135 Passive Wealth Show with Javier Hinojo
Javier Hinojo is the Co-Founder at All States Capital Group LLC
Javier is an experienced investor with property acquisitions in Dallas, Austin, El Paso, Tampa, and Raleigh-Durham.
In the last five years alone, he has acquired more than 130 properties, all of which were value-add projects.
Javier’s specialty lies in property value add strategies and acquiring off-market distressed properties.
He was inducted into the Rich Dad Poor Dad Hall of Fame for his success in real estate.
Carolina Capital is a hard money lender serving the needs of the “Real Estate Investor” and the “Small Builder” borrower who is striving to build wealth and generate income for themselves and their families. We offer “hard money rehab loans” and “Ground-up Construction Loans” for investors only in NC, SC, GA, VA, and TN (some areas of FL, as well).
As part of our business practices, we also serve as consultants for investors guiding them to network with other investors and educating them in locating and structuring transactions. Rarely, if ever, will you find a hard money lender willing to invest in your success like Carolina Capital Management.
Bill Fairman (00:01):
Hi everyone. It’s Bill Fairman and Jonathan Davis with the Passive Wealth show, Michelle, Michelle. Now I’m talking about my wife. My work wife, which is also my sister, Wendy Sweet will not be joining us today. She is not in. We are Carolina Capital Management. We are lenders in the Southeast for real estate investors. And if you’re interested in getting a loan, then go to CarolinaHardMoney.com, click on the apply now tab. If you’re a passive investor, looking for passive returns, click on the accredited investor tab. So before we get started, I wanted to give you a little teaser. That’s what we do in this industry. Right? We try to teach you stuff, but we forget to start it. And that’s why it falls flat.
Jonathan Davis (00:55):
And then a minute into it, we’re like, Oh, we’re going to teach you guys. If you’re stuck with us this long, enjoy this tease.
Bill Fairman (01:01):
So real estate investors always have some interesting stories.
Jonathan Davis (01:07):
New Speaker (01:08):
how about if your first flip, you sold to a adult industry?. Professional.
Jonathan Davis (01:14):
Oh, that’d be cool. I guess, fine , sure.
Bill Fairman (01:18):
Hear that story? Well, we’ll get to it right after this. Sorry for the tease. It’s a true tease. But anyway by the way, don’t forget to share, like, subscribe to our show. Hit the bell, all that good stuff. We do have a comment section on either the side or underneath the screen, depending on the platform you’re joining us from. And just ask a question. We’ll be happy to answer it. If we can’t, we’ll find a professional that will do it for us. How’s your day going?
Jonathan Davis (01:59):
Going great. I just didn’t know if I was allowed to talk.
Bill Fairman (02:01):
Well, unfortunately, Wendy isn’t here to.
Jonathan Davis (02:03):
To just kinda poke and drive at you?
Bill Fairman (02:03):
Shut up. It’s time for somebody else to say. Do you have anything to say?
Jonathan Davis (02:12):
Bill, I have so much to say, but we do not have the time.
Bill Fairman (02:16):
We have a great guest , Javier Hinojo. He is from the Raleigh area. He also does business in Texas as well. He started off fixing and flipping homes and he has moved into the multi-family industry. So without further a do, let’s bring Javier.
Jonathan Davis (02:41):
Bill Fairman (02:41):
How you doing? Thank you so much for joining us.
Javier Hinojo (02:46):
Hey guys, a pleasure. Nice to be here with you guys. Appreciate it.
Bill Fairman (02:49):
I heard this story about your selling your first flip and get a little bit more detail.————————————————–
Bill Fairman (02:56):
I have, yeah, I haven’t heard the story.
Javier Hinojo (02:59):
This is on Facebook, right. So I got to keep it PG.
Bill Fairman (03:03):
Tell us on YouTube.
New Speaker (03:05):
Youtube is a little different, right? So, so I started my real estate career. It’s just a little bit over six years ago and our very first flip ,That we, we ended up buying and fixing it up, selling it. Yeah, we, I ended up selling it to an adult film actress. Right. So it was very interesting. So when we’re at the closing or doing a walkthrough, et cetera , et cetera, she was like man this is a very pretty lady. And then I would look at her husband. I’m like, that’s not a good looking guy. So it’s kinda like when you see me, it’s kind of like when you see my wife and myself, but she’s not she not in that industry.
Javier Hinojo (03:48):
Okay. So make it that make that point, but you’d be like, how does she, how does he have a go like that? That’s what I was thinking. That’s people think when they see me and my wife, but my wife and I, but look, it was my first flip and the contract said, refrigerator conveys. I’m like, what does that mean? Convey convoyed means I take it with me. Right? You know, that’s my thoughts, you know, like, hi, I’m taking the fridge. So, so I took the fridge and sure enough, when we closed, got a call back from the agent, Hey, where’s your fridge? I’m like, Oh, okay. I gotta take it back. So I have to get back in at that time. My, one of my sons was how old was he? He was 19. He’s our, he’s our boy from Russia. We, we adopted him a few years back.
Javier Hinojo (04:30):
And so his English is pretty good, but you know, it’s a little rough. So him and I went to take the the refrigerator back ,and you know, we connected it and she’s talking to the ladies there, young ladies are talking to somebody to replace her carpet because she didn’t like the color. The carpet guy leaves, I’m connecting the fridge and I’m talking to her and she gets a cigarette out and starts smoking in the kitchen. I’m like, okay. And she says a fucking thousand dollars to, to replace this carpet downstairs? That’s a lot of money. Don’t you think? So. Yeah. Some of the pricey, and then next thing she said was, that’s a lot of bleep. I gotta suck. That’s what she said. Like, im like what, And I’ll sit in there. And my, and I see my behind her is my 19 year old. What’s your boy, He looks like the double take. Like, did I just hear that? Cause my English is not any good. You know, like his English is not that great. anyways, So that’s how I found out that, So you guys being hard money lenders, guess what? My next question was. I said, Oh, so what do you guys do for your retirement? What kind of returns do you get on your money? You know, I was trying to raise money.
Javier Hinojo (05:32):
She had money to Deland, right? I mean, that was like my next question. I always have this answer for anything anybody ever asked me. Right?
Javier Hinojo (05:40):
Or anything ever said, Hey, this happened, this happened. Oh, I’m so sorry to hear that, you know, deal with that situation, put off it or, Hey, that’s awesome. We deal with that situation quite often. This is the only time I’ve never been able to answer that. I come back. That was not my comeback. I can do it anyway. So yeah. That’s how that’s how I find out what she did. We talked for a little while and it was very interesting. Very interesting.
Bill Fairman (06:06):
I bet. Well, that kind of puts the rest that you can only be in the adult film industry if you’re out in LA, right?
Javier Hinojo (06:16):
It was in here in Raleigh. Yeah. Southern girl and she flipped back and forth to California and back. So yeah.
Bill Fairman (06:25):
That’s pretty interesting.
Javier Hinojo (06:27):
It was definitely interesting for sure. And I’m like, wow,
Bill Fairman (06:29):
That was pretty funny. So I understand that you got started in a rich man, poor lib, rich dad, poor dad, event. And you were very skeptical and you know, when you first got, got started in this and I see that happens a lot, but you took action. You want to talk about that?
Javier Hinojo (06:54):
Yeah, for sure. I’m like we, my good friend of mine and myself who bought the program, we split it. And I think we paid like 35K. We split that half, 50/50 and we bought our first house, I guess, six, seven years ago. It was on the MLS. You can still buy some decent deals, but back then you could buy some really good ones. And you know, we weren’t even halfway through our first like, course, right. It was like, it’s called momentum, like the basics, but we just took some action. We got it under contract we’re like, not what do we do now? Right? Like you gotta find money and it was hard. Right. Cause I didn’t really have any connections looking for the hard money lenders, like all over the internet.
Javier Hinojo (07:32):
And like, people like send me 10 grand and they will give you a, you know, we’ll give you money. I’m like, yeah, try. Like I said money before? you know, like it was just, it was so you know, it was, it was definitely a learning experience quickly. Right. Because we’re like, shoot, we got to close on this. Like, you know, we’ve got it under contract now we’ve got to figure it out. So that’s kind of the way my personality is. Right. It’s kind of what is a shoot, shooting ready backwards. Right? That’s just my personality, but yeah, that’s, that’s how we got started. Just fixing flip. That was pretty much our very first, very first project.
Bill Fairman (08:10):
Well, what made you want to get into doing fix and flip and what kind of, what sparked that up? I guess that program being interesting to you and your friend.
Javier Hinojo (08:21):
Yeah. So like when I was there, he first told me it was two hours. And when he, when he first, when he picked me up from my house, I should have been the first red flag. Cause he picked me up and it was like a three-day weekend around like, come on man. And like I don’t really need the motivation. Right. Like just tell me what I need to do. And if I want to do it, I’ll do it. Yeah. I don’t need you to sell me on like the future of my family and my legacy and all that. You know, I can you know, when she, when you, once you get a purpose, you can pretty much do anything. Motivation is not really doesn’t mean nothing but long story short. I didn’t want to do it.
Javier Hinojo (08:54):
Right. And my buddy’s like, Hey, I’m going to pay for it. I’m like, man, I felt bad. I’m like, okay, I guess you could get ripped off. You don’t, you know, we’ll give her tough together. Right? And but I mean the system, the process, the whole sales pitch, everything, I mean, it makes sense. Right? but I’m like, this is, this can’t be easy because if it’s easy, everybody would do it. And he said, Hey, look, if you do it, I’m gonna do it without you or with you. So I went ahead and said, okay, I’ll, I’ll, I’ll split it with you. I mean, that’s really what it was. I wasn’t like 110% pumped up. I mean, I was excited, but I wasn’t like ready to run through a wall. I think if he would have said, Hey, I’m not going to do it. I would have been fine. I would be like that. Let’s not do it
Jonathan Davis (09:34):
That’s a lot of money to put up with on something. You’re like, eh? I’m not really sure. You know that’s a big step. It’s a big leap of faith.
Javier Hinojo (09:40):
Yeah for sure.
Bill Fairman (09:43):
So are you guys still partners?
Javier Hinojo (09:45):
Well, so we worked together for about a year and a half, and then he went to do a big project at the beach, and then I went on my own. But we’re still good friends. Actually. I just, he send me a text text last night. But no, yeah, he, I went my own way and then he went his, his way about a year and a half into it.
Bill Fairman (10:03):
So at what point did you feel like the single family model wasn’t scalable enough?
Javier Hinojo (10:15):
Look. So the first year we did, you know, a few flips, right. And I’m like, Hey, I got to split this. I really got to do a lot to make a lot of money. And this is like a job, right. It’s like, it’s not really, you know, it’s not really passive to flipping. It’s just a job. It’s a high paying job. And I said, okay, so I’ve got to scale, right. Either I got to start doing five, 10. Okay. Let me, let me hit 10. Like for me, it’s doing what tandem was like as a big number, but then you meet somebody who does 10 and you’re like, man, that guy can do it. I can definitely do it. Right. If you would have met me when I was flipping houses, you’d be like, man, this guy can do it. I can do it. And that’s really what it was.
Javier Hinojo (10:51):
Right. It was just, in the single family, just meeting and connecting with people that were at the next level. And then I, then now you’ve got that belief say, okay, I can do it. Right. And you don’t feel alone. But I got to the point where at the peak were, we flipped, you know, a little bit over 50 houses in one year. And we also were doing a lot of you know, wholesale deals. We did, I mean a whole bunch. And I wasn’t getting ready to really scale to, I want to do a hundred, 150. And I joined a mastermind and I got, I had a guy who’s doing 200 a year, 100 a year, like talking into like, man, these guys are killing it and talking about their systems or processes. And I’m like, wow, I got to definitely step up my game.
Javier Hinojo (11:30):
I most likely got to, you know, hire some new people or kind of restructure. And then it just hit me. I’m like, man, I think you, know, if I decide to do this all the time and energy, I can focus on another aspect of real estate. That’ll help me schedule a scale off faster. Right? Which is like, you know, multifamily and mobile home parks, self storage. Right. So that’s kind of what was focus. And another thing is I don’t, I didn’t really enjoy flipping houses. So Jonathan, you look, you know not much older than me. Right? And I tell everybody I’m 24 years old, but I look like I’m 42 because I used to flip houses. Right. it’s a lot of brain damage. Right? But I mean, it was, I say that tongue in cheek, but you know, it was good money and it was a great learning experience. But at the end of the day, I didn’t really enjoy it. It wasn’t like a super passion of mine. My wife’s a lot better at it than I am. And I felt like I was going to scale to unhappiness. If that makes sense. Like I was on a scale to unhappiness.
Bill Fairman (12:32):
Yeah. And that’s part of what Jonathan and I always talk about is it, you can scale just for the purpose of scaling and you end up with a machine that you have to constantly feed. And the whole point of scaling is so you can step back and become more of the business owner than working in the business. You work on the business and it gives you a lot more freedom. You’re in a position to where the business doesn’t revolve around you. It makes it saleable because then any moron can step in and continue to make money if you have the systems and processes. And you’re, you’re correct about, you know, it’s, it’s a job you’re only as good as the last deal that you did. And you need to get in a position that you’re getting more passive income than you are active income. And that’s the only way you can pass down legacy as well as go on to whatever is next for you as well.
Javier Hinojo (13:43):
Yeah. I mean, yeah, definitely that that’s, that’s exactly what it is. Right. So if you’re not a systems guy, like, I’m definitely not like I got my team now and I say, look, I got this thing together. Can you make it look pretty right? And they’ll make it look pretty for me. So I’m definitely not the detail. Like if you want me to be unhappy, let me look at a spreadsheet all day and I’ll be miserable, but I love the people who love spreadsheets. You know, it’s like, you guys are my heroes and they can make you a lot of money.
Javier Hinojo (14:08):
Bill Fairman (14:09):
We call Jonathan spreadsheet, boy around here.
Javier Hinojo (14:12):
Yeah. We call it a, you gotta love a spreadsheet porn. That’s what we call it.
Bill Fairman (14:16):
Especially when the numbers are high.
Javier Hinojo (14:20):
For sure. Right. You gotta love it. You gotta be, you gotta love it. Gotta love messing with it, tweaking with it. I’m like, how do I copy paste? You know, I’ll do a video. I want this to equal that. that’s equal this, these two equal that. Mine is this. And multiply this by that. I’ll make a video and then send it off to my guys and let, let them put it together right now.
Jonathan Davis (14:37):
Bill Fairman (14:38):
New Speaker (14:39):
So, moving over to the, you know, multi-families though, you know, economies of scale, instead of having a hundred doors, you know, spread across you know 10 miles, 20 miles, whatever it may be, you have a hundred doors setting
Jonathan Davis (14:52):
On one block. Economies of scales are obvious, but were there other incentives or other reasons why you wanted to move into that realm? And kind of, you know, that you would recommend to other people?
Javier Hinojo (15:06):
Yeah, for sure. Like at the end of the day, just, just about every business is a sales and marketing business, right? Like your guy’s been in the sales and marketing going to have your sales, you’ve got your marketing, flipping houses, it’s sales and marketing. Right? Buying multi-family still sells a marketing. Right. You got to go market yourself, find some, you know, do some sales and buy some stuff. But, you know, just with, multi-families is not constant, alright. Like, you know, I’m not, it’s not constant. Like I got five deals a week, so it’s a little slower pace, even though we, you know, we did fairly well very quickly.
Javier Hinojo (15:37):
It’s a little slower pace so I can enjoy time a little bit more. A lot sooner. Well, I can say that a lot sooner. Right? Could you just start putting the systems in place. And it just, it’s kind of a slow moving machine, so there’s not like you don’t have to be hustling like you do with single family. But I just liked the fact that you buy one property and you know, it’s one loan, you know, almost like one contractor, one property management company, one seller, and you got a hundred doors, right. Or if you got to go buy a hundred houses, it’s a hundred loans, a hundred owners, a hundred closings. I mean, it’s like, it’s just, time-wise right. If I want to go look at a hundred properties that I own in Raleigh, single family in one day, I’m not going to do it. right?
Javier Hinojo (16:22):
I can actually fly to Tulsa, Oklahoma looking at my 208 unit apartment and fly back home and I’m done. I can actually fly one day and come back one day.
Jonathan Davis (16:33):
Now. are you, when you look at these, are you looking for value, add multi-family or kind of what’s your strategy?
Javier Hinojo (16:39):
Yeah, so yeah, somewhat of value add I mean we closed three, like super heavy value add deals during COVID. Like I’m talking like 50% occupied and that’s what really put us kind of like on the map or now we’re getting really good deal flow efficiently from brokers because they noted that we were able to close when nobody could pretty much get a bridge loan during COVID. It was like pretty much they all disappeared. So yeah, for sure. I mean, it’s just, you know, scaling, right? It’s definitely like it, I mean, it’s a lot different than multi-family.
Javier Hinojo (17:17):
I mean, than a single family is just, I like the fact that you’re able to just buy one project and move on, like, you know, be done with it and not really move on, but like it’s done. And then you got the next one and then the next one and it just big chunks, and it’s value add, right? It’s value add. So it’s 50%, 60% occupied. You gotta get it. Honestly, you gotta get those like at 50 cents and a dollar 60 cents or a dollar. I mean, like all in, I’m not talking yo just because you got, you know, surprises coming in and coming out everywhere. But we’ll still buy a pretty property. We’re buying a first kind of pretty one in about three weeks. That’ll be in Houston. Which is not really that much value add, but we’ve got a discount on it.
Jonathan Davis (17:57):
Just because of the timing of it.
Javier Hinojo (17:59):
Yeah, timing’s good and it makes it make sense for our investors. You know, it makes sense for the returns that they’re looking for, the city they want. So I got some people that want, they don’t, Hey, we’ll have lock in North Carolina in a small MSA or we’ve got people saying, Hey, I only want stuff in like half a million or above MSA, right? In the Southeast, right? So you’ve got different types of personalities, different types of investors. So once you get a good list, then you’re able to take something down.
Jonathan Davis (18:27):
So you said, you know, for your investors, are, do you syndicate your deals ? or do you take a debt for them? or combination of all the above?
Javier Hinojo (18:35):
Combination yeah. Combination. Yup.
Jonathan Davis (18:38):
And how you first got started multi-family was syndicating your first deal?
Javier Hinojo (18:41):
Yeah. So my very first one, I have a buddy in South Carolina and I said, Hey, what can I do to make this be part of this project? Right. I don’t, I don’t really care what I do. I don’t care how much I get. I just want to kind of learn the process, see how it goes. And then I, that’s the way I learn. Like I’m not the best learner on a video or even sitting down and taking notes. You know, I tell people I’m a high school push out. I’m a C plus student, you know? So I’m just never a good at school. Pretty much everybody in my, it worked for me. And my company has like a finance degree. I’m the only one without a college degree.
Jonathan Davis (19:13):
Yeah. And you’re the one running it all. So there, there you go.
Bill Fairman (19:19):
So just have one come in event is to get it cheaper because it’s not above sea level.
Javier Hinojo (19:27):
Look, you gotta hear that for sure. I mean, Houston, you’ve got to be careful because everything’s a flood zone over there, you know? So you definitely gotta account for that, right? Like if you’re going to pay 450 bucks on average for insurance a year per unit, I mean, you gotta calculate like 800 a thousand, right. I mean, for some, some of these, some of these areas, when you do your underwriting, you know, and at the end of the day you got, you got a cheap enough price. No. Yeah. Who cares if it’s 1200 bucks a year, you know, it’s four times more than the national average on insurance. Right. But if you can afford it because you got a great deal. Awesome.
Bill Fairman (19:57):
Sure. Listen, it’s all about the cash flow. As long as it’s cash flowing, it doesn’t matter what the expenses are as long as it all fits. I, I know you were talking about masterminds and we only have a six or seven minutes left. So the first mastermind that you joined, was it specifically a real estate mastermind or was it a business mastermind?
Javier Hinojo (20:20):
It was a real estate mastermind. Yeah. Real estate mastermind, for sure.
Bill Fairman (20:24):
Excellent. Yeah. We’re always pushing mentors and mastermind groups that real estate investor, you can’t do it alone. You need a board of directors to bounce stuff off.
Jonathan Davis (20:38):
All of Bill’s best ideas came from somebody else.
Bill Fairman (20:43):
And I’m quoting Glenn Stromberg here. I’ve never had an idea in my life. I just know a lot of smart people and I copy what they do.
Javier Hinojo (20:52):
There we go right. Copy and I’d try to make a little bit better. Right? I mean, no sense in remit and reinventing the wheel. I believe in coaching and mentoring and mastermind 110%. I wouldn’t have been able to scale or make the context ,get the help I needed to ask her questions that I got because you become a family. Are you hanging out 30-40 of you like constantly? And you become a family. A lot of deals happen between them. A lot of money is raised. You need help with something. Somebody knows somebody who can buy this, except there’s just so much dealing wheeling. And you kind of start there first, right? You start with your kinda, you know, your mastermind group and then your way out. Just because, you know, you’ve got those relationships and, you know, they can close, right. It’s another thing they know. They, you know, they have some experience, so there’s different levels of masterminds, right? You’ve got kind of the entry level, mid level and you get the high level and then you have like the ultra high level. So it just depends. It’s kind of hard to jump into the ultra high because you, you know, some people might not qualify for a long time. I was trying to get into a mastermind, but I wouldn’t qualify. You know, I wasn’t experienced enough.
Jonathan Davis (21:54):
What mastermind would you recommend for, for other people out there trying to learn and surround themselves by us?
Javier Hinojo (22:01):
So you’ve got to find the right mastermind, right? Probably the biggest problem with the masterminds is, if you go to the wrong one, people are just, you know, talk about what they’re doing. Right. They just, you know, everybody has an ego at some point and a lot of people are type A personality. So just like, Hey, you know, this is what I’m doing. Watch me. Right. there’s masterminds where you know, all they do is pretty much teach systems and teach how to run a business. Right. And there’s masterminds where you go and you kind of hang out and maybe only two hours a day, you kind of two, three hours, you talk systems and business. And then the rest of the time you network, that’s like my kind of mastermind. Right. Everybody’s a little different. So I really can’t recommend It depends if you’re like a COO type, like an implementer type, man, you’re going to love to go to a mastermind that’s systems and process and you know, like nothing but all day. Right? For me, I’m like, I don’t take notes. I never take notes. Like, you know, I just don’t take notes cause I never go back and look at them. I’m terrible at those. But the connections are great. Like for me, I like, yeah, I like 20% content, 80% networking. Right. That’s every time I do an event, like I have a meetup in Raleigh, a multi-family meetup, it’s like 25-30 minutes of content and like an hour and a half of drinking and eating
Bill Fairman (23:15):
Listen. The best thing to do is if you’re going to be a part of a management, everyone that you need to be a part of, one that is the people have the attitude of abundance. And you’ll get along just fine. And if Marta’s person in the room, you’re probably in the wrong room Javier, it was excellent having you on if you’ll stay with us through our, our ending here. I want to make sure that if are you taking a credit in investors? Do you have a fund?
Javier Hinojo (23:53):
I don’t have a fund, but we do a five or six C’s when we raise, you know, we do some five or six B’s for people that we know, but we also do a five or six C’s for accredited investors only. Yes.
Bill Fairman (24:03):
Okay. So they can contact you about actively investing with you through the website that we have been putting up here. All state capital group.gov.
Javier Hinojo (24:15):
There’ll be on Lincoln there for sure.
Bill Fairman (24:16):
Excellent. Great. Now we’ll keep that on there as well. Folks, thank you so much for joining us on the passive wealth show. I am Bill Fairman. This is Jonathan Davis. We are Carolina Capital Management. We are lenders in the Southeast. If you are interested in borrowing money, go to CarolinaHardMoney.com, click on the plan out them. If you’re an accredited investor and you’re interested in passive returns, click on the credited investor tab, don’t forget to like share subscribe, hit the bell, all that good stuff. And once again, Wendy has her Wednesday with Wednesday when they, one of those, when that,
Jonathan Davis (25:00):
Wednesday With Wendy.
Bill Fairman (25:02):
Where she does mentoring for 30 minutes on Thursdays click the link, the Calendly link, you know, online for that. We’re also participating in the quest expo coming up in April. It’s a, I think it’s the 21st and second. But if you click on that link, if you’ll put that back up that link will give you, I believe, 50% off your ticket price. It’s a two day event. Otherwise we will see you guys next week. Thank you so much for doing this.