623: 10th Grade Dropout to 400-Unit Apartment Complexes (WITHOUT Raising Money)
BiggerPockets Real Estate Podcast
BiggerPockets
4.8 • 16.5K Ratings
🗓️ 16 June 2022
⏱️ 67 minutes
🧾️ Download transcript
Summary
Multifamily real estate investors almost always raise money for their deals, right? Some would call it almost impossible to try and build a huge real estate portfolio without borrowing money or partnering up to take down bigger properties. Sofia Castro, along with her husband, not only built a multifamily portfolio using their own money, but did so starting with a severe disadvantage.
Both Sofia and her husband were high school dropouts, living without much money, and practically no experience. A local entrepreneur took Sofia and her husband under his wing, teaching them both how to become leasing brokers. From there, they started building their entrepreneurial endeavor, eventually selling their business a couple of decades later for a whopping billion dollars.
With cash in hand and real estate experience under their belt, they began buying apartment complexes to flip them as condos. Once the recession hit, Sofia knew this was the wrong business to be in, so she pivoted heavily towards multifamily rental investing, specifically investing in “core deals”. Now, she has a streamlined process for finding deals, buying deals, and screening tenants. She gives some out-of-the-box, but highly useful tips on tenant screening, property management, and why “value-add” real estate isn’t all it’s chopped up to be.
In This Episode We Cover:
“Core deals” explained and why they often beat value-add properties
What are cap rates and why understanding them is crucial when buying multifamily
Condo conversions and the risk of flipping during downtimes in the economy
Tenant screening tips that will get you the best tenants who pay on time, every month
The right way to do property management and why you shouldn’t immediately outsource
How to buy in the right real estate markets, plus the metrics Sofia looks for when investing
And So Much More!
Links from the Show
Ask David Your Real Estate Investing Question
Listen to All Your Favorite BiggerPockets Podcasts in One Place
Subscribe to The “On The Market” YouTube Channel
Steer Clear of Social Media Scams
Should You Self-Manage Your Properties or Hire a Pro?
The Beginner’s Guide to Buying Your First Multifamily Property
Should You Raise Private Capital for Your Next Investment Project?
Books Mentioned in the Show
ABCs to Real Estate Investing by Ken McElroy
Think and Grow Rich by Napoleon Hill
Connect with Sofia
Sofia's Instagram: @officialsofiacastro
Click here to check the full show notes: https://www.biggerpockets.com/blog/real-estate-623
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Transcript
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| 0:00.0 | This is the Bigger Pog's podcast show 623. |
| 0:04.6 | We know exactly how our properties are being managed. |
| 0:07.8 | We are the ones that are making the decision |
| 0:10.2 | on when the rents are increasing, how much the rents are going to increase. |
| 0:14.2 | When we're going to do a cat-back, |
| 0:16.8 | when we're going to replace our conditionings, |
| 0:18.8 | whatever the case may be, we have to be involved with that. |
| 0:22.4 | We do not allow the property management to make those decisions. |
| 0:26.2 | We have to come together. |
| 0:28.0 | We have a meeting about it, and then we collaborate, |
| 0:31.0 | and then it gets executed. |
| 0:32.6 | So that's the best way to do it. |
| 0:34.8 | But how do you do that if you didn't manage before? |
| 0:38.8 | What's going on, everyone? |
| 0:39.6 | This is David Green, your host of the Bigger Pog's podcast. |
| 0:42.6 | Here with a banger for you today. |
| 0:45.4 | I'm going to get right into it. |
| 0:46.4 | Today's guest is incredibly impressive, fantastic, |
| 0:50.8 | and still seemed pretty humble as we went through the interview. |
| 0:54.2 | Robin I will be interviewing Sophia Castro, |
| 0:57.4 | who is in the multi-family space, and has created an empire. |
| 1:01.6 | I don't know any other way to say it. |
... |
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