Synopsis:

Benjie Devera is a real estate investor from the Los Angeles Metro Area. Benjie is what we considered to be a Swiss army knife in the industry, he’s is a realtor, real estate rehabber, small multi family investor and also owns a 70 unit apartment in Columbus, OH. Dive into this episode as we learn more about Benjie’s real estate mindset and strategies!

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[0:01] Intro: Hey everyone, and welcome to another episode of Crushing Real Estate with Bryan Pham, where we interview real estate professionals around the industry. If you enjoy this episode, please subscribe to the show and leave a very positive review. We released an episode every single Sunday, so stay tuned. Enjoy. 

[0:19] Bryan: Hey guys, welcome to Episode One of Crushing Real Estate, today I get to interview my friend Benjie. Benjie has been in real estate for the past nine years. He’s currently a real estate agent, a real estate lender, a real estate flipper along with a buy-hold investor. Hey Benjie, can you introduce yourself really quick?

[0:41] Benjie: Yeah, first of all, Bryan, I want to say thank you and thanks for having me on your podcast. You know, I’m really excited to be here. And you know, I’m excited that you’re doing a lot of good things sharing value for your audience. So, about me, I started my real estate career when I said what my condo obviously, that was back in 2010. And, you know, at that time, I didn’t have much money, it was just a condo, but the timing was right in 2010, anyone who’s ever bought in 2010 was fairly cheap. And I didn’t know the concept there, but it was the concept of house hacking. I had my college roommate then to live with me and you know, especially as, you know, over the years, you started get into more, investment side of real estate, and but certainly, that’s how I started, you know, house hacking, and then from then on, just kind of built up equity and to progress, like where I am now investing in some units out of state and, you know, aiming for 700 units eventually.

[1:45] Bryan: Okay, wow. I mean, that’s how you got started in real estate. What were some of the challenges when you first began your real estate career?

[1:55] Benjie: In my career, honestly, you know, I think starting out, obviously, is just a trial and error type, right, most investors, you know, I think from all the investors that we meet at many conferences meetups. Some of them have, you know, backgrounds with their families, some of them or a lot of them are like us, just like trial and error. Honestly, for me, this concept of real estate started when, way back in college, I went to a private university in USC, it’s in LA. And what I notice is that all those rich alumni who’s ever donated to the school, the universities, you know, just one guy from the engineering school, Andrew Kirby donated $152 million at that time. When I was a student, I was like, how is that possible that one guy who studied engineering, donated $152 million for the university and, you know, I read up his bio as a student and I was like, wow, like they didn’t make their money through engineering, they’ve made money in real estate. So, all along like since college, I knew there was something there that I had to figure out. And honestly, that was like the birth, you know, that was like the thing that bugged me in my head that kept me thinking something about real estate that we need to find it.

[3:21] Bryan: Oh, wow. I mean, what was the very first deal that you did? Can you walk us through it and what, you don’t mind sharing like what were the numbers in those? 

[3:30] Benjie: Are you talking about the deals itself?

[3:32] Bryan: Yeah, your first deal ever.

[3:35] Benjie: Well, that was a condo. You know, a condo in San Pedro, that’s like 30 minutes south of Los Angeles. It was, I bought it for 190,000. 

[Crosstalk]

[3:54] Benjie: At that time had you asked me how do I know that 190,000 was a good deal because as a college student in 2007, that same condo was selling for 400,000, I was like at 190 that’s like 50% discount, I think it’s good enough. I may not necessarily be at the bottom of the market but it’s good enough. So, that was my first start and I actually just had sold that property a month ago for 350 so I made a little bit of money in nine years. 

[4:24] Bryan: Congratulation. How’d you find this deal?

[4:28] Benjiee: At that time, it was just go on, I think that was 04:31Realty, MLS. 

[4:34] Bryan: You found it on Realty MLS Wow. That’s pretty cool, man. Did you face any challenges with that property, like, do you have any tentative problems? What was your first intention when you first picked it up?

[4:47] Benjie: The first intention was for me to live close to work and that was my only criteria why I bought this properly and Alfred in my college friend then, my buddy, he was said, oh yeah, I’ll live with you at that location in San Pedro because he wanted to be in that area. So, it kind of worked out, it was safe for me that, you know, I had a friend helping us pay for the mortgage. The original intention was for me just to listen and just do it one step at a time. So, I wasn’t really all in, in real estate then, I didn’t really get to real estate like full 100% until 2014 when I saw the potential and met the right people along.

[5:27] Bryan: So, that’s essentially your first time or you didn’t know at the time was house hacking, right? Where you just literally like move into a property, rent out the room to like help pay for your mortgage?

[5:37] Benjie: That’s right. The house hacking that taught the game way after. Yeah, not the property. 

[5:46] Bryan: Yeah, the term was coined in bigger pockets we after but that’s cool. Yeah, yeah. What kind of type deals have you been working on recently and you know, what kind of natural progression from the first move did you continue doing, you know, buying holds or did you look into flips or what was the next progression for you? 

[6:10] Benjie: Yeah, so obviously, it was my first place to live and then I was still working at a job at that time. And, you know, by working, I was able to save up more money at a time in 2014. So, I was ready to buy another and throughout the years from 2010, 2014, I was just learning, reading a lot on bigger profits, educating myself, you know, investing a lot on just knowledge and I was able to buy this duplex that had, you know, 30 units, this essentially triplex and I’ll have them that’s about 15, 20 minutes east of downtown LA. There was a good market, the realtor that I worked with, eventually became my mentor and he’s the guy who got me into like the flips from 2014, all the way to like 2017 so I did a lot of flips, which is one of the ways to build your capital, especially in LA because you know, we have a lot appreciating market over here and it helps. Yeah. 

[7:13] Bryan: So, your natural progression is first you bought a house or condo for yourself first and you’re like, hey, this is great, I’m house hacking, my next move on my blog, they’re flipping houses. Right? 

[7:24] Benjie: Exactly, that was my progression, that’s one way.

[7:29] Bryan: It sounds pretty natural. You know, you get used to the buying process. And then from there, you’re like, hey, like, you know, save me money. How can I get my reservoir of money quicker? 

[7:39] Benjie: Yeah, if I can tell you, Bryan, you know, one thing that pushed me to really go posted in real estate in 2014, I don’t know if I’ve ever told you this but, you know, I have done with golden globes and my uncle. I visited him in the Philippines and at that time, 2014, I went, he had built a hotel from the ground up. You know, he’s like a distant uncle and when I visited him, it was 133 units Hotel in, like an hour south of Manila. Anyway, when I arrived in Manila, and I told, you know, the local locals, I said, hey, take me to the hotel, you know, with my last name hotel. So, it was kind of flattering because the locals knew, it was like a landmark in the city, right? So, I felt like, wow, I’m related to that business, I run these numbers, and I even stay at that hotel and it turns out that like, she had to move me from each separate rooms each night because the 08:45 [inaudible] was very high. I ran his numbers, I was just curious, I never asked him how much money he’s made, I ran his numbers but I realized that he’s made a lot more money in that one hotel business, than the money’s he’s ever made anywhere else like having a job with the city of LA. So, that was the lightbulb moment for me to say, hey dude, no more excuses, you better go full speed on real estate because this thing–

[9:12] Bryan: I mean, it’s obviously working out man, you’re nine years in so far so–. Can we, where are you going to be in the next five years ago?

[9:20] Benjie: We’re going to be together buying our yachts, man

[9:25] Bryan: Yeah, I mean, I know a lot about your 70 unit apartment right now that you’re currently investing in. Can you kind of help the audience understand what was your biggest challenges in this apartment unit? What was your mindset going into it? How’d you find a deal? What kind of challenges did you faced and how did you fix it? 

[9:47] Benjie: Yeah, so that time, obviously, you know, I started building up my capital, I started to have confidence, listening to all these guru experts online, all they speak about is scaling. So, I was able to partner with one of my business partners, Jane Strand, she helped raised capital, we put our capital together and said, hey, let’s do this scaling thing, and we went multifamily. So, we’ve counted, maybe five very different, six cities, studied every market in the United States and we ended up in Columbus, Ohio, the Midwest. And, essentially, you know, we did the best due diligence we could, as you know, as new multifamily investors, and we pulled the trigger. And it was 30, I think about 30% down payment, or the rest, you know, each step of the way, you know, we have that, we’ve had that property for a year and a half now and I mean, so far, we’ve learned a lot, definitely a lot of lessons learned for each of the steps, each of the mistakes we’ve made, and you know, in this business, I feel, you don’t really know until you try it. Yeah, one of the biggest problems I thought we had was managing the manager. I feel like it’s kind of like dating, you know, you don’t, you don’t really know what you get until you spend time with that person. So, this one guy, you know, he’s been in the business for 30 years, and I guess he just wasn’t performing to our expectations and, you know, partially, we’ve done a lot of self-analysis and James and I, my partner, James realized that the results of the manager is only a reflection of yourself, but me as is. So, the results that we get, these are reflections of how we perform. So, if I tolerate a bad manager, that’s a reflection on me so I can’t really blame, you know, being out of state and attempting so far away, I can’t really put all the blame on someone else, it’s all about like, what you have to do. So, anyway, a year after into it, we change managers and right now it’s only looking up. So, we’re very excited, we’re very fortunate that we have a good team now. 

[12:10] Bryan: Okay. I mean, is that the only issue you guys face with the unit or is there anything else?

[12:17] Benjie: So, I think the main motion, the hardest one is the managers, right. And the second thing is basically the tenant base, especially a C class building or in a C class neighborhood. And this is the first time I’ve invested out of state and this is the first time I’m facing this kind of problems. But if you step back and look at it, that’s really the norm. It’s, you know, the problems that we face are the problems that you expect managing a C class property in the C class neighborhood. So, nothing out of the ordinary besides, you know, putting the right team together, I think that takes time. So, obviously, time is equal money. So, I mean, you know, sometimes we think about the opportunity costs that, had I stayed on my lane and suppose I’m flipping here locally, you know, sometimes I’m like, oh, well, could I have done better as far as numbers is concerned, if I had kept that money in LA? But, you know, at the end of the day, you know, going out of state because it’s gone the other way, too. So, you know, it’s a lot of learning opportunities for this and I feel like, if you want to grow really, you got to step on the gas and this is the right thing to do, you know? No regrets, man, I mean, I enjoy it and I love I love doing what my family’s now and I still believe in, going, you know, 700 units eventually. So, that’s the goal, man.

[13:49] Bryan: Yeah, let’s, if we can do a deeper dive into this, how did you find the deal? And you know, did you guys do a 1031 exchange into it? Can you kind of explain what a 1031 exchange is?

[13:58] Benjie: Yeah, for some of our, your audience who don’t know 1031. 1031 essentially is a tax deferred process where you make your profit on the property. So, I made, I think around $200,000 on the last lip and if I were to put that money in my bank account, IRS, Uncle Sam didn’t one, a good percentage of that, like 20, 30% so we got like $60,000 of taxes. So, the IRS created the center to one option where that $200,000 profits would be discovered by investing into a replacement, applied property. Simply reinvested to another property that you like, and that way you never get taxed on it. But you do have to pay tax on it eventually, but–

[Crosstalk]

[15:00] Benjie: I mean, there’re ways to do it. So, you know, but that’s what we’ll take it one step at a time. 

[15:07] Bryan: Okay. So you–

[15:09] Benjei: The important thing with a 1031, though is that, you know, the investor, he should never have the proceeds into his account, there’s someone called in 1031. intermediary who holds their money. So, that’s very important in doing the 1031.

[15:29] Bryan: Okay, well, how did you find your 1031 attorney? 

[15:32] Benjie: It was a referral, you know, by the escrow company because they’re in the business, they know who their go to guys are and I think that’s one of the important things in this business. You have to have good team members to grow your business. 

[15:45] Bryan: Okay. Does that attorney, do you mind sharing like the attorneys, did he charge a flat fee or percentage of the deal or how does it go?

[15:52] Benjie: I think it’s $900.

[15:55] Bryan: $900?

[15:56] Benjie: Yeah.

[15:57] Bryan: Wow. That’s 15:59 [inaudible]. Yeah, for us to change gears a little bit. I mean, you mentioned earlier that you may turn off a flip project. Can we dive into one your flip projects you’ve done recently and kind of walk us through how you found a deal? How’d you find contractors and the challenges? 

[16:29] Benjie: Yeah, so back in 2014, I had this you know, my mentor, when I bought my second place. That’s who I met, David, David Frankel, if you’re listening, hey man. And so, he showed me who his contacts are as far as the how to play up, you know, I remember the first flip I did with him, I would get a measuring tape, measure every room and like, write out the cost for every single thing, that you need to pay to replace inside the house, whether it’s door knobs 12.99, toilet of $150. So, you add everything up, the knobs, you know, everything, you know, that’s how I started and just like come up with a price and say this is your budget for renovation. So, you know, and then obviously, after so many partnerships with him, I did my own, finding my own deals, finding my own contractor, and I did the same thing. Now the fundamentals, you buy low, know your budget, how much you’re going to spend and price it out and then you have to be able to sell it on a profit. You know, without strategy, it’s very useful when it was appreciating, the market was appreciating from 2010 to 2017. I think now, obviously, that strategy of slipping may not be the best strategy for flippers and my thing is because, you know, you got to have like a certain spread in order for you to make your profits after doing all that work, building a house. I mean, there is a lot of problems that we face, from renovation to selling it, to like you staying up late at night because you wonder if you’re going to hit your numbers or not. So, yeah, it’s, I think important thing is having, you know, educating yourself and you know, having mentors like you, obviously, who just share the knowledge to people and they get better. So they’re able to avoid expensive mistakes. 

[18:35] Bryan: I mean for that last year, did you, so you bought the deal in 2014, right?

[18:41] Benjie: Okay, so that one deal we can talk about in the one in Glendale that was 2015, I bought in 2015. I bought it for 600,000, one year later, I sold it for 900,000. I spent 100 for renovation for a year, and then put new talent and so yeah, for those 900 back in 2017. So, yeah, that was a good 200k spread of stuff, that’s probably one of my better point you had.

[19:16] Bryan: Was that the one you used to turn a 1031 exchange into some new unit? 

[19:19] Benjie: Yeah, partially. That was one deal, dude. I mean, you know, I mean, I’m not like killing it like other people you’re going buy 19:31 [inaudible]. It was scary, though. I’ll tell you that, it was scary when I bought it, because we had foundation problems. I never had to deal with any foundation issues in any of my flips and I was like, I was thinking like, is this, you know, just how it goes, tomorrow. But you know, in this business, like, growing, I think it’s very important. If I was going to stay in this business, long term, I better know how to handle foundation. 

[20:01] Bryan: Yeah, I agree. I mean, I have a lot of people that come out to my meetups and they asked me about partnerships. And from my perspective, I always tell them partnership is really hard because essentially, it’s almost like you have to be very compatible with the other person, and you’re dating and whatnot. How do you find your partnerships? I mean, it sounds like you’ve been through a lot of partnerships already, through your flips, through you 70 unit apartment, what was your criteria? And did you approach other people, the other people approach you like, how do you know whether or not you want to work with someone on a deal?

[20:40] Benjie: So, in my case, initially, you know, it was a real estate agent, my first partnership and he became a mentor because he was lightyears ahead of me as far as knowledge. The second partner I had was the gentleman I did business with in Columbus, Ohio, but we did some flips together, locally and with that gentleman Jim Stroud, him and I went to the same high school but we never talked in high school and we were not friends in high school. After college, we went to different colleges, I graduated, he graduated, we’re in the same year and then him and I met online on bigger pockets, you know, he went to my high school and then we met up and since then we clicked and then, I kind of liked the guy, you know, something we work together. So, it all worked out but I mean, you know, there’s compromises in the relationship just like anything. But it’s a good way to check and balance and, you know, you’ll really learn about the other person because, for example, have different risk tolerances. And I think everyone just like a different flavor. That’s why real estate have something for everyone.

[21:59] Bryan: Yeah, I agree. Yeah. Sounds like you’ve a formula, you know, partnership became mentorships, you’re high school friends, and real estate partners. That’s great. 

[22:11] Benjie: Yeah. And, you know, obviously, we’re always looking for partners to, you know, obviously, if we want to go into bigger deals, one of the things that I’ve learned, actually one of the skills I’m working on, is having the knowledge to be able to raise money, because that’s something I’ve never done. And, you know, I realized, in order for me to scale, like really scale my business, I can’t do it just from the money that I make. I need to rely on OPM as well, so I learn that skill. Yeah, I’m ready, let’s go to say, hey, man, I got a deal but that takes time also and studying.

[22:53] Bryan: Yeah, that’s good, man. So how do you keep yourself motivated to reach your goals? What, is there any particular thing that you do or do you do affirmations, you read books, do you write?

[23:06] Benjie: Yeah, I’ve always been a big reader ever since I left college, I started reading books that I liked, you know, and that’s the beauty of like not being called sounds like a strap that you have to in the textbooks that they assign to you, whether you’re interested in it or not. And since then, I mean, I read a lot of books, mostly business, real estate, psychology, autobiographies, I read a lot. So, I think in the business, you have to be well rounded with different topics, different analysis, obviously we’ll say this, obviously, probably 60% of one, is this 1% like business, history, and like economics and like–

[23:53] Bryan: All this keeps you motivated from time to time?

[23:57] Benjie: Yeah, because one book can change your life. One book, and you get into it, you’ll realize, wow, like, this is that book and then you start, that book becomes your life. You read it, live it, breathe it for like the next six months of your life and you practice what you read. And you know, sometimes with ideas and you know, you can sit there and have ideas from different people, some of the greatest people on the earth read books, you know, and you can learn a lot from them. 

[24:30] Bryan: Besides reading books, like is there any other ways that you are self-motivated? Do you go to meetups, do you read, obviously, you read but do you write new affirmation and things like that? 

[24:42] Benjie: No, I don’t. But I think partially, I think there’s some kind of like insecurity as far as like, being accepted in the family and I think partially, I’m motivated by wanting, having this desire to franchise and expand within our hotel. And, you know, I started reading, you know, the history of like the Hilton Hotels, right, so like that family how they started, you know, everyone starts with one and then it’s kind of like the your hustle, the execution piece that you have the land, expand and and do that so, you know, that’s the reason why I got my license fully immerse myself in the real thing, because the end goal is to really expand our portfolio. 

[25:28] Bryan: That’s really cool. Why man? What kind of advice would you give someone that’s just starting out?

[25:45] Benjie: Obviously, number one, listen to your podcast because I know you bring a lot of cool cats in this show, you bring a lot of value to the real estate community and I think that’s one advice I can give them and you know, obviously there’s a lot of other resources, free resources on bigger pockets, gurus, a lot of real estate books. But you know, I went to this one conference, one place is one of the multifamily guy, he essentially said that this real estate business is only 20% of your success, 80% of it is really your mindset. So, you always try to use conflict within the mindset, getting your mindset right 80%, once that said, the white line programs are like like the other 20% is a mechanic You know, it thinks what he can learn how to finance a property, you can learn how to flip a property, escrow title of his players, you name it, it’s absolutely perfect mechanics with 80% of the mindset that he wanted to be successful in the business. So, I subscribe to that. 

[26:53] Bryan: I love that. If you were to do one thing differently to be in your real estate career, what would have you done differently?

[27:06] Benjie: I think I would have started earlier, sooner. Yeah, I think the time, use your time to your advantage. And for us, you know, I think we’re fairly young but still, we’re going to be dangerous, we’re going to cause some damage. I know that is back to my experience, and yeah, I think I live in college. I got into real estate, but I do that so that’s why, you know, not everyone has the same timeline.

[27:36] Bryan: Okay. Yes, true. I guess the last question I have is, what’s your favorite book that you like to read?

[27:43] Benjie: Oh, my favorite, actually, that’s a good question, I don’t have a favorite book, but I still 27:54 [inaudible], getting myself educated, you know, financial literacy, 28:04 [inaudible], that book opened up my mind was like, the mindset. That was like the beginning of the mindset shift. And then from that book you grow into like all the other books, you know from sale to marketing to real estate and then now I just read a lot of financial statements really from all these fields that I like, so that’s kind of like what makes up my time in pretty boring with incredibly enlightening numbers, calculate names or analyze cap rates, etc. all that but you know, that’s the 20% of real estate, right?

[28:37] Bryan: Yeah, definitely, man. Hey, Benji, thank you for your time. Can you let our audience know how to reach you?

[28:46] Benjie: Yes, you can follow me at Instagram at the Benjie or you can also visit my website Benjidevera.com, Bryan will provide you that info in the link. And hey, Bryan, I just want to say, thank you, thanks for having me. It’s fun to be here on the show and you know, I’m pulling for you. I hope that we can do business again in the future, and I look forward to your success. And so anything I can do, like, hit me up.

[29:14] Bryan: Yeah, definitely Benjei. Thank you, appreciate it, man.

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