August 22, 2023 • 44 mins
Are you ready to stretch your real estate investment boundaries? In our latest episode, we sit down with Romano Muniz, the COO of Blue Modo Media. His fascinating journey from residential to commercial and industrial real estate is full of innovative strategies that will make you question everything you thought you knew about property investment.
Romano regales us with tales of buying properties at an astounding 80% discount in bankruptcy deals, and how he's learned to leverage the time value of money. From low buying to high appraising, we tackle a range of strategies that have helped Romano achieve massive success. He gives us an inside view into his unique methods of investing in real estate, which include unconventional tactics like leveraging cell phone rights and using cost segregation. The world of creative financing is vast and varied, and we discuss options like seller financing, assumable mortgages, and rev share agreements that can open up new opportunities for your real estate ventures.
But successful investing isn't just about the deals and dollars. We get real about the challenging aspects of real estate, emphasizing the importance of being strategic and intentional in all actions. Moreover, we reflect on the importance of building generational wealth and creating a legacy that will outlast us. This episode is an infusion of wisdom and actionable strategies that will inspire you to elevate your real estate game to new heights.
Onward!
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
This is the Legacy Wealth Code podcast helping you build
long-term wealth and a lastinglegacy through real estate
investing, tax strategies andmotivational stories from some
of the most successful andinfluential people out there.
Here are your hosts real estateinvestor and entrepreneur, r.
Michael Notbohm (00:20):
Hey guys, welcome back to another episode
of the Legacy Wealth Codepodcast.
My name is Michael Notbohm,here with my partner in crime,
Andrew Hoek.
H.
Andrew Hoek (00:26):
What's up, guys?
Michael Notbohm (00:27):
So we have a guest today that I think
everyone will get a lot of valueout of.
Romano Muniz is the COO of BlueModo Media.
It's a high volume leadgeneration company doing leads
in mortgages, insurance, legalservices, education $40 million
in top-line revenue in 2022,growing exponentially year over
(00:47):
year.
And, you know, good friend ofmine.
It's funny because he you know,we've had long conversations
about legacy and things relatedto that and his mantra is to
serve those I'll never meet, socreating an impact on those you
know, friends and family, notjust now, but for generations to
come.
So welcome to the podcast.
Appreciate you guys having meAbsolutely.
(01:07):
So let's talk a little bit.
You know, obviously you've gota ridiculous track record of
success partnering with anothergood friend of ours in the Blue
Modo Media.
Now you're taking that moneyand you're reinvesting in real
estate.
So I want to talk today aboutkind of what you're doing, what
you're seeing, because I'vealways, you know, hats off to
you for finding these niches.
(01:29):
I think it's pretty crazy someof the stuff that you're doing,
so excited to share witheveryone today what you're doing
.
So walk us through kind of whatyou're doing right now real
estate wise.
Romano Muniz (01:36):
Yeah.
So with all the growth of BlueModo, what we realized, really
thanks to you, kind of put usonto cost segregation.
We realized either one we'regoing to have to pay taxes one
way or another, or through costsegregation, we can buy more
real estate that's cash flowingand use that depreciation to
minimize our tax income on themarketing side.
And so when we first startedout it was the traditional
(01:57):
residential play Go to Buffalo,New York, buy duplex for 25
grand, put $50,000 into it, getit reappraised at 120, cash out
Re5, 15 grand on it and then youhave two doors cash flowing.
We kept on stacking that up.
Then we started realizing, hey,is this the best use of our
time?
So then we started looking atwhat's the commercial deals look
like.
We went into a commercialmastermind course, learned about
(02:21):
that play, got invested in abankruptcy deal.
It was 10,000.
Let's see, it was 156,000square feet bankruptcy deal.
We ended up getting it for like3.5 and probably valued at 8 to
10 million.
So we got to co-invest in that.
Then we started focusing on thebankruptcy deals.
I initially started pitchingbankruptcy attorneys like
(02:43):
randomly calling them, seeing ifwe can get in with them, buying
them at an 80% discount the onethat was like our home run we
got.
It was six acres, 40,000 squarefeet, I think.
It was 33% occupied and stillcash flow positive.
We bought it for 1.2 and beforewe could do anything to it it
(03:03):
was valued at 5.1.
So no extra money in.
And so I guess I'm bringing upall those scenarios because we
realized like all right, if welook at this data, kind of like
we do with marketing what's thebest use of our time, and we
kind of pulled it down tobankruptcy deals because even in
the height of the market we'regetting 80% off Groundup
construction when you partnerwith a developer.
So instead of buying it at $500a square foot now we're getting
(03:27):
it locked in at 100, 120 squarefoot and do a rev share with
them.
And then the most recent one'sbeen industrial.
Last year we bought 147 and ahalf acre property on the
Houston ship channel and thatside is wild because it's less
about what the existing cashflow is or tenants on site, it's
more about what's the existingreplacement value.
(03:49):
So if they had a railroad trackor a substation or water
permits that you have access tothe value.
On that I think most peopledon't realize how to really
extrapolate it and get themaximum value from it.
Michael Notbohm (04:01):
Yeah, I mean you're talking about stuff that
most people don't even knowabout.
We talk about this a lot withhow crazy real estate's gone
over the last few years.
Replacement cost is still more,I think, at least in most
markets.
I think it's more to rebuildsomething than to buy it, which
is usually not the case.
Romano Muniz (04:20):
And even just being grandfathered in, like if
you wanted those water rights,like that property, we're in for
1.2 million gallons of water aday.
Even if you had the money toget it, there might be a three
to five year process to even getapproved for it.
So the folks that want to buyit look at the time value of
money differently and use this.
Extrapolate all these differentlittle widgets from each
property and you can go commanda wild upside on it.
Andrew Hoek (04:43):
Talk a little about your transition.
It sounds like you startedwhere I think a lot of real
estate investors started.
You said you buying duplexes,small multifamily, making that
leap into commercial.
Talk a little bit about that.
I feel like for some peoplethere's a little bit of a I
(05:03):
don't know if it's a fear factoror like it's just different.
You know, everybody, everybodyseems to have some sense of
residential right Because it's ahousing, it's commodity, and
you're doing it yourself, right,right, um, what was that move
like for you?
Was that, was that scary?
Romano Muniz (05:18):
What have you learned from it?
I kind of see it as like apractice rep.
You go to the basketball game,you get your practice in and
then you're prepared to go tothe actual game.
Even before we got intoresidential like you'll see
corporate housing now, before weever got involved with this, I
pitched somebody here in Tampato borrow their house and
basically did a rev share dealwith them, so literally just
(05:38):
like almost like a corporatelease, took it over, put on
Airbnb and kind of beta testedit that way.
So that's where I got my feetwet and have the money to buy it
.
And then after that I startedrealizing all right, what's the
amount of time put into this,what's the cleaning costs, how
much am I involved in it?
And then realized, man, if wewant to take advantage of these
cost segregation opportunitiesor even cash flowing, we got to
(05:58):
own.
But then even acquiring andbuff flow, it's like you stack a
couple and you realize, man,the maintenance up north, the
wind, you know the winner thateats at your cash flow.
Again go back to the data, likewhat is the best use of our
time?
And so, instead of just goingstraight commercial, it was how
can we get into more doors butalso buy it at a discount.
Hence the bankruptcy forcommercial.
(06:18):
So, and I love the idea ofmargins, because especially now
in this market, if things gosideways and somebody's buying
just to go for, like an Airbnb,those margins are thin, or if
compliance changes, you betterhave another model to figure out
or in this model, if you'realready up 80%, you can call it
a couple of different directionswithout having all that pain
point of this is the only wayit's going to work.
(06:40):
And so that's when we startedrealizing, hey, how do we start
to scale up?
And that's when we startedgoing into commercial and
realizing more doors isdefinitely the answer.
Michael Notbohm (06:51):
Well, you know, being in a marketing space
where you're asking people tospend huge amounts of money.
I remember my first job inyellow pages.
You know I was making 35 granda year, but I'm asking this guy
to spend 4,000 a month on a fullpage ad in the yellow pages.
And one of the guys that Iworked for told me never sell
out of your own pocket.
And I think that that resonatedwith me and I was able to just
(07:14):
go into these sales calls andsay, hey, it's five grand a
month, but this is the valueyou'll get.
And I think you and I are verysimilar in that, because the
fear factor I think, and this isjust.
You're adding more zeros?
Sure, but if you've got theplan built out, you know you've.
You mentioned something that'ssuper important.
It's did I take 500 free throwsbefore I got in the game and
(07:34):
had to shoot a free throw, right?
That goes a long way, causethen it's just muscle memory
yeah.
Romano Muniz (07:38):
And I think people get caught up in like the
information overload.
There's every blog out there,there's every guru out there.
If you are kind of stuck inthat mindset, how do you partner
up with somebody that's alreadydoing it?
How do you almost in turn forsomebody?
How do you work with guys likeyourselves and say I don't have
the money, I don't have the realestate, how do I earn the right
?
Can I take the worst thingsthat you're doing that's taken
away from you, building value?
Just let me earn the right thatway.
(07:59):
Or if I find the deal like I'vewholesaled a couple of deals
too.
So I went from the Airbnb kindof arbitrage play to what midst
of I find this guy a deal, andinstead of doing the traditional
, if I hold the contract, thenyou get the papers and I'm
negotiating on both sides.
I would figure out what thedevelopers wanted, what they
need in their margins and, aslong as we had some sort of
agreement on the front end, justintroduce them direct.
(08:21):
Now you're not doing this wholeback and forth game.
Oh my God, what do I say?
How do I negotiate?
It's cool, we have an agreement.
I need to focus on adding valueto your first.
Here it is.
Michael Notbohm (08:31):
So maybe Romano actually invented the Novation
Agreement sounds like.
You didn't even know you weredoing it and you were doing it.
Romano Muniz (08:37):
I was just trying to figure out a way to get in
the game man.
Yeah, I mean, that's prettycool.
Andrew Hoek (08:42):
You know, what you're talking about reminds me
I'm reading a book right nowcalled 10X is easier than 2X.
You ever read that?
Romano Muniz (08:49):
Oh yeah, I'm listening to it right now too.
Yeah, it's been reallyinteresting to listen to.
Andrew Hoek (08:52):
but everything you're saying reminds me very
much of that kind of mindset.
Definitely yeah, and it's thesame deal with the industrial
space.
Romano Muniz (09:02):
What I realized was like the marketing process.
If it's all just a process anda system and we know how to
execute on it, what's thedifference between another zero?
It's the same process.
If anything, it's easier.
Sure, the higher the money goes.
Or when we bought that propertywe didn't have the money to do
it, so go back to the old schoolmodel.
Or if I don't have it, whatelse is available?
We put in the offer at the sametime.
(09:23):
We started the real estatesyndication, negotiating and
raising money all at the sametime.
But I just found that even inthat process, as long as you can
just dive in, figure it out,you'll ask questions.
You'll ask more effectivequestions.
Somehow it ends up working out.
I think it just pays to be inthe game.
Overall this whole real estatething, or any business in
general, I don't think there'sthis crazy overnight success.
(09:45):
I think it's those who are justconsistently daily chipping
away, constantly doing somethingto chip away at it, ask
questions, get involved, but thedifference is just those small
concerted efforts to get youthere.
Yeah.
Michael Notbohm (09:59):
So walk me through.
Your background wasn't realestate.
And yet, just even the lastcouple of years, since we've
gotten to know each other,you're partnering with people
who are doing this at aridiculously high level.
At a ridiculously high level,getting involved in masterminds,
which Andrew and I are hugeadvocates of, always trying to
better ourselves.
Like can I be in a room whereeveryone is smarter than me?
(10:21):
That's the room you want to bein.
If you're smarter than everyone.
You're not.
You know learning.
You know you might be the onethat everyone's trying to get
value from Right, which there'sa place for that.
You know we're open to sharinghow we've done stuff, but how do
you?
You know, what do you attribute?
Being able to be in the sameroom as these people and and not
just being in the same room buttaken seriously where they're
(10:41):
asking you to be part of thesedeals.
Romano Muniz (10:44):
I think a lot of it is the scarcity mentality.
Is I know something, let mehold it.
What got me into the bankruptcyspace was when we're in the
mastermind group.
I looked at everything like aparabola One week they had funds
to do it, the next week theydidn't.
But when they always said yeswas to bankruptcy deals because
the margin was there and so Ijust took that on.
You know, by the horns calledthe bankruptcy attorneys.
(11:07):
Once I figured out the play andI was one of the only non
bankruptcy attorneys on the barassociation, I literally gave
them the play by play.
So I share that to say, bygiving the play by play,
focusing on there's more thanabundance, no matter what you
think, you know, just put it allout there.
That helped me earn the rightto go speak on stage at a
conference in California whichhelped me meet the broker in the
(11:28):
industrial space which turnedinto what we're doing now.
So I think a lot of people arejust trying to hoard information
or let me go meet with Mike andget something for me.
I'm like, give it all away andsomehow it just compounds away
faster.
Andrew Hoek (11:40):
Yeah, those doors that you open like that are
incredible.
Explain the bankruptcy piece tome a little bit, because I feel
like I mean, I probably have alittle better understanding of
bankruptcy than most people withthe legal background, but it's
still such a foreign concept.
So are you actually buyingthose from the trustee or how
does that work?
Romano Muniz (11:59):
Yeah.
So back to the modelingstandpoint.
What I realized throughbankruptcy was, if you're my
attorney and I'm the client andalso I need some sort of funding
, a lot of these bankruptcyattorneys have a hard money
lending company on the side andso what they'll do is they'll
transition over and say, hey,I'll lend you the money In court
.
That's a huge conflict ofinterest.
So they'll bring in a thirdparty conflicts attorney.
(12:21):
They verify hey, do youunderstand that your attorney is
lending you the money?
That's all kosher.
So I thought, man, if we removedhard money lending and put in
real estate, is the same processapplicable?
The bankruptcy attorneys likehaving the paperwork trail with
the hard money side because theycan do it easily, but from real
estate they can't operate it.
So if you can bring in thevalue of how do I operate it?
(12:43):
Now, if you had third partyconflict attorney, could they
co-invest with you and it'dstill be kosher.
Could they give you the lead?
Now you're not doing the runinto the bankruptcy court or the
courts downtown to get aforeclosure list, competing with
everybody else.
My whole thought process on allthis is what everybody else is
doing.
Do the opposite, and it takes acouple more steps.
(13:04):
But man, those opportunitiesare like when I showed earlier
buy for 1.2, appraise at 5.1,there's no cap X, there's
nothing, so you have instantvalue kind of broken into it.
Sure yeah.
Michael Notbohm (13:16):
When there's also a lot of times on those
commercial deals there's thingsthat most don't even realize,
Like you buy a building and thenyou have the cell phone rights
on the roof.
Romano Muniz (13:27):
You know like what is that worth?
Michael Notbohm (13:29):
Yeah, I think you were in a deal with.
Romano Muniz (13:30):
Yeah, it wasn't the deal that we were in, but
essentially through the processthey were able to broker off the
cell phone rights or the towerfor like 800 grand.
So it's like if the buildingwas 3 million you can
automatically recapture some ofthe value.
Kind of like with theindustrial space you can go find
scrap metal that's on the site.
There's another one that we'reworking on now that we have an
appraisal for 20 million just onthe existing metal and copper
(13:54):
that's there.
So whatever the total value is,it's like.
I almost see it as like how doyou extract coupons out of these
sites that most people don'tsee?
And that's just the traditionalROI play.
That doesn't include.
How do we do cost segregationso people can look at the ROI or
the coupons that they'regetting on the discount, but now
what happens when you actuallyapply it to your taxes too?
Michael Notbohm (14:15):
Well, I like to take full responsibility for
your knowledge on cost seg.
Yeah, I appreciate that, but sowalk us through how that's
changed your investment strategyas a whole, because you started
with something I mean even juston the single family homes.
People don't realize you can docost seg on that, but now
you're doing it on huge scaleand what is?
That enabling you to do thatyou would normally not even
(14:37):
remotely be able to think about.
Romano Muniz (14:38):
I think with the economy the way it is today,
repurposing things that peopleare freaking out and getting out
on, meaning they might not beable to hold the debt service or
maybe their mortgage haschanged on it.
Can we buy in an unconventionalway, can we go through seller
financing, can we find dealsthrough assumable mortgages or,
subject to where everybody elseis like they're freaking out, we
(15:00):
can go get a discount.
I really think having some sortof criteria has been the key
for us to scale and grow fast.
Hence the bankruptcy.
Top of the market, low market,getting 80% off ground up
construction will make money taxfree through the deal, before
we ever put a tenant in there.
And on those traditional houses, I look at it as can you
monetize at least three ways?
(15:20):
So there's the traditionalAirbnb play.
Traveling nurses was huge for usduring COVID, but more recently
I found out about travelingphysicians and this one's like,
I think, the honeypot.
Essentially, you can do dealswith agencies or health agencies
.
You can do deals with agenciesor hospitals.
They will pay you on an annualbasis the same rates as Airbnb,
(15:41):
whether they live there or not.
So now you can go get hyperfocused on how do I do ground up
construction, partnering withthe developer, make money tax
free before you even put atenant in.
But now you're getting paid ahigh premium on an annual basis.
You don't have the cleaningfees, you don't have the
turnover, you don't have toworry about the algorithm on
Airbnb, you just have stabilizedcash flow.
Andrew Hoek (16:04):
Where are you doing those deals?
Here Tampa, yeah.
Romano Muniz (16:07):
We're building a four townhouse, four bedroom,
three bath, in West shoray rightnow and that might be a year to
14 months out.
And then we've got two onMadeira Beach right now that are
five bedroom, four bath, threecar garage.
And even with that, like I lookat, can we take everything and
do it at least three differentways.
Have Airbnb or compliancechanges.
(16:29):
What's the model?
Can you run it out per room?
Maybe it's not traveling nurses, maybe COVID isn't such a big
deal.
What are the other demands?
Traveling pilots, travelingexecutives, recruiting firms
love that to be able to host too.
So just a bunch of differentways you can kind of repurpose
it.
Andrew Hoek (16:44):
You talked about partnering with a developer and
I think you said doing it in theform of a rev share.
Talk a little bit about that.
What does that look like?
Romano Muniz (16:53):
This is not a plug for Mike, but thanks to Mike.
I have a fraternity brother ofmine from University of Florida
who has a substantial amount ofproperties and he'd never heard
of cost like before.
So I kind of challenged himrespectfully and said hey, man,
you're buying at this rate,you're selling at a premium.
But in many ways you're kind ofon a glorified hamster wheel.
(17:15):
You're constantly sellingwhat's the tax look like?
What if you held onto thoseproperties?
And then I essentially just putthe math side by side.
I'm like here's what you boughtit for, here's what you're
selling it for.
If we partnered on it, here'swhat it would look like.
We would get access to yourfunding because you have a track
record of building out.
Get a discount, but here's howit looks like to monetize it.
(17:36):
And forget just the cash flow.
But if you look at the cost segside now, what do the numbers
look like?
Cool, do this for two, three,four, five years.
Let's compare apples to apples.
Which one's gonna give youpassive income to actually
escape doing this?
Hey, if the market crashes,what's your options?
We give him the whole cost segplaybook and the next thing, you
know he's like I'm in Whateveryou guys wanna do.
Michael Notbohm (17:57):
I mean, we tell people this all the time the
rich don't get rich by sellingstuff.
They keep it you know, that'sthe bottom line.
Romano Muniz (18:05):
And we've never sold the property yet.
The property we have in theindustrial space will be the
first property we've ever sold,because the whole cost seg side.
Michael Notbohm (18:13):
Then now it's a matter of what do you do next,
cause now, like it or not,there's gonna be a tax burden on
that one.
Yeah, that's what you tend todo when it.
Andrew Hoek (18:20):
Go back to the question I asked you a minute
ago because I wanna understand alittle bit.
So you're talking about and Iwanna make sure I understand
what you're saying when you'repartnering with a developer on
the rev share, they're actuallydoing the build out, right?
Romano Muniz (18:32):
Correct.
Okay, so you'd be responsiblefor the actual land acquisition
and financing.
Okay, so that's what we did.
Michael Notbohm (18:40):
So they're just doing like a straight cost.
Andrew Hoek (18:42):
So they're building at cost for you.
Romano Muniz (18:44):
Correct this one was a little unique cause he
owned the property already.
Okay, once we explained thecost seg, we said what if we
bought your partner out Cause hewanted to stay in?
His partner didn't.
But now that acquisition withthe house and the land, we can
use as the down payment for theconstruction loan.
And if we try to get thatconstruction loan on our own,
they'd be like you're marketingguys, but because he has the
(19:04):
track record in relationship,his rates, his relationship with
the bank just made it movesmoothly.
Andrew Hoek (19:09):
Yeah, and then you're working out some
percentage, obviously with him.
Romano Muniz (19:15):
Right.
Andrew Hoek (19:16):
And that's on the longterm play, correct?
Romano Muniz (19:17):
Yeah, yeah, very good.
So you'd have that percentageof ownership in the house, that
percentage of ownership in thecost seg and that percentage of
ownership on the cash flowmoving forward.
Andrew Hoek (19:27):
Okay, you brought up financing there and I'm
curious to talk about that alittle bit too.
So where are you seeing successwith lenders?
Is that localized?
Is that national lenders?
Is a private money?
What does that look like foryou?
Romano Muniz (19:44):
So in the beginning it was all of our own
money.
Okay, so we'd buy things cashoutright, like the houses in
Buffalo that were like 25,000.
Mm-hmm.
And then we do a refund.
The back end, as we grew out ofit and started going for bigger
properties Bankruptcy deals youhave to buy 100% cash, that's.
There's no option on thelending side.
However, on the industrial side, saw the process, saw the
(20:05):
opportunity, realized you knowwe don't have eight figures
sitting around.
So two things One, we startedreal estate syndication and
raised capital through friends,family, business partners.
And then on the back end, werealized the sellers needed to
hold the note.
So we did seller financing withthem.
So, instead of the traditionalplay, it was way easier and way
less paperwork.
It was a win for them, so theydidn't get taxed on short-term
(20:27):
gains.
Sure, it was a win for us too,because we can kind of secure
the deal without having to gothrough all the back end
treasures of traditional banks.
Andrew Hoek (20:34):
Yeah, okay, so you brought up syndication.
Let's talk a little bit aboutthat and your segue into how
you've gotten involved with that.
What's it look like?
Who are you going to?
Obviously, you're bringing insome counsel, I'm assuming, with
that.
Romano Muniz (20:49):
Absolutely so.
As we're going through theprocess of a traditional primary
house, short-term rental,commercial bankruptcy, I
realized, if the process is thesame and we didn't have access
to capital because we were justtapped out internally, I studied
, studying who are the big dogsout there, all the big names
that you see online.
How are they actually gettingit done?
And the more I saw their buyingpower, I realized it's all a
(21:11):
leverage play.
If we've already kind ofleveraged what we had internally
, I realized they were doing itthrough syndications or some
sort of crowdfunding.
And through that process I wasjust trying to figure out like
well, what the hell does thatactually look like?
How does it work?
I interviewed a gentleman herelocally that was involved in
either 15 or 18 differentsyndications and I just drilled
them on questions.
(21:31):
When you got into thesyndication, what do you love
about it?
How come you passed up on otherones?
What were the kind of criteriathat made sense for you?
And as you broke it down, Irealized the more you had to
evaluate, the more likelysophisticated investors gonna
kind of compare it to everythingelse.
So when we started it, weprobably had a 30 day run to go
(21:54):
raise the money.
I thought, man, if we couldagain go back to what everybody
else is doing, do the opposite,how do you get rid of all the
fees?
How do you get rid of the legalstuff, All those charges that
end up taking out 15 to 18%?
Can you do the rev share dealin their favor?
And just simple answers to getyes.
And so that's essentially whatwe did, and I also combed it,
(22:14):
went by him first and said, hey,have you ever compared this to
the other 18?
What does that look like?
Obviously we've got legalcounsel.
I think we interviewed 15different SEC firms across the
country, went with the one thatwe thought made the most sense
and they've been wonderful.
But that was a learning curvein itself, Because you got an
offer on the table trying tofigure out how to build the
syndication.
You got SEC.
(22:34):
We're doing it in the US and inCanada.
So it's a whole differentplaying field too, Because
there's no room for errors.
That paperwork is serious and,you know, got me a little
nervous going through thatprocess in the beginning.
Andrew Hoek (22:47):
Yeah, that's a steep learning curve.
For sure, those SEC peopledon't play.
Michael Notbohm (22:51):
No, that's right, be on an episode of
locked up abroad or somethingRamona crossed the border after
having the wrong paperwork for asyndication Even at the time of
figuring out like all right,what is this subscription up?
Romano Muniz (23:02):
What's an OM?
What's the Know your Client?
All right, how does the wireswork?
I mean, you're drinking out ofa fire hose faster in that time,
sure, but ultimately it's thesame idea of if you're doing it
with a you know residentialproperty and you're raising
money for down payment.
It's the same process, as justmost people won't take the time
to figure that out.
Andrew Hoek (23:19):
Your, your BK deals are you?
Are you syndicating those aswell?
Romano Muniz (23:24):
Now, those, those we did internally.
Okay, it's funny because in theonline space we generate
bankruptcy leads and I've beentelling all the guys in our
space like you can keep sendingout bankruptcy leads and get
them, or you can cherry pickthem and use them for yourself
plus the, you know, costsegregation side and just kind
of waking guys up to realize,man, there's far more value than
a quick arbitrage plan to lead.
(23:44):
Yeah.
Michael Notbohm (23:46):
Have you done any wholesaling on like these
bigger commercial deals?
Romano Muniz (23:50):
Residential, yes, commercial now.
Michael Notbohm (23:52):
Because that's I mean we keep hearing.
I mean you've got a client thatyou've worked with.
Andrew Hoek (23:57):
It was just ridiculous, yeah, I had a client
that he was buying a.
It was a large strip mall withlike a Lowe's or Home Depot I
mean it is the anchor and someother smaller stuff and he was.
He bought it for like 13million and there was a
wholesaler in the middle thathad had under contract for like
11 million, so they made a $2million spread on on that deal,
(24:21):
yeah Some paperwork Right.
Romano Muniz (24:23):
I know a guy, you know a guy.
Andrew Hoek (24:24):
Yeah exactly.
Michael Notbohm (24:24):
You want this piece of paper, but I am hearing
more and more about that.
Andrew Hoek (24:27):
I was saying we were having a conversation.
I'm sure the one of theattorneys that works with me
kind of on a contract basis he'she's gotten involved with some
group and they're they've got acouple of properties under
contract right here on Kennedythat they're doing that style
with oh nice.
And and he kind of brought thesame thing up as he was like you
know, he's newer to it than thegroup that's running behind it,
(24:49):
but your conversation about outof zero to the back is exactly
what he said too.
He was like you guys arewholesaling these things, let's
look at how we add a zero to it,and that's kind of how they're
getting down on this path.
Romano Muniz (24:58):
Yeah, it's funny because I go back to the
criteria.
The very first property Iwholesaled to a developer, I
remember looking at the housethinking, god, good thing we got
this deal done, because I don'thave the vision for what this
guy's going to do with it.
Yeah, well, fast forward.
When he was done renovating it,we went to the housewarming
party and I happened to look athim like holy cow, there's a
(25:19):
four, two downstairs.
There's a private entrance totwo, one upstairs.
So we ended up working in thedeal where I ended up buying it
back from him.
He treated me like the realtor,took that off of it and this
was March 2020, right when COVIDhappened.
Okay, so before we ever movedin, I had a tenant upstairs
running it out and ever sincewe've lived there, we've never
paid a mortgage on it and tothis day, even when we moved to
(25:40):
St Pete, I still have it runningout upstairs and downstairs.
Andrew Hoek (25:43):
Nice, yeah, it is funny when you say that about
the people who have some ofthese visions that I certainly
don't have.
But you turn around and youlook at some of these things and
you're like man and I actuallyI don't mind the.
Michael Notbohm (25:54):
I actually like the design part of these flips,
but I feel like the naggingwife and he's like the husband
when we go to Florida core,because I'm like what do you
think about this?
Tali's like dude, I reallydon't care.
Romano Muniz (26:04):
Yeah, it's a cash flow yeah.
(26:05):
Like can you just buy it already?
Michael Notbohm (26:07):
I'm like well, we got to compare it to a couple
others.
Romano Muniz (26:09):
I'm like man, I sound ridiculous.
That is not my sweet spot.
I can figure out the resourcesand bring things together, but
when it comes to that side, thatis definitely not my gift set.
Michael Notbohm (26:17):
I think it's just fun because I like what you
just said.
Like you get to the end andyou're like where we started,
where it is now.
It's like this is really cool,it's awesome.
Now I do wish I don't want tobe the guy in the trenches like
doing the tile.
I kind of wish I knew how to doa little bit more of that,
because it's like you see atransformation like this and
you're like I actually didn'tlike screw in one single screw
(26:40):
in this house.
Andrew always hit our key tosuccess, and I don't know if we
should share this on the podcastor not, because everyone's
going to use it.
Andrew Hoek (26:49):
That's right.
Michael Notbohm (26:50):
Well, you just said gift, yeah, gift, but right
before we have an open house hegoes over with a Swiffer and
does like one thorough moppingof the floor under contract the
next day.
We're like six for six on this?
Romano Muniz (27:04):
Yeah, it's all perception.
Yeah, we had one that was onthe market for like two weeks.
Michael Notbohm (27:08):
He's like dude.
I probably need to go over andmop.
Andrew Hoek (27:10):
I was like, yeah, I think so.
It's a little mental therapy.
Romano Muniz (27:13):
You know you get to zone out for a bit and sweep
and Swiffer and if it's aplacebo effect, so be it.
It's closing, it's closing.
Michael Notbohm (27:20):
Yeah, listen, I don't know the science behind
it.
I just know it works.
Romano Muniz (27:23):
That's awesome yeah.
Michael Notbohm (27:25):
So what do you say to people that want to be
ambitious like you?
I mean, you're doing a lot ofthings at a very high level and
you know.
Just even talking through theindustrial deal, you're like I
had to get the SEC guy.
How do you know even where tostart?
What do you attribute that to?
Romano Muniz (27:41):
Man, if I was starting all over again, I would
either team up with somebodythat's doing it because I think
you can learn a lot faster byworking with somebody that's
already in the real estate space.
Wholesalers, like just finding,like, instead of trying to
figure out the whole process,just find one area that you can
add value.
Like the developers I initiallymet with, I realized, man,
they're really good atdeveloping.
(28:01):
The biggest takeaway for themthat's sucking at their time is
going to find the properties.
I'm like, man, if I could justtake care of this one piece.
Then I started realizing, man,all these guys that are
wholesaling, they're in thisweird negotiation phase.
They don't like to negotiate sothey give up on it.
Where I'm like, if we couldstreamline that and not
negotiate and just do apre-degreed terms, hey, I know
(28:22):
what your margins look like.
You've kind of educated me onit.
Now you can just introduce themdirect.
In the beginning, I mean, I wasjust driving through
neighborhoods.
It's not like I perfected.
Going on MLS, I just thought,hey, here's Honeypockets in
Tampa, what's got the biggestproperty line, what I think has
the most upside value withgrowth.
And then Dumblock found thisproperty that nobody had picked
up for like four to six months,which seems rare nowadays, right
(28:45):
here I was thinking.
Michael Notbohm (28:47):
Luck, though, is really like hard work meets
opportunity.
It's not really Dumblock if youbreak it down Like the effort
that you put in.
I know we've talked about this,but have you ever read Mamba
mentality?
Romano Muniz (28:58):
No, I haven't Not yet so you got to read it.
Michael Notbohm (29:01):
It's Kobe Bryant's book and really goes
through his life.
You got a guy who'sridiculously talented and yet
his logic and his mentality wasI'm good, but in order to be the
best, I have to not just relyon my talent.
I have to work harder, twice ashard, three times as hard as
anyone else.
So he would wake up and hewould have two workouts before
(29:23):
his kids would go to school.
He'd get his kids to school,then he would go to the normal
practice and he's like so over.
Extrapolate that out for fiveor six years, he's getting 10
times more than everyone else iswilling to put in.
Romano Muniz (29:39):
And I think that.
Michael Notbohm (29:40):
That's really always stuck with me.
Like you know, the best guys inthe world Michael Jordan, tiger
Woods, kobe Bryant they'reshooting 5,000 shots.
Before they leave, you knoweveryone else might already be
home.
They're taking those extra freethrows, they're doing the extra
drills, and so you can't relyon just talent.
You can't rely on oh, I learnedthis from a mastermind and I'm
(30:03):
just going to walk into thesecrazy opportunities you got to
be willing to work.
It sounds like that's whatyou're doing.
Romano Muniz (30:09):
I think the other thing too is if somebody didn't
know and they're intimidated byit.
Sometimes you hear the idea ofoh, gotta go to a mastermind, I
have to spend money or I have toget tied up with a Michael or
Andrew.
You know that talk about you'rethe average of the top five
people you spend the most timewith.
I think the other alternativeto that is you are the average
of the top five people youlisten to.
So if you're driving to workevery day or driving to drop
(30:30):
your kids off, even if it's 10to 15 minutes, if you had that
almost as like on autopilot tolisten to some audible
constantly conditioning and fillyour mind on how to do it.
Or when I found that propertyto wholesale, I was scheduling
calls to do kind of basicallybeating sales calls, but while I
was on them I was hitting thestreets.
So I think, being efficientwith how you like really do an
(30:51):
audit of your own time and likehow you can fit it in, because
we all have the same amount oftime every day.
It's just are you howintentional are you about really
making it happen, or is thisjust a dream that you're Looking
at for it from othersperspective and see what they're
doing, or you know?
Do you actually want toschedule and get it done?
Michael Notbohm (31:07):
Yeah, do you want to just compare it, because
you think that's like what thedream should be?
Romano Muniz (31:12):
right and a lot of people love to sit in that I
wish or so-and-so is doing thisand that, and it's like it's
just constantly a comparisongame as opposed to like what are
you actually gonna do about it.
And the longer you spendlooking at everybody else's time
spent making it happen, it'sjust that much less time that
you have to actually enjoy itfor yourself.
Andrew Hoek (31:31):
Or we were talking about something the other day
and I said this is the theunglamorous side of real estate.
Yeah which has felt like a lotlately Dealing with the city.
Yeah, I mean there's, there's acontractor.
It's not what you see, when yousee the, the perception of,
like you know all these realestate moguls or whatever, you
never see the hardships.
(31:52):
But man like that, when you'redigging the trenches to do it,
it's dirty.
Michael Notbohm (31:57):
Well, we just finished a house like a week ago
and this is the one we've beenbattling with the city on, but I
remember I think you called mewe had negotiated with the
tenant who was on a month tomonth but didn't want to leave.
We're like do we really need togo through this whole eviction
process?
So they didn't have enoughmoney to get their next place,
so we gave them a thousand bucksto leave.
(32:19):
And he went to the house andthey had taken all of the window
units out and then Took a dumpon the top stair and I'm like
this is so ridiculous.
Romano Muniz (32:30):
Thanks for the money.
Yeah, I love to party.
Thanks for helping us.
(32:34):
Here you go.
Michael Notbohm (32:35):
And I always laugh because that's like when
we talk about the non-glamorousside.
Romano Muniz (32:39):
It's so true, man, you know, tyler, and I use this
all the time as kind of a Justa phrase that we sit on.
In the end They'll say it'seasy because from the outside
and you know, looking backwards,man, this looks it's been
awesome.
Right, we've been doing a lotfast, it's been scaled, but,
like even when we were doing thesyndication, we had to go raise
roughly ten million dollars in30 days.
What people don't know is theydidn't see my spreadsheet of 254
(33:03):
names.
They didn't see it broken downby EST, cst, mountain time, pst.
They didn't see when I wasflying back and forth to Texas,
got my car locked in Orlandotake an Uber to get it realize
my car is locked there.
I'm like all right, well, I'mstuck at the airport for three
hours and it's 10 o'clock atnight here.
Who's available on PST?
So I'm like just being thatwildly dialed in.
(33:25):
I think there was a Seven daytime period where I did, or
eight day time period where Idid three over nights to just
make sure we raised it and gotthe deal done.
I used to tell my I mean, likepsycho, I would stare at the
mirror and say, hey, if youdon't get this done.
Do you feel like you could everearn the right to be in this
space?
Hey, could you let yourpartners down on this?
I just had to like gamified abit, but that's the
(33:46):
non-glamorous side, that's theyeah mama, mentality side that
nobody really sees, and thenthey just see it as kind of done
.
That's the real, though, right.
Michael Notbohm (33:53):
That's the real well, real estate is is easy,
it's simple, it's not easy.
Yeah you know, I think thatthat's definitely something.
It's not like you have toreinvent the wheel.
There's so many different waysyou can make money, but one it's
being intentional aboutfiguring out what am I gonna do
to make money and then takingaction on it.
I don't have to reinvent thewheel, like we don't have to
(34:13):
come up with the next Twitter orInstagram or Tik Tok, I mean
yeah literally, you can justcopy what what people are doing
at a very high level and to yourpoint earlier, there's always
enough Available.
Romano Muniz (34:25):
You know, and even now, like when I look at some
of these opportunities, I don'tthink there's any shortage on
the industrial side of anything.
I've realized.
How can I be more intentionalabout solving Bigger problems?
How can I solve people's taxproblems?
You know that whole conferencewe did recently with what we
brought, time will write our asman.
If we can just solve people'stax problems, then you can earn
(34:45):
the right to having access todifferent capital, as opposed to
being like here's my fancy deck, here's my ROI, here's my
unconventional way.
I feel like if you solve theirpain points first, it opens up a
completely different door togetting access to money.
Andrew Hoek (34:58):
It's a really good point.
Never thought about it that way, but I mean, if it's like we're
, we're showing you easy accessto additional capital now
Invested with us.
Yeah, yeah that's really smart.
So I'm curious, and now thatyou're doing more and more real
estate, how are you dividingyour time between that and the
motto?
Romano Muniz (35:16):
I mean it's, it takes a bit of effort.
I think one of the things we'vereally been looking at is, if
we look at every part of thisdeal of how do you source it,
what's the financing look like,what's the operational side?
We're looking at kind ofbuilding it out to have the ops
side done, where I can have moreFaceTime on opportunities,
mm-hmm, and then making surethat we're partnering.
So it's almost like the ideaearlier hey, are we giving more
(35:38):
value away?
The best way that we can getour time back is how do we
partner with all the experts whoare the guys that are building
in the industrial space?
How can we give away points toyou know developers?
Because then it's way easier toactually get it done and it
frees up our ability to just gofocus on scale.
Michael Notbohm (35:54):
Yeah so the syndication space is one of
those where it's like you know,what can I accomplish with a lot
of people being involved,versus if I'm just gonna be
greedy and I want this wholedeal myself.
Right, you're gonna grow somuch slower unless you just
somehow stumble upon a home runand you've just got a ton of
equity.
That happens overnight, whichyou know it's not like it never
(36:16):
happens, but it's very rarewhere a syndication is pretty.
I mean, it's a tried and truemodel.
Right, you can.
You can rinse and repeat it.
Romano Muniz (36:24):
Just bring value to those people that are
investing with you and you'llhave people for life and we've
been spending more time withfolks in the family office space
too, to really understand whatthey invest in, how they invest,
or Go back to the whole taxplay.
Who has real big tax problems?
Can we show them, like even theguy that work, when now he may
have had nearly a hundredproperties but he'd never heard
(36:45):
of cost segregation before.
So it's like if you can justadd value, educating them in
that way, you might not needthis indication.
We have one group now that'slooking at putting in Multiple,
multiple, eight figures, but thereason why they're willing to
do is because the property hasan opportunity zone.
They just had a big exit, so ifthey can hold the deed of trust
and minimize 20% of their capgains, that's a huge winner for
(37:07):
them.
I mean it's a eight to tenmillion dollar savings for them.
Michael Notbohm (37:11):
And defer it for what?
Two, two and a half years yeah.
So yeah, so what do you see, aswe're?
You know we talk a lot about.
You try to bring value fromalways positive, but reality is
there's also you got to protectyourself from what could
possibly have happened on thenegative side.
So what is you know what's kindof your overall global forecast
(37:32):
for real estate in the next 12to 24 months?
Romano Muniz (37:37):
Try to acquire as much as possible and hold all of
it.
I think people that are gonnado a wholesale it feels good and
see easy entry.
But man, I would try to holdeverything because I look at the
market as a whole of it'salmost vaporized.
Folks that got in a coupleyears ago that are sitting at
two, three percent don't want tomove.
Folks that want to get in arestuck because they can't find as
many properties.
Then there's this in between ofbig groups, like a black rock
(37:59):
that bought a bunch of rentals.
You have Airbnb taking a bigpart of the market.
So I Think it for folks to likereally start to scale this out
and be successful, I think theyhave to get creative on seller
financing options the assumablemortgages that you can basically
take over Somebody's propertythat got locked in at a two or
three percent, get some sort ofbridge loan to finance it.
(38:20):
Or this is not an area I'vespent much time in, but the idea
of the subject to properties.
I don't know if that'ssomething that you guys have
focused on or done, but it's anarea that we're looking into now
too.
Andrew Hoek (38:32):
Yeah, I'm seeing more and more of it on the legal
side for sure, but I I stillit's.
It strikes me and we haven'tdone any that on the investment
side, but it strikes me kind ofas a Um, it's not well
understood outside of smallcircles, which I think is an
opportunity right, Totally.
Romano Muniz (38:52):
It's just a matter of explaining it correctly, and
so are the people who are doingit, the guys that have done it,
really well is, instead ofbeing like we're taking over
your loan and that's just it,They've used the phrase um,
credit restabilization, sothey'll end up putting it in a
trust they, instead of beinglike, oh, we're taking over your
property, they'll pitch it asmore of a scarcity play hey, if
(39:15):
you qualify, we'll see if we cango.
You go through our creditrestabilization process and see
if you qualify to be, you know,subject to people want what they
can't have.
So it's been an easier way forthem to kind of make the
transition, as opposed to we'retaking over your existing loan
and you know what's the what'sthe end for you.
Andrew Hoek (39:32):
Are in those scenarios.
Are they running back to thesepeople?
Romano Muniz (39:36):
No, no, they're.
They're basically taking overtheir existing property now.
So a good example I've heard ofrecently was let's say,
somebody moved here fromCalifornia last year.
They got the house.
Turns out they have to go back.
Maybe or maybe doesn't makesense for them to sell it
because there's not enoughequity or you know the cost of
transaction with real estateside.
Maybe they don't want to loseyou know the 6% so there might
(39:58):
be opportunities where they'lltake over the existing property.
A new buyer would take over theexisting property without them
being down on it overall and youcan do some sort of creative
financing and maybe you sweetenthe deal, give them a thousand
bucks.
Maybe you leave some poop on theproperty, like those guys
upstairs.
Michael Notbohm (40:15):
Yeah Well, let's kind of wrap up with this,
because one of the things thatwe always like to talk about and
I know this, this is somethingthat means a lot to you but just
kind of how all this stuffreally ultimately is about
legacy, about building wealth.
You know, doing these things,that that you know the glamorous
and the not so glamorous day today in order to build this
generational wealth.
So what do you envision yourlegacy being?
Romano Muniz (40:37):
So the background that most people don't know
about me is I never wanted to goto college.
I was going to be a full-timemissionary.
I went to Ghana, africa, haitior sorry, mexico.
I used to live in the innercity of Tampa working for the
dream center, and so I had ahigh school teacher that
basically said hey, go get youreducation, understand, you can
make an impact later on.
Fast forward to today.
(40:58):
I always think about what thatlegacy looks like from a family
standpoint.
But you know we're doing thosetype of projects are going
overseas.
I realized it was some sort ofrally of raising money do a good
cause.
It may stay around, may not.
So my focus now with realestate business you name it is
how can I inquire?
Require properties that arecash flow positive, that can go
(41:21):
support organizations like that,so it's actually a sustainable
asset to support it rather thanhere's a one-time donation, good
luck.
And so you know I've beenlooking at a lot of
opportunities on how can Iessentially be the Robin Hood,
if you will, to support thoseinitiatives where it's not just
a one-time donation or thatorganization goes away?
Do I have an asset that canspit out and redeploy to
(41:41):
somebody else so they can faroutlive what I'm doing, or my
family, you know.
Push it through trust andthere's actually a substantial
legacy value to it that'ssustainable.
Rather than you know, we didgood and we got a tax right off
of the end of the year.
Michael Notbohm (41:56):
That's powerful .
Romano Muniz (41:58):
And that's the whole where I get the phrase to
serve those who will never meet,because I realize there's folks
that are in the field that aremaking a wild impact that we'll
never see.
And if I'm not the guy for thatto be, that if I can just be
the catalyst through capitalismthat's sustainable, it's a
win-win for all.
Michael Notbohm (42:16):
Yeah, give them the resources they need.
Yeah, well, how does thatrelate?
Then, taking it a step further,because now you're a dad, so
what does that mean for yourkids?
Romano Muniz (42:28):
Man.
It's an interesting dynamic oftrying to manage, like how do
you don't really come fromanything to give them the
opportunities that you want butalso keep it in check?
I'm teaching my kids now allabout finances.
Even when we drive down thestreet I'll look at apartment
buildings.
I did this with them when theywere like three years old.
I'd say, hey, is that a houseor apartment?
(42:48):
And they go an apartment.
I said, do we rent or do we own?
They go, we own.
I said, why do we do it?
And they always were a buttleback.
Even to this day, they go forthe cash flow, baby.
And I love it because it's likeman, if I could just show it
through simple application butthey remember it and then kind
of earn the right to share itthat way.
But also teach them like, hey,we got to be in a position of
(43:08):
ownership, go serve and gotravel these places so they
still have that level ofhumility.
But understand, all this wasnot really for you, it was kind
of a tool.
Like you are, you'reresponsible to serve others
through this.
This is a blessing, to be ablessing, and so I want to teach
them that early on.
Michael Notbohm (43:26):
It's crazy like how little financial literacy
is taught, oh yeah.
You know, and I think it's Imean part of it what I think is
by design right, because it'slike if you have a bunch of
financial literate people, youcan control them a lot easier.
Unfortunately, that's thereality we live in, but I think
it's our duty as successfulbusiness owners to be the person
(43:47):
that's teaching anyone aroundus financial literacy, because
it's not a really difficultconcept.
It's just one that's not taught,so you don't even really know
about it Just being wildlyintentional about it.
Romano Muniz (43:57):
You know, and even now, my son just got into
Pokemon cards.
It was not the thing I wantedto do, but even having the
conversations of like what's thevalue look like, how are you
going to trade that?
What does it mean?
It's through a fun format, butat least it's just like
conditioning them early on tostart to see the perception of
value and how you make decisionson things and slowly earn the
right to do it through realestate.
I bring them to the propertiesas we're developing.
(44:19):
Hey, here's why we're doing it.
We got this property.
Hey, this well, like, I'll gocollect rental checks too.
Hey, we used to live there,cool.
Yeah, now we have somebody elseliving there.
Why are we doing it?
Andrew Hoek (44:29):
Yeah, that's great, I love that man.
Michael Notbohm (44:34):
I think we covered some good stuff today.
Andrew Hoek (44:36):
Yeah, definitely.
Thanks for coming on, man.
Romano Muniz (44:38):
I really appreciate you guys having me
again.
Michael Notbohm (44:40):
Romano Robin Hood Munez.
Romano Muniz (44:41):
That's right, take it.
Michael Notbohm (44:43):
Until next time onward.
(44:46):
Thank you for joining us for another episode of the Legacy
Wealth Code podcast.
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This is the Legacy Wealth Code podcast helping you build
long-term wealth and a lastinglegacy through real estate
investing, tax strategies andmotivational stories from some
of the most successful andinfluential people out there.
Here are your hosts real estateinvestor and entrepreneur, r.
Michael Notbohm (00:20):
Hey guys, welcome back to another episode
of the Legacy Wealth Codepodcast.
My name is Michael Notbohm,here with my partner in crime,
Andrew Hoek.
H.
Andrew Hoek (00:26):
What's up, guys?
Michael Notbohm (00:27):
So we have a guest today that I think
everyone will get a lot of valueout of.
Romano Muniz is the COO of BlueModo Media.
It's a high volume leadgeneration company doing leads
in mortgages, insurance, legalservices, education $40 million
in top-line revenue in 2022,growing exponentially year over
(00:47):
year.
And, you know, good friend ofmine.
It's funny because he you know,we've had long conversations
about legacy and things relatedto that and his mantra is to
serve those I'll never meet, socreating an impact on those you
know, friends and family, notjust now, but for generations to
come.
So welcome to the podcast.
Appreciate you guys having meAbsolutely.
(01:07):
So let's talk a little bit.
You know, obviously you've gota ridiculous track record of
success partnering with anothergood friend of ours in the Blue
Modo Media.
Now you're taking that moneyand you're reinvesting in real
estate.
So I want to talk today aboutkind of what you're doing, what
you're seeing, because I'vealways, you know, hats off to
you for finding these niches.
(01:29):
I think it's pretty crazy someof the stuff that you're doing,
so excited to share witheveryone today what you're doing
.
So walk us through kind of whatyou're doing right now real
estate wise.
Romano Muniz (01:36):
Yeah.
So with all the growth of BlueModo, what we realized, really
thanks to you, kind of put usonto cost segregation.
We realized either one we'regoing to have to pay taxes one
way or another, or through costsegregation, we can buy more
real estate that's cash flowingand use that depreciation to
minimize our tax income on themarketing side.
And so when we first startedout it was the traditional
(01:57):
residential play Go to Buffalo,New York, buy duplex for 25
grand, put $50,000 into it, getit reappraised at 120, cash out
Re5, 15 grand on it and then youhave two doors cash flowing.
We kept on stacking that up.
Then we started realizing, hey,is this the best use of our
time?
So then we started looking atwhat's the commercial deals look
like.
We went into a commercialmastermind course, learned about
(02:21):
that play, got invested in abankruptcy deal.
It was 10,000.
Let's see, it was 156,000square feet bankruptcy deal.
We ended up getting it for like3.5 and probably valued at 8 to
10 million.
So we got to co-invest in that.
Then we started focusing on thebankruptcy deals.
I initially started pitchingbankruptcy attorneys like
(02:43):
randomly calling them, seeing ifwe can get in with them, buying
them at an 80% discount the onethat was like our home run we
got.
It was six acres, 40,000 squarefeet, I think.
It was 33% occupied and stillcash flow positive.
We bought it for 1.2 and beforewe could do anything to it it
(03:03):
was valued at 5.1.
So no extra money in.
And so I guess I'm bringing upall those scenarios because we
realized like all right, if welook at this data, kind of like
we do with marketing what's thebest use of our time, and we
kind of pulled it down tobankruptcy deals because even in
the height of the market we'regetting 80% off Groundup
construction when you partnerwith a developer.
So instead of buying it at $500a square foot now we're getting
(03:27):
it locked in at 100, 120 squarefoot and do a rev share with
them.
And then the most recent one'sbeen industrial.
Last year we bought 147 and ahalf acre property on the
Houston ship channel and thatside is wild because it's less
about what the existing cashflow is or tenants on site, it's
more about what's the existingreplacement value.
(03:49):
So if they had a railroad trackor a substation or water
permits that you have access tothe value.
On that I think most peopledon't realize how to really
extrapolate it and get themaximum value from it.
Michael Notbohm (04:01):
Yeah, I mean you're talking about stuff that
most people don't even knowabout.
We talk about this a lot withhow crazy real estate's gone
over the last few years.
Replacement cost is still more,I think, at least in most
markets.
I think it's more to rebuildsomething than to buy it, which
is usually not the case.
Romano Muniz (04:20):
And even just being grandfathered in, like if
you wanted those water rights,like that property, we're in for
1.2 million gallons of water aday.
Even if you had the money toget it, there might be a three
to five year process to even getapproved for it.
So the folks that want to buyit look at the time value of
money differently and use this.
Extrapolate all these differentlittle widgets from each
property and you can go commanda wild upside on it.
Andrew Hoek (04:43):
Talk a little about your transition.
It sounds like you startedwhere I think a lot of real
estate investors started.
You said you buying duplexes,small multifamily, making that
leap into commercial.
Talk a little bit about that.
I feel like for some peoplethere's a little bit of a I
(05:03):
don't know if it's a fear factoror like it's just different.
You know, everybody, everybodyseems to have some sense of
residential right Because it's ahousing, it's commodity, and
you're doing it yourself, right,right, um, what was that move
like for you?
Was that, was that scary?
Romano Muniz (05:18):
What have you learned from it?
I kind of see it as like apractice rep.
You go to the basketball game,you get your practice in and
then you're prepared to go tothe actual game.
Even before we got intoresidential like you'll see
corporate housing now, before weever got involved with this, I
pitched somebody here in Tampato borrow their house and
basically did a rev share dealwith them, so literally just
(05:38):
like almost like a corporatelease, took it over, put on
Airbnb and kind of beta testedit that way.
So that's where I got my feetwet and have the money to buy it
.
And then after that I startedrealizing all right, what's the
amount of time put into this,what's the cleaning costs, how
much am I involved in it?
And then realized, man, if wewant to take advantage of these
cost segregation opportunitiesor even cash flowing, we got to
(05:58):
own.
But then even acquiring andbuff flow, it's like you stack a
couple and you realize, man,the maintenance up north, the
wind, you know the winner thateats at your cash flow.
Again go back to the data, likewhat is the best use of our
time?
And so, instead of just goingstraight commercial, it was how
can we get into more doors butalso buy it at a discount.
Hence the bankruptcy forcommercial.
(06:18):
So, and I love the idea ofmargins, because especially now
in this market, if things gosideways and somebody's buying
just to go for, like an Airbnb,those margins are thin, or if
compliance changes, you betterhave another model to figure out
or in this model, if you'realready up 80%, you can call it
a couple of different directionswithout having all that pain
point of this is the only wayit's going to work.
(06:40):
And so that's when we startedrealizing, hey, how do we start
to scale up?
And that's when we startedgoing into commercial and
realizing more doors isdefinitely the answer.
Michael Notbohm (06:51):
Well, you know, being in a marketing space
where you're asking people tospend huge amounts of money.
I remember my first job inyellow pages.
You know I was making 35 granda year, but I'm asking this guy
to spend 4,000 a month on a fullpage ad in the yellow pages.
And one of the guys that Iworked for told me never sell
out of your own pocket.
And I think that that resonatedwith me and I was able to just
(07:14):
go into these sales calls andsay, hey, it's five grand a
month, but this is the valueyou'll get.
And I think you and I are verysimilar in that, because the
fear factor I think, and this isjust.
You're adding more zeros?
Sure, but if you've got theplan built out, you know you've.
You mentioned something that'ssuper important.
It's did I take 500 free throwsbefore I got in the game and
(07:34):
had to shoot a free throw, right?
That goes a long way, causethen it's just muscle memory
yeah.
Romano Muniz (07:38):
And I think people get caught up in like the
information overload.
There's every blog out there,there's every guru out there.
If you are kind of stuck inthat mindset, how do you partner
up with somebody that's alreadydoing it?
How do you almost in turn forsomebody?
How do you work with guys likeyourselves and say I don't have
the money, I don't have the realestate, how do I earn the right
?
Can I take the worst thingsthat you're doing that's taken
away from you, building value?
Just let me earn the right thatway.
(07:59):
Or if I find the deal like I'vewholesaled a couple of deals
too.
So I went from the Airbnb kindof arbitrage play to what midst
of I find this guy a deal, andinstead of doing the traditional
, if I hold the contract, thenyou get the papers and I'm
negotiating on both sides.
I would figure out what thedevelopers wanted, what they
need in their margins and, aslong as we had some sort of
agreement on the front end, justintroduce them direct.
(08:21):
Now you're not doing this wholeback and forth game.
Oh my God, what do I say?
How do I negotiate?
It's cool, we have an agreement.
I need to focus on adding valueto your first.
Here it is.
Michael Notbohm (08:31):
So maybe Romano actually invented the Novation
Agreement sounds like.
You didn't even know you weredoing it and you were doing it.
Romano Muniz (08:37):
I was just trying to figure out a way to get in
the game man.
Yeah, I mean, that's prettycool.
Andrew Hoek (08:42):
You know, what you're talking about reminds me
I'm reading a book right nowcalled 10X is easier than 2X.
You ever read that?
Romano Muniz (08:49):
Oh yeah, I'm listening to it right now too.
Yeah, it's been reallyinteresting to listen to.
Andrew Hoek (08:52):
but everything you're saying reminds me very
much of that kind of mindset.
Definitely yeah, and it's thesame deal with the industrial
space.
Romano Muniz (09:02):
What I realized was like the marketing process.
If it's all just a process anda system and we know how to
execute on it, what's thedifference between another zero?
It's the same process.
If anything, it's easier.
Sure, the higher the money goes.
Or when we bought that propertywe didn't have the money to do
it, so go back to the old schoolmodel.
Or if I don't have it, whatelse is available?
We put in the offer at the sametime.
(09:23):
We started the real estatesyndication, negotiating and
raising money all at the sametime.
But I just found that even inthat process, as long as you can
just dive in, figure it out,you'll ask questions.
You'll ask more effectivequestions.
Somehow it ends up working out.
I think it just pays to be inthe game.
Overall this whole real estatething, or any business in
general, I don't think there'sthis crazy overnight success.
(09:45):
I think it's those who are justconsistently daily chipping
away, constantly doing somethingto chip away at it, ask
questions, get involved, but thedifference is just those small
concerted efforts to get youthere.
Yeah.
Michael Notbohm (09:59):
So walk me through.
Your background wasn't realestate.
And yet, just even the lastcouple of years, since we've
gotten to know each other,you're partnering with people
who are doing this at aridiculously high level.
At a ridiculously high level,getting involved in masterminds,
which Andrew and I are hugeadvocates of, always trying to
better ourselves.
Like can I be in a room whereeveryone is smarter than me?
(10:21):
That's the room you want to bein.
If you're smarter than everyone.
You're not.
You know learning.
You know you might be the onethat everyone's trying to get
value from Right, which there'sa place for that.
You know we're open to sharinghow we've done stuff, but how do
you?
You know, what do you attribute?
Being able to be in the sameroom as these people and and not
just being in the same room buttaken seriously where they're
(10:41):
asking you to be part of thesedeals.
Romano Muniz (10:44):
I think a lot of it is the scarcity mentality.
Is I know something, let mehold it.
What got me into the bankruptcyspace was when we're in the
mastermind group.
I looked at everything like aparabola One week they had funds
to do it, the next week theydidn't.
But when they always said yeswas to bankruptcy deals because
the margin was there and so Ijust took that on.
You know, by the horns calledthe bankruptcy attorneys.
(11:07):
Once I figured out the play andI was one of the only non
bankruptcy attorneys on the barassociation, I literally gave
them the play by play.
So I share that to say, bygiving the play by play,
focusing on there's more thanabundance, no matter what you
think, you know, just put it allout there.
That helped me earn the rightto go speak on stage at a
conference in California whichhelped me meet the broker in the
(11:28):
industrial space which turnedinto what we're doing now.
So I think a lot of people arejust trying to hoard information
or let me go meet with Mike andget something for me.
I'm like, give it all away andsomehow it just compounds away
faster.
Andrew Hoek (11:40):
Yeah, those doors that you open like that are
incredible.
Explain the bankruptcy piece tome a little bit, because I feel
like I mean, I probably have alittle better understanding of
bankruptcy than most people withthe legal background, but it's
still such a foreign concept.
So are you actually buyingthose from the trustee or how
does that work?
Romano Muniz (11:59):
Yeah.
So back to the modelingstandpoint.
What I realized throughbankruptcy was, if you're my
attorney and I'm the client andalso I need some sort of funding
, a lot of these bankruptcyattorneys have a hard money
lending company on the side andso what they'll do is they'll
transition over and say, hey,I'll lend you the money In court
.
That's a huge conflict ofinterest.
So they'll bring in a thirdparty conflicts attorney.
(12:21):
They verify hey, do youunderstand that your attorney is
lending you the money?
That's all kosher.
So I thought, man, if we removedhard money lending and put in
real estate, is the same processapplicable?
The bankruptcy attorneys likehaving the paperwork trail with
the hard money side because theycan do it easily, but from real
estate they can't operate it.
So if you can bring in thevalue of how do I operate it?
(12:43):
Now, if you had third partyconflict attorney, could they
co-invest with you and it'dstill be kosher.
Could they give you the lead?
Now you're not doing the runinto the bankruptcy court or the
courts downtown to get aforeclosure list, competing with
everybody else.
My whole thought process on allthis is what everybody else is
doing.
Do the opposite, and it takes acouple more steps.
(13:04):
But man, those opportunitiesare like when I showed earlier
buy for 1.2, appraise at 5.1,there's no cap X, there's
nothing, so you have instantvalue kind of broken into it.
Sure yeah.
Michael Notbohm (13:16):
When there's also a lot of times on those
commercial deals there's thingsthat most don't even realize,
Like you buy a building and thenyou have the cell phone rights
on the roof.
Romano Muniz (13:27):
You know like what is that worth?
Michael Notbohm (13:29):
Yeah, I think you were in a deal with.
Romano Muniz (13:30):
Yeah, it wasn't the deal that we were in, but
essentially through the processthey were able to broker off the
cell phone rights or the towerfor like 800 grand.
So it's like if the buildingwas 3 million you can
automatically recapture some ofthe value.
Kind of like with theindustrial space you can go find
scrap metal that's on the site.
There's another one that we'reworking on now that we have an
appraisal for 20 million just onthe existing metal and copper
(13:54):
that's there.
So whatever the total value is,it's like.
I almost see it as like how doyou extract coupons out of these
sites that most people don'tsee?
And that's just the traditionalROI play.
That doesn't include.
How do we do cost segregationso people can look at the ROI or
the coupons that they'regetting on the discount, but now
what happens when you actuallyapply it to your taxes too?
Michael Notbohm (14:15):
Well, I like to take full responsibility for
your knowledge on cost seg.
Yeah, I appreciate that, but sowalk us through how that's
changed your investment strategyas a whole, because you started
with something I mean even juston the single family homes.
People don't realize you can docost seg on that, but now
you're doing it on huge scaleand what is?
That enabling you to do thatyou would normally not even
(14:37):
remotely be able to think about.
Romano Muniz (14:38):
I think with the economy the way it is today,
repurposing things that peopleare freaking out and getting out
on, meaning they might not beable to hold the debt service or
maybe their mortgage haschanged on it.
Can we buy in an unconventionalway, can we go through seller
financing, can we find dealsthrough assumable mortgages or,
subject to where everybody elseis like they're freaking out, we
(15:00):
can go get a discount.
I really think having some sortof criteria has been the key
for us to scale and grow fast.
Hence the bankruptcy.
Top of the market, low market,getting 80% off ground up
construction will make money taxfree through the deal, before
we ever put a tenant in there.
And on those traditional houses, I look at it as can you
monetize at least three ways?
(15:20):
So there's the traditionalAirbnb play.
Traveling nurses was huge for usduring COVID, but more recently
I found out about travelingphysicians and this one's like,
I think, the honeypot.
Essentially, you can do dealswith agencies or health agencies
.
You can do deals with agenciesor hospitals.
They will pay you on an annualbasis the same rates as Airbnb,
(15:41):
whether they live there or not.
So now you can go get hyperfocused on how do I do ground up
construction, partnering withthe developer, make money tax
free before you even put atenant in.
But now you're getting paid ahigh premium on an annual basis.
You don't have the cleaningfees, you don't have the
turnover, you don't have toworry about the algorithm on
Airbnb, you just have stabilizedcash flow.
Andrew Hoek (16:04):
Where are you doing those deals?
Here Tampa, yeah.
Romano Muniz (16:07):
We're building a four townhouse, four bedroom,
three bath, in West shoray rightnow and that might be a year to
14 months out.
And then we've got two onMadeira Beach right now that are
five bedroom, four bath, threecar garage.
And even with that, like I lookat, can we take everything and
do it at least three differentways.
Have Airbnb or compliancechanges.
(16:29):
What's the model?
Can you run it out per room?
Maybe it's not traveling nurses, maybe COVID isn't such a big
deal.
What are the other demands?
Traveling pilots, travelingexecutives, recruiting firms
love that to be able to host too.
So just a bunch of differentways you can kind of repurpose
it.
Andrew Hoek (16:44):
You talked about partnering with a developer and
I think you said doing it in theform of a rev share.
Talk a little bit about that.
What does that look like?
Romano Muniz (16:53):
This is not a plug for Mike, but thanks to Mike.
I have a fraternity brother ofmine from University of Florida
who has a substantial amount ofproperties and he'd never heard
of cost like before.
So I kind of challenged himrespectfully and said hey, man,
you're buying at this rate,you're selling at a premium.
But in many ways you're kind ofon a glorified hamster wheel.
(17:15):
You're constantly sellingwhat's the tax look like?
What if you held onto thoseproperties?
And then I essentially just putthe math side by side.
I'm like here's what you boughtit for, here's what you're
selling it for.
If we partnered on it, here'swhat it would look like.
We would get access to yourfunding because you have a track
record of building out.
Get a discount, but here's howit looks like to monetize it.
(17:36):
And forget just the cash flow.
But if you look at the cost segside now, what do the numbers
look like?
Cool, do this for two, three,four, five years.
Let's compare apples to apples.
Which one's gonna give youpassive income to actually
escape doing this?
Hey, if the market crashes,what's your options?
We give him the whole cost segplaybook and the next thing, you
know he's like I'm in Whateveryou guys wanna do.
Michael Notbohm (17:57):
I mean, we tell people this all the time the
rich don't get rich by sellingstuff.
They keep it you know, that'sthe bottom line.
Romano Muniz (18:05):
And we've never sold the property yet.
The property we have in theindustrial space will be the
first property we've ever sold,because the whole cost seg side.
Michael Notbohm (18:13):
Then now it's a matter of what do you do next,
cause now, like it or not,there's gonna be a tax burden on
that one.
Yeah, that's what you tend todo when it.
Andrew Hoek (18:20):
Go back to the question I asked you a minute
ago because I wanna understand alittle bit.
So you're talking about and Iwanna make sure I understand
what you're saying when you'repartnering with a developer on
the rev share, they're actuallydoing the build out, right?
Romano Muniz (18:32):
Correct.
Okay, so you'd be responsiblefor the actual land acquisition
and financing.
Okay, so that's what we did.
Michael Notbohm (18:40):
So they're just doing like a straight cost.
Andrew Hoek (18:42):
So they're building at cost for you.
Romano Muniz (18:44):
Correct this one was a little unique cause he
owned the property already.
Okay, once we explained thecost seg, we said what if we
bought your partner out Cause hewanted to stay in?
His partner didn't.
But now that acquisition withthe house and the land, we can
use as the down payment for theconstruction loan.
And if we try to get thatconstruction loan on our own,
they'd be like you're marketingguys, but because he has the
(19:04):
track record in relationship,his rates, his relationship with
the bank just made it movesmoothly.
Andrew Hoek (19:09):
Yeah, and then you're working out some
percentage, obviously with him.
Romano Muniz (19:15):
Right.
Andrew Hoek (19:16):
And that's on the longterm play, correct?
Romano Muniz (19:17):
Yeah, yeah, very good.
So you'd have that percentageof ownership in the house, that
percentage of ownership in thecost seg and that percentage of
ownership on the cash flowmoving forward.
Andrew Hoek (19:27):
Okay, you brought up financing there and I'm
curious to talk about that alittle bit too.
So where are you seeing successwith lenders?
Is that localized?
Is that national lenders?
Is a private money?
What does that look like foryou?
Romano Muniz (19:44):
So in the beginning it was all of our own
money.
Okay, so we'd buy things cashoutright, like the houses in
Buffalo that were like 25,000.
Mm-hmm.
And then we do a refund.
The back end, as we grew out ofit and started going for bigger
properties Bankruptcy deals youhave to buy 100% cash, that's.
There's no option on thelending side.
However, on the industrial side, saw the process, saw the
(20:05):
opportunity, realized you knowwe don't have eight figures
sitting around.
So two things One, we startedreal estate syndication and
raised capital through friends,family, business partners.
And then on the back end, werealized the sellers needed to
hold the note.
So we did seller financing withthem.
So, instead of the traditionalplay, it was way easier and way
less paperwork.
It was a win for them, so theydidn't get taxed on short-term
(20:27):
gains.
Sure, it was a win for us too,because we can kind of secure
the deal without having to gothrough all the back end
treasures of traditional banks.
Andrew Hoek (20:34):
Yeah, okay, so you brought up syndication.
Let's talk a little bit aboutthat and your segue into how
you've gotten involved with that.
What's it look like?
Who are you going to?
Obviously, you're bringing insome counsel, I'm assuming, with
that.
Romano Muniz (20:49):
Absolutely so.
As we're going through theprocess of a traditional primary
house, short-term rental,commercial bankruptcy, I
realized, if the process is thesame and we didn't have access
to capital because we were justtapped out internally, I studied
, studying who are the big dogsout there, all the big names
that you see online.
How are they actually gettingit done?
And the more I saw their buyingpower, I realized it's all a
(21:11):
leverage play.
If we've already kind ofleveraged what we had internally
, I realized they were doing itthrough syndications or some
sort of crowdfunding.
And through that process I wasjust trying to figure out like
well, what the hell does thatactually look like?
How does it work?
I interviewed a gentleman herelocally that was involved in
either 15 or 18 differentsyndications and I just drilled
them on questions.
(21:31):
When you got into thesyndication, what do you love
about it?
How come you passed up on otherones?
What were the kind of criteriathat made sense for you?
And as you broke it down, Irealized the more you had to
evaluate, the more likelysophisticated investors gonna
kind of compare it to everythingelse.
So when we started it, weprobably had a 30 day run to go
(21:54):
raise the money.
I thought, man, if we couldagain go back to what everybody
else is doing, do the opposite,how do you get rid of all the
fees?
How do you get rid of the legalstuff, All those charges that
end up taking out 15 to 18%?
Can you do the rev share dealin their favor?
And just simple answers to getyes.
And so that's essentially whatwe did, and I also combed it,
(22:14):
went by him first and said, hey,have you ever compared this to
the other 18?
What does that look like?
Obviously we've got legalcounsel.
I think we interviewed 15different SEC firms across the
country, went with the one thatwe thought made the most sense
and they've been wonderful.
But that was a learning curvein itself, Because you got an
offer on the table trying tofigure out how to build the
syndication.
You got SEC.
(22:34):
We're doing it in the US and inCanada.
So it's a whole differentplaying field too, Because
there's no room for errors.
That paperwork is serious and,you know, got me a little
nervous going through thatprocess in the beginning.
Andrew Hoek (22:47):
Yeah, that's a steep learning curve.
For sure, those SEC peopledon't play.
Michael Notbohm (22:51):
No, that's right, be on an episode of
locked up abroad or somethingRamona crossed the border after
having the wrong paperwork for asyndication Even at the time of
figuring out like all right,what is this subscription up?
Romano Muniz (23:02):
What's an OM?
What's the Know your Client?
All right, how does the wireswork?
I mean, you're drinking out ofa fire hose faster in that time,
sure, but ultimately it's thesame idea of if you're doing it
with a you know residentialproperty and you're raising
money for down payment.
It's the same process, as justmost people won't take the time
to figure that out.
Andrew Hoek (23:19):
Your, your BK deals are you?
Are you syndicating those aswell?
Romano Muniz (23:24):
Now, those, those we did internally.
Okay, it's funny because in theonline space we generate
bankruptcy leads and I've beentelling all the guys in our
space like you can keep sendingout bankruptcy leads and get
them, or you can cherry pickthem and use them for yourself
plus the, you know, costsegregation side and just kind
of waking guys up to realize,man, there's far more value than
a quick arbitrage plan to lead.
(23:44):
Yeah.
Michael Notbohm (23:46):
Have you done any wholesaling on like these
bigger commercial deals?
Romano Muniz (23:50):
Residential, yes, commercial now.
Michael Notbohm (23:52):
Because that's I mean we keep hearing.
I mean you've got a client thatyou've worked with.
Andrew Hoek (23:57):
It was just ridiculous, yeah, I had a client
that he was buying a.
It was a large strip mall withlike a Lowe's or Home Depot I
mean it is the anchor and someother smaller stuff and he was.
He bought it for like 13million and there was a
wholesaler in the middle thathad had under contract for like
11 million, so they made a $2million spread on on that deal,
(24:21):
yeah Some paperwork Right.
Romano Muniz (24:23):
I know a guy, you know a guy.
Andrew Hoek (24:24):
Yeah exactly.
Michael Notbohm (24:24):
You want this piece of paper, but I am hearing
more and more about that.
Andrew Hoek (24:27):
I was saying we were having a conversation.
I'm sure the one of theattorneys that works with me
kind of on a contract basis he'she's gotten involved with some
group and they're they've got acouple of properties under
contract right here on Kennedythat they're doing that style
with oh nice.
And and he kind of brought thesame thing up as he was like you
know, he's newer to it than thegroup that's running behind it,
(24:49):
but your conversation about outof zero to the back is exactly
what he said too.
He was like you guys arewholesaling these things, let's
look at how we add a zero to it,and that's kind of how they're
getting down on this path.
Romano Muniz (24:58):
Yeah, it's funny because I go back to the
criteria.
The very first property Iwholesaled to a developer, I
remember looking at the housethinking, god, good thing we got
this deal done, because I don'thave the vision for what this
guy's going to do with it.
Yeah, well, fast forward.
When he was done renovating it,we went to the housewarming
party and I happened to look athim like holy cow, there's a
(25:19):
four, two downstairs.
There's a private entrance totwo, one upstairs.
So we ended up working in thedeal where I ended up buying it
back from him.
He treated me like the realtor,took that off of it and this
was March 2020, right when COVIDhappened.
Okay, so before we ever movedin, I had a tenant upstairs
running it out and ever sincewe've lived there, we've never
paid a mortgage on it and tothis day, even when we moved to
(25:40):
St Pete, I still have it runningout upstairs and downstairs.
Andrew Hoek (25:43):
Nice, yeah, it is funny when you say that about
the people who have some ofthese visions that I certainly
don't have.
But you turn around and youlook at some of these things and
you're like man and I actuallyI don't mind the.
Michael Notbohm (25:54):
I actually like the design part of these flips,
but I feel like the naggingwife and he's like the husband
when we go to Florida core,because I'm like what do you
think about this?
Tali's like dude, I reallydon't care.
Romano Muniz (26:04):
Yeah, it's a cash flow yeah.
(26:05):
Like can you just buy it already?
Michael Notbohm (26:07):
I'm like well, we got to compare it to a couple
others.
Romano Muniz (26:09):
I'm like man, I sound ridiculous.
That is not my sweet spot.
I can figure out the resourcesand bring things together, but
when it comes to that side, thatis definitely not my gift set.
Michael Notbohm (26:17):
I think it's just fun because I like what you
just said.
Like you get to the end andyou're like where we started,
where it is now.
It's like this is really cool,it's awesome.
Now I do wish I don't want tobe the guy in the trenches like
doing the tile.
I kind of wish I knew how to doa little bit more of that,
because it's like you see atransformation like this and
you're like I actually didn'tlike screw in one single screw
(26:40):
in this house.
Andrew always hit our key tosuccess, and I don't know if we
should share this on the podcastor not, because everyone's
going to use it.
Andrew Hoek (26:49):
That's right.
Michael Notbohm (26:50):
Well, you just said gift, yeah, gift, but right
before we have an open house hegoes over with a Swiffer and
does like one thorough moppingof the floor under contract the
next day.
We're like six for six on this?
Romano Muniz (27:04):
Yeah, it's all perception.
Yeah, we had one that was onthe market for like two weeks.
Michael Notbohm (27:08):
He's like dude.
I probably need to go over andmop.
Andrew Hoek (27:10):
I was like, yeah, I think so.
It's a little mental therapy.
Romano Muniz (27:13):
You know you get to zone out for a bit and sweep
and Swiffer and if it's aplacebo effect, so be it.
It's closing, it's closing.
Michael Notbohm (27:20):
Yeah, listen, I don't know the science behind
it.
I just know it works.
Romano Muniz (27:23):
That's awesome yeah.
Michael Notbohm (27:25):
So what do you say to people that want to be
ambitious like you?
I mean, you're doing a lot ofthings at a very high level and
you know.
Just even talking through theindustrial deal, you're like I
had to get the SEC guy.
How do you know even where tostart?
What do you attribute that to?
Romano Muniz (27:41):
Man, if I was starting all over again, I would
either team up with somebodythat's doing it because I think
you can learn a lot faster byworking with somebody that's
already in the real estate space.
Wholesalers, like just finding,like, instead of trying to
figure out the whole process,just find one area that you can
add value.
Like the developers I initiallymet with, I realized, man,
they're really good atdeveloping.
(28:01):
The biggest takeaway for themthat's sucking at their time is
going to find the properties.
I'm like, man, if I could justtake care of this one piece.
Then I started realizing, man,all these guys that are
wholesaling, they're in thisweird negotiation phase.
They don't like to negotiate sothey give up on it.
Where I'm like, if we couldstreamline that and not
negotiate and just do apre-degreed terms, hey, I know
(28:22):
what your margins look like.
You've kind of educated me onit.
Now you can just introduce themdirect.
In the beginning, I mean, I wasjust driving through
neighborhoods.
It's not like I perfected.
Going on MLS, I just thought,hey, here's Honeypockets in
Tampa, what's got the biggestproperty line, what I think has
the most upside value withgrowth.
And then Dumblock found thisproperty that nobody had picked
up for like four to six months,which seems rare nowadays, right
(28:45):
here I was thinking.
Michael Notbohm (28:47):
Luck, though, is really like hard work meets
opportunity.
It's not really Dumblock if youbreak it down Like the effort
that you put in.
I know we've talked about this,but have you ever read Mamba
mentality?
Romano Muniz (28:58):
No, I haven't Not yet so you got to read it.
Michael Notbohm (29:01):
It's Kobe Bryant's book and really goes
through his life.
You got a guy who'sridiculously talented and yet
his logic and his mentality wasI'm good, but in order to be the
best, I have to not just relyon my talent.
I have to work harder, twice ashard, three times as hard as
anyone else.
So he would wake up and hewould have two workouts before
(29:23):
his kids would go to school.
He'd get his kids to school,then he would go to the normal
practice and he's like so over.
Extrapolate that out for fiveor six years, he's getting 10
times more than everyone else iswilling to put in.
Romano Muniz (29:39):
And I think that.
Michael Notbohm (29:40):
That's really always stuck with me.
Like you know, the best guys inthe world Michael Jordan, tiger
Woods, kobe Bryant they'reshooting 5,000 shots.
Before they leave, you knoweveryone else might already be
home.
They're taking those extra freethrows, they're doing the extra
drills, and so you can't relyon just talent.
You can't rely on oh, I learnedthis from a mastermind and I'm
(30:03):
just going to walk into thesecrazy opportunities you got to
be willing to work.
It sounds like that's whatyou're doing.
Romano Muniz (30:09):
I think the other thing too is if somebody didn't
know and they're intimidated byit.
Sometimes you hear the idea ofoh, gotta go to a mastermind, I
have to spend money or I have toget tied up with a Michael or
Andrew.
You know that talk about you'rethe average of the top five
people you spend the most timewith.
I think the other alternativeto that is you are the average
of the top five people youlisten to.
So if you're driving to workevery day or driving to drop
(30:30):
your kids off, even if it's 10to 15 minutes, if you had that
almost as like on autopilot tolisten to some audible
constantly conditioning and fillyour mind on how to do it.
Or when I found that propertyto wholesale, I was scheduling
calls to do kind of basicallybeating sales calls, but while I
was on them I was hitting thestreets.
So I think, being efficientwith how you like really do an
(30:51):
audit of your own time and likehow you can fit it in, because
we all have the same amount oftime every day.
It's just are you howintentional are you about really
making it happen, or is thisjust a dream that you're Looking
at for it from othersperspective and see what they're
doing, or you know?
Do you actually want toschedule and get it done?
Michael Notbohm (31:07):
Yeah, do you want to just compare it, because
you think that's like what thedream should be?
Romano Muniz (31:12):
right and a lot of people love to sit in that I
wish or so-and-so is doing thisand that, and it's like it's
just constantly a comparisongame as opposed to like what are
you actually gonna do about it.
And the longer you spendlooking at everybody else's time
spent making it happen, it'sjust that much less time that
you have to actually enjoy itfor yourself.
Andrew Hoek (31:31):
Or we were talking about something the other day
and I said this is the theunglamorous side of real estate.
Yeah which has felt like a lotlately Dealing with the city.
Yeah, I mean there's, there's acontractor.
It's not what you see, when yousee the, the perception of,
like you know all these realestate moguls or whatever, you
never see the hardships.
(31:52):
But man like that, when you'redigging the trenches to do it,
it's dirty.
Michael Notbohm (31:57):
Well, we just finished a house like a week ago
and this is the one we've beenbattling with the city on, but I
remember I think you called mewe had negotiated with the
tenant who was on a month tomonth but didn't want to leave.
We're like do we really need togo through this whole eviction
process?
So they didn't have enoughmoney to get their next place,
so we gave them a thousand bucksto leave.
(32:19):
And he went to the house andthey had taken all of the window
units out and then Took a dumpon the top stair and I'm like
this is so ridiculous.
Romano Muniz (32:30):
Thanks for the money.
Yeah, I love to party.
Thanks for helping us.
(32:34):
Here you go.
Michael Notbohm (32:35):
And I always laugh because that's like when
we talk about the non-glamorousside.
Romano Muniz (32:39):
It's so true, man, you know, tyler, and I use this
all the time as kind of a Justa phrase that we sit on.
In the end They'll say it'seasy because from the outside
and you know, looking backwards,man, this looks it's been
awesome.
Right, we've been doing a lotfast, it's been scaled, but,
like even when we were doing thesyndication, we had to go raise
roughly ten million dollars in30 days.
What people don't know is theydidn't see my spreadsheet of 254
(33:03):
names.
They didn't see it broken downby EST, cst, mountain time, pst.
They didn't see when I wasflying back and forth to Texas,
got my car locked in Orlandotake an Uber to get it realize
my car is locked there.
I'm like all right, well, I'mstuck at the airport for three
hours and it's 10 o'clock atnight here.
Who's available on PST?
So I'm like just being thatwildly dialed in.
(33:25):
I think there was a Seven daytime period where I did, or
eight day time period where Idid three over nights to just
make sure we raised it and gotthe deal done.
I used to tell my I mean, likepsycho, I would stare at the
mirror and say, hey, if youdon't get this done.
Do you feel like you could everearn the right to be in this
space?
Hey, could you let yourpartners down on this?
I just had to like gamified abit, but that's the
(33:46):
non-glamorous side, that's theyeah mama, mentality side that
nobody really sees, and thenthey just see it as kind of done
.
That's the real, though, right.
Michael Notbohm (33:53):
That's the real well, real estate is is easy,
it's simple, it's not easy.
Yeah you know, I think thatthat's definitely something.
It's not like you have toreinvent the wheel.
There's so many different waysyou can make money, but one it's
being intentional aboutfiguring out what am I gonna do
to make money and then takingaction on it.
I don't have to reinvent thewheel, like we don't have to
(34:13):
come up with the next Twitter orInstagram or Tik Tok, I mean
yeah literally, you can justcopy what what people are doing
at a very high level and to yourpoint earlier, there's always
enough Available.
Romano Muniz (34:25):
You know, and even now, like when I look at some
of these opportunities, I don'tthink there's any shortage on
the industrial side of anything.
I've realized.
How can I be more intentionalabout solving Bigger problems?
How can I solve people's taxproblems?
You know that whole conferencewe did recently with what we
brought, time will write our asman.
If we can just solve people'stax problems, then you can earn
(34:45):
the right to having access todifferent capital, as opposed to
being like here's my fancy deck, here's my ROI, here's my
unconventional way.
I feel like if you solve theirpain points first, it opens up a
completely different door togetting access to money.
Andrew Hoek (34:58):
It's a really good point.
Never thought about it that way, but I mean, if it's like we're
, we're showing you easy accessto additional capital now
Invested with us.
Yeah, yeah that's really smart.
So I'm curious, and now thatyou're doing more and more real
estate, how are you dividingyour time between that and the
motto?
Romano Muniz (35:16):
I mean it's, it takes a bit of effort.
I think one of the things we'vereally been looking at is, if
we look at every part of thisdeal of how do you source it,
what's the financing look like,what's the operational side?
We're looking at kind ofbuilding it out to have the ops
side done, where I can have moreFaceTime on opportunities,
mm-hmm, and then making surethat we're partnering.
So it's almost like the ideaearlier hey, are we giving more
(35:38):
value away?
The best way that we can getour time back is how do we
partner with all the experts whoare the guys that are building
in the industrial space?
How can we give away points toyou know developers?
Because then it's way easier toactually get it done and it
frees up our ability to just gofocus on scale.
Michael Notbohm (35:54):
Yeah so the syndication space is one of
those where it's like you know,what can I accomplish with a lot
of people being involved,versus if I'm just gonna be
greedy and I want this wholedeal myself.
Right, you're gonna grow somuch slower unless you just
somehow stumble upon a home runand you've just got a ton of
equity.
That happens overnight, whichyou know it's not like it never
(36:16):
happens, but it's very rarewhere a syndication is pretty.
I mean, it's a tried and truemodel.
Right, you can.
You can rinse and repeat it.
Romano Muniz (36:24):
Just bring value to those people that are
investing with you and you'llhave people for life and we've
been spending more time withfolks in the family office space
too, to really understand whatthey invest in, how they invest,
or Go back to the whole taxplay.
Who has real big tax problems?
Can we show them, like even theguy that work, when now he may
have had nearly a hundredproperties but he'd never heard
(36:45):
of cost segregation before.
So it's like if you can justadd value, educating them in
that way, you might not needthis indication.
We have one group now that'slooking at putting in Multiple,
multiple, eight figures, but thereason why they're willing to
do is because the property hasan opportunity zone.
They just had a big exit, so ifthey can hold the deed of trust
and minimize 20% of their capgains, that's a huge winner for
(37:07):
them.
I mean it's a eight to tenmillion dollar savings for them.
Michael Notbohm (37:11):
And defer it for what?
Two, two and a half years yeah.
So yeah, so what do you see, aswe're?
You know we talk a lot about.
You try to bring value fromalways positive, but reality is
there's also you got to protectyourself from what could
possibly have happened on thenegative side.
So what is you know what's kindof your overall global forecast
(37:32):
for real estate in the next 12to 24 months?
Romano Muniz (37:37):
Try to acquire as much as possible and hold all of
it.
I think people that are gonnado a wholesale it feels good and
see easy entry.
But man, I would try to holdeverything because I look at the
market as a whole of it'salmost vaporized.
Folks that got in a coupleyears ago that are sitting at
two, three percent don't want tomove.
Folks that want to get in arestuck because they can't find as
many properties.
Then there's this in between ofbig groups, like a black rock
(37:59):
that bought a bunch of rentals.
You have Airbnb taking a bigpart of the market.
So I Think it for folks to likereally start to scale this out
and be successful, I think theyhave to get creative on seller
financing options the assumablemortgages that you can basically
take over Somebody's propertythat got locked in at a two or
three percent, get some sort ofbridge loan to finance it.
(38:20):
Or this is not an area I'vespent much time in, but the idea
of the subject to properties.
I don't know if that'ssomething that you guys have
focused on or done, but it's anarea that we're looking into now
too.
Andrew Hoek (38:32):
Yeah, I'm seeing more and more of it on the legal
side for sure, but I I stillit's.
It strikes me and we haven'tdone any that on the investment
side, but it strikes me kind ofas a Um, it's not well
understood outside of smallcircles, which I think is an
opportunity right, Totally.
Romano Muniz (38:52):
It's just a matter of explaining it correctly, and
so are the people who are doingit, the guys that have done it,
really well is, instead ofbeing like we're taking over
your loan and that's just it,They've used the phrase um,
credit restabilization, sothey'll end up putting it in a
trust they, instead of beinglike, oh, we're taking over your
property, they'll pitch it asmore of a scarcity play hey, if
(39:15):
you qualify, we'll see if we cango.
You go through our creditrestabilization process and see
if you qualify to be, you know,subject to people want what they
can't have.
So it's been an easier way forthem to kind of make the
transition, as opposed to we'retaking over your existing loan
and you know what's the what'sthe end for you.
Andrew Hoek (39:32):
Are in those scenarios.
Are they running back to thesepeople?
Romano Muniz (39:36):
No, no, they're.
They're basically taking overtheir existing property now.
So a good example I've heard ofrecently was let's say,
somebody moved here fromCalifornia last year.
They got the house.
Turns out they have to go back.
Maybe or maybe doesn't makesense for them to sell it
because there's not enoughequity or you know the cost of
transaction with real estateside.
Maybe they don't want to loseyou know the 6% so there might
(39:58):
be opportunities where they'lltake over the existing property.
A new buyer would take over theexisting property without them
being down on it overall and youcan do some sort of creative
financing and maybe you sweetenthe deal, give them a thousand
bucks.
Maybe you leave some poop on theproperty, like those guys
upstairs.
Michael Notbohm (40:15):
Yeah Well, let's kind of wrap up with this,
because one of the things thatwe always like to talk about and
I know this, this is somethingthat means a lot to you but just
kind of how all this stuffreally ultimately is about
legacy, about building wealth.
You know, doing these things,that that you know the glamorous
and the not so glamorous day today in order to build this
generational wealth.
So what do you envision yourlegacy being?
Romano Muniz (40:37):
So the background that most people don't know
about me is I never wanted to goto college.
I was going to be a full-timemissionary.
I went to Ghana, africa, haitior sorry, mexico.
I used to live in the innercity of Tampa working for the
dream center, and so I had ahigh school teacher that
basically said hey, go get youreducation, understand, you can
make an impact later on.
Fast forward to today.
(40:58):
I always think about what thatlegacy looks like from a family
standpoint.
But you know we're doing thosetype of projects are going
overseas.
I realized it was some sort ofrally of raising money do a good
cause.
It may stay around, may not.
So my focus now with realestate business you name it is
how can I inquire?
Require properties that arecash flow positive, that can go
(41:21):
support organizations like that,so it's actually a sustainable
asset to support it rather thanhere's a one-time donation, good
luck.
And so you know I've beenlooking at a lot of
opportunities on how can Iessentially be the Robin Hood,
if you will, to support thoseinitiatives where it's not just
a one-time donation or thatorganization goes away?
Do I have an asset that canspit out and redeploy to
(41:41):
somebody else so they can faroutlive what I'm doing, or my
family, you know.
Push it through trust andthere's actually a substantial
legacy value to it that'ssustainable.
Rather than you know, we didgood and we got a tax right off
of the end of the year.
Michael Notbohm (41:56):
That's powerful .
Romano Muniz (41:58):
And that's the whole where I get the phrase to
serve those who will never meet,because I realize there's folks
that are in the field that aremaking a wild impact that we'll
never see.
And if I'm not the guy for thatto be, that if I can just be
the catalyst through capitalismthat's sustainable, it's a
win-win for all.
Michael Notbohm (42:16):
Yeah, give them the resources they need.
Yeah, well, how does thatrelate?
Then, taking it a step further,because now you're a dad, so
what does that mean for yourkids?
Romano Muniz (42:28):
Man.
It's an interesting dynamic oftrying to manage, like how do
you don't really come fromanything to give them the
opportunities that you want butalso keep it in check?
I'm teaching my kids now allabout finances.
Even when we drive down thestreet I'll look at apartment
buildings.
I did this with them when theywere like three years old.
I'd say, hey, is that a houseor apartment?
(42:48):
And they go an apartment.
I said, do we rent or do we own?
They go, we own.
I said, why do we do it?
And they always were a buttleback.
Even to this day, they go forthe cash flow, baby.
And I love it because it's likeman, if I could just show it
through simple application butthey remember it and then kind
of earn the right to share itthat way.
But also teach them like, hey,we got to be in a position of
(43:08):
ownership, go serve and gotravel these places so they
still have that level ofhumility.
But understand, all this wasnot really for you, it was kind
of a tool.
Like you are, you'reresponsible to serve others
through this.
This is a blessing, to be ablessing, and so I want to teach
them that early on.
Michael Notbohm (43:26):
It's crazy like how little financial literacy
is taught, oh yeah.
You know, and I think it's Imean part of it what I think is
by design right, because it'slike if you have a bunch of
financial literate people, youcan control them a lot easier.
Unfortunately, that's thereality we live in, but I think
it's our duty as successfulbusiness owners to be the person
(43:47):
that's teaching anyone aroundus financial literacy, because
it's not a really difficultconcept.
It's just one that's not taught,so you don't even really know
about it Just being wildlyintentional about it.
Romano Muniz (43:57):
You know, and even now, my son just got into
Pokemon cards.
It was not the thing I wantedto do, but even having the
conversations of like what's thevalue look like, how are you
going to trade that?
What does it mean?
It's through a fun format, butat least it's just like
conditioning them early on tostart to see the perception of
value and how you make decisionson things and slowly earn the
right to do it through realestate.
I bring them to the propertiesas we're developing.
(44:19):
Hey, here's why we're doing it.
We got this property.
Hey, this well, like, I'll gocollect rental checks too.
Hey, we used to live there,cool.
Yeah, now we have somebody elseliving there.
Why are we doing it?
Andrew Hoek (44:29):
Yeah, that's great, I love that man.
Michael Notbohm (44:34):
I think we covered some good stuff today.
Andrew Hoek (44:36):
Yeah, definitely.
Thanks for coming on, man.
Romano Muniz (44:38):
I really appreciate you guys having me
again.
Michael Notbohm (44:40):
Romano Robin Hood Munez.
Romano Muniz (44:41):
That's right, take it.
Michael Notbohm (44:43):
Until next time onward.
(44:46):
Thank you for joining us for another episode of the Legacy
Wealth Code podcast.
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