Stop Scrambling for Funding: How Investors Can Structure Real Estate Deals the Right Way

Jimmy Rios (00:00)
it’s not, and what’s cool about it is you don’t have to deflate the dream. I mean, it just has a different starting point, right? Because your dream, want, my goal is to get you to that goal, whatever it is. The thing is that many people come out the gate and end up falling right out of the gate. And then they actually get delayed because it takes time to get back up and get going again. So what I, and I’ve done that. See, I’m talking.

point of and respect and trust because I’ve done it. I’ve made those mistakes. So I know that by going slower, I have a saying, let’s go slow to go fast.

Cody Crabb (02:06)
Welcome back to the Real Estate Pros podcast by Investor Fuel. I’m your Cody Crabb, and today we’ve got Jimmy Rios, owner of Business Advisors in Phoenix. Jimmy helps stop funding like a last minute scramble and start structuring deals like an architect. What they have, what they need, and how to make the deal actually work. Jimmy, it’s a pleasure. Thanks so much joining us today.

Jimmy Rios (02:25)
Thanks, Cody. It’s a pleasure to be on your show. Looking forward to it.

Cody Crabb (02:28)
Yeah, so I’d love to hear a little bit about your background, of, you know, where you came from, like, what’s, how did you get to be where you are right now terms of like, you know, education and kind of what’s your background?

Jimmy Rios (02:42)
Definitely. So I started ⁓ my companies over 20 years ago, about 23 years ago, ⁓ out of a little Arizona room in Arizona. We call it Arizona rooms, little space. I came from the consumer finance world and corporate, working for a big player called City Group. And ⁓ decided that I wanted to make a change.

in some way as a very young 20 something in the late 90s and started my own And it was crazy because I really didn’t know what I doing. I jumped in as a property management company and then delved into, jumped into real estate, headfirst And then because I was working with probably about 95 my clients were

were Latino, Spanish speaking. I started doing what I did for my parents and translating and being able to help them with everything where they’d say, well, can you help me with this? And you help me with that? was, you know, and that’s where my vertical started coming from was because I had to dive in and become very knowledgeable about different areas. And so we built those verticals my Rio’s financial group.

Rio’s business funding, Rio’s business advisors, next level credit, Living Easy LLC. So all these different verticals we utilize as kind of like an ecosystem of financial services where we built and really around the of what we do to help people. And as needs arose, we quarterbacked.

those deals into proper channels. And now we very much helping individuals in the space, know, with real estate mortgages, with living better and trying to get to a better place in

Cody Crabb (04:40)
What did those early Latino investor clients need that the normal finance world just wasn’t doing very well? Was it translation services or was it something more than that?

Jimmy Rios (04:51)
Totally, I mean, now we have the ability to translate on spot, right, with all the tools. But back then, you know, trying to get somebody to understand the nuances of getting into a home or an investment property and ⁓ spelling out the credit nuances, the conditions, all the different rules of the game was extremely daunting for they felt almost defeated before they got started just on account of the…

the different requirements that were needed or the lack of knowledge that they had because in their countries, you know, the rules of the game are different. most everybody comes in with cash or very short span of time to pay off a debt. So they don’t believe in debt and understanding how to leverage in have creative financing tools to help them get into these things where I was unheard of, much less being able to teach them how to build their credit to use it as a tool and not.

looking at it as detriment, that was a big mindset shift that I’m still working through 20 years later in that space with the Latino market. But it’s better because we have better tools and better ways to present and better ways to translate and do these things. So we’re getting there and I’m more investors in that realm and the Latino market that’s starting to come out of the many of them come with very good capital. They just didn’t know about.

how they to use all their money in the way that we’re used to doing it.

Cody Crabb (06:17)
So I mean, I’d be curious what what sort of advantages does someone who is a an immigrant or a first-generation investor like are there any advantages that you might have in that situation?

Jimmy Rios (07:14)
I think because of their habits that they’ve implemented for generations, it helps them because they come to the country with a lot of gusto. They want to come out of the gate. They want to do a lot. So they’re very good about saving. They’re very good about putting money away. So if I construct a blueprint for them, they’re very good about following directions and doing the things I prescribe. And they don’t have a problem or qualm with coming up with

whatever the conditions are, if they properly know how to get that, right? So, you know, down taxes, you know, whatever it is that is needed, they, with proper guidance, follow through and do it. And then they’ll tell everybody and their mother about the great services that you did and helping them So that’s how, social media even became, that’s my, that was my marketing.

If I can do a really good job with this person, them, hold them by the hand and push them through, ⁓ then they’re going to see value in effort and then they’re going to tell somebody else. Ultimately, one led to two, two led to four, and the compound effect happened in my life that level. ⁓ But now I can parlay that in podcasts and the world of YouTube and everything that I’m in to be able to teach and show people what I’ve been doing.

you know, working and failing at for 20 years. ⁓ I wrote a book called Decoding the Mystery of Business Credit. It’s on Amazon. And I just started putting it in Spanish to start really laying out a dual bilingual ⁓ kind of way of teaching, you know, which is a little bit different out there in the spaces.

Cody Crabb (08:57)
I think that’s really interesting because you’ve kind of got, it’s not even a market. mean, in marketing terms, it’s like, that’s just Latinos that want to invest or Latinos that want to do things in Spanish. But it’s more than that. Like you said, there’s qualities that are also part of the culture and things. mean, the networking alone, like handing you off to their friends, that’s probably a huge benefit in the Latino community. I think there’s a lot of things like that. Marketing is so tricky because

Jimmy Rios (09:23)
Trust is a very…

Well, we talk right? How difficult is it in the scope of a relationship to build trust? And that trust very difficult to get. But once you get it and you can fine tune it to the needs of the client, they’re so open about talking about their experiences and how it helped them. Right. So that’s something that you don’t get a lot out there. know, people are very gun shy about talking about things.

They’ll talk about when it goes 100%. But when it’s good, you don’t hear too much about it. So I’m kind of the mindset of let’s talk about what we can do to better things in everybody’s lives. And it works very well when the law of reciprocity kicks in. It works really well.

Cody Crabb (10:11)
Yeah.

I’d love to hear more about at the beginning, you kind of gave me this kind of architecture metaphor. I’d love to hear kind of more about how you apply that and kind of how that frames how you see the real estate world.

Jimmy Rios (10:24)
So I’m not an architect by trade myself, but I a lot. And over in building businesses and being in the broker world and selling them for exits, all these different things that I ended up learning, and then also in building credit and doing all these things, a series of and processes that have to be done. ⁓ And what I noticed was that a lot of

investors were really flying by the seat of their pants on account of what they heard or saw as opposed to what needed to be done. I said to you, hey, Cody, I got this deal. Cash flow is good. You know, it’s priced 30, $40,000 less. You you’re going to start thinking like, OK, how do I get it? Right. And so you’re going to go you’re going to get into a hard money loan or whatever. You know, but.

is that’s not necessarily the, I’m not saying that the wrong way, it’s just that nobody ever taught you how to look at it from the perspective of an architect and being able to construct the best outcome and the best visual for what I’m trying to do. If I was able to step back a little and think of it like a blueprint, an architect, men are very averse about reading directions, but how much better is it when we take out the directions of

whatever we to put together, we start following it step by step. And all of sudden you were more efficient. You probably have a better product, stronger, and you’re not missing Everything is there and it’s working. Right. Why do we treat our scope?

Cody Crabb (12:00)
speaks to me because my

wife and I don’t argue often, but a chunk of them have been when we’re putting together IKEA furniture. So I feel that deepened by bones.

Jimmy Rios (12:08)
I was just going to mention IKEA. That’s a great example. it happens.

we as men women too, but men more so than women ⁓ will just go make mistakes. And I was one of those. And it took me a long time to start thinking that I need to construct this better. And so by working with other experts in the I started seeing things in a different light. And I said, well, we got to start thinking like an architect.

and really constructing the blueprint of what this field could really be. It doesn’t have to be complicated. It just has to be right. And when we start putting the pieces together in the right way, all of a sudden the world starts opening up. Sometimes I like to say we’ve got to go ugly pretty. What does that mean? Well, that means that if I want to get to buying 10 homes this year and I only know X amount because I only have so much capital.

How do I construct other modes of capital to give me the leverage points and perspectives so that I can go pretty, right? So don’t have to just go with one, but I can ultimately build my portfolio in a much better way. And so we go ugly to go pretty is learning from others, right? And their mistakes so that we can make better choices and see better results. And so that’s how I operate from that perspective. When I meet with my clients and they tell me their vision,

or their goal, I applaud them for that. But then we get very real in talking about, what do you have to bring to the table and how are we going to construct this? Because you’re telling me you have no credit, you assets, ⁓ you have no revenue. Right. So what do you have? Right. And then it gets real, real fast not to take anything away vision or mission wise. But I get realistic about what the expectations are.

So we can now, that doesn’t mean we can’t do it. We might just need a JV, right? Maybe we can get a finance partner that can help bridge that gap while we work on you build your capital and your reserves and all the things that you need. a lot of people that are out on the sidelines that are looking to get in the game with capital. They just don’t know how or who. And so we come together as a bridge to help them cross that bridge and solve for a lot of things. It’s the best of both worlds.

when you can mitigate risk and still be able to do the things you want to do. But it might not be at your thought process because you wanted it all by yourself. And maybe you might have to share the wealth in starting off, but it’s good. There’s ways to do it.

Cody Crabb (15:17)
Well, and I think something that you say, something that you said that really sticks out to me is when people are setting goals, ⁓ it’s to actually keep the goal in mind, like the reason for the goal. So I don’t know. A good example is I want to invest in just a super simple one. Like I want to invest in a new new property this year. I don’t own any properties. I want to own a property by the end of this year. ⁓ That might be completely realistic. Might be totally But if your finances are not in a that is

like an easy, obvious thing, you are gonna have to, like you said, you’re gonna have to get creative. You’re gonna have to either think of ways to that financing work, or you’re gonna have to think of ways to change your maybe it’s actually But like the amount of effort that you have to take is the difference. Like you could maybe still do that, but the amount of effort it’s gonna take to get.

are you willing to do that amount of effort? And if not, let’s adjust I really like that because I hear about goals like they’re shooting as far as they can and just try to get as far as you can. this way seems so much better because you can actually know where going to land more or less. And then it’s actually something doable.

Jimmy Rios (16:19)
Good.

Well, and it’s not, and what’s cool about it is you don’t have to deflate the dream. I mean, it just has a different starting point, right? Because your dream, want, my goal is to get you to that goal, whatever it is. The thing is that many people come out the gate and end up falling right out of the gate. And then they actually get delayed because it takes time to get back up and get going again. So what I, and I’ve done that. See, I’m talking.

point of and respect and trust because I’ve done it. I’ve made those mistakes. So I know that by going slower, I have a saying, let’s go slow to go fast.

Right. Let’s slow down and taking that approach of what you want to do. And let me show you some pinpointed facts of what, you need right now. Right. Because like, if I asked you, okay, give me your cashflow the next 90 days. ⁓ Right.

show me your expenses that you have right now. And they don’t even know. Right? So like, if you don’t know your numbers, then how are you going to account for a ⁓ or war, change in rates, all these different variables that are out of your control. But yet you just came into a hard money deal that, you know, is at 12 or And your overruns on your construction bids.

And the timeline just changed from 30 days to 60 Where’s the reserves to cover those you know what I’m saying? Where I’m going with this? It’s how quickly the starts falling apart and that you projected in your head because you thought, you know, they told me that I was going to make this or ⁓ the comp said this. Well, the house was only really going to sell for this. All these variables come into play.

Cody Crabb (18:41)
I do.

Jimmy Rios (18:58)
So I already know things ahead of time. So I’m thinking like an architect and saying, okay, what are we going to put in place to efficiently get to the finish line as quick as possible? Try to meet our goals for timelines, budgeting, all those factors. Right. And many times it’s not utilizing own money. That is the key. Right. Many times people are so caught up in process that they don’t have enough in the bank at the moment.

But we need to construct, there I go again, talking like an architect, because the creative side of making money is constructing these pillars that are going to us help money make money. And so people don’t realize how important those things are when they go to the bank and they get denied because they thought they had a 750 credit score and that’s all they needed and they got denied. They’re like, what do I do now? Well, I thought I was going to go SBA and SBA has taken six

to get you an approval, well, you need to find other ways because your is going away, right?

Cody Crabb (20:00)
especially now in the market now. mean, it’s it’s so quick. mean, I know people that are just trying to get like a residential house for themselves and they’re barely even able to see anything before. Like the availability is just not there for places. And so I think something that you said that really stuck out to me was it’s almost like you’re saying don’t think of how you’re getting to the goal when you make a goal. Think of what the goal is. So like if you want to retire by age 50,

then maybe that means you have adjust your retirement looks like and you’re not gonna be on a cruise every And maybe that means can quit your job at 55 instead of 50, like if you do X amount of dollars. So like, I like that thinking because you said, and I don’t wanna crush anybody’s dreams. On the contrary, I think you’re actually saying, no, I actually think if we change it to goal, which you might be It’s just that, I think that’s so…

Jimmy Rios (20:55)
It’s

Cody Crabb (20:56)
That’s such a great way of looking at it.

Jimmy Rios (20:56)
putting on… Look Cody, it’s like this. You ready? It’s like right see everything through this pair of glasses and then after meeting with me, I’m like boom. ⁓ I got the smart glasses on. I can see, I can can do it all. reality is that the of what kind of glasses you’re putting on is super important in how we go about…

understanding that my goal is to help you get to that goal because you know, I don’t make my job is contingent on your success. Right. That’s a different that’s a difference is that when I’m contingent on your success, then everything I do is to get you to that goal. Right. When you’re doing it on your own, everything is all in. You’re you’re either going to it or break it. And my goal to make it. So we help you.

in that regard and showing you the things that we feel now might not be in 30 or 60 days the way you envisioned but it’s going to get you there. Your goal is to get there. We’re going to help you get there. We construct that blueprint for you. So you’re not because many times you just don’t know where to pull from or who to talk to or, the, the construct of doing it is totally different. So we need to give you the tools to be able to see it and implement it, but you do have to do work and that work is in doing it, following a plan.

Right? Follow those directions.

Cody Crabb (22:20)
So, okay, so if people are really liking what you’re saying, they kind of vibe with you a little bit, you sound like you could really give them a hand. Who should be reaching out to you how can they do that?

Jimmy Rios (22:31)
I think, I mean, I talk to people from all walks of life, but I mean, even the guys at the high level ⁓ come to us and we talk about high level to high level in our program because we talk to everybody the high level that is just starting in the first few deals of their investment trajectories to seasoned vets that are portfolio in that to do private equity or bigger, higher level types of financing.

or projects, right? It’s still the same thing. At the end of the day, they all have to go through the same process. It doesn’t matter how many more zeros this one has over this one. If it’s one home or if it’s a paradise on an island that we need to construct, it still follows the same patterns. So we talk to everybody in that realm and break it down for that person based on a lot of those variables that I talked about at the beginning.

Cody Crabb (23:21)
That’s true, yeah.

Jimmy Rios (23:28)
What do you have? What are you bringing in? All these things that people need to account for, not trying to bust anybody’s bubble, but you should see it. I get people at the higher level that think that because they’ve made it here that they don’t have to come in with any collateral or that, you do I have to pay that? Or, right? It’s the same concepts. So we make it very simple.

Cody Crabb (23:51)
I love that. that’s I think just about anybody could kind of do with this extra perspective, but especially kind of when you’re looking at it holistically like you with with your ⁓ the whole approach, look at look at what you want to accomplish and why. So ⁓ that’s so great. So if someone wants to get in touch with you, how can they do that?

Jimmy Rios (24:10)
⁓ Right now, our YouTube channel, Rios Business Funding, and our website, riosbusinessfunding.com ⁓ you’ll see us on social media. Google Jimmy Rios or ⁓ Rios Business, and you’re going to see me. always following all our social media. If you text me, if you call me, if you make an appointment through our channels, ⁓ you’ll

you’ll reach one of our team members or myself and we’ll get you going. The methodology that I’ve implemented across the channels has extended nationwide and now we opened in Medellin, Colombia. We just came back from Ecuador. ⁓ So we’re starting to transcend ⁓ across borders, you know, with Mexico being on the forefront for us even faster. So there’s different things. Obviously we undertake it a little differently in the countries.

that are outside the US, but we can still do it because of some of the things that we teach and that we do. So don’t think that just because you’re a foreigner that you can’t partake and do the things in the US. ⁓ There’s a lot of things you don’t know being able to partake in all these things that we call and making money work for you. And we would love to help you.

Cody Crabb (25:29)
Well, thank you so much for all the all the great insight you’ve given us today I love the analogies and I feel like I understand a little better with that kind of thinking so I appreciate that and thank you listeners for joining us as well if you feel like you got something out of today’s episode go ahead and give us a like subscribe comment all the things and make sure you follow us so that you don’t miss another awesome conversation like this one Jimmy thanks so much. It’s been a pleasure

Jimmy Rios (25:40)
That’s awesome.

Thanks Cody. Definitely. Thank you so much. Take care.

Cody Crabb (25:51)
Have a good one.