PLP-047 Raising Other People's Money (OPM) For Out Of State Deals with Gustavo Garza
Gustavo Garza, the CEO head guy in charge and main check writer of Clear Path Property Solutions, discusses how to raise other people’s money (OPM) for out of state deals. Going deep into the relationships that start it all, Gustavo talks about the need to build it well with the people and not just ask for money. He shares his own personal journey that eventually got him to start on second liens, giving advice on how to be safe at it. Gustavo shares how he raises money, highlighting the value of networking through social media, conferences, and hosting dinners where people can share the same fears and provide each other solutions. Learn about all of this together with some nuggets about deeds of foreclosure and private lending that will equip you to navigate through investing.
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PLP-047 Raising Other People's Money (OPM) For Out Of State Deals with Gustavo Garza
Joining us is Gustavo Garza, the CEO, head guy in charge and main check writer of Clear Path Property Solutions. Gustavo, welcome to the Private Lender Podcast.
Thank you.
Thanks for being on. It goes just goes to show you the hustle that's involved in running your own business. You are a real estate investor full-time. Go ahead and walk us through from the very beginning to your company.
I got into real estate because my wife and I wanted to buy a mobile home park. I was working a six-figure oil and gas job doing well. We wanted to start gaining some passive income. We got to the point of almost closing on this park and we step back and go, "Do you know what you're doing?" She goes, "No, I thought you knew what you were doing." I was like, "No, I was pretty much BS all the way up to this point. How about we figure out what we're doing first before we go and buy an $800,000 mobile home park?” It’s not a small investment at all, so we probably should figure out what we're doing. That's when we did one of those real estate programs that everybody likes to knock. I'll keep their name out of it, but you know who we're talking about.
That opened my eyes. It was essentially like the scene in The Matrix, “Do you want to take the red pill or the blue pill? Do you want to forget everything and go back to your ordinary life or do you want to embrace the knowledge that you have just received and completely open your eyes to what's out there?” I felt like that was a decision that was being made. When we did that, out the gate, we started lending money. We did it in the second lien position. We did pretty well our first year. We made a total return on our capital of about 29% between points and interest. We jumped into the home staging of properties that were being done by investors. We started marking for deals. It was a flood of us what can we do, what's possible and figuring out what interests us.
My wife hates this analogy, I was sleeping around in real estate and I hadn't figured out who I wanted to marry yet. I’ve got to have a little thought. I’ve got to try a little bit of everything before I figure out where I want to sink my teeth into. Throughout that process, we flipped houses. We've wholesaled. We've lent money. We learned a bunch of different stuff in the process where it fell into my niche. What I enjoy doing is building the relationships, getting to know people and raising capital for the projects that we have and I’ve been able to do that where I'm based here in Houston Texas. We raised capital for projects in Florida and Iowa and here in Texas. Most of our lenders are from other states outside of those states. They rarely ever see the projects that we're working on, which I feel is a little bit unique because for the small stuff that we do, we deal with a lot of small investors. I feel that most people want to go see the project that they're putting that money into.