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In this episode of The Hive With Us Podcast, host Daniel Martinez is joined by special guests Kyle Thompson and returning guest Paul Montelongo. They delve into interesting and challenging real estate deals, sharing their experiences and insights into property management, negotiations, and the importance of thoroughness in the real estate business.
Chapter 1: Introduction and Previous Episode Recap (0:00 - 1:22)
Daniel introduces the guests and briefly recaps the previous episode with Paul Montelongo, encouraging listeners to check it out for insights on multifamily properties, life, and marriage.
Chapter 2: Deal Breakdown - Property Management Challenges (1:23 - 5:25)
Paul shares a story about acquiring a property in San Antonio in December 2020, where the property management contract fell through the day before closing. Paul and his wife had to manage the property themselves initially, dealing with tenant issues and rent collection. They faced challenges like tenants refusing to pay rent, highlighting the importance of having professional property management in place.
Chapter 3: Successful Property Turnaround (5:26 - 8:30)
Paul describes the process of turning around the problematic property by clearing out issues like drug problems and ensuring proper management. Despite the initial difficulties, they managed to sell the property 16 months later, achieving a 40% return on investment for their investors.
Chapter 4: Corpus Christi Property Acquisition (8:31 - 9:56)
Paul discusses their recent acquisition of a 101-unit property in Corpus Christi, which had survived five hurricanes and was operating at high occupancy. They faced a different negotiation environment in late 2023, requiring detailed discussions and building a relationship with the seller.
Chapter 5: Final Thoughts and Contact Information (9:57 - End)
Paul highlights the importance of thoroughness and adaptability in real estate transactions.
Daniel wraps up the episode, encouraging listeners to check out previous episodes and promoting their annual event, The Hive Summit.
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Transcript
hello welcome to the H podcast I'm your
host Daniel Martinez today we have
special guests Kyle Thompson and
returning guest Paul Montelongo if you
have not seen the other episode please
go check it out we covered multif Family
Life marriage all the good stuff uh
definitely go check it out it's the
previous episode before this
one we're back with deal breakdown we
cover cool interesting business stories
Paul says he has two for us today what
two you got for us today okay well you
kind of prompted me here so I had to
think about right um after a while you
get to do these things and and they all
seem kind of like okay this is the
normal way that business happens but um
I do recall a deal that we bought in 20
20 in 2020 right December of 2020 so
it's in San Antonio it's a Class C Plus
Class B minus property and it's in an
area town that is not sketchy but it's
you know it's not it's it it has some
some
crime and so the day before we actually
closed we had a property management
contract and the day before we closed
that property management contract that
they pulled
up and so we were left without a
property manager on the day that you
take over the property now when you take
Chapter 2: Deal Breakdown - Property Management Challenges.)
over a property you got to have your
property management in place because
they tell the tenants hey new sheriff in
town here's where you pay your rent and
that happened to be December 1 2020 so
rent was due that day okay so uh we took
all day to close that transaction that
transaction actually closed about 6:00
pm at night and then Leticia and I sat
in the office and we printed out flyers
on bright orange and bright lime green
paper and we went to the property now
keep in mind this is December so that it
so dark and I was you know I had my 9
mimer with me and we got you know we
actually had to do the work that night
that a property management company would
have to do uh because you know you last
minute you last minute you do the thing
you have to do and as it turns out we
operated that property for two weeks
while we were getting a new property
management company so we walked that
property at night knocking on doors and
giving uh the notice and then about two
or three days later we go back to
collect rent and it's the craziest thing
so the the there was one particular lady
there and she had she had a brand new
whatever phone it was you know at the
time I13 whatever it was which I'm sure
at the time was a $1,200 phone she had
Nike Air Jordans on and you know what's
an Air Jordan a couple hundred bucks
right and I just remember that her
fingernails were painted out to here and
she had them all decorated and I asked
Leticia you know what is a what is a
manicure like that cost and she's like
oh that's a $300 manicure and that lady
stood there and told Leticia I don't
have the money to pay you my babies need
to eat and you're just not going to get
paid and I have to you know I have to
you have to
wait and Leticia came unglued right she
just like she came unglued on this lady
and I'm like no you these are our
customers yes they're are tenants but
they're our customers we cannot we
cannot do this to our customers so as it
turns out we left and then the next new
management company came in and they they
handled that stuff but the the point
there was that you do what you have to
do to to take over when you it's time to
take over your property and that's why
you hire professional professional
management to go in there and do the
stuff that that you don't want to do or
don't need to do or don't have to do and
so that was kind of a crazy then that
same property you know it it it had it
had some drug problems at the beginning
and so we cleared that out we fixed a
lot of broken doors um and we uh put in
a you know police car and that was
during the pandemic so we had a lot of
people that thought they could they
didn't have to pay yeah and so we we got
them to pay and we got government
assistance for them and as it turns out
we were able to sell that property about
16 months later for a 40% return on
investment for
investors that's amazing yeah I never I
never asked in the other episode but do
are you doing a stops for all your
properties uh some are required some are
not do I I think this one I I believe
this one did require it right some
sometimes the lenders require it other
times they don't they will require an
updated rent roll the day before you
close and they'll compare that to the
three or four previous months rent rolls
that youve furnish to them so you know
they're looking for and of course we
always do a lease audit so you know we
we lay the leases next to the rent roll
and we make sure that that you know
people are in there that need to be in
there but I do think on that property
there was a stops that were required but
it's not normal okay I got you I think
you have one more story for
us yeah I got a bunch of stories man
okay so our latest transaction was kind
of cool we bought a property in Corpus
Christie uh we bought it two months ago
and it's 101 units and it's a Class C
Chapter 3: Successful Property Turnaround.)
property it's an over property it's 1948
and best we can tell it's been through
five hurricanes right but it has
survived and not only has it survived
it's thrived it's in the middle of a
neighborhood that has no other apartment
complexes and it's operating at about 94
95% occupied wow okay but the the story
here is the way that we got the
transaction because we're in a little
bit different time right now about how
buyers and sellers interact with each
other you know three years ago a broker
would call and say hey there there's
this property for sale it's $10 million
take it or leave it and you could tell
them oh we think it's worth seven they
would say okay take it or leave it and
it would end up trading and selling for
for 12 million so crazy
times fast forward to 2023 late 2023 is
when we actually got this under contract
and we discovered that this guy wants to
sell it for $7.4 million we don't think
it's worth 7.4 in fact we think it's
worth little over six we valuate at six
we put in an offer at six and he's you
know then we begin to go negotiations
and we negotiated with him for the
better part of two months maybe even
closer to three months to the point
where we sat down with him and the
broker and opened up our laptop side by
side and said this is the way that we
value the property these are the line
items that we see need to happen this is
the way you think you value the property
they're not matching so this is what
we're buying it on and this this is how
we value it so let us explain to you so
now you don't always get a chance in
fact you rarely get a chance to sit down
with a seller and show them your
business plan and we were able to show
them our business plan I went to dinner
with this guy went to lunch with this
guy several times our our partners they
went to lunch and dinner with him
several times and like we just built a
relationship with him now the the this
the story is is that he had investors
that had cycled through he was cycling
through his 5-year business plan on this
property and he had investors that he
had promised returns to so he it was
time time for him to sell the property
and he had done 2 and a. half million
well $2.2 Million worth of rehab on this
particular property so we were taking
over a property that was pretty much
rehabed okay so we were able to sit down
and we were able
to show him line by line on our business
plan how we how we arrived at the $6
million purchase price and he agreed it
made logic to him to the point where he
then turned around after we closed and
he invested some of his own money back
into our syndication which was the
second time that's happened from a
seller putting their money back into our
syndication so he's gonna make money one
time he's gonna make money twice on that
property right so I think it shows to
your uh your thoroughness for them to
reinvest that's all it is we've we've
had we've had some of our sellers do
that sometimes too and it it really is
showing to like how how much of a
service providing to the sellers if
they're willing to reinvest as as as a
lender so it's really cool and and then
this property along with others you know
Chapter 4: Corpus Christi Property Acquisition.)
you have an expectation of what the
property is going to be like and how
it's going to perform when you take over
the keys yep and that expectation is
usually different from the reality when
you take over the keys so every property
even though we have a pretty good idea
of what it's going to be like the
experience is going to be like there's
always some you know there's always some
nuances there so this particular
property you know we had some
delinquencies we had to deal with right
off the bat we had some evictions we had
to deal with more than we anticipated
and so
the first couple of months of business
it's gone through a real cleansing and
now which is which is
normal but it wasn't really expected to
this extent but it's gone through a real
cleansing and so now it's back on you
know getting filled up with people that
that we
approve yeah you know th those aren't
those aren't stories like people part
pulling guns on me I have had a gun
pulled on me though so yeah back at the
back at the marina yeah
you know my Marina my Marina project but
uh you know every every deal presents
challenges that you just have to buckle
down and get with it and um work through
those challenges absolutely absolutely
uh working people find you online I
think this has been another great
episode of deal breakdown I hope you all
enjoyed it but we have montongo
capital.com and please if you haven't
heard the episode please go check it out
we cover a lot of cool stuff that was a
good episode Montelongo capital.com and
Chapter 5: Final Thoughts and Contact Information.End)
anything social media at Mont Longo
there you go everybody here you know
what to do thanks for coming to the show
thanks for listening go share with a
friend like subscribe leave us a review
we'll see you in the next episode guys
thanks hey if you like to meet us in
person we do an annual event every year
the hive.com summit we'll see you there
have a good day
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Daniel Esteban Martinez
Host/ Ceo/ Speaker
I have been an entrepreneur since 2018. I come from a regular home just like most people. My dad worked on the roads in the Chicago area for over 30 years. He always taught me to work with my brain, instead of my body. Your body can only take so much abuse. I learned so much from my father. He always pushed me to work smarter and not harder.
I have owned and operated a trucking business for 2 years. I started learning real estate in 2019. Fell into the Data & Skiptracing business in 2020. My partner Anthony & I started Hivemind in 2021.
I have done a ton of different jobs coming up from painting, to door-to-door sales, telemarketing, truck driving, and loading trailers. What I learned most is that I want to stay in the digital business space. The leverage you can have delivering digital products to the marketplace can yield limitless possibilites.
I started The List Guys in 2020. It is a data and skiptracing service. We provide seller and buyers list nationwide. My clients have been getting great results and I am proud to help people killing it.
I started the Hive in 2021 with my partner Anthony Gaona. It is a real estate and business mastermind. It also comes with a all in one CRM, that can host unlimited websites and users.
Starting the Hivemind has been an amazing journey so far. Seeing one of our users make his 6 figure month in June 2021 leveraging our software, I know there will be plenty more to come!
Anthony Gaona
Host/ Ceo/ Speaker
Hi! I am Anthony Gaona.
I’ve been in digital marketing for almost 15 years.I grew up in construction working for my dad when I was only 12 years old. Normally we had a ton of work or no work at all so a lot of my free time was spent learning how to generate leads.
It didn’t take very long for me to master online marketing because I became absolutely obsessed with it. For the last 15 years I’ve been generating construction based leads. At first I was running the projects myself. This led to sub-contracting all of the excess projects and eventually wholesaling the leads off to other construction companies.
One day I was preparing to build a single family residence for myself. In mid December, 2018, a simple YouTube search led me to the term wholesaling and the rest is history. The plan was to use my construction background to start flipping houses. By January 1st of 2019 I launched several marketing campaigns both on and offline for real estate seller leads.
Within about 4-5 weeks I had my first real estate contract locked up. It didn’t take long for me get a land lead where I made almost a full year’s pay on a single transaction. This came from a land lead and that forever changed my life.
I ran low volume larger land deals for the first two years of my real estate career. Like anyone who has been in real estate investing for an extended period of time, I started thinking about scaling my business.
Instead of deciding to vertically integrated and start hiring I imagined a model where I would teach my real estate investing method… Read More
Paul Montelongo
Investor
Paul Montelongo
Paul Montelongo is a lifelong investor, entrepreneur, and business owner. Paul has built, owned, and operated eight multi-million-dollar businesses in his 40-year career. These companies have generated over $90 million in revenue and have employed well over a thousand people.
He invests in underperforming specialty properties in emerging markets including marinas, resorts, apartments, event facilities and residential properties. Currently, Paul has invested in 582 units in six different markets throughout the US.
In addition to his personal investments, Paul works with Real Estate Investors and Real Estate professionals to help them balance their life, extract more profit from their deals and design their lives from the inside out.
Paul’s businesses have included high-end construction and remodeling, casualty management, flipping residential properties, sales operations and a mentoring program.
Paul has made hundreds of professional speaking appearances at Real Estate and Construction Industry conferences around the world. He has authored three books, hundreds of training videos and audio programs, and more than two hundred trade journal articles for the construction and real estate industry.
Paul lives in San Antonio, Texas with his wife, Letitia and is an active father and grandfather to his family.