JF1930: Building A Real Estate Investing Business & Apartment Syndication Breakdown with Mauricio Ramos
Mauricio has been building his real estate portfolio and is invested in passively in other deals. He currently owns 48 units, we’ll hear about his first 16 unit apartment syndication, and what he’s learned along the way. If you enjoyed today’s episode remember to subscribe in iTunes and leave us a review!
Best Ever Tweet:
“Take action, don’t wait until you have learned everything on the subject” – Mauricio Ramos
Mauricio Ramos Real Estate Background:
- Full time real estate investor and accredited investor
- Founder & Managing Member of de Medici Group
- Currently controls over $2M in multifamily assets
- Based in San Antonio, TX
- Say hi to him at https://www.demedicigroup.com/
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Theo Hicks: Hello, Best Ever listeners. Welcome to the best real estate investing advice ever show. I’m Theo Hicks, I’ll be your host today. Today we’ll be speaking with Mauricio Ramos. Mauricio, how are you doing today?
Mauricio Ramos: Hey, Theo. Doing great. Thanks for having me. It’s a pleasure.
Theo Hicks: Absolutely. We appreciate you coming on the show today to share your expertise. Before we get into the conversation, a little bit more about Mauricio’s background. He is a full-time real estate investor and accredited investor, founder and managing member of de Medici Group. Currently controls over two million dollars in multifamily assets. He’s based out of San Antonio, Texas, and you can say hi to him at demedicigroup.com.
Mauricio, do you mind telling us a little bit more about your background and what you’re focused on now?
Mauricio Ramos: For sure, and thanks for the space. My names is Mauricio Ramos, I’m from Merida Yucatan, Mexico. I grew up in Matamoros, Tamaulipas, which is also in Mexico. I went to school through high school all the way in Mexico, and I came to Texas for college, under a student visa, and obtained my civil engineering degree from Texas A&M University, and worked for ten years in the construction industry as a project manager, under different work visas.
Currently, I’m 34 years old, I live in San Antonio, like Theo mentioned, since 2014. I’m married to my wife, Dominga, since 2018. She’s a mariachi director here in San Antonio ISD. Currently, my wife and I own and manage de Medici Group, a multifamily real estate investing firm here in San Antonio.
We are currently invested in 234 units, and recently just got another 28-unit apartment complex under contract. A little bit of how I got started – I got introduced to real estate by one of my interns when I was in construction, and it really caught my attention. I started educating myself and changing my mindset, like many people who read Rich Dad, Poor Dad and Cashflow Quadrant, and those kinds of books. So definitely a lot of mindset changing for about a year; not really a lot of deals, but just mindset changing.
With the help of my first mentor I bought my first deal. It was a mobile home. So I bought a mobile cash, fixed it up, and owner-financed it out in 2017. Right after that I did another mobile home, wholesaled a few single-family homes, and then this is when I came across multifamily, and I immediately fell in love with it. I started educating myself, reading books, listening to hundreds of hours of podcast, and going to seminars to start learning.
I decided to start doing my first direct mail campaign in September 2017, so by December 2017 I bought my first my first ten-unit apartment complex in Lexington, Texas, which is 34 minutes South of San Antonio. This was a seller finance deal, 0% interest, 7% down. It was a very good deal, and actually, this property — I just went full-cycle on this property 18 months later for a 159% return on investment.
Theo Hicks: Alright, thanks for sharing that story. Of the current 134 units, are those all properties that you own yourself, or is it a combination? Because I know that you said you’re an accredited investor as well. Is it a combination of deals that you own outright yourself, obviously with the loan, and deals that you are a passive investor in?
Mauricio Ramos: That’s correct. It’s 234, and it’s a combination of passive and syndicator, and that 10-unit was just me and my wife.
Theo Hicks: Of that, how many do you own yourself?
Mauricio Ramos: Currently, 48.
Theo Hicks: Okay. How many different buildings?
Mauricio Ramos: There’s a 16 and a 32-unit apartment complexes in McAllen, two separate properties that we’ve syndicated.
Theo Hicks: Okay, so you actually syndicated those deals. Do you wanna walk us through — which one was your first deal, 16 or 32?
Mauricio Ramos: The first syndication was the 16.
Theo Hicks: Alright, do you wanna walk us through that? Before you’d even found the deal, what types of things did you put in place? Did you have the capital first, did you have your team in place first, or did you find the deal and did that later? Walk us through the process of acquiring that deal.
Mauricio Ramos: For sure. At this point me and my business partner Adrien – we continued sending direct mail (postcards) to McAllen and different other cities which we were familiar with… And we found this 16-unit apartment complex. This is in a very good area in McAllen, Texas. We bought it for $570,000, and we brought four other investors, and Adrien and myself, and we just got a long-term loan on it. The plan is to hold it for 3-5 years.
Theo Hicks: How did you find those four investors?
Mauricio Ramos: People that I knew from when I was in corporate America, people that knew that I was doing real estate and they saw how I was making progress, and having success. Then I quit my job last year, so during the last few months they said “Hey, the next one – I wanna jump in with you.”
Theo Hicks: Did those first four investors actually come to you, seeking out the opportunity, or did you bring the opportunity to them?
Mauricio Ramos: I brought the opportunity to them.
Theo Hicks: Can you walk us through how you presented that to your co-workers? Did you do it at work? Did you do it at a bar after work? I’m just curious… I know a lot of people that are listening probably have their W-2 jobs, have a lot of people who are the ideal passive investor, but might not necessarily know how to properly go about presenting deals, especially when they’re still working at the company… So do you wanna walk us through that process?
Mauricio Ramos: For sure. I put a package together, my investor package, which is a ten-page deal where I explain all the ins and outs of the deal. I presented it to my investors, met for lunch with them and said “Hey, I have this opportunity. This is how much I’m looking for, this is the return on your money. If you’re interested, this is how it’s gonna look like”, and they decided to jump in. But it was definitely a combination of doing things while at work, then at lunch, and then definitely a lot of work after five, after my job.
Theo Hicks: Yeah, I figured. And what was your structure for those passive investors? What types of returns did you offer them?
Mauricio Ramos: This one is a 9% cash-on-cash average, and 96% ROI over the life of the project, for a 3-5 year hold. It’s a 70/30 split GP/LP.
Theo Hicks: So the GP gets 70%, or the LP gets 70%?
Mauricio Ramos: The LP gets 70%.
Theo Hicks: Okay, okay. Are those the actual numbers? Is 9% cash-on-cash, 96% ROI over the life of the project, or is that what your projections were, that you presented to them, and said “Hey, if you invest, here’s what our projections are.”
Mauricio Ramos: Those are the projections. We’re six months into the deal, so we’re still working through it.
Theo Hicks: You said 96% ROI?
Mauricio Ramos: Yes.
Theo Hicks: So essentially doubling your money, okay. What about the second deal? Do you wanna walk us through that one?
Mauricio Ramos: For sure. This 32-unit we found through cold-calling. We called the seller (he’s out of state). After probably two months of following up, we finally agreed on a number, got it under contract… And this one is a little over a million, so we were able to get agency debt on it. Similar situation, 70/30 split, brought seven investors, and then my business partner and I, to the deal.
This one is a little better, because since it’s an off-market deal, the price was pretty good compared to the area… So this is a 10% cash-on-cash average for 3-5 years the life of the project, and 100% return. We’re pretty confident that this one — we should be able to turn it around in two years max.
Theo Hicks: Why did you decide to transition from the direct mail to the cold calling?
Mauricio Ramos: We had both going on… We just had the resources to do some skip tracing and have some good properties to call. So we just had the resources to do it.
Theo Hicks: So you’ve done three deals so far: the 10-unit, the 6-unit, and the 32-unit that came from a combination of cold calling and direct mail. How many marketing contacts – combination of direct mail and cold calling – would you say you did in order to get those three closed deals?
Mauricio Ramos: I’m gonna back up real quick, and I’ll get to the question; it’s a great question. So after I did my 10-unit through direct mail, I found an 8-unit in Kingsville, Texas, and I wholesaled that for a five-figure fee. Then I found a 24-unit in downtown San Antonio, and with that one I did a six-figure fee, which was twice my annual W-2 income… So this is the one that really put me in a different position to be able to get into some mentorship programs, get into a couple of Airbnbs and get some additional cashflow. I also basically quit my job. At that point is when I decided to marry my wife, and quit my job and just went full-time into real estate.
So to answer your question, I’d say the response of the postcards is pretty good compared to what typically single-family people see. I’d say probably 5%-8% response. We have a good 150 to 200 leads that got offers in our system to get to those five deals or so.
Theo Hicks: Do you wanna walk us through that 24-unit that you got the six-figure fee on? Obviously, you mentioned that you got it through your direct mail… Why did you decide to wholesale it, as opposed to buy it yourself? And then how did you find the person who ended up buying that property from you?
Mauricio Ramos: For sure. And a little bit of that I have prepared to one of the questions further, but I’ll try to not spoil it…
Theo Hicks: It’s your best ever deal… You can go over it now, and I’ll ask a different question.
Mauricio Ramos: Okay, I’ll just go through it. We found it through a postcard, it was a mom and pop owner… They were just tired. My postcard was delivered just at the right time. It was actually the right color. My postcard is pink, and the owners of the property are gay, so for some reason they decided to call my postcard. So they called my postcard, we met, great people, they liked me, and we went under contract.
I wasn’t sure what I was gonna do with it. I was going to either wholesale it, or try to kind of syndicate it, bring some investors in and do it. It was a very old building; there’s two buildings, one of them built in 1896 and the other one in 1928… So there’s a lot of historic character in it.
I wasn’t prepared to syndicate it at the time; I didn’t have the resources to do it. So at the same time I attempted to wholesale it. I put a package together, put it on Facebook, and within 24 hours I had it under contract to sell.
Theo Hicks: That’s amazing. And then you said you got a six-figure fee. Was there negotiation back and forth, or did you just say “Hey, this is how much money I want for wholesaling this”?
Mauricio Ramos: I double-closed, so the buyer didn’t know how much I was making until the very end… But I double-closed, and actually there was my asking price, and the buyer really wanted it; it’s a buyer from California that has a strong presence in San Antonio. They really wanted it, so they were like “What do you need to put this under contract with us right now?” So I said “Alright, just throw in 50k and then I’ll do it”, and they did.
Theo Hicks: Perfect. Alright, so before I ask you the money question, I had asked you — for those who are listening, I’ll describe it, but those watching will understand… So Mauricio has a whiteboard behind him, with a bunch of different color codes on it. I can’t read it, but it’s got a statement at the top. Do you wanna walk us through what that is?
Mauricio Ramos: Yeah, the statement at the top says “Keep God first place.” I’m a Christian, and ever since I really started taking that to heart and really putting God first, my life really started making a transition and making a change for good.
Theo Hicks: But below that, are those like your goals, or is that strategies for your business? Is that like a goal board/vision board?
Mauricio Ramos: No, it’s really just everything that I have going on in my mind… Everything just floating in my head, I put it on the board, and that way I get everything every morning, and I just know where I’m at. Just different things that I have going on at the same time; so it’s not necessarily goals, but just ongoing deals.
Theo Hicks: Okay, Mauricio, what is your best real estate investing advice ever?
Mauricio Ramos: Best advice for the Best Ever listeners is to take action. Don’t wait until you have learned everything, all the ins and outs on the subject. Just take action, jump, and build the parachute on your way down. Just do it. For example, you don’t have to wait to learn how to do a 1031 exchange if you haven’t even submitted an offer on a property.
Theo Hicks: Alright. Are you ready for the best ever lightning round?
Mauricio Ramos: Ready.
Theo Hicks: Alright, first a quick word from our sponsor.
Theo Hicks: Alright, Mauricio, what is the best ever book you’ve recently read?
Mauricio Ramos: It’s called “Am I being too subtle?” by Sam Zell.
Theo Hicks: If your business were to collapse today, what would you do next?
Mauricio Ramos: I would go straight into multifamily.
Theo Hicks: What deal have you done that you’ve lost money on?
Mauricio Ramos: I haven’t done a deal that I’ve lost money on, but maybe I can think of a few deals that I could have done it, I just wasn’t ready; I didn’t have the knowledge at the time to do them. So now that I know, it’s like “Oh, man, I could have done that”, I just didn’t know.
Theo Hicks: What is the best ever way you like to give back?
Mauricio Ramos: Anonymously. I believe in Matthew 6, so I give to my church and other charities, but I don’t announce it to social media.
Theo Hicks: I like that. What is the best ever place the Best Ever listeners can reach you?
Mauricio Ramos: It’s on my Instagram. I’m at @maurms, and my webpage, demedicigroup.com, and email@example.com.
Theo Hicks: Mauricio, I really appreciate you coming on. A very inspiring conversation; you’ve come quite the journey. I’m sure things are just getting started for you. Just a summary of what we talked about – we went into how you got into real estate, and you were actually introduced to it by an intern at one of your companies. That’s a first I’ve ever heard that one. You mentioned how you started off with buying a mobile home, which you owner-financed out after you bought it, and then you wholesaled some single-family homes before you came across multifamily.
You started sending out your direct mailing campaigns, and your first deal was that 10-unit in Texas. Again, another seller finance deal, 7% down, sold it 18 months later for a very high return on investment.
We went through two of your syndication deals. One was that 16-unit, which was your first one; you got that through direct mail. Four investors, all co-workers, and you kind of walked us through how to present investment deals to people that you’re working with, while still at that company. You also gave us the returns on that one.
We talked about your second deal, which was that 32-unit that you got through cold-calling back and forth for two months and ended up putting it under contract. It was a better opportunity because it was off-market, and again, you walked us through the returns on those as well. You told us that you get about a 5% to 8% response rate on those direct mail that you sent out, and for those five or so deals that you either bought yourself or wholesaled, you said that you had to go through about 150 to 200 offers before you got those five.
Then we also talked about your best ever deal, which was that six-figure fee on the 24-unit. Mom and pop owner who you sent the pink letter to, so perfect letter, perfect timing… You didn’t really know whether you’d wholesale it or syndicate it. Older building, historical building. You decided to wholesale it. A company came to you once you posted on Facebook within 24 hours. You got to add a nice little $50,000 fee to that to close it quickly.
Then you talked about your whiteboard, which I like how you’re just kind of like journaling, but you see it; it’s much more present in your office. And then your best ever advice, which was to take action. I liked how you said “Don’t wait until you know everything. Just jump and then build your parachute on the way down.”
Mauricio, I appreciate you coming on the show. Great advice, again. Best Ever listeners, thanks for listening. Have a Best Ever day, and we will talk to you tomorrow.
Mauricio Ramos: Thanks, Theo. Thanks for having me. It’s such a pleasure.