Jerome Maldonado, Entrepreneur and Investor | Real Estate, Subway & Buying Radio Shack w/ Tai Lopez

Welcome to success story, the most useful podcast in the world. I'm your host Scott D. Clary. The success story podcast is part of the HubSpot podcast network. The HubSpot podcast network has incredible podcasts for you to check out. Like remarkable people hosted by Guy Kawasaki. Of course, brought to you by the HubSpot podcast network. The remarkable people podcast with Guy Kawasaki helps you better understand the changing world with interviews from thought leaders, legends, and iconoclasts. If you are interested in business, leadership, entrepreneurship, he interviews the best of the best leveraging connections that he's built over his career. Here's some of the episodes and interviews that he's done. He's spoken to Seth Goden, marketing god, blogger, author. He's spoken to Pat Flynn, entrepreneur, power podcaster, and popular YouTuber. He's spoken to Jen Lim, happiness evangelist, and author of Beyond. Happiness. He's spoken to Steve Blank, author entrepreneur, and startup whisperer. If you want to listen to incredibly intelligent conversations with some of the most remarkable people on the planet, listen to remarkable people podcasts by Guy Kawasaki, wherever you get your podcasts. Today, my guest is Jerome Maldenado. He is a highly successful real estate investor, entrepreneur, business owner, salesman coach, and speaker over the span of his 20 year career. He's built an eight-figure empire and has mentored people from around the world and sales real estate business entrepreneurship. He has done a lot. So he is an author. He's written a couple books. He is a founder of various companies. Obviously, he's also a very successful real estate developer and investor. He is an equity owner of retail e-commerce ventures, which include radio, chat, pure one imports, model sporting goods, and more. He is a serial entrepreneur. Like I mentioned, but he is one of the largest subway franchises in the nation. He's also invested in beauty salons, juice bars, and a variety of other assets. So what do we speak about? Well, let's go through the list of stuff that he's done and we sort of touched on everything. So real estate, we spoke about starting off and real estate. What to invest in? We spoke about the different types of real estate you can invest in. How to build a debt-free real estate portfolio, how to set up your real estate portfolio for downturns and markets. What's going to happen with real estate coming out of COVID? So we went into real estate. Then we went into investment. So we spoke about how obviously Jerome and his team decided to buy failing businesses such as RadioShack, Pure One imports, Models, Models, sporting goods, and more. And then we just spoke about some great business strategy, entrepreneurship strategy, sales strategy that he's used to grow real estate portfolios, franchises that he's purchased, businesses that he's wanted to scale, including his own personal brand that he's building out right now. So he's done a lot. So just a really, really well-rounded person. So if you want to learn anything about real estate, about investment, about entrepreneurship, about some of the stuff he's done with Ty Lopez and Alex Mayer, including buying up RadioShack, Pure One imports, Models, sporting goods, which are just really interesting stories and why they chose to do that. We went into everything. So I hope you enjoy. So this is Jerome Maldonado. Highly successful real estate investor, business owner, entrepreneur. Being ready, I'm always thinking, okay, God, I gotta revise this and that. The funny week, it doesn't start quite like that. And it's been a journey, right? And so developing business, life, and getting to a place where we're at now is been a journey to get here. And we're still moving. We're still working and facilitating business. I'm in the office every day. I just got back from Phoenix yesterday where we're undergoing municipal approvals on variances and zone changes for projects. But I come from just a normal background. I grew up in a regular small Catholic family in an Albuquerque. And we were taught just to go out and get a good education, Scott. And that's what I did. I went through school. I was dyslexic. I struggled in school and I was never my forte. But I knew I wanted better in my life. So I went to college and I was in pharmacy school. And in the midst of pharmacy school, I was introduced to direct sales and network marketing company. And I bullhorned the company and I went full force with it. And I took a little sabbatical from school for four and a half years. And I struggled for about three of those four and a half years and about the last year and a half. I really hit home runs with it. And it was because I stayed persistent with it. I went broke. I went through some really hard times financially. But there was some of the best times in my life. You know, I got to travel this country being poor broke. And how we did that, we extended credit and we just went into debt and stuff on people's couches and we built a business. And I was fortunate enough for my young twenties to make a strong, strong six figures. And in the 90s, that was a great income. Today it's a great income, but really a great income in the 90s. And so the life change, life has its alterations. In 1997, the FTC came in to the regulation on network marketing companies. Our company was one of them. We got shut down and we were left with zero. And that's when I came back finished my schooling. And in the interim time of finishing my schooling, my schooling, I opened up a business and I opened up a construction company of all things. Didn't even have any construction experience. But I helped my brother-in-law go get a contractor's license and I landed up for the contractor's license. God only knows how. But I knew how to sell. And Scott, the biggest thing in business is if you can learn how the best sales people in the world sell and it's the building relationships, not through actually selling. There's no like these all these zig-ziggler old school techniques. We live in a different society now, right? So we learned how to build relationships in direct sales and network marketing. And I knew how to go out and build a, I knew how to network and I knew how to build a foundation to the business and I did. And so we did seven figures our first year, not knowing anything about construction. I applied some simple concepts that I learned from simple books like Thinking Grow Rich, employing the efforts of other people, get people who know how to do things you don't know how to do and implement their talents. And still those simple concepts that I was taught at a young age, I implemented. And we killed it. We still own that company today. That's Jay Jacob Enterprises. It was J.M. Enterprises back then and then we incorporated back to 2001. And we've been the same company since 2001. And that company has taken us through some journeys for sure. And it's, it's been a great, it's been a great road. We've rode the roller coaster of the recession and economic changes and we've pivoted and we're still here and we're still standing. We've done extremely well and we've been very blessed. So thankful for that Scott. No, I appreciate the story. And I appreciate your willingness to jump into things because that's also not easy. You have a personality obviously that sort of goes after something. And I just see that in the way that you've gone through and gone into all these different ventures. So construction, so yes, so network marketing was sort of like your training ground for sales, pivoting into your own business construction. Construction is really the kickoff point of entrepreneurship and building your own thing in your life. Correct. And then everything else to sort of float from there. It was, you know, and I never really considered myself, you know, when I was young, my parents I was told me that if I didn't get educated, I'd land up in the construction. So I always had this little pet peeve in the back of my mind that I was, I was less of a person for for being in construction because that my parents told me that. And even when I was making a ton of money, I was kind of, when people would ask me what I do, I always tell my business and I never really owned up to owning a construction company. And it took me years to warm up to to being in construction because of the stigma that contractors have, you know, being, you know, less affluent, you know, there's that stigma of contractors, you know, they're not reliable and there's just all these stuff. And that's really how we built our company is, you know, I'm going to create a business in a blue collar industry where we run it like white collar professionals. And my whole means behind that madness when I first opened up was if I, if I created a company or I ran it like a white collar professional, and I acted like a white collar professional, which I was, you know, and in all honesty, my college degree gave that to me because I felt like when I sat across the table from a client, a business colleague, when I was doing stuff, big governmental jobs, I never felt inferior to them. I didn't feel like I was that undermined, uneducated contractor. I felt like, okay, I've got my education. I know how to speak well. I've done what I need to do. Maybe it's not in in this industry, but it gave me a level of confidence to sit down across the table. And I decided, you know, I'm going to run a white, a blue collar business as a white collar professional, in a white collar manner. And we're going to, we're going to go in and we're going to take advantage of this industry and that is lucrative, which I didn't realize. Yeah. And that's a lot of money in construction. I was going to say, you know, I was going to say, you almost, you almost leverage, like your experience, you had an incredible imposter syndrome from what it sounds like going into this. But like as, as all entrepreneurs do, like they have this imposter syndrome, like I shouldn't be here, you know, so you have to get through that in your head. And that's, I think that's actually how you ended up being successful is pushing through that. And that's probably something that, I don't know if you want to speak on imposter syndrome or what your thoughts are on that. But that's something that I'm seeing just from your, your story. Yeah. Well, I think we all battle different things like that, right? We society labels us as what we're, what's respected and not respected and what, you know, and we live our lives trying to, I think, fulfill other people's expectations and societies, expectations of ourselves. And when you really start hitting a level of success is when you stop caring, I spoke in front of a huge group a couple, two years ago. And I was going to speak on on real estate and business. And, and then the, the gentleman who brought me up and he came to me, Scott and he said, hey, Jerome, can you do me a favor? These are young professionals just getting going into college, getting out of college. They're just really confused on their direction in life. And we want to give them something that they can really hang on to and move forward with that can help them really and honestly in their life. And so I did this thing. I said, you know, I sat there that morning in my hotel room and I got a piece of one of my yellow tablet books. I have these all over my house. I got these little yellow, yellow tablets everywhere all over my house. And I carry them, I travel with them. And, and I sat down, I outlined, I said, you know, why do most people not succeed at what they do? And it's, and I thought to myself, why did I succeed? And I remember moving from Albuquerque all the way to the Washington DC Beltway and it's living in in in Alexandria, Virginia. And I moved out there because I remember looking at a map and I thought, okay, where do we need offices and training centers for the network marketing company I was in? And I had little pins all over where training centers were. And that there was New York City up by Wayne, New Jersey, Washington, DC. I said, well, I'm going to go so far that I can't turn around and I cannot come back home. And I was getting ridiculed at the time by by colleagues, by friends, by schoolmates, by my parents, by everybody. And I thought, you know, if I could just get away from all this, I'll just have such a better way of succeeding. And so I sat there that morning, I thought about it and I said, you know, if people were behind a blindfold and nobody could see their failures, I bet you anything that they would try and more stuff because they would just pick up the pieces and just try again, right? Because then it's not on public display. They're not getting judged. They're not getting criticized. And so I got in front of the room and I did this speech about, you know, when you stop caring about what other people think and you live your life in a fashion where you can go in and you act like you are behind blinders and you stop being concerned with other people's judgments against you. That's when you'll truly succeed. And it was at that point in my life where I sat back and I've had many, many, many instances where I have felt this way. And I think we still go through this even today, you know, when people say, well, you've been successful, why would you go through that? And I think there's a level, there's a level of acceptance in our mind that we want from people, right? But, but when you stop caring as long as you're doing through your eyes, I tell my children to say, look, don't worry about what other people think. People are going to be just and if you aren't doing anything wrong, you're doing things right and you're not hurting anybody, you shouldn't have to worry about what people think. And in fact, when you stop caring about what people think and your life's not on public display anymore, what you realize is that your life becomes less interesting and they don't have anything to talk about. And so you just move forward and then you become a success in your own right and your own story. And when you can put those blinders on and go through life without worrying about what other people think and you don't worry about failing because if you could pick it up and I've always said, if you have your health, you have everything. Because if you have your health, you can pick up all the pieces when you make mistakes, if you even if you embarrass yourself and then you just go move forward with things, you know, and you do that if you're doing things the right way, you know, honestly, ethically, so forth and so on. And it was a successful speech. People loved it. I got a ton of feedback from it. And so I've always I've always went back to that and I say, you know, that really is a pivocal pack factor to people succeeded is to stop caring what other people think and then just move forward and make your mistakes. You're going to make them. You were all human. It doesn't matter who you are and how talented you think other people around you are. We're all going to move forward and we're all going to make our mistakes doing so. So that's that's a good that's a good life lesson. And that's something that, you know, you brought out of I appreciate the story and and and just framing that that's very that's very good advice. So that's what you that's what you, you know, you you found that while you dove into construction, you built the construction. So after after construction, that was sort of obviously what solidified, you know, your first your first probably level of financial success in your life. So all the all the things that you've worked on, like your keynote speaking, your working on, I think it says over 400 real estate transactions. You work with distressed brick and mortar brands. How do you decide what to work on next? How did your career progress to the point where even where you are today and and because there's so many different avenues we could take with this. So curious where you want to take it. Just want to take a second and thank the sponsor of today's episode get abstract. 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dot com slash success to request a demo and get 20% off when you sign up for like a I live one day at a time but I but I always work towards the future and so what that means is I'm always looking the future of my end goal right my end goal is to have a solid passive income that I've always wanted but then there's always end goals you know and then we get to a milestone and we move forward with them but in the interim time I always I've always had this belief that God elit is in the direction that we need to go put the right people in there as long as you're driving forward and when most people make the mistakes they think okay God will just leave me in the right direction but you got to be driving a vehicle forward and so construction landed on being that vehicle for me and and I've always I've kind of pivoted into other industries and areas above done that and in truth be told you know all the stuff that we're doing like I've doing with Tai Lopez now it's me I would have never thought I would have been in those industries and be working any commerce stuff at all but when 2008 hit we went through a lot of reevaluations and business right we I had office buildings they were my buildings they were being constructed I had retail centers that were my retail centers that I was developing I had subdivisions going up that were in my subdivisions that I was developing going up at that time and thank God the subdivisions were we were building cash we were building them debt free at that time but the retail centers and the office complex as we weren't and those almost pulled me under and we when we did when this happened and eight and I almost got pulled under financially we rode or tied rope for about three to three months and some people sit back and go okay you know for you right wow at three months well let me tell you those were temperature taken three months when you go through 1998 till 2008 for a full decade and you make you're making seven figures strong and you're doing they're doing well over strong six figures on a monthly basis and revenue your income goes back down to five figures in a monthly basis and low five figures your temperature gets taken especially when you have yeah for sure millions of dollars in debt on your books right and the income stops revolving and it's outside of your control so I it took me five years to clean up everything that we went through in the recession now we we did make immediate pivots and in December of 2008 things got really tough and then all the way till April of 2009 it continued and so there was a there was a time period there there was very temperature taking by April of 2009 I worked my ass off from December and I'm always work hard but December January February and March I think where the four months that I probably worked as hard as I did the first day that I had opened up and I was worth about 14 15 million dollars at that time and so we weren't broke or pulled by any stretch of imagination but our money was tied up our capital was tied up in assets and so I went back to work and I put my head down to the grindstone and I woke up every morning bright and early and I went to work with a vengeance and I started trying to figure things out that's what I read crop models into play where with with real estate I started buying subway stores I started opening up beauty salons I became an evata certified yeah owner and a by a large owner and we started opening up businesses in our retail centers and we started making adjustments and in in in by April of 2009 we had a business plan and we were functioning and pushing towards that business plan and we were starting to be able to make a leeway into at least being able to pay for our assets not like leaving ourselves on but moving forward so all the way into 2012 we continued this process we slowly started selling off assets that we that were we're bad nagging assets that were on our on the back on the back of our shoulders and we started moving impivity and then from those assets that we bought and we started buying real estate in phoenix it grew and the money that we spent at that time was so well-vested and I didn't know at the time that it was going to do this but I invested about a million dollars into just not even C class real estate it was like D class it was just net you know just sub part real estate in the phoenix area and that stuff turned into about a 15 million dollars worth of assets now in today's value from about a million a nine hundred and fifty thousand dollar investment that I made into just nominal real estate and then I scaled up I sold that off 1031 exchange it to an apartment that stuff is all evolved and here we sit in 2021 and if that apartment complex that I bought from all that that's that garbage I bought is worth about 15 million dollars today and that happened just from being able to recognize the pivots right yeah yeah and be and be okay to jump into those pivots and and and accept them as opposed to just sort of staying part for the course what with with with what you've been doing for the past X amount of years and you know and so in 2018 I started about 2016 I started feeling stagnant I thought I felt like I got beat up by the recession mentally I felt like we hadn't really evolved if the if the rate that I wanted to we had evolved but even at that time I was just in 2016 that's when I started selling off some of these assets I still felt like we our net worth hadn't really grown a lot that our net worth had you know we had we were making good money we were making investments but I didn't feel fulfilled I felt like I had just worked to maintain and so I started feeling this level of the slack of fulfillment in 2016 I even told my wife I said man I go I've worked so hard I just don't feel like we've evolved to be level that I feel like I should be at when my talents really are and so in 2016 I started making some some moves and I started making some changes and I really started trying to scale again it's okay I've got to I've got to get bold again as bold as I was when I was younger I'm I've gotten too conservative I'm playing it way too safe but I've got to be smart about it and so that's when I started doing research and I finally I started looking into other influencers one of my closest friends like a brother to me he reached out and said look you need to look at these influencers these guys are people that are doing stuff and he was introducing me like Grant Cardone and these guys and so I started investing money yeah spend a couple hundred thousand dollars investing with Grant to go to 10x growth comm as an investor and and me people I got a chance to go to the back I was in the I got to go into the VIP section with all the speakers and everything and so I got to start meeting people that's where I started meeting Ty and these guys and they were speaking and I paid to play Scott I said you know what I'm gonna get in I'm gonna get current with stuff and I'm gonna get bold again I'm gonna I don't care what I need to do you know if I have to buy my way to the top financial I'm gonna do it so I literally just started putting down my credit card and buying $25,000 masterminds and and just working my way into their inner circle financial doing it fine in a financial basis and then I started showing my value you know and I thought I thought if I'm gonna do this I'm gonna network my way to the top and buy my way there and the network show my value and that's what I did I went in there I offered my assistance I started helping with real estate stuff and and I did it for free you know most people are looking for compensation I wasn't looking for compensation what I needed I needed that that social exposure and and I needed the people that were already there and so and so that's how we did it and then we I became the CEO of a ESR e-commerce supported real estate we partnered up and and so here we sit today and there's a lot there's a lot of intermixed businesses and and transactions and relationships they go into all of that but here we sit and that's how that's all evolved and that push that decision that I made in 2016 and things have evolved Scott we've gone we've grown we've grown a lot we have a lot on our books we have a lot of transactions and a lot of projects that we have going that we're undertaking right now so I'm curious so unpack your mindset is just very interesting because I see the vast amount of people that don't want to pay to play and I'm not an advocate for or against I'm just I'm curious to understand you made that decision you invested you go to masterminds you're you're working with you're sitting backstage at 10x growth com with Grand Cardone you meet Tai Lopez and whatnot a lot of people feel like there's no it doesn't make sense to pay like you can get there anyway so or it's just a waste of money these people like they're not going to provide any value for you so how do you decide what to invest in or who to invest in because obviously it's worked out like it's you know you're the you're the the living example of somebody who's who's spent the 25 50 100 thousand bucks to get in the room with the right people which in and of itself is a is a it's something that not a lot of people are comfortable doing so you did it you did it strategically how do you how do you find out who you want to spend the money on when there's so much bullshit out there when there's so much stuff that's a waste you you got to look for the good people right yeah they're actually speak louder than words documentation I've always been taught beats conversation um so you can you can smell shit from a mile away Scott um and you really honestly can't and so one one of the things that I've tried to do even for my platform is just let people realize that look we're they're the real deal you know I mean I'm out here working we've we're facilitating millions and millions of dollars of deals um and we've worked it we've worked it from the bottom all the way to the top and I'll tell you that I learned years ago that was the one thing that when I first got started in network marketing that's it the young lady that brought me into the business Angie Lucido she she told me she goes just Jerome I asked right I looked at Angie and I go Angie I don't get this business what do I do and she goes Jerome you need to get trained and I say wow where and she goes look and she pointed the calendar says there's there's there's a place indigenous one in Danbers one in Houston there's one in Pennsylvania here's you go train Scott I drove all over the country and every weekend I was getting trained I was spending $300 a weekend to get trained back in the early 1990s where in $300 was a lot of money for people today they won't even invest $300 into themselves and I mean I have a backpack in my closet that I keep and it's a reminder because I open up that backpack in every single notebook from every single seminar that I've ever been to is in that backpack and then I have every single pass that I that I every every time I got a little ticket stub from every training that I have and it's just a testament to my success because I was taught years ago that the level of success you reach is based on the level of education that you willing to go to and I've always been trained even to the state I spend money I invest money being trained there's there's people that that know more than I do I invest in the books the in the research the training and so it was a no-brainer to me at that time I knew what I needed to do in 2016 I felt stagnant I hadn't come up today with technology with e-commerce hadn't done that stuff and so I knew that in order to do that to get to where I needed to go I needed to get with people that were doing it and so I did research I didn't know anything about Tyler Lopez at that time didn't know who he was didn't know who brought partner was through the means of people that I respected my buddy Rick a day started introducing me to some of these influencers and then I started research and there was a lot of noise out there there really really is and so I just I didn't get it I ignored the noise and I just focused on people that look like they had real stuff going on and so fortunately enough I just went to the top of the people that look like they have the biggest things going on in the industry and like I've always said if you want to learn how to do things go straight to the top and surround yourself around them and so I didn't waste any time I just went straight to the top and I started influencing myself around the top as influencers in the industry and I paid to play and I was willing to pay to play and some people say well Jerome you had the money there was a time Scott I didn't have Jack shit I didn't have money I leveraging credit cards and I'll tell you I would leverage my credit cards to a tee then I'd write a check from Northwest Bank anybody remembers Northwest Bank it's been that long ago and bagged the Boston I write them a check from my Northwest Bank account that had zero money in it and by the time the payment went in and it bounced I'd already had the card max down again and that's it and that's some people stick back and go that that's you know that that's not right look I didn't have the money back then that I just did what it took to make it look I paid all that back and of course of course of course but Scott I just did what it took to be able to get to where I'm at and understood the importance of it and so for those of you guys see well he had the money to go out and pay 25 thousand dollars ladies and gentlemen there was a day and age that I didn't and I just did whatever it took to make sure that I got the training I needed and I really truly believe Scott that the reason I'm here today is because of that and so they made it was a no-brainer to me that I was gonna have to pay and I spent hundreds of thousands of dollars on stuff and between 2018 and 2020 to get to the relationships and the business partnerships that I have and I'm sitting with right now today I just want to take a second and thank the sponsor of today's episode now with the holidays and full swing we're that much closer to a new year which means new year's resolution and we often focus on what we feel we fail that health relationship finances but what if we tried something new this new year and instead of acknowledging what we failed at let's acknowledge what we did right the things we want to continue doing more of the relationships we want to show appreciation for and what if we did that for our businesses HubSpot is challenging businesses to focus on how to grow better starting with our custom because a HubSpot CRM platform is dedicated to making the connection between you and your customers better than ever how well new tools like native payment links and recurring payments that directly embed in HubSpot's quoting tools and emails mean seamless delivery and payment collection and cost them surveys easily capture feedback unique to your business share insights with your teams and help you understand what makes your customers tick learn more about how HubSpot CRM platform can help build maintain and grow your customer relationships at HubSpot.com I think I think it's I think it's a smart note and I know that a lot of people that in even in my circle I know they do pay to play but I think that it's two pieces that you have to take an consideration you have to you have to pay of course and you have to know who to go after you do your research do your due diligence if you want to get in their circle there's a good chance that you don't have access to them says you know you're paying for access but then you have to you have to have the attitude that you're going to action you're going to action on stuff like it doesn't matter you you can pay 25,000 to 100,000 you pay nothing if you don't action on anything you're not getting anywhere that is a piece and I told my wife that when I did I said you know you know what's sad I told her as I told her look we're going to go in here I'm going to network with the top and I said take a collective a collective view of everybody that's part of this and they'll be maybe a handful of people that out of the hundreds of people to get involved in this stuff actually go out and do anything and and rightfully so did we sit a few years later and myself along with a handful of people are the only ones and I like to sit back and say that I've probably been the most proactive out of all of that entire group in regards to those specific relationships and business endeavors I know other people have been out and scaled their own personal businesses but my goal is to partner with some of these people and help push our brand how push our business and so I like to say that we're probably the one of the more successful ones and do so and it's because of us being able to take action push and push and push but show value of what that action is right is give back value for those actions and show what we actually know and deliver you know to people in value so yeah I agree okay so I guess I will you know you mentioned a few things that I would just love to for you to break down not you know to go into go into as much details you want two things that I'm curious about is building building a debt-free real estate portfolio that's something that I think is is difficult with a comprehend what does that mean how do you do it how do you get started and real estate that just like a high level because you've lived your whole life and then I also wanted to get some opinions on what you're doing with all these distress brands and e-commerce because that's also what you're living right now so just some some very tactical real estate advice or people that are trying to get into the into the game so I like buying land and building houses this made me a shitload of money Scott I made a ton of money there's a lot of fixed inflip people out there they're watching this and I don't like the fixed inflip game it's not my deal I tried it there's too many variables the risk factor for the margin returns are are not worth it to me I can make substantially more money on buying land and building and building houses and so when you ask about building a debt-free real estate portfolio that's how I did it I went out I bought about a thirty thousand p-dollar piece of land there's still out there today I just bought three lots each from costing forty five thousand dollars in Palm Springs California I'm building I just bought three of them I'm getting ready to buy another three we're gonna have six homes going up in there collectively we'll make about one point one million dollars on a net profit between all of those and and it's something that we'll have finished out by next spring and so I mean that's just one little tiny example right that's just one little piece of one little tiny project that we have going on we're doing the same thing up in the Seattle area and we take that money and I won't pay taxes in the state of California I'll pay we'll pay taxes right but we won't we won't pay what most people pay taxes because we'll deploy that capital and we'll expense it into a larger asset we'll take that money we'll deploy it into a larger asset and so you start off this little piece of land and I took a home equity line of credit out on my house to build the first the first house that I ever built and then I had a little bit of money in the bank saved and between the little bit of money that I had in the bank saved plus the home equity line of credit that I took out on my house I went out and I built my first house cash and so when I say debt-free I used I used debt on my personal assets which it wasn't they aren't assets they're liabilities right that's what people make the mistake they're liabilities if you're if you're real estate and your properties are not making you money it's a liability you have to be making money on it and so I leveraged my personal real estate which wasn't worth a darn sitting there paid off and I leveraged that to get started in early years I had money tied up in it I had to put big down payments because I had bad credit in order to get my first house and so I took that money back out when my credit was good again and I deployed it I deployed it into into an investment and I took that investment instead of paying my house off I kept revolving that capital so I built the first house I made an $80,000 profit I had saved up a little bit more money in the interim time with my with my construction company and then I took that capital I went and built two houses cash and and then I made about 90,000 on each of those and this all happened in the same calendar year so I lined up building three single family homes in the first year and I made about $260,000 to $270,000 net profit plus we had made money in our in our regular company and then I still had the capital that I had pulled out of my my single family home and the money I had saved and so we had about a half a million dollars in liquid capital and so I took that half a million dollars and I took three homes with it and so and then I just kept evolving and I kept building it and and I did it methodically and I never I never drew on it I just live modestly with the capital that I was living make building my business along with and the capital that I was generating through buying land and building houses I just kept revolving that capital and this grew from half a million dollars to a million dollars to a two million dollars and it continued growing and we kept using that capital to build out subdivisions and we always did it get free I didn't when the recession hit I didn't have any debt on any of our homes I in the banks any money now our cash producing entities like our buildings our offices our apartments those we would never get on and we still do today and it's because those are those have passive income they also have internal rates return there there's different types of capital plus there's tax benefits to me doing it the way I do it and there's a lot to learn it's a loaded question Scott yeah I know I know real estate yes minutes yeah but that that's how we did that's how we did that's how we built a deaf free portfolio when when the recession hit I would take that capital I was doing I'll tell you the best industry in the whole world and real estate is buying land and building houses Scott hands down why why is it supposed to multi like multi-res why because that's if you're the first person I've ever met who doesn't just buy a whole bunch of doors and I that's actually I'm really curious about that why you wanted to building we need well you can go in and buy doors and for the average person there's an art behind buying apartments okay there it's there's an art branded it's not just like hey I'm gonna go look for an apartment complex buy and do it there's a there's a lot of moving pieces to it I know the grant makes everything look really really sexy and really really simple and easy and it's not you know I've been in the business too I own apartment complexes I have an office building it's a it's a 16 million dollar project I'm doing in Phoenix right now taking it we're building out new apartment a new apartment complex 50 units on the back side and we're we're converting to another 52 units on the front side of the office complex into multifamily and then I have a project over into coma that we're working on we're gonna build 120 units of multifamily over there so I know it from the ground up from the dirt all the way to the to the management side of it stabilizing it and owning it as an investor because I've done it and we own it we own stuff like that and so you can go out and you can buy doors and you can raise the capital but there's a lot of moving pieces to that whole deal right like I was sitting with with my business partner Kyle Mitchell yesterday in Phoenix and we sat down and said man the part I hate the most is raising capital you know I hate raising capital and so I try to do as much stuff with a limited amount of partners is is and I like to have a fluent partners and I'm gonna fluent partner right I like if I can't raise the capital I'll just write a check for it not so I told Kyle yes he was hey what's in the background sword on this and then I said you know what I I'm not gonna make a phone call I hate making phone calls if people aren't are too stupid to invest with us then that's their deal I'm not gonna call them anymore if they're that they're that don't need an rent and they don't want to invest with us well then fine let them keep pounding pounding their head against a brick wall if they don't see the opportunity I'll just write a check you know and then I'll just I'll just write a check for the difference and we'll just fund a deal and let's just move forward because I hate it I'm not gonna bait people for money at this point in my life I don't need to and I won't and so if I make an offering out there and I say hey guys I got this bad ass project if you want to work with us this is my offering to you and I'm gonna do it one time and for those and I might send out two or three follow up emails but after that you're not gonna hear from me I'm not gonna call your phone if I do I'm gonna call it once and that's it that's I'm done and and then I'm gonna fund it so to hold to answer your questions Scott the reason I like buying land and building houses is because if I could teach people to do that then I can cut out the bullshit of raising capital with people and begging people for money and I could teach you how to go out and make money and those good partners that I taught how to make money they'll take that money and deploy it into my assets real easy because they advocate for me they like me and they'll and then I can go in with six partners instead of 100 partners and and buy the same exact apartment complex and so the reason I like it is because even when the recession hit back in 2008 the housing market was just in shambles I was able to still go out and make profits it's the only thing that continue making us big profits and our profits were substantially smaller but hundreds of homes I built Scott hundreds of them I've never lost money on even one I've always made a profit on a hundred percent of every single house that I turned dirt on and I took out of the ground and and how do you do that I mean that's a great business no matter what the economy has been I tell people like I have my Seattle project going on right now and we're going to make about $250 to $300,000 per per dwelling out there and so even if the market took a shit Scott even if the market got to its lowest point and let's say it declined by 30 40 percent well if I take a 30 40 percent margin cut on $300,000 I'm still making a couple hundred thousand dollars on my on my on my build right yeah I go to Palm Springs and if I'm going to make $160,000 on that build and even if the market took a dump I can still go out and make $80,000 on that build is still a win and so that's why I love it so much because I there's less variables than fix and flippy I've done fix and flippy and I open up walls and I find problems and then my 30,000 40,000 50,000 dollar margin goes to a $10,000 margin or no margin at all and my risk factor goes up and there's too many variables in that they're unforeseen variables I just don't like that feeling of not knowing so what I like about buying land building houses is I know the process I know what I know how to reverse engineer I know when I buy my land but I'm going to profit at the end and that's why I love it so much I could teach people how to do it and I could take that capital and tell them look all the money you make why pay taxes on it deploy it into a long-term holding depreciate the hell out of that thing and pay zero in taxes now you have an asset and now you have a cash flow from that sucker coming in you pay and you made 100% of your money worked for you in your benefit without having to pay taxes and you're able to go out and have cash flow and that's what it's about is passive income cash flow in a nutshell so you know yeah so yeah that's that's that's that's what I want to pull out I just want to understand the distress brand play because that's what ties talking about on Instagram on social and like you know all these brands that nobody nobody's heard about in 10 years all of a sudden ties buying up these assets talking about radio shack about pure one so what's the what's what's the play bringing all these companies to e-commerce how did that come about what was the what was the rationale the thought process behind that and what's happening with it I just want to take a second and 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alternative terms and conditions do apply I just want to take a second and thank the sponsor of today's episode playbook now what is playbook playbook is an app that gets to know your unique financial situation and helps you get the most out of every dollar you save the best part you don't have to do any crazy budgeting or change a single thing about your lifestyle so if you're just making money but you're not sure what to do with it playbook is the app for you for the average user playbook helps boost their net worth by over 1.3 million dollars playbook tells you which tax advantage to counts that you need how much money to put into each one of them and automates all these investment processes for you it's rarely you find a finance app that thinks about your finances as a whole this includes your taxes your savings and your life goals it was super simple to set up I just set up all my accounts and then I set my preferences as to where I want to put my money and then it's on autopilot so I can be investing in my Roth IRA and my travel fund or my new car fund or my wedding fund or my kids education fund all in one spot and on top of that because it can forecast where I'm going to be in 10 20 30 years I know exactly how much money I'm going to have when I do want to retire or when I'm going to actually hit those milestones in my life financially because I've set up these automatic contributions so if you want to get on the road to financial freedom go to helloplaybook.com slash Scott you can immediately predict when you can finally stop working you don't even have to sign up for the service yet you get a free playbook impact is going to predict your net worth if you follow the guidelines that they set out for you so remember go to helloplaybook.com slash Scott that's your special link for a free assessment and basically roadmap for your future net worth sign up for playbook today so you can enjoy financial freedom and beyond so I can't take any I can I can't take any credit for any of that Scott I just I've just been able to live and witness it okay so before I pat myself on the back I don't want anybody to be giving Jerome all the notapats on the back for any of that I was just wise enough to say you know what holy shit these guys are have something going here and I started fully money out of my pocket investing and buying into them with them and so in giving capital to help buy them so I just saw the opportunity and so the whole thought was I was in Virginia and we were looking at we were looking at a shopping center to buy it was a $450,000 shop a 450,000 square foot shopping center 40 40 acre place and a tie and hard literally climbing up on the roof through the ladders of the entire side of this this mall right it's a it's a mall and and he's taking phone calls in the midst of all this stuff and in the calls that he's taking are from from big bankers you know equity partners with these with these brands and so at the time it was strictly 21 and there was some other ones a dress barn was another one and and so he's negotiating I had the fortune opportunity of driving with him from Staten Virginia over to Richmond Virginia for an hour and a half to the to the airport sitting in the passenger seat with him talking to the to the to the bankers negotiating these deals and Ty just kept saying man drum if I can get these things if I can get these things purchased this is going to be a game changer and so I had the fortune opportunity of actually seeing him in the negotiation states to see all this unfolded and we had a whole different business plan our our business model was not to revolve around these brands and then they just started unfolding so everything that we were doing in real estate kind of took a back seat too long to the brands and so I've understood that I've been very patient with that partnership because I understood what what they were doing so you take somebody from intelligent their online marketing right you take somebody like Dr. Alex Merrick he took Zeus from zero to and sold it for 300 million dollars in a private acquisition and and did it on the New York Stock Exchange and then we then you take some of my Tai Lopez who built one of the strongest personal brands in the in the world was spending more on advertising than Coca Cola right one is good at one point time he was the number one ads on ad spender on Facebook than anybody in the world and so you take somebody who knows online marketing and then you take the biggest American brands and what the place we're behind it we say okay think about how long and how much money it would take for Scott for you and I just to go out and build a personal brand is big and is recognizable as pure one imports or radio shack or any of these large brands right yeah right now they're working on payless shoe source so you know payless shoes that hopefully by the time this comes out hopefully have it under ownership and and so a lot of these big American brands that have been that are not only nation national brands but some of them are international brands like radio shack and so you take this and you think about how long and how much money would take to build it and you take a look at like someone like Kylie Jenner who you have Revlon and some of the largest makeup companies in the world and have been around for 30 plus years and then in one year Kylie supersedes all of their revenue that they've done in 30 in just one year because of online marketing so you think about the strength of e-commerce and online marketing and that's really where these this this play comes into in an interaction you take the reason that they're distressed because of the real estate end of it they have all this brick and mortar that they're servicing debt on and it's pulling their it's pulling them down financially same thing that happened was back in 2008 right and so they have to shake off all this real estate but in the interim time brands are still viable people are still buying hundreds of millions of dollars are still being spent on these brands online and in stores but it's all the debt that they've accumulated that they just can't serve to send more and they just never they they missed the boat on pivoting to go to go online one of the most successful companies that has done this and it made this pivot is Nike shoes you know Nike shoes were struggling financially they lost the Jordan brand and then they pivoted and now they're one of the most successful online shoe brands in the world and they did it successfully but most companies haven't done it successfully you take a you look at old CEOs that are in their fifth they're 40s 50s and 60s these guys don't know anything about e-commerce so to get them to adapt and create an online presence has been a challenge for them they've missed the boat and so tie a number able to come in pick up the pieces and then put phase one on all these brands is to go in and put them 100% online compete up against like Wayfair compete up against Amazon on some of it utilize some of those platforms to also help build our platforms on the brands and then phase two will be maybe kiosks little kiosks centers and some small brick and mortars but phase one is just to take the brands 100% online and and my my partnership it was a ESR was e-commerce sporting real estate so any of the real estate the distribution regional distribution warehouses industrial warehouse based position where we could have distribution of these products from the from e-commerce deliveries in regional areas with distribution could be done a lot easier so that's where that's where that kind of all came into play and that's what we're doing right now would be would be on my very not very smart and and you know what I've actually noticed just one more one more point on this is that tie and yourself you're all leveraging you're all leveraging your your weak spots by in each other right so tie doesn't have the commercial real estate doesn't have the warehousing whatnot you don't have the marketing so just speak to me on the on the importance of I guess like subsidizing your own skill sets yeah you know it's it's super important this is that's what I wasn't doing pre 2016 I sat down with my wife and I said you know if she goes drum you're gonna kill yourself you're gonna have a heart attack you're trying to do everything yourself you know and I had to come to a realization that look I'm only as good as the talents that I really really specialize in you've really got to outsource stuff that you're not that you're not great at and I always try to be great at everything to run all my businesses 100% myself and I did I was really successful we made a ton of money all the way from 2000 up to 2016 but we in part of this movement in 2016 for me to grow and really take my business my brands to the next level I knew that I had a partner with the right people and so in life and business Scott it's super important for you to really focus on what you're on what your superpowers are right what you're really honestly good at and figuring out what you're good at and then allowing good people to surround yourself with good people to have better talents than you do in other areas that you have weaknesses and allow them to run and so my wife complimented me the other day she goes you know because there's always a working progress right there's always you know wife knows more than anybody because we talk every day and she goes you know and I was beating myself up on some stuff going man I need to do this better I need to work on this I got trained these sales guys better this and this and this are weak spots in our company right now and I was just really pounding myself on what where I needed to invest my time to make the company more solid and she goes you know one thing I'm proud of you that you've done well is you were able to take yourself off the reins of the horses and allow your part and you've been able to create great partnerships which was your main goal back in 2016 she goes and I'm proud of you for being able to do that because that was one of the hardest things for me to do Scott was to remove myself and allow people to go in and partner with good people Scott I got some great partners I got Ray Mes in the south in the in the northwest I got Kyle Mitchell I got David Carbohawk I got Tai Lopez and Alex and Alex mirror and we I got a good collaboration of partners now and through that collaboration of partners I got I'm just around just incredibly sharp smart and honest people and people need to realize the importance of partnership I couldn't be doing what I'm doing right now and being as many places in the country with as large a project that we have going on without great partnerships good advice okay let's do let's do some rapid fire career questions to pull out some last insights and then we'll we'll send people we'll send people to go check out more about you we'll get some socials and website why not okay biggest challenge in your career how do you overcome it the mental the mental side of it I stop listening to people yeah how do I overcome it through persistence and ongoing ongoing putting myself around good people for a long period of time that's been my biggest challenge is overcoming the mental side of things from the mindset if you could tell your 20 year old self one thing what would it be not to dwell on not to dwell on things just to continue working and be consistent and stay positive and everything that you're doing and you know I think my 20 year old self I was smart at 20 I got to say I okay we'll go back to 16 when are you when are you dumb well I mean we're always dumb dumb today yeah a few days that are dumb right so but yeah 16 I would have told myself the thing my dad told me I think the one thing that I my dad told me is I was a real edgy kid so I always push the bar ethically everything right I was edgy I was I was I was always trying to push the bar and my dad all sat down and I have come from good family my parents are just good people and my dad told me drone you know we raised you a certain way and I'm telling you that if you never tell a lie you never have to tell a story to back that lie and he goes you know just do things ethically and as long as you do things ethically and you do things right you'll never have to explain yourself to anybody and so I was a 16 year old kid moving into a 20 year old kid going through everything that I went through all the ups and downs trials and tribulations that by far is his help me with everything so I always think I was put myself in this one I'm a bad situation I told myself okay what would my dad do will he approve if he was looking on my shoulder right now would my dad approve of it and and my dad fortunately enough is still with us and I tell him you know and so I run things through him sometimes and I try to get some feedback from so I always tell people you know as a young entrepreneur just do shit right you know we're just trying to take the shortcut there is no shortcut and it just takes a lifetime to build this stuff you know I'm you know I'm in my late 40s now it takes a lifetime to build this good good there's still young relax like all right if you had to choose one person that had a major impact on your life who was it what did they teach you um you know I probably give it to my mom even over my dad because my mom was uh she's a she's a spitfire for sure and they're not entrepreneurs by any stretch imagination my mom started as a bookkeeper and she got into running on profit organizations in her later years and my dad was a 32 year accountant um but my mom was resilient when things were tough in life I got in a bad car accident when I was 18 years old and um and she's always the one that makes the most sense um even to this day um you know when when she was talking you know even like when she's talking about pandemic and vaccinations and she looks like she puts perspective on things and sometimes it's hard for people to put real life perspectives on things is judgmental judgmental and it's critical as my parents have been on me through my professional career um still the fundamentals the basics that she's given me about staying persistent not letting people tell you what to do my mom has advocated for that and she and being able to press through through hard times finding the good when there's bad happening um you know when I got in that car accident she told me Jerome you could see her insult and she doesn't feel sorry for you she doesn't feel sorry for anyone she'll sit back too you could sit here insult Jerome or you can find the good out of it because God puts good and there's good and bad and everything but if there's but if you look and you allow God to unfold the good and you focus on that you'll always push forward and she used to tell me that you want to buy that back car accident and um and I always remember that and I think I have to give that that award to my mom okay for being that person alive a book or podcast you'd recommend people check out a book in general business um one of my favorites is called Rhino Success by Scott Alexander hands that's where all the Rhino stuff on my logos and this stuff from is Rhino Success it's a great book um he he uses the Rhino as an analogy of what the perfect business person is and it's it's just a great book to read it's a short book real short and sweet but it's helped me out a lot in my career I think everybody should read that um and then as far as a podcast God there's there's there's so many good ones I think my favorite is still Joe Rogan just because he's so raw yeah I don't know about the improvement coming out over Joe Joe still has my heart on on those ones but you know Gary Vee his pot all the stuff with Gary Vee is good um for general business stuff he makes a lot of sense I I give him if you go to my YouTube I kind of challenge him on some stuff you're in there about like uh he makes comments about young people trying to become millionaires and that was me and so I always kind of backlash Gary a little bit and say hey man that was me yeah that's what drove me don't take that away from the young entrepreneur's that's my only thing with Gary's at home don't take that drive away from the young entrepreneur because that's what made me me and so y'all said you have to rest your life be patient and you do have to be patient but keep that drive I love that keep that drive um what does success mean to you um success to me is um it's it's an abundance of all areas I um really family success if if if the end of the day start um I I afford my family the ability to do whatever the hell we want and freedom of flexibility the money's one thing but that's not success and that's where most people get confused is that they get tied up when they don't have money they get tied up in money um really success is about family I look at my kids and how fast they've grown up and I look at my wife and all the years that we've been together and I sit back go damn where does time go and um I worry more about time now than I do the money and I sit back and say okay I've got a I've got to focus on on balancing my time with my kids and um really appreciating that time that I have with them and um and so for me Scott real success comes from being healthy enough to be able to spend good quality time with my kids my family and um and if I if I if I raise my kids in right way and they're able to have successful solid lives I I'm successful um if I make a ton of money and I fail my kids and my family I failed I failed in my man I just I I really jack these up and so the way I feel right now is I is less about the money we talk about money in our house but I talked about my kids more about their futures and I my my focus more is about sculpting them and I feel like if I can get them sculpted to where they have a good life then I've succeeded and um and so that's that's success to me I love it um and then most importantly where do people connect with you social website all that I'm easy to find just uh my name's in the bottom of the screen you guys can google me anywhere um on every social media platform it's Jerome Aldenado on Instagram it's Jerome Aldenado and the number one and um you'll see the same photo same same marketing same uh logo goes everywhere um you go to Jerome Aldenado.com you can google Jerome Aldenado and you guys will find me I'm really easy to find if you guys want more inside on on um how we deploy money tax-wise real estate by land build houses deploy that into multi-family and passive income um look us up we we're working with people all the time we have an incredible solid inner circle of people that we work with and in a great successful uh base of uh entrepreneurs and so love to meet a lot of you guys that are watching the podcast and hopefully get off to work with you guys as well perfect all right that's awesome man that Jerome that's that's it that's all I got