Seyla (00:02):

Thank you, everyone for joining today’s episode of the, how did they do it Real estate podcast. I am your host today. Seyla [Inaudible] today’s guest is Abel Pacheco. Abel is the president at five T commercial real estate. He and his wife have been investing in real estate since 2008. He has experienced in acquiring when renovating and managing both residential and multifamily real estate investments. Abel has invested in $93 million of commercial real estate, total 865 doors across five multifamily apartment complexes which he’s a general partners in 400 doors and is a limited partners in 400 doors. Abel is also the author of his new book, tackling commercial real estate. The easy way, the guide that he used to invest into $93 million of commercial real estate. He also the host of the popular heart task, five talents, podcast, commercial real estate investing. Welcome to the show Abel.

Abel Pacheco (01:04):

Hey, thank you very much for having me Seyla. I truly appreciate it. And sincerely and I know how much effort, time, energy resources it goes into, you know, launching and getting the podcast out there. So thanks a ton for taking the time to give back to your own network and a pleasure to be here.

Seyla (01:22):

Definitely. Thank you as well for joining the podcast. Today’s and can you please share a little bit more about your background and how did you get started with real estate?

Abel Pacheco (01:31):

Sure. So I would say background wise me, my family, my dad was the first individual that I saw that had a rental property. And so, you know, I was, as a young kid, we lived in a house, moved to another house and I thought, oh, you know, we got rid of the first one. Well, he later told me three, six months later, Hey, we’re going to the back to the other house. And I said, well, we still haven’t. And he goes, yeah, we’re a, we have a rented and let’s go pick up some rental or a rent or check checks back then, you know, there was no you know, online, anything, I guess, literally go to the front door, Hey, thank you very much. And I saw my dad exchange some niceties and, you know, talk to the renters and build a little rapport, but every month they paid the rent.

Abel Pacheco (02:17):

And so that was my first kind of taste to, Oh, there’s a, there’s a way to create some extra income. My dad was doing this and he would explain it to me. He was a pretty savvy kind of business guy sales guy, and that’s kind of how I grew up. He would tell me different ways to make money and rental real estate was one of them. And so what we did and so that was my first kind of introduction. I would say, I’m the second generation, a real estate investor, you know, and appreciated that. So just, you know, throughout the years I always said I’m going to invest in real estate and had had a number of years and single family investing. So probably about 10, 12 years plus, and I did that while I was while I was at work full-time W2.

Abel Pacheco (03:02):

My, in my professional career, I was sales executive and sales leader. So I worked at a tech hosting tech background, a lot of you know, working with a lot of people, helping fortune 500 companies, fortune 400, 301, our companies determine the best path for internet hosting and managed services and it and cloud. And so a lot of tech background there that I, you know, basically worked, you know, my professional career and then invested all the way through it. The harder I worked, the more that I realized that if I stopped working the, you know, the check was going to stop as well. So we try to take that. I viewed that as my active income, every day, Monday through Friday, I had to work my tail off to get a little bit of seed capital and put that and invest it into what I felt was passive.

Abel Pacheco (03:54):

And that was single family for me. So the more that I could do that, the more that I could create that money while I was sleeping and, you know, God willing for me, it was man, how do I figure out how to switch story? I get more passive than active one. I never quite got there a single family, but I did find on the journey you know, multifamily syndication, and commercial real estate investments. And just really realized this is the way to get there with scale a larger, a larger deal, meant more opportunity for profit. And then, you know, just kind of transitioned my way slowly from single family to commercial real estate. So you know, this is a little bit about me, but I grew up in Corpus Christi. So I grew up at the beach and I lived the second, pretty much my adult life in San Antonio. I went to UTS university of Texas San Antonio, got my general business degree there. And then pretty much worked here in San Antonio, married two kids. I have a two and a half year old and a, one-year-old a son, a baby boy, and a girl. And so I’m really happy. And I and my wife had been invested married number of years while we’ve been investing and just enjoying the run, enjoying the ride so far

Seyla (05:06):

That’s awesome. And thank you for sharing your background on that. And you mentioned that you learn it from your parents at a time to do the real estate investing. Was that at a time when you learning that, did you realize at the time that, Oh, this is something that you wanted to do when you grow up? Or how, what was your mind-set at the time?

Abel Pacheco (05:26):

When I was younger, my, I think what my dad instilled the most that I wanted to be, my dad was a salesman. And so my dad sold all kinds of goods. Right. And he would talk to me about number of you know, number of meetings, number of new opportunities. How many of them he’d have to meet in a week? And this would lead to X amount of new sales and those new sales led to X amount of commissions. And that’s why we could live in a nice new house. We moved out of, you know, for lack, better words, a pretty rough you know, grow up upbringing in a really rough, you know, kind of a neighbourhood. And then we went to like a middle-class really nice house, right. And so he’s like, this is how we can this is how we’re in a nicer home, a nicer neighbourhood, you know, less crime and things like that.

Abel Pacheco (06:14):

And you know, he was telling me about that, but so I kind of ended up going the sales route, but when I looked back on it, that learning or understanding of like passive income, I guess it was more of the subconscious thing, because the moment I bought my first house, I mean, you know, really, and my wife together, you know, as me and we’re like, well, it was always intentional. We’re going to buy this house. I want to make sure that the mortgage is not too great because eventually like my dad and my mom, I guess once they could afford it, they got into a nicer house. So that was my mind-set by the minimum that I could afford as quickly as I could buy it. I think I was 26 at the time we bought our first one buy the first one, get in so that we’re not paying somebody else’s rent, that’ll be our savings account.

Abel Pacheco (06:59):

And we’ll just, you know, put some money in it. And then quickly as quickly as we could, it took us three or four years to save up a little bit more, to get into the next house until we’re making more. But that was kind of, it, it was like, I think more subconsciously seen what they did and that was the route we were going to take. And, you know and then, you know, somewhere through that path, it was rich dad, poor dad, Robert Kiyosaki’s book. It was the follow-up to that. It was ABC’s of real estate investing with Ken McElroy talking about commercial real estate. And at 26, I really said, I’m going to buy apartment complexes. This is, this is absolutely what I’m going to do. Now. The funny part is when reality sets in, I’m a 26 year old kid, I have $5,000 in the bank and I’ve never done any deal.

Abel Pacheco (07:44):

I go, man, who are you kidding me? My limiting beliefs told me, who are you kidding? Abel, you can’t buy an apartment complex. It was a good book. It was nice and entertaining. Read now, go buy in the single family house. And that’s what I did. And then we bought single family houses for the next 10 years. It took us 10 years to buy eight houses in our portfolio. And then as soon as we switched to commercial real estate, we went from eight to 800 doors in under two years. So it was just a, it was a tremendous kind of mind-set learning from my father, learning from my dad, learning how they did it, and then kind of taking my own path which, you know, through education and knowledge and insight, it was like, Oh, this path is available.

Seyla (08:25):

So I want to go back and talk a little bit about you building up your single family portfolio. Is it, you mentioned that you took 10 years to buy eight houses. So what are the, some of the challenges that you can share with our listeners in terms of managing the single family portfolios?

Abel Pacheco (08:42):

Yeah, it was for me then I always managed our own portfolio, so we never used property management, third-party property management. It was myself buying the house you know, then advertising it, meeting the tenants, doing the background, checks, doing the agreements, signing the leases, and then, you know, checking up on the pro on the property periodically. So really the, the biggest challenge was not at deal number one or two or even three. I think four, maybe I started to experience, you know, a little bit of losing my Saturday, losing a Sunday, losing a night and weekend. Really when I got cooking though at five, six, seven, and eight, I realized man, most of my nights and weekends were spent in real estate. If I was not talking to a tenant, doing Alyssa, doing a renovation on a lead, on a renter, leaving, and then leaving my house in disarray and having to go do the renovation.

Abel Pacheco (09:39):

There was an AC that died. There was, there was a roof that needed to be repaired. That was expenses that were going out. And it wasn’t, you know, like I didn’t do any of those that work. I have probably the least capable construction kind of management and rehab guy. You know, I tried to lay a floor once and I hate painting and I’m horrible at all the details in the house. And so I like, I didn’t do any of this stuff, but it was still, it takes up your time, your energy, your focus. And at the time I led a, a pretty large growing it, you know, business, we, we, we scaled from $5 million, you know, our own little quota or a 5 million bucks to 12 to 24 to 40, $50 million a year in new acquisition business. So when I was at work, I was like highly focused on work.

Abel Pacheco (10:29):

And then you had to learn new tech stuff and new managed people. I had about a 60 person team. So, you know, Monday through Friday, my mind was a hundred percent focused on tech. So when I had, when I leave, when I left either for lunch, if I got one as soon as I left six o’clock till whatever o’clock at night, I didn’t have any kids then. And my weekends, it was a little easier for me to focus, but you start racking up the hours. And that was the biggest difficulty, like you said, is one of the biggest challenges was that, and then really acquiring it all. I made pretty good income. You know, I was a six figure earner for most of my tech career. And towards the end, you know, a couple hundred, you know, on paper, it was, you know, a few hundred.

Abel Pacheco (11:08):

I was just hoping to hit my commissions to get it all right. But for the most part, it was how to still save enough money to go put that next 30, 40, $50,000 down on a house because the first one was a little easier. I, you know, it was it was I left my existing house where I did an FHA loan. I put 5% down, so that was simple. My second house, I did the same, because I lived there. You could put five or three or 5% down and I got them with a minimal amount of money. And that was cool. I ran out the second one, but my third one, anything after the ones that you’re living in their investment properties. So the banks want, typically they wanted for me 20% down for the, for the dollar amount. And they wanted six months of reserves in every single one of the properties that I currently own.

Abel Pacheco (11:58):

And for those that don’t know, those reserves are basically like whatever your mortgage payment is, multiply that by six, six months. And they wanted that cash not invested in the deals for me to go borrow enough to do the fifth and sixth and seventh and eighth. So when you have seven, eight properties, even at a minimum thousand dollar a month payment, you know, that was seven grand multiply that $42,000. They want you to have a reserves plus the 30, 40, 50 grand to go invest in my next deal. And I realized, man that was not scalable. It was you know, it was going to take me forever. So that’s kind of the, the biggest challenges that I, that I had.

Seyla (12:38):

So possibly that one of the main reason why you decided to go into the multi-family business side of things. Yep. And can you walk a little bit about that and what, what steps did you take in order to make that transition?

Abel Pacheco (12:53):

Yeah, the biggest thing for me, and honestly, I think I’ve heard this so many times, so hopefully it’s not cliché, but it is, it was absolutely true for me, which was, it was a mind-set shift more than it was like education or tactics or strategy on how to do it. I read that book in 20, you know, when I was 26, the ABC is a real estate investing and it tells you, this is how to go look for deals. Here’s how to analyse them. Here’s how to raise the money. Here’s how to put a team together. Here’s how to know market and it rally read it now. And I’m like, man, this is exactly what I do today. This is a great book for now. But it took me all of those years and all that transactions, all those cycles for me to kind of get to a point where I finally said, you know, it’s okay, well, you can go do this.

Abel Pacheco (13:44):

And the only thing, or the biggest thing for me was like, you know, I’m a big faith, I’m a big faith, individual Christian. And it took me a lot of prayer kind of meditation. However you want to call it to say like, can I do this? Is this the right time? Should I be doing this? You know, I thought a hundred, $200,000 deals, it was quote unquote risky. It felt riskier than the 401k that all of my friends and all the people that were working with invest in stocks, invest in 401k. They were like, man, you’re invested in like a hundred percent real estate aren’t you concerned? And don’t you, you know, I started in 2008 too. So it was like right in the, you know, the great recession. And so you kind of like, even in those years, I had to just dismiss what they were telling me.

Abel Pacheco (14:32):

And, and I realized that I’ve met. It feels like what they’re doing a lot. It was a lot more risky than what I was doing, but it took me all those years to get over that hump of limiting beliefs, to where I could finally say like, yes, we can go do this. It was a lot of prayer, a lot of meditation. It was me and my wife, you having the conversation, you know, eye to eye, hand to hand, you know, need any conversation where we’re talking about the future and my, you know, thank God I had one of those one of those great relationships where my wife has always backed all the plays that I’m making. You know, she tells me when she thinks I’m off and she’s my strategy person. She’s really great at strategy. But for the most part, it was like, this is what I think we should go do.

Abel Pacheco (15:17):

What do you think, babe? And, and we’re talking about it and she goes, well, you know, we’ve come this far and we’ve done this many deals and, you know, let’s, let’s, you know, to her, it was like, let’s diversify, let’s try it a different way. Let’s let you know. I think we should do it. It’s is it risky? Is scary. Is it? Yeah, it’s scary putting out 50 K and I couldn’t see the property in advance or I didn’t, I could have, but I didn’t even think to ask, I was just looking at this documentation and paperwork, private placement memorandum operating agreement, and I’m like, Oh my gosh, what are we getting into? But let’s move forward and overcoming that limiting belief. And that was probably like 90%. You know, w what helps me a lot was education. I took the time to kind of take the education go to a real estate conferences.

Abel Pacheco (16:01):

I, you know, soaked up as many you know, cycles from my now mentor back then he was the, my syndicator choice and asking them a bunch of questions and, you know, talking to other people who are already doing it. And, and I think that kind of helped me over the education hump, which, you know, created more competence in the subject, which created more confidence. So the more education you have, the more competent, the more confident, the better action or more results you’re going to have from your actions. So all of those things kind of fed together for me.

Seyla (16:32):

I totally agree. I mean first of all, it’s like, I can resonate to that. My wife is my strategist in this as well. So anything that I need to do with investing, I usually consult my wife and say, Hey, what should I do with this? What do you think about this? And we talk about through it. So, and a second thing you mentioned about educations and go into seminars and be confident you know, like jam over that limiting belief that you have 99% is basically my mind-set is to get over that hump. So I totally agree with that. So thank you for sharing that with our listeners. And so after dance how did you get into your first day, or did you go in as a limited partners or general partners? Can you walk us through that first day of yours?

Abel Pacheco (17:20):

Sure. Yeah. The first thing I invested was as a limited partner and it was an opportunity where I knew someone local saw some Facebook posts actually. And it was funny because I, I know, I know this individual, one of the partners that I I’ve partnered with Devin elder he’s local, he was in San Antonio. We grew up at this tech company together. So when we were there growing the business, he was there. I had a lot of success and he left and I’m like, you know, in my, I’m like, dude, where are you going? Like, we’re, we’re just about to have this massive tech success run. And he goes, and he’s doing real estate. And I didn’t realize that at the time, but I just, some people didn’t make it or left or whatever. And I always said to myself, oh man, they made the wrong decision because this tech job, this W2 job is where it’s at.

Abel Pacheco (18:10):

And you know, I don’t you know, for me seeing that individual leave and then go have success and see him on Facebook and see these posts on walking through an apartment complex, I realized, wow, that’s why he left it. Wasn’t to leave. We had successful run through our hosting company. I wouldn’t have changed a thing, right? Like this is my journey. And I went through it, but seeing him, I go, I want to experience the same thing that he’s doing. I want to walk through an apartment complex. I want to show it on, you know, on YouTube, tell people how they’re repositioning you know, 60 unit apartment complex. I want to go do that? And I reached out to him and he said he was doing deals. And I said, man, I I’d love to, you know, to learn from you and get mentored from you and coach for you.

Abel Pacheco (18:54):

And he actually said, man, I’m sorry. I don’t have any time. That was, well, I go, what? You don’t have any time. It’s me. Like I went to their wedding. I, you know, I know who you are, we’re friends. And he’s like, I’d love to just, I don’t have any time. I’ve just not in this mentor and coach thing. But if you want to learn as an investor, he goes, man, every one of my investors asked me a lot of questions and I have to answer them all because they’re my investors. So if you want to invest in the deal, I’ll be happy to help you along the way, same way through. And I was like, well, what’s the minimum 50 K. And I said, I’m in. So I joined as a limited partner, passive investor out of my first deal. I did it on my second deal.

Abel Pacheco (19:35):

And then my wife invested herself as well. So we kind of got in those three cycles as a passive investor, 128 doors on the first one which got, which has gone completely full cycle, meaning it’s sold. And I have my capital back, which is really cool. The second deal was 282 units. And then my wife got in on herself as well. So those transactions are cycles. We read the OEMs, we read the private placement memorandums, which is the agreements we started asking about returns and how it worked and, you know, kind of at that basic level, it was, well, how much am I going to have to put in? And how much do I get out and at what cycles, and you’re going to pay me monthly or quarterly, or how does this work? And just kind of explaining that. And I did invest passively in my own city.

Abel Pacheco (20:21):

So it was easier for me to kind of like know the market demographics. I was already investing in single family already knew the median cost of homes. I already knew what I was searching for. I knew the markets and sub markets by default, you know, 10 years prior investing myself. So that was very helpful. Maybe for somebody that’s, that’s listening, that’s not investing in their backyard. You’re probably going to have a little extra learning curve than I did, but, but it was like the team member was the most important thing who’s running the deal. The market was the second and then the deal and I really didn’t know enough at the time to analyse the deal. It was more based on trust. Hey man, is this a good deal on my buddy’s like, yeah, this one’s going to be a winner. And you know, if you’d want to invest as a great starting point. And I said, absolutely. And you know, that was, those are my first cycles as a, you know, a multifamily commercial real estate investor.

Seyla (21:19):

That was a really awesome, I’ve been due to have an invested in a deal that actually went through a full life cycles. And as we exited out and get your capital back as a passive investor and stay benefited or the real estate benefits out there, I mean, that’s amazing. And you know, like I want to ask if someone wanted to jump start, how do you get over that home of, you know, investing $50,000 of your hard earned money into a syndication deal with somebody, a sponsor, especially with someone in your case, you kind of know him around here, but if someone who doesn’t even know to sponsor how do you get that mind-set to actually do it and actually investing?

Abel Pacheco (22:03):

Yeah. There’s a book that I really love and I kind of reference often and it’s called the speed of trust and it’s by Stephen Covey. And if you are a Stephen Covey fan, you know, his other books seven habits of highly effective people is probably one of the biggest ones. And I’ve read that, you know, countless times, right? Well, there’s another book that he wrote this called the speed of trust. And for me if you’re a reader of that, you’ve you kind of know, like to work in a team to be an investor to hand over your highly, highly high amounts of earned money, right? Capital it’s like, man, I have to have that trust in somebody. And for me speed of trust was already there. So there was already some things that were built in to my first one to three investments that other investors may not have.

Abel Pacheco (22:53):

But if you’re a new general partner or a passive investor, that’s listening to this right now, you need to establish this level of trust, both for you as an investor, to make sure that the trust is created. It’s built the relationship is there because when a good deal pops up you have to move quickly. Some of these deals actually the first one that I tried to invest in we got it on Sunday, I think, Oh, Hey, Hey, this deal is coming out on Monday. Just want to give you a heads up. So I knew it was coming. I got an email on Monday. And then by the time me and my wife talked it over Tuesday night or Wednesday to kind of discuss it, I go back to him and I say, Hey man we’re ready to invest. And I sent him an email.

Abel Pacheco (23:35):

I got a response saying, Hey man, I’m sorry, we’re already 1.5 X oversubscribed. So they had already over-subscribed. It was like three or four days later. And I go, what the heck just happened? So I missed out. I thought I was in, that was like three days later. Right? Well, if that speed of trust wasn’t established, then I wouldn’t have even made the first week. Right. I would have still been in an asking question mode, Hey, tell me about this deal. Tell me about you. Tell me about your market. You got to establish that stuff well in advance of an, of a general partners deal that comes out because you never know when they’re going to get full. And if I’m a general partner, you have to establish that trust with a new investor plant and have those cycles in advance of your deal before they’re going to, you know, spend over your invest their hard-earned capital.

Abel Pacheco (24:26):

So that was a big one for me that I just, I didn’t appreciate them. And I really truly appreciate it now, because now it’s, you know, the numbers are bigger. The deals are greater. The risk reward opportunity is just amazing. So I put in a lot of time today, networking with new passive investors, with new general partners, learning about their markets, learning about their investment goals, whatever, you know, all those cycles. We need to develop that trust in advance. So that way, when a deal comes out, you’ve already spent the time uncovering, discovering doing your background checks, finding out a little bit more about this syndicator or the operator or the team running the deal. So there’s no question when their deal comes up, like you’re in it. So those are some of the things and some simple tactical things to do, like ask, you know, well if you search for the markets that you really want to invest in, you can kind of start with the markets I’m in San Antonio, Texas.

Abel Pacheco (25:30):

And I do a lot of South Texas deals, right? So a lot of the 800 doors not another, you know, couple hundred doors on our contract as well in some of the surrounding areas. But when we look at that, it’s easy for me to say, this is my market. Know a little bit more about it, but if you’re for the first time trying to figure it out well, research the markets. First, once you’ve found the markets that you really feel like you want to invest in, then you can go back and find the general partners of the operators that are in that specific market. And then you can set up time with them and you can ask them about their past deals. You can ask them for their OEMs. You can ask them for their, their pitch decks, their presentations, and you can ask them if the deals they’re looking for in the future are going to be somewhat like they are today. And then you can ask those questions and start vetting them out long before their deal comes out and you can make a decision. And that’s kind of what I would say is probably the biggest the biggest hurdle or the biggest, you know, cycle that a new investor can do as you’re trying to figure out more to invest or not.

Seyla (26:30):

I really appreciate that you’re sharing the tips and tricks for our listeners and especially for new investors so that it can be paired themselves. And like you say, it’s, some of these deals are very fast and they come out and they can be oversubscribed pretty quickly. I have an experience with one of the sponsor that I got a deal at 11:00 PM at night times. And my wife and I, we were looking at it and we were like, okay, it’s 11:00 PM. We don’t have time for this. So let’s go to sleep. And in the mornings at six o’clock, we got another email said, it’s already oversubscribed. We were like, what, how is that even possible? We haven’t look at it yet. So basically, you know, like real estate is way lucrative investment opportunities, and we’re going to have to educate ourselves, identify our market, identify a sponsor and get ourselves ready once the deal is available and be quick about it. So I totally agree on that. Yeah.

Abel Pacheco (27:24):

I just interviewed one of, one of our, you know, really mentors and kind of guys that I look up to and he raised $10 million in a 10 hour. Let me see, let me make sure I get this right. Because I just wrote 10 million in two hours. Why puts us, you know, put the deal out there in $10 million. I’m like, oh my God,

Seyla (27:44):

That’s amazing. That’s amazing. Well, hopefully one day you will get to that levels. And yeah, that’s one of the things I want to ask you next is you also sponsor your own deals and what made you decide to sponsor your own deals? And can you walk us through how you were able to complete your first deal as a general partners and how’s that journey look like?

Abel Pacheco (28:07):

Yeah. This is so this one’s a fun topic because it’s so cumbersome, hard, stressful, whatever you want to call it for. Some individuals and then easiest, you know, easy, cheesy 11 squeeze for some other people. And the way I view that is like there’s this game that’s happening on the field. And every, a lot of people want to be in the game and play, but unfortunately there’s this huge chasm that you have to cross to go from zero to one deals. And in that it’s like everyone wants to play only the few starters are on the game, scoring touchdowns, you know, making goals and have, you know, have a great time and everybody else wants to get in. But for those that are not in it, you know, you’re trying to figure out how, and if you want to, you know, be a player on the game, if you want to do that, the easiest way to get there in my personal opinion is to leverage someone else’s track record and to join and partner with some other individuals that are highly successful, that I already have what you have there on the game.

Abel Pacheco (29:21):

They’re in the game, they’re playing right now and you’re trying to convince them to join the team basically is what you’re doing. And so if you can do that, your path to success is going to be greatly reduced quickly shortened. And you’re going to have a lot more success, much more rapidly because you know where everyone wants to get in the game. The question is, have you done a deal before? And the answer is no, it’s hard for, to raise capital. It’s hard for you to get any cycles from the brokers. It’s hard for you to find a first opportunity or know what to do. And so the way I did it was I brought my general partner or past my syndicator, my operator, I brought them value. And I look back on this now and I go, man, if I had somebody like me, they would absolutely get an invite to my team.

Abel Pacheco (30:09):

So here are the, the things that I think I did right, is I learned on my own, I paid for education. I paid for coaching, went to the mentor programs. I travelled all over the United States and many multiple different conferences. And I took notes like crazy. I logged like 200 hours of education, right. And those not including podcasts, or I don’t even know how many podcasts I consume, right. Because every minute that I had that was free washing dishes, picking up the backyard. I mean, podcasts, headphones in podcasts, and I’m really consuming as much education as I can, so I can talk the talk so I can know the lingo so I can sound educated. And you know, that helped then along the way I invested passively right? Step number, you know, whatever, call that to education and invest passively.

Abel Pacheco (31:04):

And that now allowed me to say, I had a quote unquote track record, even though it’s not the banks the, the lenders or the banks, which I’m also a commercial mortgage broker for anybody that wants to kind of, you know, bend my ear about this, the commercial lenders don’t want to lend to you. If you’ve never been a principal on a deal, they won’t lend to you. If you don’t have a track record of having success or have managed this before. So even if you have a bunch of money, you’re it’s going to be hard to get alone on your own without using professional property management on your own. So like, they don’t want to do that. So what’s the best way? Well, I’m not saying, try it on your own. I’m saying partner with somebody else. And what I did was I, you know, invested passively, but I had that conversation in advance and I said, Hey, I want to be a general partner on the deal.

Abel Pacheco (31:59):

Is this possible to do that and answers like, yes. Is it possible with you in the future? And you know, I didn’t ask that in the first conversation. Right. Took some rapport. And this is somebody I knew still, I still like, kind of had that business report being built. And I said, okay, is that possible? And he’s like, yeah. You know, you never know. Right. It was not a yes, but it was like, okay, well let me keep going. And I said, Hey, I’m going to invest in a second deal. Is that possible? And the answer is probably a little bit more towards the yes. And I wanted to learn what he was doing. So I was, I figured I’m going to have to raise capital at some point. So I started inviting other investors to go meet him. And I said, Hey, I, some other investors, would you like to have lunch with them?

Abel Pacheco (32:41):

His answer. Yeah. Yeah. Abel, we can have that call as or lunch. And back then it was. So we sat down at the table and I’m learning through their questions that he’s answering and that this process. And so I go, Oh, this is how he raises millions of dollars. I can do that. And so that was further education, but it was a value for the PA for the general partner that I was doing. It was doing a deal with invest in possibly. Because I said, here’s an investor. Here’s another one. Let me introduce you to some other people. I, I engaged on his posts, Facebook posts, the same ones that I saw right back then are the same ones that he’s doing today. And I looked at him and I go, man, I’m going to like, and engage and say, thank you for allowing me to join your deal.

Abel Pacheco (33:25):

It was amazing partnering with you. Because we’re formal partners from the operating agreement. It was a great partnering with you. You made this a great transaction. It was easy to work with you. And I was like, man, so engaging us posts. And the next interaction was like me asking them, hey, what do I need to do to kind of, to get going and raise capital? And he goes, well, do you have a brand? Like you have your website, a business card, you know, basic branding. And I was like, no, I’d probably be a good idea. And he goes, well, if the deal comes up in the future, you don’t want to be doing that stuff in the moment you want to do it now because you want to be able to raise capital six months or a year in advance long before you actually need the money.

Abel Pacheco (34:07):

So do that today. And you know, I took that literally today as today, I you know, started the corporation. You don’t need to go that far, but I did start the C Corp. I did start the brand. I did get the logo. I did have the website. I did make the business cards. I did put my mission values. I did do all of that. I put my passive investments as deals that were in you know, talked about my track record, any skill, anything I could put in there, talk to my professional career. We’ve done $50 million in a year. Talked about all that stuff on my website and put it there. And that was well in advance of anybody ever saying, hey, you should go be a general partner. And because that’s what essentially helped me start talking to investors and quote, unquote, investors were like, people that ping me from social as well.

Abel Pacheco (34:55):

They ended up saying, Hey, I saw that you invested in this 128 units. There’s 282. How did you do that? And I would say, well, if you want to set up some time, you know, let’s go do that. And so we’d have lunch. And I talked to them and I’d use my deal as the offering memorandum, the ones that I invested with. And I talked to them about the, the returns, the syndication, the reg D fibre succeed, how, you know, how it was you know, how it worked basically, right. Syndication top to bottom. And after, you know, a couple of lunches or phone calls, it was like, Hey, can you tell me when your next deal is? I think people outside of the world, they don’t relate whether it’s a limited partner or passive or general partner. It’s just like, that was your deal.

Abel Pacheco (35:36):

Yeah. I’m a part owner in this, I don’t know in the whole thing, but I’m a part owner and they would ask me, can you tell me when your next deal is? And those people were essentially my first investors, when, you know, I don’t know, a few months later, my partner, my mentor coach, and he’s asking me, he’s like, Hey, I’ve been thinking about starting this meetup. You know what you think about, you know, maybe doing that. And I’m like all over it, dude, let me get on it. I’ll sign up a meetup page, get the branding, get our dates, and get it going. I’ll advertise, I’ll put it on my Facebook. I’ll do all that stuff. And then when I think about that, that was basically inviting my entire network to know, or, you know, to be, to establish a relationship, to know like, and trust to invest with him.

Abel Pacheco (36:23):

And I wasn’t a general partner yet, but soon after that is like, hey, you, you know, I’m going to do my next deal. We found a deal. It works. You provided a lot of value. Would you like to join as a general partner? And the answer is obviously yes. So you know, all of those series of steps, you know, if I have somebody that does that for me today, like I’m absolutely going to give somebody on my team. And that was, it was very quote unquote easy. It wasn’t a simple, it wasn’t easy for me to do all of those steps, took some hard work and effort and diligence, and it wasn’t overnight, right? It’s not like I did all of that in a week. That was, you know, months and months and months, but the process is repeatable. You can absolutely do that. And it’s very simple, straightforward, and I could go dive down, you know, anybody today and say, how do I get on my first deal? I’m like, man, do these things. And you’ll probably get an invite from somebody that’s doing deals.

Seyla (37:23):

Awesome. Thank you so much for sharing that with me. And I will appreciate that. And you know, like it’s very important to be a resource falls and, you know, have the mind-sets and to try to actually fly, start initiating the process on your own, you know, like, and like you mentioned, and eventually when the general partners actually start seeing you, you know, be really resourceful and use falls and, you know, so driven by this whole real estate investing, they started inviting you to be a general partner. So that’s a great way to get in. And so since then how many general partner deals have you done so far as, and how many units and that your company has invested in

Abel Pacheco (38:05):

As a general partner, we are in well, San Antonio is my primary market, so we’re in about 400 doors on two deals. And that’s here in San Antonio locally. I’m a general partner principal. We’re also doing a new development from the ground up another 150 plus doors. That’s a third deal. And then I’m not sure when this is going to air, but we’ll probably have closed 120 units by then just outside of Dallas. And then we have another 88 doors, something under contract. And so excited about that too.

Seyla (38:40):

Wow. Very successful. So congratulations on that. So Abel, I have a couple more questions as a closing questions. Are you ready? Yeah, absolutely. How has real estate investing impacted your life so far?

Abel Pacheco (38:57):

It’s changed the trajectory. I think of my first retirement. I’m at the end run. It’s my family’s legacy because I learned from my dad, he instilled a little nugget and I improved on it. And I have a feeling that my children are also going to, you know, get some learnings for me and improve on it. So I’m excited to see not only, you know, me and retirement age, I’m 40 now. I don’t know if I’ll ever quote unquote retire, but I sure would like to do what I want to do when I want to do and how I want to do it. And I think that’s going to be different for me in 10, 15 or 20 years. Especially from now, once we kind of get some traction right now and I think our family’s going to have, you know, just different it’s impacted so much. And then you know, really it’s a lot of faith also deeper impacts. It is having trust and faith in the Lord for me. And I’m asking for wisdom, guidance, courage, you know, to keep me on his path.

Abel Pacheco (40:00):

First and if I can keep his kingdom first, all these other things will be added. And it’s a big faith thing for me to leap out and say, well, shoot, do I feel comfortable signing on this, you know, next loan for $10 million and raising, you know, a couple million dollars in capital and are people going to support me and what, you know, what if I fail, what if we lose people’s money? What if you know all that, it’s just your fear and anxiety can be overwhelming. And if you just, you know it’s given me a lot of the confidence to just silence a lot of that stuff and then focus on, you know, like I said, God, and say, Hey, this is, is this the right move? And that’s life changing.

Seyla (40:41):

What is one thing that, you know now about real estate that you wish you knew when you first started?

Abel Pacheco (40:49):

I would say probably the biggest thing is that you can actually leverage team members and you can raise capital and buy something bigger than you think you would have been able to. So I, I bought single-family houses for those eight, 10 years. I don’t know whether I was too simple or whether I just didn’t look outside of what I was doing. I never realized that people raise capital from other investors and go buy something bigger than they could do on her own. I heard of people doing 50 and a hundred deals, and I just thought they must have had success with number one, two, three, and four. And they finally have enough money that they can go buy 10. And now they’ve done 10. They could go buy a hundred and it doesn’t work like that. It works very much so where man, if you want some scale, you’re going to need doing it to leverage investor capital. Then you leverage the bank. The bank gives you 80%, but you go and raise the 20 and now you’re basically unrestricted to the deals you can do. You can go do the biggest deals out there if you have enough capital for you. And I think that was, that was a big aha moment for me after 10 years.

Seyla (42:02):

Awesome. What is one thing that sets the successful people apart in the real estate investing business?

Abel Pacheco (42:08):

It’s definitely taken action for me. So I’ve interviewed, you know, 65 close to 70 people on our podcast. I’ve talked to hundreds of investors. I’ve talked to ton of syndicators. I’ve talked to thousands of people at those real estate conferences, people that have paid money alongside with me, here’s 20 grand, here’s 30 grand, here’s 15 grand and signed up. And then I very rarely see them or the ma a good majority of those people again and again. And the reason why a lot of them are the people that don’t really have success is they don’t take the action necessary to enable themselves to have success. It stops at education or learning and it stops at under, you know, learning something new and then never taking the next. And I’ve heard it being called massive action and I’m a subscriber to that.

Abel Pacheco (43:04):

Like I took, I took massive action over a couple of years, but in the moment it’s like these very small steps, like pick up the phone and call my buddy and ask him, how the heck are you doing? Can we go to lunch? And then the next one is like, yeah, put up a website. And the next one is like, I guess like pay him $500 and go to the conference this weekend and go to the next one and go to the next one. And they’re like all these smaller steps that lead up once take like, just like money compounded interest will start to grow faster than it would when you take action daily, it compounds and it becomes a massive return. So it’s really action.

Seyla (43:46):

Awesome. So what tools or techniques have you used to improve the efficiency of your business or personal life?

Abel Pacheco (43:54):

Yeah. You know, scheduling is like, it’s the bane of my workweek. What is also the part that brings freedom when I can accomplish it when I’m horrible at it? I mean, my week is like, it’s all over the place. It’s like podcasts interview talking to an investor, you know, asking about my deal, look, walking into the property, doing underwriting. You know, it’s just, it’s a little nutty, but when I have a nice schedule and I say, okay, let me look at it in advance. How do I want to schedule my week? And you start with your prior blocking, literally priorities. Here’s what I’m going to spend time with my family. I want to take that hour and a half lunch with my family, and I want to enjoy the time and spend lunch with them. I also want to spend the morning with them also want to spend the afternoon with them on a walk or going outside it Monday through Friday.

Abel Pacheco (44:46):

And I want to block off Saturday and pretty much Sunday, you know, maybe there’s some Saturday evening cycles that I’ll do for some investors, but I mean, I start with my schedule and I block off everything that I want to do first. That’s the most important in my church hours, those things, you know, in prayer meditation. And so when I’m doing that, now I can say, okay, cool, what’s left. What are my second priorities? Well, I need to schedule all my investor calls. Tuesdays, Thursdays, all my podcast interviews in the afternoons you know, Friday, Thursday, blah, blah, blah. And then I, you know, look at your asset management, look at your, whatever it is going on in your world, your properties, your deals, your day job, right. Then you can start to filter in back. And what ends up happening is like you start to drop off or what gets left out from your calendar is like the free time that probably wasn’t going to help you hit your goals.

Abel Pacheco (45:44):

Anyways, excessive TV, watching excessive, social, networking, excessive you know, just leisure, whatever, sleeping late, all those things. And you’re like, those are what gets left off you’re, when you block your priorities first, and now it becomes very much freedom you know, exercise of freedom for yourself and saying, I’m hitting my goals. My family’s good. You know, I’m ready. And man, I miss that TV show. I miss the game. I don’t, I haven’t watched sports in like probably like six years or seven years. It’s been awhile. My wife lasted me. I don’t know. Who’s I, I sometimes I don’t know, who’s on the super bowl you know, championship game, NBA games, the World Series. I’m like clueless. And I know some people make fun of me sometimes. You’re like, why you don’t know? Like, no, I don’t have any idea, but we’re invested in like $93 million worth of commercial real estate. So and we’re trying to close our next deals. So it’s a little different though. Different paradigm, man.

Seyla (46:44):

Yep. Abel, thank you so much for coming on to our show is today is I learned a ton from you and I’m pretty sure our listeners as well. So if our listener wants to find out about more about you, your company, your book, and your podcast, where can they go?

Abel Pacheco (47:00):

The, the easiest place is go to our website. It’s five T C R e.com. That number five T C R e.com. And you can go onto that website. You can from there, you can go to the forward slash eBook page. And there is a, I took the time and our COVID year, I guess we wrote about 40 something pages of texts and, you know, 20 some odd pictures, pages of pictures. So it’s a 65 page resource that really it’s the handbook or the investor’s guide that I put together. That’s what I use to invest in $93 million worth of real estate. And so there’s a lot of good nuggets. There’s also good nuggets on active versus passive. So you can check that out there. And then if you’re interested in, you know, setting up a conversation and just talking about your goals, I’d love to you go to my contact page and you can set up a time and book a time with me. And I would love to talk with you. So thank you very much, Seyla.

Seyla (47:52):

Awesome. Thank you so much Abel.

Abel Pacheco (47:55):

All right. Thank you.