Skyrocket Your Success: Why Systems & Processes help you WIN in Real Estate

Stephen S. (00:03.438)
Welcome to the show where we interview the nation’s leading real estate entrepreneurs. If you’re joining us for the first time or you’re coming back for the second, third or hundredth episode, you’re in for an absolute treat today. I’ve got Richard Gonzalez in the house. He is out from San Antonio and we’re going to talk about long-term wealth building, the long-term vision, but also

how important it is to have systems and processes in your business because at the end of the day, you don’t rise to the level of your goal, fall to the level of your processes and systems. just remember, at Investor Fuel, we help real estate investor service providers and real estate entrepreneurs two to five X their businesses to allow them to build the businesses they’ve always wanted, to allow them to live the lives they’ve always dreamed of. Richard, that being said, welcome to the show.

Richard Gonzalez (00:51.409)
Hey, thanks for having me. Appreciate it.

Stephen S. (00:53.59)
You bet. I mean, I’m so looking forward to this conversation, but before we get into it, because I know we’re to talk about a lot about buy and hold long term wealth building systems and processes, which you’re an absolute guru with within within the real estate space. Tell me what got you started in real estate 10 years ago, according to our conversation before we hopped on and hit record. What what got you started and how did you get to where you’re at now?

Richard Gonzalez (01:18.877)
So I’ve been now a real estate investor full time for the last 10 years. So originally I moved out to Texas. I’m from California, from the West Coast. I moved out to Texas to expand a different business. I was in the merchant services credit card processing. So we would help small businesses to set up their POS systems, their credit card services.

And the majority of my clients, they were really focused on the Hispanic community. So in L.A., you know, it’s a big demographic, huge city, close to 20 million in the metro. So I said, where else can we go outside of Los Angeles that had a good, you know, population, but also demographics? And San Antonio was like the perfect fit, you know, fourth largest city in Texas. I think we’re like 80 to 90 percent Hispanic out here. And it’s a big city.

So that’s what I did. I ended up coming out here in about 2011 and it went very good, meaning we ended up expanding into multiple markets, Dallas, Houston, and San Antonio, basically having sales offices and going business to business, offering our merchant services. And then about two years into it, the payments app started coming out, Square, Stripe.

all these dozens of apps coming out with no transaction fees, no monthly services. Well, the way that we made money in that business was off residual income, meaning off all these fees and transactions, even though we made a couple cents per swipe. But when you have thousands and thousands of merchants, it adds up. So eventually, we’re getting our legs chopped off. And I was just pretty much bleeding out. Trishon was going through the roof. And the amount of new

Merchant accounts that I was bringing in on a monthly basis didn’t even offset what was you know going out on the back end so luckily Luckily when I moved out one of my friends moved out with me and he was the real estate investor He had millions of dollars in out in California, but went bankrupt on the a crash. So basically lost it all

Richard Gonzalez (03:34.773)
And finds out that I’m moving out to Texas to expand my business. He said I’m coming with you and I asked him well, what are you gonna do? He’s like, I don’t know. I’ll figure it out. I mean that guy’s pretty much, you know owes a lot of money at that point and wants a fresh start. So throughout this journey that I’m expanding my merchant services business, he’s studying the areas. And again, the guy has no money, literally broke, negative like I tell people. And within two years, I’m not kidding you.

He started rebuilding his net worth. He had purchased close to about 15 to 20 properties, mostly vacant land, but near the downtown area, downtown of San Antonio. So these lots, at one point, nobody wanted them, specifically on one of the sides of town. And they were on the MLS for 10, 15, $20,000 back then.

And he had already done all the research and all the development that was coming to San Antonio in the next five to 10 years. And he kind of went in early. I remember during those days, we were kind of living below our means, sharing a one bedroom apartment here in downtown, I think it was like $700. He was sleeping in the couch and I had the bedrooms. tell people he was that couch story that people always talk about. And I’m not kidding you, within…

Within two years, I saw him basically go from being negative to now having a net worth of a few hundred grand. And I remember two years into it, this was about 2013, he started flipping these properties. So now he’s selling them to developers for 50, 80. The last one he sold in front of my own eyes, he sold it for 120,000.

I know he purchased that for 10 grand just two years prior and that was it. That was like that screw that turned in my head. I’m like, I don’t know how this thing works, man, but I’m going all in into real estate. And I started purchasing vacant land too, know, the deals that he would pass on. I knew they were pretty good deals, but they were not the $10,000 deals. They were like the 20, 30, $40,000 ones.

Richard Gonzalez (05:49.47)
But I actually ended up buying about seven or eight properties myself, land at that time. And like I mentioned, within two years, I also sold that. And then I went full time into real estate in 2015, used that money, leveraged it with hard money, and then got into the rental space. So that was pretty much my start to real estate, kind of by accident.

Stephen S. (06:10.061)
man.

Stephen S. (06:14.493)
So, so essentially your buddy who didn’t have a pot to pee in or a window to throw it out basically followed you and then developed the sauce figured it out and then you saw it as things were tanking on your end you’re working your butt off trying to keep up but what you’re losing on the back end isn’t even helping with what you’re bringing in and so you had to make a major pivot yourself and then the rest is history.

Richard Gonzalez (06:41.135)
Absolutely. And I think even at that point, he had told me when I told him I was going all in, he’s like, man, it’s opportunities over. Everybody knows about this area. All the investors are coming in. The difference was that his expertise is he was like a master speculator. My expertise was sales and marketing. Right. So if I can get in front of sellers or potential sellers and offer them to buy their property.

To me, it was a numbers game, and that was my skill set. My skill set has always been sales, so I started sending out those yellow letters, literally handwriting them. I remember handwriting hundreds of those back in the day, and they worked. People would call you and say, okay, I got your letter, what are you offering? And then I had to figure out what to offer.

And then after that, once I started getting contracts, then I had another problem. How was I going to finance these? And then it was like one challenge after another. But I figured, you know, one of my mentors at that point told me, Rich, if you find a deal, the money will show up. And that’s been the philosophy that I have.

Gone with since day one that if you find anything that has value there’s people out there that have the money whether it’s an institution a private lender your friends and family I mean, it’s like finding a Lamborghini for 20 grand I mean Even the scrap metal on that sucker is probably worth 50 to 100 just the transmission alone or or whatnot So that’s that was my philosophy where when I got started was, you know Just take it one step at a time

Stephen S. (08:21.185)
Now what made you decide to buy and hold to begin with?

Richard Gonzalez (08:26.321)
So my first deal, and just like everybody that gets into this business, I think tries to flip. And I lost 30,000 literally on my very first project. So I did what I think most people do. They watch the TV shows, they get excited and say, you know what, I’m going to start flipping houses. You don’t realize all the intricacies and mechanics, processes that you need, quality control, project management.

you know, skill sets that you need. obviously, even though I thought I did my homework by, you know, interviewing contractors, checking their references, going to go see their previous work, and then making an educated decision saying, you know what, I think I found a good contractor here. We can probably pull off this project. And then I had a project that had enough meat on the bone.

And then halfway into the project, you know, we’re pretty much at a budget and

The contractor knew I was a beginner, so he took advantage of that. At the end of the day, I remember I would show up on Fridays to inspect the property because they’re asking me for a draw, and I don’t see any improvement. And they’re like, no, we reframed the attic. We braced all the walls. And I’m like, what the hell are you talking about? So obviously, I kept issuing draws. They got me on the technicalities. And then eventually,

you know, we’re out of budget, they pick a fight with you, and then they take off. So it’s almost like MO 101 for them. They can smell new investors from a mile. So after that project, I decided to take a step back and then start doing rentals. Because with rentals, you can make some mistakes, you can cut some corners.

Richard Gonzalez (10:22.363)
And then as soon as you’re done with the project, can stick a sign in there and get a renter in there. And then eventually after so many rentals and hiring better subs or contractors, your quality starts going up. Your finishes start looking pretty good. And then that’s when you kind of motivated to do a higher end project. So then you took another stab at flipping again.

was successful at that point, but my strong suit has always been, you know, buy and hold and building long-term wealth. That’s my number one goal.

Stephen S. (11:00.929)
Hmm, man, that’s so good. Now, so what are some ways that you think that people can like shorten their learning curve when they’re get started? Because like you talked about there, know, you people that just get in it not knowing what they don’t know. And then things like that happen and it blows them out of the water. They never consider it again. So like what are some ways you think people could shorten their learning curve when they’re getting started in real estate?

Richard Gonzalez (11:22.919)
Yeah, think number one is they have to partner up with somebody that’s already doing it. So if somebody, and I’ll just use myself as an example, if somebody has a deal out here in San Antonio, maybe in my area and doesn’t have the resources or the contractors, but has the actual deal, maybe already even has the money in place, but just needs some guidance, you have to give some of that pie away at the beginning, basically, you know, pay your dues. And then eventually,

from watching and learning hands on, then I think at that point, you’ll have more experience, you’ll see the mechanics. But when you don’t have any reference points and you’re just using YouTube and flipping shows as your guide, mean, at that point, you’re pretty much asking for it. And I think that’s how a lot of people don’t make it in this business, they have a bad experience. Like I said, luckily for me, I just decided to take a step back and get into the rental arena.

And then once I polished our contracting, our construction, and got those systems in place, then obviously the results were a lot better.

Stephen S. (12:33.409)
Yeah, for sure. Now, what are some of the systems and processes that you’ve put in place to manage all the properties that you have and then all the ones that you’re still trying to acquire since systems and processes like we spoke about in the beginning are critical for success?

Richard Gonzalez (12:53.051)
Yeah, so what I recommend to everybody is that everybody has to start doing all the positions at the beginning. That would be my recommendation before you bring anybody on board or hire somebody. So I remember at the beginning, I was doing the leasing of these rentals, right? I was answering the calls. I was showing the properties. Eventually, I got an assistant that was helping me do the paperwork.

and some of the minor tasks. And then as you get more experience, then you start leveraging some of those duties out. But I think at the beginning, you personally have to do the majority of the work just so you can actually understand it and learn it. Because you’re never going to be able to scale and build a team if you’re not able to problem solve and be able to provide solutions to your team.

So that right there, I think, is the most simple format, the best processes. And they don’t have to be, you know, softwares at the beginning and high end. Obviously, now we’re using the high end softwares for property management, the stuff that Cardone uses for thousands and thousands of units, or the big companies out there. Obviously, you’ll eventually get there at the beginning.

I was basically using an Excel sheet. Eventually we moved on to a CRM, a property management software, et cetera, et So I think what’s most important is really just getting the mechanics down and the sequence. And then when you’re able to repeat the process over and over and have some success, then you can plug somebody in and leverage that out. And that’s how you build some of the processes is really just by trial and error.

Because if something’s not working, you’re going to have some pain points, right? You’re going to realize, OK, I’m dropping the ball. Nobody’s leasing these properties. I’m showing 10 properties and nobody wants them. So obviously, there’s something missing. Maybe you’re not the right person for doing the sales. That was my background. But then you have to hire somebody that’s better than you. So either you’re going to have to get your skill set to that level or find somebody that that’s their

Richard Gonzalez (15:17.511)
their expertise or their background. And then at that point, you can bring them into your business and your ecosystem. And then they just got to learn your system at the end of the day.

Stephen S. (15:31.213)
because ultimately it’s about having the system built but also understanding how it operates.

Richard Gonzalez (15:35.89)
Yeah, yeah, I think I think if you talk to anybody any any entrepreneur and you know when new software has come out and With all the bells and whistles everybody says the same thing. Yeah, it’d be great if everybody used them at the same level Software is only gonna get you so so so so far You know and everybody has different learning curves skill sets technicalities that type of thing so I think I think the

you know, making it simple and duplicatable, that’s more important. So like I mentioned at the beginning, you know, using spreadsheets and, you know, doing what works. And then from there on, you know, I’ve been in a lot of masterminds, so I piggyback off other people that are ahead of me. And that’s what I’ve done. So I know you guys talk about stuff like that.

and I recommend it 100%. And that’s how I have learned a lot. I’ve been in many boardrooms and masterminds throughout my last 10 years. So trust me, I’ve paid my dues.

Stephen S. (16:42.477)
You bet. Now, why should somebody join like a mastermind? I know you touched on that piece. What’s the value a mastermind can really bring to the table there?

Richard Gonzalez (16:51.645)
Yeah, I don’t think there is another way to be able to bridge the gap. if it’s going to take you a year or two years to get to a certain point, a mastermind will help you kind of shorten that gap or basically condense time. And for those that value time, it’s the most valuable asset. So that’s what it does.

It costs money, it might be expensive or whatnot. You might not have the revenues at the beginning, but you’re not going to get to those revenues or if you don’t get in groups like that, because at the end of the day, that’s how you’re going to get to that. And sometimes it’s just minor, minor things. I remember some of the groups that I would be in, and sometimes it was just mindset shifts where maybe I didn’t understand something.

you know, at a high level and now being in there, I got clarity. My vision got more clear. My next, you know, goals for the next year, two years, three years got simplified. And that’s it. I had a road roadmap at that point. So again, I’ve been in Masterminds when I had 10 houses, 20 houses, you know, so definitely, definitely it’s a plus.

Stephen S. (18:11.735)
So there’s not a specific time of like, when I get there, then I should be in one. It’s a matter of if you wanna bridge that gap between where you’re at and where you wanna go, you’d highly recommend it.

Richard Gonzalez (18:22.277)
Absolutely, absolutely. And I think now a lot of the groups, have different levels, right? Where they’ll have people that are making, you know, a million plus or under a million, five million plus. So you’re already, you know, surrounded with people that are where you’re going to be or want to be in the near future. So obviously, they know something that you don’t know. And to me, that is worth, you know, the value.

Obviously, going to, you know, it’s going to be up to you to get the most benefit out of them. Just being in masterminds itself is not there’s no guarantees. But the way that I have seen it, the way that, you know, my my my mind works is like I want to be the smallest guy in that group because I know I’m going to get the most benefit out of anybody else. I’m to be the most hungry. And and that’s how I seen these groups. You know, I always been like, just let me in. Let me in.

and then I’ll figure it out.

Stephen S. (19:22.701)
Because ultimately, if you’re the smartest person in the room, then there’s nothing for you to learn, right?

Richard Gonzalez (19:28.025)
Absolutely, absolutely. And definitely, definitely you can go in there with egos, right? You got to be very, you know, humble to a certain degree. And those are, think, the people that are going to get the most benefit from a mastermind.

Stephen S. (19:42.252)
Yeah, I agree. Because I think a lot of people get lost in the sauce too.

Because ultimately, especially with masterminds, to your point, you join a mastermind to be around the people. And nowadays, every mastermind that I’ve heard of, all of the different things that are out there, different options, seem to have a ton of benefits that are just included on top of. But really the biggest piece of it is like what you said, being able to be in the room with people that are either where you’re at or where you’re going.

that way you can see what that gap is and how to bridge it. There’s a book that talks about that, the gap and the gain, I think, or something along those lines. it’s when you have someone to chase after that’s further ahead than you, you always bridge the gap between you and them, right? And then you look for somebody that’s further ahead and you bridge that gap again, right? And the mastermind is just a perfect place to do that, you know? So yeah, I’m…

Richard Gonzalez (20:33.799)
Definitely.

Stephen S. (20:41.869)
100 % following you that love love everything you’re saying there. So like let me let me ask you this though Richard so if you had to Go back to like when you first got started right and kind of put yourself in those shoes You’re seeing what your buddy’s doing things are going haywire with the payment processing and you’re like I got to fix this problem now But if you were able to do that and start all over

but you were able to take all the knowledge, all the experience, all the lessons, everything that you’ve accumulated up to this point, what would you do different and what would you do the same?

Richard Gonzalez (21:18.161)
Yeah, so the thing that I would do the same or even different because in my previous business, had, there was a point where I could have scaled my business even to a higher level.

Like I said, was in that industry for almost 10 years. So I started in California, then transitioned to Texas. So I was already supposed to exit out of that business. I was supposed to build my portfolio, sell it for a big multiple. There’s a lot of banks and processors that buy it for…

30 times, 40 times is monthly income. So we’re talking about millions of dollars. And then all of a sudden the industry changes and nobody’s buying portfolios, right? Everybody knows the attrition’s through the roof and they’re pretty much worthless. So I spent a lot of my 20s working my butt off and I’m talking about 18, 20 hour days for almost 10 years. So.

For me, when that business was going under and I came across real estate, I knew at that moment that that was my way to regain my entire time that I invested in the payment processing just because real estate is such a high ticket. So it’s like no difference in selling jets or luxury real estate. If you succeed, then you’re going to make some money.

So for me, I had no choice. Like I had to figure out real estate. It was kind of like, this is it. And then I remember at that time, you know, the book Second Chance came out, the author Robert Kiyosaki. So a lot of people know the quadrant, know, cashflow quadrant, but very few people have actually read that second book that he did called Second Chance.

Stephen S. (22:51.618)
Mm-hmm.

Richard Gonzalez (23:14.491)
man, it was like speaking to me, to my soul. And I basically talked about that, getting a second chance at life, you’re getting a second chance at business, and what are you gonna do about it? And it was like perfect timing. So for me, real estate was on the table and I needed to figure out a way. going back to your question was, that industry, in that business,

If I would have been able to raise capital, I would have been able to scale and maybe even get my business to a point where even attrition wouldn’t affected it because I would have been now a merchant service provider, which is the next level up from where I was. I was what they call it an ISO, independent sales office. So I was working for MSP, which they have hundreds and hundreds and maybe even thousands of sales offices nationwide.

And I could have got to that level. I think there was an opportunity for me. I just never had the resources, never had the, you know, the money to be able to scale and expand. And when I started in real estate, I realized right off the get-go that I was going to run out of cash. You know, there’s only so many properties. I don’t care if you have five million bucks in the bank or 10 million. There’s only so many properties you can invest in at one time that you’re just going to basically tap out. So

When I was building the engine, quote unquote, and the model, I realized that right off the get-go. So what I did, I started building a private lender group. So I started not only soliciting to homeowners, I started soliciting to everybody that was lending privately here in my city. And it was not that difficult to find them. All you had to do is pull all the trustees that were recorded within the last 12 months that are not a company.

Basically, I’ll say, Steven has lended 50 grand to ABC Main Street. And I send you a letter and I say, hey, my name is Richard. I’m a real estate investor and I’m out here in downtown San Antonio and I do deals. And at that point, I was doing so many coffee meetings every day, literally on a weekly basis. I was meeting maybe

Richard Gonzalez (25:37.746)
five to 10 potential private lenders and kind of pitching on my vision, my model. And at the beginning, it was difficult because I didn’t have the track record and nobody believed it. But there was a couple of private lenders that believed in me. They said, OK, let’s give it a shot. Obviously, you have a track record in another business. I’ve been an entrepreneur now since I was 18 years old. So 23 years at this point, going on 24.

So they gave me a chance and those private lenders, I’ve been working with them ever since. And I have paid millions of dollars in interest at this point. So those guys that believed in me, know, reap the rewards. And that’s the potential. You just never know. So that’s something that I would have done the same. Is right off the get-go build, you know, a private lending group to be able to fund your deals.

and make quicker decisions. You’re not dependent on hard money or even your own money only. That’s only gonna get you so far. So that’s been one way for me to be able to scale. What would I done differently in hindsight? think basically where we’re at today,

I think one of my best years was like 2017 right before 18. Things like double, tripled, I think nationwide, especially here in Texas or in San Antonio. And I remember 2017, I was going pretty hard, but I think I could have gotten harder. And then when 2018, everything doubled literally overnight. And I’m like, I knew it. I knew I should have gone even harder. Because again, there’s a lot of…

unknowns and you know pitfalls that you can fall into and then fast forward today, know, we’re in 2025 and Right now I’m even buying for less than 2017 so I’ve been able to kind of come back in time to my area where there’s Very few investors playing right now. I’m pretty much like one of the few kids in the playground playing by myself while everybody’s asleep

Richard Gonzalez (28:02.545)
And I’m just taking advantage. luckily I got the opportunity to again have a stab at it. And I’m seeing a big opportunity in the marketplace right now. So what took me 10 years to do, if I play my cards right and put all my resources in action, I should be able to double my portfolio within two years or maybe three. And that’s the vision that I have right now. And the reason I’m still working

extremely hard at this moment.

Stephen S. (28:33.697)
Wow. Richard, thanks for joining us today. If anyone wants to learn more about you or what you’re working on, where should they go for that?

Richard Gonzalez (28:41.563)
Yeah, find me on Instagram. My handle is TheRichardGonzalezSA for San Antonio. So send me a DM. Anybody wants to partner up on a deal out here. Like I said, I’m an open book. Send me a message. Any way I can help. You know, at this point, it’s about giving back too. So I’m a big believer of that. And eventually, you know, I think I’m to be doing a lot more very soon. Obviously, I’m still very active and I’m still in the trenches.

like we mentioned from the start of our conversation. So I’m still hands on.

Stephen S. (29:15.605)
Awesome. Well, everyone, hope you enjoyed today’s show and we’ll see you on the next episode. Thanks again for being here, Richard.

Richard Gonzalez (29:21.022)
Thank you. Thanks for having me.