WIN Ep170. Aligning Investment Strategy with Life Goals with Jorge Vazquez

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Trent Werner: Welcome back to another episode of the deal deep dive segment on the Westside Investors Network podcast. I'm your host, Trent Warner. In this segment, our featured guests will share their unique stories on a specific deal they've invested in. We will dive deep into finding the deal, financing the deal, writing an offer, and the due diligence. Do us a solid and smash that subscribe button, leave us a rating, and share this episode.

And now, let's dive deep.

Trent Werner: Welcome back to the Westside Investors Network podcast. I'm your host, Trent Warner. On today's episode, we are joined by Jorge Vasquez, cofounder of Greystone Investment Group based on Tampa, Florida. Jorge and I are going to talk about his real estate career. He's been in the business for twenty years now after starting his professional career in financial advising.

Jorge realized that his clients were excited about real estate and wanted to help his clients achieve their goals through real estate investments. We're going to talk about when you should invest for cash flow, when you should invest for equity, and how to diversify your real estate investment portfolio. Now let's welcome Jorge Vasquez. Alright. Jorge Vasquez joining the Westside Investors Network podcast.

Jorge, thanks for joining.

Jorge Vasquez: Thank you. Thank you for inviting me.

Trent Werner: So Jorge, for people that may not have seen your content before because I know you're very very prevalent in the space, you have number of different articles and and research that you have published and shared across the internet. Who is Jorge Vasquez?

Jorge Vasquez: Thank you for asking. Jorge Vasquez is a former financial advisor that had a lot of clients under wealth management that I was advising into buying stocks and stuff like that. They, but a lot of my clients said to me, you know, let's go into real estate because they knew I was doing real estate. And I moved from advising, helping clients build portfolios of stocks to helping people build portfolios of real estate properties. And I've been doing that for twenty years.

So I'm a former financial advisor that moved from advising to doing real estate. So I've been doing that for the past twenty years. And I've made every mistake you could think of. I bought, sold a hundred properties to one client in 2010. I've had fires.

Some of my properties have murders. Some of my properties, anything and everything that you could think of I've encountered. And hopefully through those mixed days, I'm able to help you at least on the areas of the things you don't want

Trent Werner: to do. Well, and that's another reason that I'm excited for our conversation today, Jorge, is because you have experience doing a lot of different using a lot of different investment strategies, whether it's fix and flip, buy and hold, certain types of purchasing, know, creative financing subject to all those different things. What do you what do you I guess what do you like the most when it comes to helping clients or yourself invest? Is it a buy and hold? Is it a fix and flip?

What do you like to focus on?

Jorge Vasquez: Well, that's an amazing question. I think a lot of people don't know what they don't know. So a lot of people come to me and say, well, they've heard a terminology, they've heard the bird strategy, they've heard house hacking. But until they didn't know themselves, they would not know what matches their financial profile and or their long term goals, you know. So when I'm talking to a client it's like, okay, what are you trying to do, my friend?

What is the real goal? Surprising enough, most people don't have a goal. Most people don't have a short term goal. Most people even less have a long term goal. So I start always with that.

What is your long term goal? Is it income or do you want to flip properties forever? You want to continue that guitar, you know, play music gig forever because you just enjoy flipping properties or you want to create an empire with rental properties, you know? So I call them, you want to create franchises, right? That's how I see rents.

So it really has to match the goal. I always tell people, you have to know the last property you need to buy to know the first property you need to buy. There has to be a correlation between the last and the first. I can just say, well, property, I think you should, without knowing what your goal is, without knowing your age, without knowing are we plugging any type of gap on income? What are we doing?

Is this for legacy? Until I know that, I'm not able to say what type of strategy we need to do. But for instance, if the person says, I have $50,000 I have zero money, or I have $50,000 then my advice is going to be house hacking all day long. That's how I went from zero properties to my first ten properties. If you marry, it's a tough discussion with the wife.

Super tough discussion. So you have to promise a castle towards the end. You have to say, hey, honey, sit down with her, grab her hand and say, listen, we're going to jump around. But I promise you the last one is going to be your castle, what you want. So I mean, so it depends on the profile of the person, depends on how much cash they have, and it depends on the goal.

So in a case with somebody with super ambitious, young, with little money, I'm going to say let's do house hockey. Somebody with more money, I'm going to say, well, let's forget about the cash flow, let's focus on equity rich properties so we can do diverse strategy and build momentum. Somebody with a ton of money that they have just, you know, millions, then maybe as a private lender will be better because it's completely passive. So it depends on the person, it depends on the goal, on what they're trying to do long term.

Trent Werner: I like that. And that's your financial advising background coming out. You're not just looking to churn and burn properties and close deals. You're looking to help your clients long term and achieve their goals, which is great.

Jorge Vasquez: I think a lot of people look at real estate like real estate. But when you start presenting it to them as, this could be your four zero one, this could be your retirement, this could be your legacy, then it becomes more vivid. More vivid. They know, okay, I understand what I've to do. So through the ups and downs.

Because most people get a little bit of knowledge, advice. When they work in corporate America, they might be an in house advisor that says, hey, pick this mutual fund or, you know, stay diversified. Have all heard that, the word, you know, stay diversified, buy stocks, bonds, buy large caps, small caps, keep it diversified. But when it comes to real estate, nobody knows. They just know they need to buy properties as a primary home.

But beyond that, they're clueless. So and I believe real estate is the fastest way of building a retirement actually.

Trent Werner: And that actually kind of leads me to a question. And when it comes to, like you said, everyone hears diversify and they're usually hearing it wrapped around their four zero one ks, you know, mutual funds, bonds, stocks, all that stuff. What does diversifying in real estate look like? And that could be that could be two different parts. Right?

Like diversifying with real estate is obviously diversifying from stocks. I'm talking about someone that wants to use real estate investment, their portfolio as their legacy, their four zero one k, as a retirement. How would one go about diversifying within their real estate portfolio?

Jorge Vasquez: You know what, nobody has asked me that question, but that is an amazing question because I've asked myself that question. But you have different ways of diversifying. The easiest one and the most obvious one is short term rentals versus long term rentals. Okay? You've got everybody and their moms investing in short term rentals, flooding the market.

There's people that don't even know what they're doing. They've never held long term rentals, they're jumping into short term rentals. People don't understand that short term rental could be almost a foreign stock. It could be a small cap. There's a lot of risk on a short term rental.

Everything has to go well. You the cleaning has to be done on time. You've got to please the guest. It's not a tenant, it's a guest. So to me, when it comes to portfolio risk, long term rentals, it depends on, once again, your profile.

If you're super young, go 80% short term rentals, 20% long term rentals. If you're near retirement, I will go 80% long term rentals and 20% short term rentals if you want to be brave. Because once again, long term rentals, you set it up, it's a franchise, you collect your money and it's done. Short term rentals is still kind of like you're still in the business operating it, kind of. So that's one way of diversifying.

The other way is you could do you could buy properties and also be the lender. You know, you could do eightytwenty. Once you accumulate enough properties or cash or equity from your properties, then you could become a private lender, of course, in first position only. So that's another way of diversifying. But those are the two ways that are the most, to me, the better ones.

I don't even like flipping, to be honest with you. I've seen a lot of disasters, even with seasoned people with flipping.

Trent Werner: Yeah, and I liked your comments on short term rentals. Personally with my wife have talked and thought long and hard about getting into the short term rental space. We only have long term rentals right now and it's honestly I don't want to say it's easy because it's not, but once you get it set up it's a lot less stressful and a lot less work than short term rentals even though you see people on the internet talking about how much they made from short term rentals and yada yada yada, but the risk profile in that is just not something that I've been comfortable with. And I think you know when someone is looking to diversify, know it may be the different investment strategy, but it can also be a different investment location area, I guess single family versus small multifamily, those types of things. What are your thoughts on different areas or locations as a form of diversification rather than just short term, long term?

Jorge Vasquez: Absolutely. That's another way of diversification. But going back to short term rentals, think about it. Here's why short term rentals are so risky. You either you're going to put so much money into them, you're going to furnish them, you're going to put the nicest quality of everything that you can.

So the only option you have for a short term rental is a short, I guess, a short term lease. You don't have a plan B in case that the property doesn't rent. Now the mortgage is too high because you bought a very nice property and you're stuck with it, right? There's a chance that can't even flip it because you got to get rid of the furniture. But with long term rentals, you always have the option of renting it, flipping it, and whatever the case might be.

When it comes to geographic location, I own 40 properties. I'm in Tampa, Florida, but I have properties in Jacksonville. So I don't believe that you have to buy properties next to you because that just narrows down too much your options. And it's not about you. Your investment should not like you.

You don't have to like the investment. It's not for you. It doesn't have to be your street. None of that. It has to make money is what it has to do.

So I think to me Florida is big enough where I keep everything within Florida. I haven't had the need to go outside of Florida. But as prices go up in Florida, will definitely look at Georgia or the next state over that I want to invest in. But yes, absolutely. It's all about the number.

It's all about the return. And boots on the ground is just another equation within the risk. You know, how many people do you have a family member that could be boots on the ground just in case for you? Do you have a trustworthy vendor or property manager that could be boots on the ground? And then that equates to a risk percentage, but it's always good to diversify for sure.

Trent Werner: And Jorge, let me ask you, what are you looking at when it comes to your portfolio at this point in your career? You own 40 different rentals or 40 units. If you have a deal come up, what are your criteria that you're looking for now if you're going to add a deal?

Jorge Vasquez: I'm not flashy. I lost my butt in 02/2007. I'm just going to be honest. I lost all of my properties, my marriage, everything in 02/2007. So when I started, when I restarted again, I was like, I'm going to go slow.

Here's the misconception, or I hear a lot of gooders saying, oh, become super rich quick, buy 300 properties quick. At the end of the day, just freaking enjoy the ride. Take your time. Don't go too slow. Don't go too fast.

But for me, I just want to build two or three more properties a year. I want to make sure, but before I buy, there's specific what do you call it a specific status. You can call it my portfolio has to have very low vacancy. My portfolio has to have certain requirements, let's call them, for me to keep buying. But I pace myself, I don't go super fast.

So I can see, I will continue finding value added properties. I think that what happens when you've been in the business on and off, you already have better vendors. There's nothing more beautiful than forced equity because it's real equity. The equity that you sold in a narrative because this is a better property than the other one, I don't believe in it. But I do believe that if I'm putting a new roof, I'm going to get equity on it.

If I'm painting the property, I'm going to get equity on it. So I really like properties. I'll go with the worst property that I can swallow, the worst property that I could feel that I could rehab. That's usually the best investment plan for me. Maybe ten years from now, twenty years from now, whenever I own maybe 100 properties, whatever the case might be, maybe I'll go become a lender.

But I'm having fun with it and it doesn't feel like a job. So my advice is pace yourself. You have to like this thing. And now here's a word from our sponsor.

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Trent Werner: And do you have do you have metrics that you look at in terms of cash on cash return numbers or, I guess appreciation numbers that you're projecting? Or do you just want the deal to pencil and cover itself?

Jorge Vasquez: When a client comes to me and says, I'm sold Jorge, I just want to build a portfolio, I ask them, what type of property are you looking for? Are you looking for more equity? Or are you looking for more cash flow? Well, I want both. Yeah.

Want yeah. But you have to think in order to create momentum on your strategy, you to stay in a lane, right? And that's so hard for them to hear. But at this moment right now, because I own multiple businesses that got, the properties have allowed me to have a pretty decent lifestyle and I own property management company, a construction company, like four or five different a brokerage. I don't need the cash flow now.

So to me, a duplex, fourplex is not sexy. I like single family homes right now because I'm looking for fast equity within the next three to five years. Because here's a paradox. A lot of people go into multi units and then I ask them what is the purpose of, well, because of lower risk. Well, I don't believe that.

There's not an economy of scale until you have centralized management. In order to do that, you need 100 units. Anything under that, you really have one bad apple in a fourplex, one bad plummeting issue in a fourplex, they'll get affected. So there's not the economy of scale that people talk about and the type of tenants you have in a multiunit, which most of the time are there on a transitional basis, they're not as good as a single family home where your tenant is going to tell their friends, oh, this is my house, and nobody can tell me otherwise. You know, you have that pride of ownership.

Yes, I'll definitely look for single family homes that could build cash flow right now because I don't need the equity. And think about it, Trent. I like to invest on the high end of the low end. That's what I call it. Okay?

That means in areas that are going to get gentrified soon. And here's a tip, okay? This is the secret, how you know that, is how much you buy properties, but on the ends you have brand new properties. So you got a couple of people that have been brave enough to say, you know, like a sandwich, like, you know, this area is next. That's how you find an area where to me is the high end of the loin.

And I want to be able to share that wave of appreciation against the best comp as a similar property and be able to increase because inflation is going to take care of the rents, right? You don't have to worry about the appreciation of the rents that's going to happen with inflation. The equity, well, you've got to buy smart because that's the problem with duplexes. The duplexes, fourplexes, they only go up based on the income that is generated. You can have a property that's sold for a million next to you, but it's not going to be a comp to your duplex.

So you lose that. You lose it. And the retail buyer is the one that, quote unquote, the most foolish, right? The one that pays overpriced and stuff like that. So you're not, quote unquote, being part of that appreciation wave when you have multi units.

So, but then again, that's for me because I want to I'm on expansion mode. Somebody that says, Jorge, I got 3,000,000 or $4,000,000 I could care less what the properties are worth. I just want X amount of cash. Then it's the inverse, the reverse. We don't care about equity ever.

We just care because equity can mean taxes going up too. We just want, in that case, then we just go with multi units, Section A if we have to. We're always curious about what the cash that we get today. That makes sense a little bit?

Trent Werner: Yeah. And so I'm familiar with Tampa or Florida markets all too well, but in Florida, for example, where you're investing, are you still able to get a decent cash flow or I guess are single family houses able to support themselves while they're appreciating?

Jorge Vasquez: Yeah, I will say that a couple of years ago, people come to me and say for the past couple of years, people said, can I get a property that's hitting the 1% a month? And I was saying, no. There's no You either take the equity or not. Now because of the little hit that we've gotten because of the Fed's interest rates, insurance, the perception about hurricanes, etcetera, etcetera, it's become more of a balanced market. So in one end, you have some investors saying, this is still pretty good because the roof is not on fire, could promise you, and properties are rented.

But there's still some panicking sellers that bought properties without really not knowing and they're just hearing just bad news, bad news. So you're able to still spot deals where you get very close to the 1%. Where you kind of like get the cake and eat it too, so you get it in the 1% and you're also building up equity. Because anything you buy in Florida, after COVID, Florida is taking more citizens than any other state in The United States. Two plus two is four.

So no matter what the market does, there's a shortage on inventory, and then you have more people coming in. And then on top of that, you don't have very low inventory, I think. In 02/2007, when we had the collapse of the market, Tampa had twenty five months of inventory available. About 25. Right now we don't even hit maybe six.

In a balanced market, it's seven. So we're not even and Florida has gone through the worst of the worst. Anything that you could throw at Tampa, I mean at Florida, has happened from hurricanes and everything else. So that's the resiliency of Florida is pretty good. So, yes, you could find close to 1%, but what I tell investors, once again, hey, if you have limited cash and you're looking to do the best strategy, forget about the cash flow, just get properties that you for sure are going to build up on equity, and then the rents are going to go up.

The rents in Florida for the past ten years doubled. They're slowing down now because they're plateauing now because they went up too quick. Within the next few years, that acceleration is going to come back again. So the question you're going to ask yourself is, do I have 50 or 100 in equity to be able to cash out and do this thing? And rates, by the way, can only go down, too, if this government is able to push the Feds, which I think they will, to lower them.

It's going be a win win situation. So that's how I feel about it. Does that make sense?

Trent Werner: Yeah. Yeah. No, absolutely. And I think you made a good point, too, with the speed that everything shot up in over the last five years, whether it's rents or values or whatever, Florida is taking on so many new residents that there's going to be a shortage. I don't think it's possible to build houses, build units at the clip that's needed to in order to get to a balanced, you know, inventory level for for just citizens, not necessarily buying.

But Florida is a state that everyone's talking about right now because of how many people are moving there, both for the weather, the economic policies, the business friendliness of it, know, whatever it

Jorge Vasquez: may be, Florida

Trent Werner: is a great market to invest in. Now I've looked at deals in Florida. The one thing that that I struggled with, you know, wrapping my mind around because in Portland, Oregon here, we have caps on how much, you know, property taxes and stuff like that can go up. We also have rent control, which makes being a landlord difficult. But

Jorge Vasquez: Oh, wow. In in Florida

Trent Werner: I mean, your guys' property taxes and insurance can just go whatever they want. Right? Like, they can they can 300 times year over year if they wanted to, right? There's no cap or there's no I mean, it seems like it's a mystery box when it comes to insurance and property taxes in Florida. Correct?

Jorge Vasquez: Yeah, you're absolutely right. In theory, they could go to the sky, but in practical purposes, they don't. That's a misconception. If you look at the past ten years, there's one or 2%. And if you go back twenty years from now, it's only 12% in average.

You know, we've had a little bit of a boost in the past five years, but in average, I mean, when I was in Tampa here, when I first arrived to Tampa Thirty Something Years ago, property prices of they were like $50,000 60 thousand dollars forever for five, six Then we had a little bit of a bump in the 2000s, '2 thousand and '5 '20 '15, and then it dipped again where taxes and insurance went down again. Insurance in Florida has a lot to do with fraud. People think that it has to do with the hurricanes zero. Hurricanes have been coming to Florida forever, since the long The reason why insurance policies have quadrupled is because of fraud. A lot of fraud was happening with sinkholes where somebody will come to you and say, Yeah, I could get you 100 ks if you let me do a claim.

Only if I see a crack in one of your walls, let's do a claim. That's what happened in the early 2000s. That was nipped. New legislation was created and that was put away. But recently, as of before 02/2002, there was lawyers.

I had a lawyer that came to me and said, Hey, you own 40 properties. Can I get you, you know, 50,000 times 40? You know? And I said, how are you going to do that? Well, you know the last storm we had?

I said, well, I didn't have any damages. It doesn't matter. So the type of fraud that we were having when it comes to roofs. That's been nipped too, as of 2022, the legislation doesn't allow you to sue insurance companies just on hunch. You have to have proof that there's a direct correlation between the storm and what happened.

And I could tell you, you heard in the past year the hurricanes that came through Florida, right? Well, 40 properties, knocking wood, no damage, managed 300 properties, knocking wood. So there was only a couple and the claims were rejected. So when you start asking like, why are these people increasing? I mean, now if your property is on the water, it's on the water.

That's different. Most that are buying long term, that's hardly ever the case that we're buying properties on the water. So I do believe that the insurance companies are starting to recuperate from all of the fraud really. And they're going to start coming back into business. My, yeah, I mean, my policies went up 400%.

Imagine you're owning 40 properties and they go from like a hundred bucks a month to $400 a month, a couple of years. I was like freaking out, but I'm happy to report that we're back almost back to normal. You to do your due diligence. You have to get your four point inspections. You got to get all of your credits.

You have to battle it. There's a lot of, most, if I were to analyze 100 homeowners insurance policies versus, you know, what you have on asset coverage versus what the bank is required, there's a huge discrepancy, but people don't bother to do it. For a perfect example, if you only owe $200,000 on a property, why you have $500,000 coverage policy? Well, because my property is worth $500 Well, your lot is worth $200 And then building it, calculating $200 a square feet, two fifty, you really only need $200 And I could tell you that managing thousands of properties for the past twenty years, I've never had a claim being approved more than $10,000 So why are we covering half a million dollars? Does that make sense to you?

And then I started going through their policies and I, do you know that you're paying extra money for leaky zinc? So there's a lot of stuff within the policies that people don't know about. So if you're very surgical with that, you can save a lot of money. And also when it comes to taxes, people don't know that at the bottom of the bill it says, hey, you could dispute this bill and you've got to dispute it every year. You can't compare your Tonka type of repair type of rental, which you're doing, you know, I call it the Tonka thinking, which is just durable and cheap versus the flip that you saw next door to you with brand new countertops and everything else.

So, but you got to be proactive with that. But yes, so I believe if you're proactive with those two, and the fact that rents continue to creep up, long term you find in Florida anything you buy.

Trent Werner: And it sounds like Tampa is the place to be for for Florida investment, right?

Jorge Vasquez: Well, I'll tell you why. We're the serious champions. We have the Buccaneers, the Rays, we have the Lightning, we have the Yankees in the summer. I mean, we're such an underdog. I mean, we're a bay.

We're so cheap compared to California, compared to San Francisco. We have a lot in common. We're more cheaper than Orlando, Miami. So I mean Florida overall has been the underdogs of The United States. And I think Tampa is the underdog of Florida, if that makes sense.

Trent Werner: The only difference is it's way more humid in Florida than it is California.

Jorge Vasquez: Yeah. Mean, you got a give and take. It's a give and take situation.

Trent Werner: And you guys got gators down there.

Jorge Vasquez: Yes. Exactly. Exactly. Exactly. I'm not gonna I'm not gonna this year stay, but I I got a couple of things that I could say.

Trent Werner: I'm a big fan of Florida. I'm a big fan of Florida.

Jorge Vasquez: Okay. Cool. Cool. Yeah. Mean, it's just listen.

The last property I bought, a hundred and $80,000. 3 2. Tell me where you can you find that in California? You see what I'm saying?

Trent Werner: Maybe a studio condo somewhere.

Jorge Vasquez: Yeah. Yeah. Yeah.

Trent Werner: Yeah. Well, Jorge, I appreciate you conversing with me and joining the show today. Is there a place where people can hear more from you or connect with you?

Jorge Vasquez: Yeah, absolutely. They could go to graysonigcom. Graysonig Com. I'm obsessed with writing articles. We're the number one website in Tampa.

If you type Invest in Tampa, we're number one out of even big brokerages, stocks or real estate. We're the number one. So you can look us up. I write a lot of content into the website. I think two or three new articles on a weekly basis.

I love it. So you guys could go to graystoneig.com or Google Invest in Tampa or top investing companies in Florida. You'll find us.

Trent Werner: Awesome. We'll make sure we link those in the show notes. Jorge, thank you again for joining us today.

Jorge Vasquez: Thank you for the time. It was an honor. Appreciate it.

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