the 300 bucks, 150, 400 bucks, whatever it is in your area. Get a home inspection. It might help you. mean, it might not help you at all. ⁓ you might go in and say, Ooh, I found, you know, foundation issues and you may go to the seller and be like, no, that’s why this is the price that it is. And then you can just make an informed decision on moving forward or not.
or it might help you get it reduced, but you know that 300, 400 bucks that you spend to be able to say, you know what? Nah, I don’t want it after all is, you know, it’s well worth it. ⁓ you know, rather than running into an issue later on.
Dylan Silver (20:45)
Yeah, and you know, too, I think to follow to follow that up, there’s a lot of people who might get in a flipping thinking like, this is going to be a walk in the park. And, you know, there was there was a time and that this may come back where you could buy a flip wrong and you could still get out on the upside. But that’s become harder and harder and harder. And now it almost feels like in some cases you could buy a flip right. And still, you know, the market could could be against you and you might have to hold the property, you know.Mauro Ben Alvarez (21:04)
COVID.Yes.
Dylan Silver (21:14)
And so it’s not something that you can go into like 100 % certainty really ever. And that’s why you’ve got to be ultra conservative right now with a buffer, with having someone look at your numbers, with having a home inspection, right?Mauro Ben Alvarez (21:29)
And and preferably on your first flip do something local. Find something where you can be taking a look at, know, because it’s easier to for you to stay on contractors because contractors are horrible. So when you you know you get into a bad contractor, tight numbers, tight time frame and the market kind of shifting on you, you could end up in a whole world. Whole world of hurt.Dylan Silver (21:52)
Yeah,it’s going to be a tough spot for anyone to be in. We are coming up on time here though, Mauro. Any new projects that you’re working on and then also what’s the best way for folks in our audience to reach out to you or your team?
Mauro Ben Alvarez (22:04)
⁓ they could go ahead and look me up at Mauro Ben Alvarez either on Facebook or on Instagram. ⁓ we do have aPark and actual RV development part that I’m going to be looking at in the next few days. Somebody came to me with some land. They’ve got a house on it. It’s overlooking a river and they’re thinking of doing some development. So we might be looking for some capital, ⁓ some private money lenders or private money partners for that particular situation.
Dylan Silver (22:36)
Mauro, thank you so much for your time today. Thanks for coming on the show.Mauro Ben Alvarez (22:39)
Appreciate you, bud.
