JF1897: 16 Year Real Estate Investor Shares How To Grow An Investing Business By 3500% In 2 Years with Luis Leiva
As a 16 year real estate investor, Luis has seen and been through a lot in his journey. Since 2016, Luis as CEO of Culture Estate, has helped grow the company 3500% in just two years! Joe will ask a lot of mindset questions in this interview so we can hear what it takes to grow to high levels. Tactics and strategies are a big part of it, but the biggest part is our mindset, Luis shares some personal stories with us that give us a peek into the mental toughness required to scale a large business. If you enjoyed today’s episode remember to subscribe in iTunes and leave us a review!
Best Ever Tweet:
“How Can I align myself to be where investors are?” – Luis Leiva
Luis Leiva Real Estate Background:
- CEO of Culture Estate
- Grown company 3,500% since Oct 2016, has been involved in over 2,000 transactions and closed over half a billion in sales
- Based in Scotch Plains, New Jersey
- Say hi to him at https://www.culture.estate/
- Best Ever Book: Can’t Hurt Me by David Goggins
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Joe Fairless: Best Ever listeners, how are you doing? Welcome to the best real estate investing advice ever show. I’m Joe Fairless, and this is the world’s longest-running real estate investing podcast, where we only talk about the best advice ever, we don’t get into any of that fluffy stuff. With us today, Luis Leva. How are you doing, Luis?
Luis Leva: I’m doing great, brother. Thank you for having me.
Joe Fairless: Well, I’m glad to hear that, and it’s my pleasure. A little bit about Luis – he’s the CEO of culture estate. Grown the company 3,500% since October 2016, and has been involved in over 2,000 transactions and closed over half a billion in sales. Based in Scotch Plains, New Jersey. With that being said, do you wanna give the Best Ever listeners a little bit more about your background and your current focus?
Luis Leva: Of course. I’ve been in this business about 16 years now. I started around the age of 22. I was a frustrated entrepreneur at that time; I was running a barbershop business and I just felt capped for what I was doing at that moment. I didn’t feel challenged. I felt like I needed something more… And I’ve found that real estate was my passion. Since growing up as a kid I’d never had a house to call my own. We always moved from apartment to apartment every single year… So for me, being able to get involved into real estate was not only a progression of my personal development, but it was also something that I felt strongly about, because I knew I could change the lives of other people.
My first year was a very rocky one. I didn’t seem to make much money my first year. It was all about the trials and tribulations, and I was learning as I went. I had no mentor… But then the following year it kind of all clicked, and it came full circle. I became the top producer at my office, and from then it’s kind of been a snowball effect, with an exception of when we hit that 2007-2008 rocky time period… Which I learned a lot from and I’m very grateful for. But fast-forward to today, we have a [unintelligible [00:03:11].20] real estate companies in New Jersey, and I’m happy to be on the show with you today show some of our growth.
Joe Fairless: What did you learn during the recession as a real estate broker?
Luis Leva: What I learned during the recession is that it’s all a mindset thing. What I used to think back then was that the market was tanking – because it was tanking – but I also felt like my income had to tank as well as a result of the market not doing so well… So I kind of went into survival mode, and instead of expanding, I contracted. I even thought of stupid things to do with my time to make extra money, instead of being more productive in real estate. I started to think about weekends, which would make more money for me.
It was really a weird time for me, but I’m so happy that we experienced it. Especially personally, I can say I’m happy that we experienced it… Because it also taught me what the economy does, whether it’s up, down or sideways; it really matters more what you do.
When I changed my mindset and started thinking about “What can I do to change our work with the current market?”, in the following year I made more money than I ever did, and I stopped listening to what everyone else was telling me to think. I was listening to the news telling me how bad things were, listening to doomsday preppers and what they were doing to survive the coming apocalypse… And I was so wound up in that that I was missing my whole opportunity. I was so far from reality that it was crazy.
Then things started to get better progressively, and I just surrounded myself around positivity and I started becoming a student. To this day, I’m just thinking to myself this morning how obsessed I am with learning. And that’s what I got from it – I learned that anything is possible, no matter what market we’re in.
Joe Fairless: Do you remember the epiphany that took place, where you were watching the news and had the mindset that it was more of a limited resources mindset, versus now you have an abundance mentality? Do you remember what took place?
Luis Leva: I remember clearly one day I had taken up a part-time job cutting hair again on the weekends, just to try to make some extra money during the recession… And granted, I was having years before that when I was easily making over six figures every year… And I went to the point where I was cutting hair on the weekends to try to make ends meet, and I said to myself “I’ve got the idea now. I know what I’m gonna do now to be more successful. Instead of just cutting hair at a barbershop, I’m gonna go cut hair at a luxury barbershop. That’ll be the ticket.”
I went to a salon that was looking for a barber in an affluent town in Jersey – and I’ll be honest with you, through my life I must have cut thousands upon thousands of people’s hair… And when I went to go cut the first person that [unintelligible [00:05:46].01] his hair, I almost felt like I’d never cut anyone’s hair before. I felt so out of place; my hands were shaking, the hair felt like sandpaper… It was just such a bad experience, and I just felt to myself that my body and the universe is telling me “What the hell are you doing? You’re meant for so much better things…” Superman lost his powers when he got hit with kryptonite; I almost felt like that.
So as soon as the gentleman was done with his haircut, he was very grateful and he tried to give me a tip, and I told him it wasn’t necessary… And I immediately left the salon, went across the street to a park bench and just had a conversation with myself; not an audible conversation, but one in my head, telling myself “What the hell was wrong with you? You’re meant for bigger things. You should be ashamed of yourself.” I was just really ripping into myself. But I don’t think it was me, I think it was a higher power.
From that day on, I called the lady who owned the salon and I said “I’m so sorry, I can’t continue doing this. I have to do what I’m meant to do.” She was so bummed out, because she was getting an opportunity to get someone as skilled as me at her place… She even had her husband call and try to convince me and offer me more money. I said “There’s no amount of money in the world you can give me. It’s just not meant for me.”
From that day forward I did a full 180 back into real estate, I started getting more creative with what I was doing and who I was working with, and since that day I have never, never looked back, and I’ve just gone to bigger and bigger things.
Joe Fairless: Can you give some examples of what you mean by “you got more creative”?
Luis Leva: Of course. When I got out of my rut, what I did was at the time the market was tanking, so the only people that were buying and selling really were investors… And I said to myself “How can I align myself with these investors?” These were the guys that were calling me for deals, which I had no deals for them… How can I align myself so I can be where they are? I wanted to figure out what they were doing, and I would surround myself around them.
So I would call up my investors and ask them how much they were planning on selling their properties for. They would give me a rough number, around 250k, 300k, and so what I would do is I would find buyers for these properties before they were even listed. I’d go crazy, I’d go nuts. I’d call everybody I knew and looking for buyers… But eventually I would always sell these properties presale. And as long as they netted their number, they didn’t care what I put on it. So I was wholesaling without even knowing I was wholesaling. I’d make 10k-20k on each one of these properties, and before I knew it, I had some of my own money, which was incredible.
Maybe a year later I bought my first property with my family. I put in the majority of the money, and my parents had a little nest egg that they had put away… I said “Let’s invest this money together and we can buy a house cash.” So we did, and I immediately doubled their money, and they’d never seen that much money in their life. I took a property, a two-family house, and I flipped it within three months and I made them double the investment they had initially put in, and they were ecstatic.
We just kept repeating the process over and over again, until we got to the point where I was juggling multiple properties at once, and then hard money got introduced into the equation, so it really started to go haywire for me…
But then I had another epiphany later on. There was an electrician who was working for me at the time, and he said to me “Luis, you’re great at what you’re doing. Why are you on the job site, swinging hammers and hanging sheetrock? You shouldn’t be here with us. You should be where you belong, and that’s finding more deals. It took an electrician to tell me that to figure out that I’m a great salesperson, and I don’t know why I’m not spending more time getting deals and delegating this work to someone else who can do it better than I can.
From that day on I went full right back into real estate, and I delegated my investment side of my business to contractors, to my brother, to different people… And I’ve grown both businesses to a pretty crazy level. Now I just focus on repeating those lessons that I’ve learned throughout my experiences; I just repeat it with every business venture that I jump into.
Joe Fairless: Some people might have the mentality that if I’m gonna try and help someone find a buyer for their property, I wanna make sure it’s my listing, that way my efforts go rewarded, versus me spending a lot of my time finding buyers, but then what if that buyers fall through – then I’ve done all this work and not got paid. So you did not have that thought process… What would you say to that thought process?
Luis Leva: That’s a great point, and I’m glad you brought that up… Because what happens is at that time I was hungry; I was super-hungry. And if you don’t approach what you’re going after with that level of hunger, you’re not going to succeed in what you’re looking for… Because a lot of people want the easy route. Yeah, of course, it’s a lot easier to work on deals that you already have a commitment from the seller, but it would leave a lasting impression to that seller if you went ahead and going crazy looking for a buyer, without having any type of written agreement.
So I only had to do this a couple of times before the investors would come to me and say to me “Can you list these properties for me?” Because they knew my work ethic. They knew that I first put out my energy and my money before asking for a single dime. And like you said, the mentality nowadays with most people is like “Pay me first”, instead of me giving whatever I have to give.
Gary Vaynerchuk wrote a great book, “Jab, Jab, Right Hook”, and in that book he explains that you’ve gotta give a lot of value, tremendous value, before you can expect anything back. And I’d done this in my career without knowing it, but after reading the book, I’ve 10x-ed that. With my real estate business I have a ton of knowledge, I have a ton of information, and I give all this information out for free. I have tons of YouTube tutorials for real estate agents, for investors, for everyone… And people would tell me “What, are you crazy? Why are you giving us information? You’re creating competition.” I said “You might be able to look at it that way, but if you look at it with an abundance mentality, I’m creating a loyal following.
People are gonna be quilted into working with me if I give away enough valuable information”, and that’s exactly what’s happened. I’ve grown my company 3,500% since our inception. I started this business with three agents and we’re the largest real estate company in our area. We have over 100 real estate agents in our crew now, and we have almost a staff of ten people. So we’ve grown pretty sizeable in a short amount of time because of that mentality.
Joe Fairless: Let’s talk about a real estate brokerage and growing it. What are some keys to growing it?
Luis Leva: The key to growing anything, especially if you’re gonna be managing people and leading people, is that you have to think about others before you ever think about yourself. There are so many other people that are gonna be depending on you, and there’s gonna be a lot of people who are looking up to you… So during those times, you’ve gotta make sure that you have a loyal following, you have to think about them.
There’s a good book by Simon Sinek that’s entitled “Leaders Eat Last.” When reading that book, I learned that you always have to make sure that others are eating first, that you’re putting money into their pocket first, before you’re successful. Because if all the money is funneling its way to you, and then everyone in your camp is starving, they’re gonna either create a mutiny or they’re all gonna leave you.
So what I did was I made sure that when I created my brokerage that I wasn’t their direct competition. A lot of brokers continue to sell real estate when they become a broker. I became a visionary at that point, I didn’t wanna be the operator. So I made that transition from operator to visionary, and I gave away all my business. Every single client. I just came from an appointment right now upstairs where an old client came to visit me, and I gave it right to one of my agents who was here in the office. So I give away all my business, which is frightening, which could be the end of most people. It was a big what-if for me. But I did it without any worry, and I was rewarded more than I ever expected to be rewarded for doing that.
It was scary for a while. A few months went by that I wasn’t making the income I was used to, and I was making less because I was taking a small piece of every closing… But my agents were able to provide better service, because I can’t be a leader, a broker, and I can’t grow this company if I’m too busy with taking listings and showing houses. That was a big transition, that was a big step that I had to take and get comfortable with.
Joe Fairless: And you were flipping properties in the early days, right? That example with your parents.
Luis Leva: Yeah. Right after the crash I started flipping properties. I did a few with my parents, and that’s what I’d say I’m most proud of – the fact that only after a few properties I was able to retire my parents. My parents are living a really nice life right now. They went to another country, they have a farm, paid off, a house paid off… They’re living very comfortably, and I send them money every month, because without them I wouldn’t have anything. They migrated when I was four years old. They sacrificed tremendously. As a kid I was never hungry; I might not have been the rich kid in school, but I was never hungry and my clothes were always clean. I could imagine what they had to go through to make that possible, so for me taking care of them is the ultimate thing I can do with my success. Gratitude, at the end of the day, is what it is.
Joe Fairless: Do you have any children?
Luis Leva: Two girls. One that’s turning seven this month.
Joe Fairless: So when you were growing up, seeing what your parents did and the sacrifices they made, and how hardworking I imagine they were… You were four years old when they came to the country with you, so you saw it first-hand… And what typically – with families who let’s say they inherit a lot of money, or a generation makes a lot of money, they always say the first generation makes it, the second generation holds it, and the third generation loses it. So with your children and other people who you come across, how do you instill that type of work ethic and hunger in your kids, because you were exposed to it first-hand with your parents? And I’m sure your kids are exposed to it with you, but it’s just a little bit different because they were coming to the country the first time. That was probably life or death for them… Whereas you had it a little bit easier than them, and then your kids will have it a little bit easier than you did… So how do you instill that hunger in your kids?
Luis Leva: Well, to be honest with you, I’m a big believer that the apple doesn’t fall too far from the tree… So we definitely have to be very conscious of what we teach our kids. With my girls, I could spoil them rotten, and at times I do, because they’re girls, and I get them little knick-knacks here and there… But when it comes to the big stuff, when they keep asking for things, we always explain to them that it’s not just about “Hey, can I have this? Can I have that?” We actually give them chores to do throughout the house on a weekly basis, and we have this whiteboard that we check off every time they do what they’re supposed to do. And at the end of the week, when they finish doing their things they’re supposed to do, they get a prize. So they go into this toy chest, and they close their eyes, we put a blindfold on them, and they put their hand in and they pick out a price from the toy chest.
So what we’re doing is teaching them that hard work and responsibility earns you something that you want. We’re starting at an early age with that, but I have every intention that if my daughters want to take the path that I took in real estate, I will make them start at the very bottom. There are gonna be no handouts; they’re gonna have to figure out a lot of things on their own. I want them to get their hands dirty, because I’m glad that I worked in every aspect of what I do now – I’ve worked in real estate, I’ve worked in construction, I’ve worked in everything – because I can never delegate orders to someone if I didn’t do it myself. So I would very much have them do the same thing. If they were to have an interest in media, I’d have them start from the very bottom, learn everything there is about media. If they wanna open up a company, then figure out how to get financing. I’ll be there and I’ll give you advice, but it’s on you.
I really want to instill that hunger in them as well, because whatever is given to you on a silver platter is never appreciated. But what you sweat for, what you stay up late for, and lose sleep on – that’s when you appreciate it, and that’s why I think I’ve been successful, it’s because I work hard at it.
Joe Fairless: You’re the CEO of Culture Estate, and you’ve got over 100 real estate agents at your brokerage… You have grown it from ground up, 2016 to today, and it is primarily – and just fact-check me, please – residential real estate transactions, yes?
Luis Leva: Yes, we do a lot of residential.
Joe Fairless: Okay, so primarily residential. And is this your primary source of income?
Luis Leva: I would say maybe 50/50, because I do have a lot of real estate holdings.
Joe Fairless: Okay, but those are holdings that are passive investments?
Luis Leva: Yes, I’m in passive investor. I flip very little.
Joe Fairless: Okay, you flip very little. And there is the segue to the question. When you started out flipping, you had success; you earned your parents money that they hadn’t seen before; now they’re on a farm in another country, enjoying life… Why did you choose to start and grow a brokerage, versus staying focused on the flipping?
Luis Leva: Okay, so flipping is a business that to me does not make a whole lot of sense. Even though you can make money very fast, the market that we’re in right now and the area that I’m in right now – you don’t see great spreads anymore. The spreads that we used to make are far and few between. So if I’m not going to make a decent spread on a flip, then I’d much rather keep it as a long-term rental… Because if I can cash out the money, even if I don’t put any extra money in my pocket, if I can take an asset, cash out, and keep it on my books, let it pay itself off, and maybe I make $500 to $1,000 a month on a property, that’s a win. For me, that’s the ultimate win. I don’t get hit on the capital gains… I’m in the best scenario possible. So I just love that equation so much…
And I’ll be honest with you, one of the things that really kills me about the flipping game – and I’m not sure how it is in the rest of the country, but here in Jersey the buyers will try to skin you alive when they do a home inspection. They’re never happy. And why I don’t like that is because it’s very regular for there to be 2-3 buyers on your home before it actually sells… So why I don’t like that is because it’s a very unpredictable outcome. You really don’t know how long it’s gonna take you because of that scenario. But with rentals it’s a much more manageable business model, where I know if I bought it today, it will take me 2-3 months to rehab it, and then I’ll have a tenant waiting for me as soon as the paint dries.
I like that scenario much better, because I can’t predict when my home is gonna flip… And because of overhead, sometimes you make less than what you thought you were gonna make.
Joe Fairless: What’s your best real estate investing advice ever?
Luis Leva: Best advice ever that I can give somebody for real estate is the best time to get in real estate is today. Don’t think about what someone else paid for it ten years ago, five years ago, because there’s a law that’s called the law of dollar cost average. What that means is that you can never time the market. If you try to only buy when it’s at its lowest, you’re gonna miss a lot of great opportunities. And if you try to sell at its very highest, you’re gonna miss a lot of great opportunities.
What the law of dollar cost average teaches us is that if you invest over time, you’re gonna have the highest success ratio because you’re gonna hit days that are gonna be high, and you’re gonna hit days that are low, but over time you’re gonna win. So if you find a deal and it makes sense, then buy it. Don’t worry about what someone else paid for the same property a year ago.
Joe Fairless: We’re gonna do a lightning round. Are you ready for the Best Ever Lightning Round?
Luis Leva: I’m ready, brother. Shoot!
Joe Fairless: Alright, let’s do it. First, a quick word from our Best Ever partners.
Joe Fairless: Alright, best ever book you’ve recently read?
Luis Leva: David Goggins, that’s the best one I’ve read recently.
Joe Fairless: Alright, let’s see… “Can’t hurt me”? “Extreme Ownership”?
Luis Leva: “Can’t Hurt Me.”
Joe Fairless: “Can’t Hurt Me”, alright. Sweet.
Luis Leva: Yeah, that book was a game changer.
Joe Fairless: Alright, noted. I hadn’t heard of that one. I’ll check it out. What’s the best ever way you like to give back?
Luis Leva: Actually, we’re involved directly with an organization called Project Underground Railroad. What they do is they liberate young children that are being sexually-trafficked. We contribute every month directly from the proceeds of Culture Estate to that organization. We’ve been able to rescue, including this month – we’ve been able to rescue three children. We’ve donated enough money to do that. And my goal is to somehow one day become more active with them.
Joe Fairless: How can the Best Ever listeners learn more about what you’ve got going on?
Luis Leva: You could definitely please visit us at culture.estate. No .com there, it’s just www.culture.estate. You can see all the stuff we’ve got going on. Right now we’re doing a charity basketball tournament on 1st June, which is gonna be an awesome, awesome event. We raise money for a local organization through that as well. That will be our second time doing that for that organization.
Joe Fairless: I like that URL, by the way. Props to you on that. That’s smooth.
Luis Leva: I thoroughly enjoyed our conversation, and thank you for sharing the mindset that you have, the mindset that you used to have, the epiphany that took place, and the reason why you’re in the business that you’re in, as well as how you pass down the mindset lessons to future generations, specifically your daughters, but then certainly others who are listening who have children, or just are in a position where they’re looking for that type of information.
Thank you so much for being on the show. I hope you have a best ever day, and we’ll talk to you again soon.
Luis Leva: Absolutely. And I just wanna thank you; I’m a big fan, and I’ve watched your stuff many times, and I was very shocked when my partner was able to come on your show, and I congratulated him… Luckily, I got on, too. Look at that!
Joe Fairless: Great. Thank you so much.
Luis Leva: Thank you, Joe.