Tony Alvarez with Bruce Norris Part 2

 

Tony Alvarez has been a successful Real Estate Investor and Certified General Appraiser in Southern California since 1981. But more importantly, Tony made over $10,000,000 buying, renting, and selling properties while working with professional real estate agents that specialize in selling lender-owned (REO) foreclosure properties. And, he did it all in seven years in one of the lowest-priced most depressed Southern California real estate markets.

Tony has bought, rented, and sold hundreds of properties from vacant land to condos, single-family residences, apartments, and commercial properties. As an appraiser, Tony worked as a staff appraiser for Great Western and Glendale Federal Bank and is approved by hundreds of Lenders, Insurances Companies as well as Government Agencies. He has worked with Fannie Mae, Freddie Mac, FHA, the FDIC, and the RTC (Resolution Trust Corp). He has in-depth knowledge of the inner workings of Lenders and their REO (foreclosure) departments. Tony’s knowledge of real estate, appraisal, finance, and investing is vast and varied. He brings a unique perspective to the real estate investment community. Tony is a sought-after speaker and has previously spoken at The Norris Group’s Multi-Millionaire Maker in 2005 and 2006, as well as, other real Estate Clubs in Southern California.

See below for the full video and resources.

Episode Notes

 

Narrator  This is The Norris Group’s real estate investor radio show the award-winning show dedicated to thought leaders shaping the real estate industry and local experts revealing their insider tips to succeed in an ever changing real estate market hosted by author, investor and hard money lender, Bruce Norris.

Joey Romero  Thank you for joining us once again, on the TNG real estate radio show and podcast. This week, we have part two of our interview with The Outspoken Investor, Tony Alvarez. Enjoy.

Tony Alvarez  But from that adversity, because of, my just, you know, going on to the next, I got to keep my business moving and do my thing. I end up at a place that’s actually connected to someone who heard me on the radio show one time speaking with you, the years later, years before, and it ends up that he finds out I’m looking for a new bank and they want me and now I have a wonderful relationship with them. As a matter of fact, that’s the bank who financed my latest construction project. It’s just amazing to me, it’s like, it’s like Tarzan swinging from vines, one vine to the other, right? But if Tarzan doesn’t decide to swing, okay, if he doesn’t decide to swing and grab one vine and go to the next and go to the next life, has no ability to respond. Okay, that’s the crux of the story that I just told you is someone else the guy at the bank may have said, ‘Hey, we don’t want you as a client’. They might have gone home and spent the rest of that week obsessing about, you know, they’re worthless, maybe they don’t deserve to be in the business. Maybe they should take that as a sign to quit their bla bla bla bla bla, I took it as you know what, I’m shocked. What have I done that caused this problem? By the way, I went back and I did what I did when you asked me to analyze my behavior to see why you know, what made you successful? What do you think made you successful? I had to really think about that, because I didn’t think anything of it. I just work, you know, right? I know. And I just kept doing the thing, doing this thing, repeating the same steps, until I became really good at it as a result of my own actions, you know, learning and bumping my head up against the wall and then finding ways around it. But look at how these things are connected. What if I never did a radio show with Bruce? I that, that gentleman would have never heard me. One of that gentlemen decided after he heard me not to call because oh, they’ll never, they’ll never give me his information. They’ll never. What if he listened to his mind? You know, years ago, years ago, I had an opportunity. And I’ve told you the story before, where a good friend of mine, Brad Neste invited me he’s, he owned Gold’s gyms. And he was writing all these big developments. And I got to be with him inside of a conference room, where were, where they were doing a presentation, this guy who owned this company called Red Development in Arizona, and they were awarded the contract to do this major development of the City of Phoenix and the Downtown Phoenix. And he had brought Brad along to put his gym into the development and all of this stuff. This is a young guy who started who went from being a leasing a commercial leasing agent to creating the largest development company in Oregon in 12 months, okay, and how did he do it? Instead of hiring employees, he went to all the other competitive companies around him and actually offered to make each one of the heads of each department partners with him. He brought on people as partners into his company, they all they all mesh together made the largest company, they, the contract they gave him was so large that he had to hire his competition to help them complete the project, okay? I get to be in the room. This guy does this presentation when he was done. He says any questions. Now I’m the only guy who’s in that room who’s really not supposed to be there. I’m just there because Brad invited everyone else as part of the project. I, of course, don’t pass up an opportunity to ask a question. So, I raise my hand and he go, yes, Tony, he had already remembered my name. Okay. And I can’t remember his. He says, ‘You have a question?’ I said, ‘Well, yes’, now everyone looks at me. Right. And I’m and now I’m turning a little red. Right? Because I thought there’s gonna be a lot of questions. He said, ‘What is it?’ I said, ‘Can you please tell me, you know, is there one thing that you can credit with having helped you to become so successful so quickly? Because I’m just fascinated. I mean, the presentation you did here is fantastic. Obviously, you guys got this contract. I noticed you’re having to hire people that you were competing with a year ago to get this thing done by your own admission. What, what do you credit with with, with having gone from a leasing agent to the number one development company in in Arizona, and he turned around to me and he’s, I never forget it. He had his back to me when he was listening to me. And he’s moving some papers around and he looks up at me and he glances he goes, ‘Oh, that’s easy. I stopped listening to my own bs, and then everybody laughed, right? And, and, and I wasn’t, I was kind of like a little embarrassed because I didn’t get it at first and I, and I, and I walk out and we get into the elevator myself and my friend Brad Neste, and he turns to me and he goes, ‘Do you always have to open your mouth? Can I just not take you to one of these places without you saying something? I said, I asked the guy a serious question. He gave me kind of a BS answer. He goes, what Tony, what do we do with the guy was asking if there were any questions about the project? He wasn’t asking about his life story. I said, No. So, we’re now on the plane back from Arizona, to Los Angeles. And somewhere around midway, it hit me with that man has answered me, okay? Because I hadn’t, I’m not that bright. Here’s the question that all of us should ask ourselves, have we stopped listening to our own bs? Because under the title of BS, right, our internal conversations, comes all of those things that we do to ourselves, to keep ourselves from moving forward, when we hit some roadblock, or some adversity, or we wake up one day and we say, you know what, I’ve had enough, I’m going to do something different. I’m going to get involved in real estate, I’m going to do this, I’m going to do my first flip, I’m going to do my first fixture, whatever it is, and in your mind immediately, five seconds after it gave you the idea and the confidence in yourself to make that decision. It says, but what if? What if this happens? What if that happens? What if this, your brother, you know, he tried it in your cousin? Did you hear about that other guy, I don’t think you have what it takes. And then that conversation starts, right? And people will sit down mentally at some chair and you see them, it’s almost like you can see them, they’re staring out a window. And they’re frozen in time, because they’re in that conversation in their own minds, and then won’t take the next step. That’s listening to your own bs. And that’s what that young man was saying. He stopped listening to his own bs, that was the most powerful phrase that that man could have sent to me in that moment. And it was true. Now, I didn’t get that till I get on the plane. And I turned to Brad and I said, that son of a gun is brilliant. The only reason and that’s the reason you and I are friends. So, it’s it’s, it’s, it’s a you start the ball rolling, and you have to stay really aware and awake to life, because we think it’s about business. And we think it’s about money. And of course, it’s all of those elements are involved in business. But you know, this life is a fantastic thing, because it responds to whatever you bring to the table. If what you bring to the table is your, your insecurities, or your negativities or whatever, and you stop there. You know, you should look at that as the weapons, the bullets that you load in your weapons to keep you moving in the direction that you really want to go. In spite of all of those things. In spite of all that conversation, in spite of all that, just take the next step, do the next thing, you know, and just, in life itself will come will respond to you. When I tell you that story, it’s so easy to like cast that aside, a guy hears me on the radio with you, you years before that asked me to do something What if I would have said no, Bruce, I can’t handle it. Because I was riddled with fear. I want you to know, and that’s true. When you asked me to speak in front of an audience, and I’ve never done that in my life. I mean, I talk to people all the time, but in front of a group, and I’m supposed to tell these people how I got successful. I, you know, I kept thinking to myself, how do I get this done? I don’t know i just worked what I want to do, that’ll be a five second conversation.

Bruce Norris  Now, do you realize every speaker was hand selected for their differences, not for their commonality?

Tony Alvarez  No, I understand because.

Bruce Norris  Yeah, and and you. All successful using their own skill set. And you, you I knew could garner people’s cooperation. You know, when you were dealing with REO agents, you know, you had their attention you were going to get a yes answer more often than anybody else. And that was part of that day. But I put you last for a reason because I didn’t I No, no, it was not. Mike, Mike Cantu sent this to me says I am so glad I didn’t have to follow Tony Alvarez. And I knew that would be true because I do remember, I know you remember, they people lined up to hug you. It wasn’t an education thing. It was an impactful emotional event.

Narrator  Yeah, and I think it was, to be very fair, and I’ve always told you next to my son being born, that was probably the most powerful day of my life. And but I remember before I was going to go on stage and I was afraid to do it. And I said, ‘You know, I don’t know if I can do this. But you know’, and you said something to me. That was very, very important. You asked me a question. You said, ‘Well, you’re going to lie to anybody here today’. And that shook me. Okay, I want you to know that really kind of pissed me off. It was a lie, I’m not going to lie to anybody. But in that question, you shook out of me. You, you took my focus and put it on, tell the truth. I’m telling the truth, what am I worried about? You know, and you said, just get up there, you got two hours. And I thought two hours, what am I going to talk about for 2 hours, you got two hours to speak. Get up there, tell them what you did. If you’re up there for 15 minutes, just finish and get off the stage. And that’s fine. You know, just do whatever it is, but you know it, but when you ask me that question, and you’re going to lie to anybody can, what are you worried about? Just going to tell me a story. That’s it, you know, I got up there. And I remember being very nervous, and then realizing that I was just started speaking, and all of a sudden, that just took a life of its own. It just, I was just telling them the truth about every moment and remembering all these instances that were so perfect. I just, you know, I learned so much about myself and so much about what actually helped me to succeed going through the process of speaking that day. It was it was just astounding. And then watching those guys. I mean, these meant, like you said, line up. And just to give me a hug, you know, it says thank you. And most of them, I want you to know, it wasn’t just a few. It was most of them were really emotional. And some of them had tears streaming down, they gave me a hug. I remember one guy hugged me and he said, ‘You just reminded me, I need to call my sister’, now how the hell that happened? What I was talking about a government, it just, I think, I think somehow it broke through and made a lot of “businessmen”, you know, quote, unquote, businessmen realize that if there is a secret to success for anyone, it has to be that you have to bring the best of yourself to whatever it is you do, and to treat people always with respect and dignity and to hold that flag high. As you do whatever it is you do. And it doesn’t matter if you, nowadays technology, right? If you’re on the internet, communicating with people, if you’re putting out whatever, if you’re writing letters, if they’re sending them out to masses of people that you have never met, you know, you can, you can transcend that form of communication and bring through the best of yourself. And if you can connect, because I’ve done it here, and you know, people say, ‘Oh, come on, you can’t buy properties, they buy blah, blah, blah’. I needed to strategically purchase five buildings out of eight to that, so that I would own the majority of these buildings within this homeowner’s association. All four, fourplexes. I bought two because I needed to attend through one couldn’t find a lot of properties in Grants Pass, okay?

Bruce Norris  Okay.

Tony Alvarez  But I could have bought the whole city, okay. And I’m looking at these 2 buildings, I buy them and I realized the homeowners and the people are not really paying and doing what they have to do. And so I had to take control. And the only way to do that I met with the with the property managers. They said, ‘Listen, you got to become president’. ‘I got to become president’. ‘Yeah, you got to get the people to vote for you’. Nobody would even show up for the meeting. So, I sent out a letter to everybody asking if they would please participate in fixing up the place, or sell their building. Because I didn’t want to be an owner of a slumlord. I didn’t want to be a slumlord, and I’m going to fix my buildings up, and I’m going to steal all your good tenants because when they see me fixing all these buildings up and my two are beautiful. And your two, looked like a disaster. Your good tenants are going to come to me. Well, what happens is, everybody starts listing their buildings. Some of the people didn’t like my letter, you know, they wouldn’t, they would list it, but they wouldn’t come to me first. I ended up buying them anyways, I buy the next one and then the next one. And one of them this older lady calls me she’s in her 90s, I just talked to her a couple of days ago to wish her a Merry Christmas. We stay in touch. She called me she got, and through her voice. She sounded like she was very, very weak person. ‘Hello, are you that guy who sent me the letter that’s going to break my legs if I don’t fix my building?’ And I said, ‘What?’ And I started laughing I said, ‘I didn’t say such things’. She goes, ‘Nah, I’m just teasing you’. She goes ‘I got your letter’. She goes ‘I don’t really want to fix anything, but maybe we should have a conversation because I only have one problem. I bought the building for a million years my husband has passed away last year. I really would like to sell it. But I like the income and I don’t really want to pay the capital gains I got no; I got no depreciation. I got no basis anymore this day’. She says ‘Come see me’. I said okay, she lives so far out in the woods out here. My GPS wouldn’t even work. I had it I had to follow her direction. You know, you know those kinds of three stooges’ directions. Take a left at the rock that looks like a tree and then take the right at the bear that looks like a rock you know, that kind of thing. That’s how I found her; I go to see her. She’s got a million dogs trying to kill me. And then 100 cats in her house. And we sit down to talk. And she says, ‘Do you have any idea?’. I said, ‘Listen, I’ve been thinking about what you said. And there’s only one way we can do this deal to where you don’t pay any taxes. She says, ‘Yeah, yeah, yeah. 1031s. I don’t want to do that. Because then I end up buying more property that I don’t know’ then I said, ‘No, no, it’s not 1031. I said, it’s easier than that. You have to sell me the building, and you got to carry 100% of the financing’. ‘Really? What?’ I said ‘You only got to pay capital gains on the income that you make’. She goes, ‘Okay, I’m glad you mentioned the income. I don’t want, if I do that, I don’t want my income to drop one penny’. She goes, ‘Oh, how we going to structure this?’ I said, ‘Well, you got to carry the financing’. She goes, ‘Well, what interest rate are you going to give me?’ I said, ‘What interest rate do you want?’ She goes, ‘Just figure out I want to get the same payment’. I said, ‘Look, I’ll pay you the same interest rate I give to the bank’. ‘What bank Do you bank with?’ I said ‘Evergreen bank’. She goes ‘Well, we’ll see about that’. She picks up the phone she dialed, dials the bank. I don’t know who she’s calling, though, right? And I’m thinking oh my god, what if then she calls them and they’re, oh boy. She gets to, she goes, ‘May I speak to Jeff’, I want you to know Jeff is the president of the bank. She gets through the guy goes ‘Hi, how you doing?’ So, they have some niceties on the phone with each other. Right? She says, ‘Well, look, I called you because I got this guy here. His name is Tony Alvarez’. ‘Uh huh’. ‘Yeah, he wants to buy my building and he wants me to carry on and he says he will give me the interest rate that you give him.’ ‘Uh huh’. Yeah, but I don’t know this guy. I mean, he gives us this letter. Yeah, uh huh. Uh huh. Uh huh. Okay. All right. Thank you, Jeff’. And hangs up the phone. She goes, Okay. So, he says it’s around 5% that you’re getting at the time, this and that. And I said, ‘Well, wait a second. What did the guy say?’ She goes, she said, ‘That’s not important’. I said, Well, I said, ‘No, no, it’s important to me. I was scared right now. I don’t know what that guy was going to tell you’. She goes, he said, ‘You got more money than me not to worry about it’. Right, right. So, we cut that deal I want you to know and what I said to her was, I did the calculations right there with her. By the way, she’s a math whiz, she could run circles around me. She ran her own checkbook. She’s in her 90s. And her own checkbook ran the checkbook for her business for her and her husband for many years, ran the checkbook for her ladies’ club and for her church. Once a week she drives into town by herself in her own jalopy. You know, her old car, and she has lunch with her girlfriends. Ladies club. Okay? This is a woman who’s elderly, but sharp as a tack. Okay? So, she’s she, we do it. We cut the deal basically, on a piece of paper. We didn’t, we just write it out. We figure out she’s going to get about $200 more by doing this. Every month on her income without having to deal with anything. She was smiling from ear to ear. She goes, I can’t believe that. She goes, Well, wait a second. ‘What if you die?’ She says to me. I said, ‘Eat it. You’re in your 90s I’m 30 years younger than you. The likelihood of me kicking the bucket before you is not’ and then she laughs and go ‘Oh, you’re right. Okay, wait a second, what if I die, who’s the who’s going to get my money’. And she has her buildings in a trust and everything. She was hilarious. So, we get this deal done. I said to her at the end, I said, Look, I’ll pay for all the costs, you’re doing this, you don’t have to put a penny into this transaction. I bought that building for 325 grands from her, so four unit. At the time, the renter around 750 800 bucks. She had some really low rents. One was as low as 550. Those rents today are 1100 bucks. Okay. And that building today, we just had them appraise recently, because I was considering refinancing them. And the amount they gave me in the appraisal was was stupid high. You know, I mean, it was just like, they appraised it for like 500 some odd dollars. It was just ridiculous. I even told the appraiser I called him. I said, You’re out of your mind. He says no, Tony. That’s what they’re paying right now for those kinds of buildings. So, Well, you know.

Bruce Norris  Let me, let me ask you, we, we got about 10 minutes that we need to maybe talk about real estate just for let me, let me ask you.

Tony Alvarez  Right, I’ll keep my, my answers brief.

Bruce Norris  Did you, have you sold most of what you had intended to sell in California?

Tony Alvarez  Yeah, we’re down to one property and it’s in escrow. I’ve liquidated everything else. Well, I’ve got another property in Sonoma that I may sell or may not sell I’ll probably will sell it but I was thinking about keeping it as a vacation rental. And also, now I can build two other structures on it. So, as kind of teetering on that one whether to get rid of it or not. But all the other stuff I had in the Antelope Valley, done.

Bruce Norris  Done. Okay. And Oregon’s where you have most of what you own now as far as rentals?

Tony Alvarez  Yes, Oregon is where I have the bulk of the rental properties. And I’m building here. And what I’m doing here now is I’m liquidating the older stuff, because I had to do it in steps, I had to 1031 exchange into it, into, into this area. And, and I had to buy whatever I could find. There’s a lot of old stuff up here that I really didn’t want to own. But you know, that were a much, much more manageable. But now, I’m probably only going to end up keeping the stuff that I’ve built, which is, is a, you know, 11 lot 22 units on one side. And the other side, I think it’s 18, 19 units, I’ll probably end up keeping those. I’ve got another project and I’m looking at a larger parcel to be honest, I’m looking at a 10-acre parcel that I may or may not do. It depends. But I’m really kind of got my sights on Florida, to be honest with you. You’ve kind of stoke that fire a little bit for me, and it’s, you know, there’s a lot of good reasons to make that move. I would probably spend half the time in Florida and half up here, depending on the you know, the weather because I don’t, I’m not looking forward to I don’t think humidity is too good you know, so in the summertime, I don’t know if I’d be down there. I know Cuban, you’d be okay with it. But you know, I might go, I might, I may do that. But I’m really looking forward to establishing my residence and stuff in my enlistment being over there for the wintertime.

Bruce Norris  Alright, well.

Tony Alvarez  Atleast.

Bruce Norris  We’ll give you whenever you want to do that come down, we’ll give you a tour. What what’s your take on, like, what’s next for real estate? Are you concerned about a glut of foreclosures, law changes what what concerns you have, if anything?

Narrator  You know, I think all of the above, but I’ve always looked at real estate, as you know, local market, you know,, I I know we’re, I know, we’re affected by the broad strokes. But I think, for example, there’s a tremendous amount of people still moving into this area, in Southern Oregon, and of those coming here, a majority are moving into areas like Grants Pass, we have a huge problem with available housing, it’s just show, you know, I’ve got a great contractor who is, who’s become a good friend. And, you know, work, I’m constantly looking for stuff now to keep him busy, because, you know, he builds his own stuff for sale and stuff like that, but he loves us working together. Because, you know, it’s become like, it’s on auto, autopilot, you know, I got to find the right the right projects. But, you know, I do think eventually we’re going to, we’re going to see, we’re going to see some hits. But I think in this area in the last downturn, this area got wiped out, even though it was it took a while for that wave to catch, you know, to catch up here. But I’m watching, what I’m seeing is a lot of over 50’s moving into the market, and medical community is expanding here. And by leaps and bounds, it seems like every application we’re getting, because keep in mind, I’m building new. So, they’re two-bedroom one-bedroom units, I have a development that we’re looking at doing now. And Hubbard, which is a small is probably only about 12 units, but they’re all going to be one bedroom, nice one bedroom, one and a half bath type units, which are pitching directly to nurses and you know, people coming into the medical community. So, I’m getting high rents is what I’m saying. So, it doesn’t apply to everyone in this market. I’m specifically you know, targeting a certain demographic, and that demographics is exploding. So, even though we may see some changes in the real estate market, and I think we will eventually I don’t I, you know, nothing lasts forever. Obviously, I’ve, if anything, if I’ve learned anything from you. It’s been, you know, keep your eye on what’s happening, because it’s just, it’s just a matter of time before we come back around again. I’m concerned about the political things that are going on and all that I think all of it affects real estate, you know, and there’s no telling what’s going to happen. There’s such outrageous conversations out there about, you know, the loss of we’ve seen loss of rights and realty. Just in the last couple years, you know, we’re even with this pandemic and all of this stuff where you’ve got landlords that are not able to collect rent.

Bruce Norris  Right can’t evict.

Narrator  Yeah, yeah. And, and at the same time, they’re not, they’re not really getting any, any mortgage relief, you know, I mean.

Bruce Norris  No.

Tony Alvarez  Yeah, so, so it’s, it’s, it’s a mixed bag right now, we’ve been very fortunate of all the tenants we have appear we had two that were late, for their rent late, but they all paid.

Bruce Norris  Yeah.

Tony Alvarez  You know.

Bruce Norris  Same with me in Florida have had any. I haven’t had anybody, that has been well, first of all, honestly, I don’t even think we’ve had a late but we certainly had no long-term problem, that’s for sure. And it’s the same tenant. It’s, it’s a nurse. It’s the same tenants.

Tony Alvarez Yeah. Yeah. So, So I think, you know, I’ve always been, let’s but let’s be honest too, I’m moving in the direction of, you know, whatever I’m keeping will be debt free. It’s not, you know, I’m utilizing financing from, from banks for development, and probably for, for some short term, you know, but as I liquidate some of these other things, my goal is to end up, you know, with my stuff debt free, I don’t want any, any long term financing on anything.

Bruce Norris  Can you? Can you imagine, this is one thing I’ve thought about in the last year, because there’s just been some stuff that we’ve had to deal with. But just in general, all the upheaval and if you had normal jobs, and you couldn’t go to your restaurant, or whatever, is the ability to have a monthly income on automatic pilot is a big deal.

Tony Alvarez Listen, that, that has been that became my life goal years ago, my dream was on 10 houses, have my tenants pay him off by him at 50 cents on the dollar. At the time, if I could, you know, find deals, I’m not talking about paying, you know, top dollar. And I’ve heard all kinds of stories about how you structure creative financing, and all of this stuff, and you can pay full price and all that. Yeah, that’s all well and good. There’s something about buying something 50 cents on the dollar that just makes me sleep really well, So, I would say 50% cost, right, and then fix it up, if I have to whatever, and then rent it, my tenants would pay it off. My goal was in 10 years. And I stretched that out to 15. But I got it done in 10, in 10 years, pay off those 10 houses with 10 rentals, and I looked at them as houses. And my, my rent would go to $1,000 a month on each I’d have 10 grand grosses coming in a month, of which after expenses, which were 30%, if I’m managing them myself, I would get $7,000 a month net, that is all the money Tony Alvarez would ever need in his life to live it the lifestyle he’s used to which I still live at, by the way, I don’t have any big anything. I drive a Toyota Tundra. I mean, I am, I’m the same guy I’ve been my whole life. And I don’t want to be any different financial even than that. I don’t need any special anything. Nobody has to drive me around or whatever. So, that became hundreds of rental properties, hundreds of units over time. Why? Because I just kept repeating the same, same simple deal, the same deal over and over and over again. I got better, by the way, and I don’t and I don’t, I don’t downplay the benefits of creative financing or whatever. I’m not saying that because I’ve used it myself over the over the years. But like yourself, I’m one of those guys who, you know, now at my age, I keep I want to keep rentals, but I want to keep the new stuff. Now, I’ve discovered how to you know, build something for myself. I know the property from the ground up, you know, if anybody said, ‘Hey, we got a leak here’. Listen, I know what that is, you know, I don’t have to worry about anything. Everything’s brand new. I’m not going to live forever. So, at least I’ll be ushered out of here with the least amount of headaches. And And so, yeah, I think I think we’ve made good decisions over over time. And, and I keep getting rid of this stuff, Mike Cantu taught me that years ago, when he spoke at some of your stuff, where he said, you know, he keeps an A list a B list. And, and I followed that. And I’ve been liquidating the older stuff that I did. They’re nice properties, but stuff that I prefer. If I look at two properties, here’s a single-story duplex that I’m building on a brand-new street with all brand-new properties around it over 55 and over community. And I’m looking at an old duplex in the middle of town surrounded by a bunch of properties owned by other people. And I can’t control anything that’s going on over there minimal it’s simple. And that’s a typical scenario for an investor.

Bruce Norris  Ofcourse.

Tony Alvarez  And I’ve got I’ve got to this level, here. I’ll give that away to somebody else, here. Get it, I’ll give a good deal. Take that enjoy yourself. Now, here’s the thing. They’re paying me top dollar for stuff up here. What I’m getting for properties that I paid 150 of what I’m getting right now is honest to God, it’s highway robbery. But here’s one other thing and I need, and this is important. When I got up here, I saw a lot of things in the, in the, in the infrastructure of the rental business that I disagreed with, they were getting beautiful units, 1200 square foot nice units, they were getting 750 for rent, I’m like, What, what, what, what, what are you doing?’ And they were doing things like, they, they were supplying refrigerators, a small thing. There was supplying refrigerators to all the units, right? I had never done that Bruce, I had never, you know, spent $500, $600 on refrigerator, to put into a rental unit, and then deal with that. So, I made the change. First of all, we started charging higher rents with the rents that I thought would attract better tenants. And I thought, I also started to really screening those tenants with and we’ve set some standards. And we ended up having to get rid of our management companies and manage ourselves. We open up our own office up here, Sabrina was coming up after the time. What happened is, and I told them, no more refrigerators. I’m not paying for that. You’re not, that’s, that’s a lot of net rent for $500 refrigerator out of a two-bedroom unit or a one bedroom? No way, I’m not doing it. I only supply refrigerators. If it’s a two-story property, I don’t want a tenant lugging stuff up, up to the top. But what do we do not we refer them to a place that rents out or sells used refrigerators to let them go do their own thing? Would you believe me, if I tell you not only have, we led the way in this town to raise rents, okay, we set the highest rent levels. And all of them were following us. They were just, they were putting their rents like 50 bucks below ours, that kind of thing, thinking that that was going to help them out, when it’s actually the quality of management that people were seeking. The other thing we did was remove refrigerators. Now, all the other guys were following us what were first they were using that as a, as a level of competition with a sample we provide refrigerator. And we would tell tenants, whenever they give you some old refrigerator that’s got being held up with plastic and everything because you can’t find the parts anymore, because we’re trying to get as much life out of it as possible. No, that’s nonsense. You want a nice refrigerator, go buy one, you know, and then you can pick out whatever, whatever you want in Walmart or whatever, we don’t want to deal with your refrigerator. Okay, we became number one, we’re, I’m telling you bar none, we get the cream of the crop tenants in this town, because of the standards that we set. So, what happens is, most of the riffraff doesn’t even come to us. They’ve got plenty to go to, they’ve got plenty of other places, we get the best and the word gets around at the hospital, you go see Evergreen properties, go see evergreen, go talk to Sabrina, she’ll, she’ll take care of you.  This past week, we sent out envelopes to all of our tenants. This is Sabrina’s way of saying thank you, with a gift card inside. I think it was $50 something like that, to all of our tenants to say ‘Merry Christmas, thank you very much. We know you’re going through a difficult time, you’ve all been wonderful to us, we just want to say thank you’, okay, now, and I had to, you know, you have to, that’s a fine line, you have to walk because, you know, just like with this whole thing, though, this whole pandemic thing came out and a lot of people were a lot of investors were out there say bragging about how they were holding back on the rents and stuff like that. I didn’t agree with that. I thought that’s it, that’s, that’s, you know, you got to be careful, because if they don’t have a hardship, and you start, you know, pulling back on, you know, getting ahead of the curve, so to speak and offering free rent and all you know, taking all that stuff that’s a you know, in Cubans call that, call it a situation like that Aros con mango, rice with mangoes, it’s too sticky of a situation, you know, that could go in a lot of different places, that you had to be careful how you, how you handle that, but it’s, I’m very, I’m just very grateful that we have great tenants, and I can’t I, I’ll send you some copies of some of the letters we’ve gotten in response to those cards that went out. You know, because our tenants, you know, some of the incomes that they’re making, they’re pretty, you know, pretty, pretty good incomes, you know, I don’t need $50 gift card. Okay, but just a gesture. And just, thank you very much. They really, really appreciated it. And they didn’t even expect that it came out of the left field, you know.

Bruce Norris  Very cool. Tony, we have got a wrap up, man. I have enjoyed talking with you as always.

Narrator  It’s my pleasure, Bruce, anytime, and I look forward to seeing you in Florida. I am going to, we’re attending your, your next job. I don’t know if I should even, I don’t know if anybody knows about what you’re doing or whatever. But

Bruce Norris  Yeah, that’s fine. No, yeah.

Tony Alvarez  Because you got a class coming up. It’s kind of more like an event that you do. And Sabrina said, to make sure that we’re both going to be attending that. So yeah, I was thinking about driving cross country in my, in my Sprinter Van conversion. Yeah.

Joey Romero  It’s gonna be March 12.

Bruce Norris  March 12. Okay.

Tony Alvarez  Okay, cool.

Joey Romero  That’s the next bootcamp.

Tony Alvarez Thank you so much. It’s been a pleasure Bruce. always wonderful to see you. I love you very much.

Bruce Norris Love you too, buddy. Take care.

Narrator  For more information on hard money loans and upcoming events with The Norris Group check out thenorrisgroup.com for information on passive investing with trust deeds, visit tngtrustdeeds.com.

Aaron Norris  The Norris Group originates and services loans in California and Florida under California DRE License 01219911, Florida Mortgage Lender License 1577, and NMLS License 1623669.  For more information on hard money lending, go www.thenorrisgroup.com and click the Hard Money tab.

 

 

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