Jessie Alvarez’s journey in the Northern California real estate market is a compelling story of growth from humble beginnings to significant success, highlighted in this episode of the REsimpli podcast. His initial dive into real estate was through a seller-financed deal at the age of 19, influenced by his family’s passive investment approach.
With a military background instilling discipline and strategic thinking, Jessie transitioned from a novice to a seasoned investor, focusing on distressed properties in desirable neighborhoods to ensure steady rental income and long-term appreciation. His approach emphasizes market knowledge, strategic property improvements, and the importance of a robust professional network.
In addition to real estate investments, Jessie diversified his portfolio by venturing into real estate photography and digital marketing with his business, Suncrest Digital. This move not only expanded his revenue streams but also synergized with his real estate efforts by enhancing property presentations and staying abreast of market trends. Jessie’s story is a testament to the value of seizing opportunities, strategic growth, and the synergy between different business operations in achieving success in the competitive real estate market.
Jessie Alvarez’s insights for aspiring investors underline the significance of thorough market research, strategic property improvements, and building a strong professional network. His journey illustrates that success in high-cost markets like Northern California is attainable with creative financing options and disciplined investment strategies, balancing cash flow with appreciation, and leveraging in-depth market knowledge.
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Transcript:
Sharad Mehta 0:06
Hey guys, this is Sharad with REsimpli. I’m the host of REsimpli podcast and I have the honour of having Jesse Alvarez. On today’s podcast interview. Hey, Jessie, how are you doing that?
Jessie Alvarez 0:18
Living the dream. Thank you so much for having me.
Sharad Mehta 0:21
Thank you so much for coming on the show, man. Yeah. Tell us a little bit about yourself. You know where you’re joining from? What do you do? How did you get started in real estate.
Jessie Alvarez 0:30
I live in Northern California now, just outside of the Bay Area. I grew up in Oregon, small town in Oregon. And I grew up in a family pretty middle class. But one thing about my family that I guess was unique because everybody invested in real estate one way or another. And so I kind of grew up around real estate my entire life. I don’t think I ever would consider either of my parents or grandparents real estate investors. But they knew that if they bought real estate, bought the right real estate and held it for long enough that in the long term, it would be a good investment for them. So there wasn’t really any discussion of strategies or why they were buying certain properties or 1031 exchanges, there was none of those type of conversations really growing up. But I kind of assumed that someday in my life, I’d probably own some real estate. So when I was 19, I got in a little argument with my parents and moved out. Maybe I was a little rebellious at the time. And so I guess I got kicked out, I didn’t move out. But I ended up sleeping on a buddy’s couch, my best friend’s couch. And the time came where his parents had owned that property for a while they wanted to sell it. And they asked me if I wanted to buy it. And I was 19 at the time. And I was like I don’t know. So I kind of lucked into a deal where they seller financed me my first property at 19 with 10% down. So that’s kind of where it got started. And then I got locked into the corporate world where the golden handcuffs where I just couldn’t leave and they took care of me so well. So as I was working in corporate America for almost 15 years, and I started investing in real estate, I guess, as an investor around 2011, where I bought my first place in Phoenix, Arizona.
Sharad Mehta 2:28
And then you still own the property that you bought as your buddy’s parents house. No,
Jessie Alvarez 2:33
we ended up 1031 exchanging that into a better property at the time I bought it because it was an opportunity to purchase with seller financing. And this is before anybody even talked about seller financing. There was no YouTube or anything to really learn that type of stuff. So it was really my my buddy’s parents that were like, well, this is an option. You don’t have to go to the bank. And so they kind of have
Sharad Mehta 3:00
that locked into that one. Yeah, that’s, that’s fantastic. And then where was that property? Was that in Oregon? Yeah,
Jessie Alvarez 3:08
that was up in Oregon, in Sherwood, Oregon. It’s a suburb of Portland.
Sharad Mehta 3:13
And then, at 15 years, she worked in corporate real estate. And then why buy in Phoenix?
Jessie Alvarez 3:20
Well, I was living in San Jose at the time, I grew up in Oregon, and I got recruited down to the Bay Area. And I was looking at the cost of houses. And I was like, This is crazy. This is absolutely crazy what people are paying for houses. And so I was never home. I was on the road, five days out of the week. And so I just started stacking my paychecks and ended up buying my first place in Phoenix, because I did some studying on the markets and it was one of the hardest hit by the the housing downturn. So they were selling houses for almost nothing. They were given them away.
Sharad Mehta 4:01
So you bought it as an investment property just to strictly keep it as a rental property. Right. And they hopefully get some appreciation.
Jessie Alvarez 4:08
Absolutely. Yeah. It was a short sells. So it had a little bit of distressed but there wasn’t really any strategy around buying a distressed property or direct to seller or anything like that. It was on the market for quite a while. But at that time stuff was sitting on the market for quite a while. Nothing was selling in 2011 prices. Were just tanking.
Sharad Mehta 4:31
Were you actively looking to or were you actively studying the Phoenix market? Are you just kind of, you know, read a little bit online? Absolutely.
Jessie Alvarez 4:39
So we don’t invest anywhere unless we fully understand the market, the neighbourhood. The street, we were very strategic. This investment was a newer development. And when I was studying that neighbourhood I saw there was a long strip through through the centre of the neighbourhood, and I thought it was the most weird thing I was like, What is this is this power lines, what’s going through the middle of this neighbourhood, and I pulled up Google Maps did my research, and there’s nothing there. It’s just this long strip of grass through the middle of the neighbourhood. It’s not a park. And so I kept digging, and I found out it was the freeway extension. And this neighbourhood was a pretty remote neighbourhood. That’s part of the reason why the prices were is low, but it was still in Phoenix. And they were about to build a eight lane freeway right through the middle of the neighbourhood, which some people would say that sounds horrible. But if you’re commuting into downtown Phoenix are going up to Scottsdale, yeah, you’re driving to work goes from 30 minutes down to eight. So if I knew I was going to make the neighbourhood much more desirable, and there was going to be some businesses that came in, and it was really going to change that part of town, and it did.
Sharad Mehta 5:54
If you don’t mind sharing, how should you pay for the property? Do you still own it? Or did you exit from it? So
Jessie Alvarez 5:59
we I paid 60,000 for it, it was a three bedroom, two bath track home 1533 square feet, just your average single level track home. And we ended up exiting from that and 1030, wanting it into a triplex here in California? A couple years ago, but we ended up selling it for like 225 250, somewhere around there. Yeah,
Sharad Mehta 6:24
you’d like for extra money on that. It’s not bad. Not bad at all, no pet at all. So you mentioned that, you know, a few moments ago, like when we buy a property. So I’m assuming this is not just you doing anymore? So what happened after that kind of just, you know, walk us through on your progress. Sure. So
Jessie Alvarez 6:45
I guess my third property would have been my first place in California, which is, it’s still actually our primary residence. Growing up in Oregon, everybody kind of moves out when they’re 18, or 19. Or they get kicked out like me, they kind of buy a small starter home. But as soon as I moved to California, I realised there’s a lot of, well, we refer to it as the California house hack, where you find a house of multiple bedrooms, you rent out the bedrooms to people and it pays your mortgage. So I started researching different ways to be able to buy a house in California. And I started doing the math, and I was like, I can buy a four bedroom house right now. And I can rent out the three bedrooms and live for free. I was like that sounds pretty good. So I had a little bit of money saved up at the time, but nothing nearly enough for a down payment on a California house. So I took a loan from my 401k for the downpayment and then purchased that place. So I rented out the three bedrooms for about a year or two, and literally living rent free being able to save more and more money to buy more properties. And eventually, I met my now wife, Isabel, and she said, Okay, we’re adults now you probably probably need to have the roommates move out. So and
Sharad Mehta 8:04
then what happened, like so you bought that third property, then what kind of, you know, Lady or to the next deal, and just getting deeper into real estate investment journey?
Jessie Alvarez 8:13
Yeah, so at that point, we were I was still only at, I guess, three doors. And so it started becoming pretty apparent to me that this was a good way to build wealth and the market obviously, the first or the second third properties that I bought, were in such a low time in the market 2011 2013 where the prices were just so low, and they were going up so fast. And so we started looking at other options, we bought a I bought a duplex with my mother here in town that we still hold to this day. And then my wife is primarily the only other person I’ve invested with and we are buying duplexes triplexes here in Northern California, and we target I would say a pretty specific type of property we’re looking for like B plus A minus type neighbourhoods, but that have duplexes and triplexes in them, which are pretty hard to find. And we look for distressed properties, obviously. And what we’re doing is we’re buying these distressed properties, we’re fixing them up, and we’re probably guilty of over improving for rentals, but it’s part of our strategy and it’s worked really well is we over improve the property. And we get those tenants that have a very high income, very high credit score, and want are willing and able to pay a higher rent premium to get themselves into a nicer neighbourhood as a renter
Sharad Mehta 9:49
in what part of Northern California buying these properties. And so
Jessie Alvarez 9:53
we live in Tracy, California, so we’re just we’re basically in between San Francisco and Sacramento. It’s kind of a bad Drum community, a lot of people commute into the Bay Area for their tech jobs. So there’s a lot of young tech professionals that live in this area and then commute in. So that’s primarily what a lot of our tenants are is young tech professionals. And
Sharad Mehta 10:14
how far are you from like, the Silicon Valley area? Like about 45 minutes or no?
Jessie Alvarez 10:20
Without traffic, you can get there in probably about 35 minutes. But with traffic it can be it can be pretty bad. So over an hour, yeah. Yesterday, I drove into Santa Clara and it took an hour. So not too bad.
Sharad Mehta 10:33
Yeah, that’s not too bad. And then are you primarily just investing in California market, though? Are you still doing out of state investing?
Jessie Alvarez 10:42
So we pulled we had a couple of properties in Phoenix, we pulled out of there, we had a couple up in Oregon, pulled out of Oregon. And right now we’re we’re primarily only in Cal, Northern California, within an hour is kind of our, our market within an hour of our home.
Sharad Mehta 10:58
I’m curious, what’s the reason for that, you know, you’re familiar with investing out of state, you know, you grew up in a different state, you understand, you can get higher rate of return, you know, cash flow. And I would just say properties, like why invest in your backyard?
Jessie Alvarez 11:12
I think it mostly has to do with being able to understand our market and know it inside and out. I could be flying out to the Midwest and researching markets there. I’m really comfortable with Northern California because I understand it. And I think I don’t want to ever have analysis paralysis and not invest. And so, California, everybody hates in California real estate investing, it gets a lot of bad rap online. We actually love it. So are you familiar with Prop 13?
Sharad Mehta 11:44
I’m not I just moved to California, like six months ago.
Jessie Alvarez 11:48
So probably 30 going on with California, I know that we have such a massive housing shortage. And if you were to watch the news, you’d think the world was coming to an end. But we have such a massive housing shortage. And there’s a very, very limited amount of land to build on. So in the Bay Area, specifically, there’s there’s not a whole lot of buildable land, so they’re literally tearing down houses to build apartment complexes now. So we have a supply restraint, that’s definitely helping with the appreciation. And then we’ve got more red tape than you could ever imagine to to make sure that that kind of stays intact. So our rents are very strong, our renter base is very strong. The quality of tenants is phenomenal, their incomes is great. And the numbers, I think I would rather own one duplex or triplex here and get the cash flow that we’re getting, then own a maybe a seven or eight unit in the Midwest, that cashflow is exactly the same. I only have to deal with one or two broken toilets instead of eight. So there’s some distinct advantages. We we utilise the burr method on a lot of these. So we’re looking for distressed we’re adding value and then we’re doing a cash out refi to pull our equity out and roll it into the next project. So on a lot of these, we’re able to pull out all of our capital that we’ve invested into the downpayment and the rehab cost, and then roll it into the next property between the appreciation and the cash flow. It’s hard to rival it.
Sharad Mehta 13:27
Yeah, no, I totally get it to California, you can beat the appreciation. I just like for any pretty much any 10 year period that you hold the property, it’s gonna it’s gonna go up. Are you buying primarily for cash flow or appreciation? If the property in there appreciate and you just got cash flow? Would you be happy with that?
Jessie Alvarez 13:46
So that’s, that’s everybody’s favourite question. And I like to think that we’re somewhere in the middle we’re buying in neighbourhoods that are high appreciation, but I’m making sure that they cashflow well on day one. So they on year 10, their cash flowing phenomenally well. Prop 13 limits our property taxes, how much they can go up. So if you hold something for 10 years, the cashflow only gets better. Every time that a tenant moves out. The rents are significantly higher. So we’re we just had a tenant move out last week, and we’re able to raise rents $450 Just on that unit, just over a three year period,
Sharad Mehta 14:27
let’s say extra 5000. Yeah, yeah, that’s crazy. And then can you walk us through like a typical numbers on a property like your average deal? What does that look like? So
Jessie Alvarez 14:39
yeah, I can give you a kind of a general thing of what our last few have looked like. It’s it’s a little different the last couple years, or specifically the last year, because what interest rates have done, but typically we’re looking for distressed property somewhere in the 350 to 450 range that you We can put in 100k, maybe 150k into. And then usually the ARV after that is somewhere in the 650 to 750 range. Right?
Sharad Mehta 15:08
So and you’re buying these properties with your own money upfront and then doing refi? Or do you have any private money,
Jessie Alvarez 15:17
we’re doing conventional, conventional lending on almost everything. So we do have a seller financing deal going through right now on two properties, actually, that’s, that’s going to be the one out of state property, then I’m gonna have or two out of state properties, and I’m going to have, but primarily conventional lending, but still able to get conventional on these distressed so it’s, they still have the bones to be able to get the conventional lending.
Sharad Mehta 15:44
So these properties that you’re buying, getting conventional loans or their functional properties, but just need updating, they’re
Jessie Alvarez 15:51
updating, we bought a grow house, marijuana grow house, it was in pretty rough shape,
Sharad Mehta 15:57
so that you wouldn’t be financing on that.
Jessie Alvarez 16:01
We were able to get financing on it, mostly due to the fact that the problem with the marijuana grow house was in the attic. So we ended up having to get the entire house because once we did a little bit more diving that everything had to be gutted. But the untrained eye it looked like a beautiful move in ready house.
Sharad Mehta 16:21
Right? Well, interesting. And then what about the money for rehab? Is that you own money? Are you getting bank to lend you money on that too.
Jessie Alvarez 16:28
So it’s a combination of either money that we have from the cashflow, the rental properties, we also have a HELOC that we utilise for some of the rehabs and then once we refi we pay off the HELOC sometimes based on how much we just pulled out of a refinance, we may have the money sitting around. So I think one thing that might be a little bit different than our strategy than everybody else’s, would be that we’re pretty dang patient, we’re looking for the right property, we’re looking for a deal. We’re not trying to grow our portfolio to 5000 doors overnight, we’re just comfortable. And my wife still has her W two job. I also own three other businesses. So we’re very, very involved in the our work lives as well. So we eventually might get into full time on real estate. But I think we kind of liked the balance of being able to go back and forth between work in real estate and in
Sharad Mehta 17:26
play. And then how are you finding these properties. So
Jessie Alvarez 17:29
previously, a lot of them were found on market. And we would look for properties that were sitting on the market for 90 plus days. And I would underwrite it before even viewing I’d call the realtor and ask them questions about the property, why isn’t it selling. And a lot of the time you can you can call the realtor and figure out what the what the issue is. And if there’s a deal to be had there. Lately, it’s became more and more on relationships. So almost all of our businesses are involved in real estate one way or another. So I spend a lot of time talking to realtors, I spend a lot of time talking to homeowners. So we’re able to find deals off market before they hit the market. And that’s that’s kind of been our our sweet spot lately. And
Sharad Mehta 18:15
then when you’re working with an agent on these properties, you have your own buyer’s agent, are you just working directly with the listing agent
Jessie Alvarez 18:23
depends. The one we’re working on right now we went direct to the seller and negotiated everything. And then we have an attorney writing it up, obviously, but in reviewing everything, but a lot of the time I have a buyer’s agent that that puts in the offer for me. And a lot of the time we’re finding it ourselves, and we’re coming to them with the offer. And I’ll admit, sometimes these offers are a little disrespectful. I mean, based on the condition of the property, we put in some offers that I mean, most wholesalers wouldn’t have an issue with these offers. But for the average on market listing, sometimes they don’t like what we’re offering them. But a lot of times they don’t have a choice.
Sharad Mehta 19:05
Yeah, I mean, you know, the worst that’s gonna happen if they say no, but the best is, hey, they come back. Either they accept it, or they come back with the counter. So you don’t do have some motivation going on there. Absolutely.
Jessie Alvarez 19:16
And we’ve been surprised that the agent was like, There’s no way my clients going to accept this, but I’ll present it to them. And then sure enough, they accepted it. So the worst you can do is ask. Oh, absolutely.
Sharad Mehta 19:27
I remember first property I bought was listed on the module 65 I made an offer 20 Just thinking what’s the worst that can happen? And I think they accept it for like 22 Five or 25,000. I would have never imagined that but I’m okay. You know, I’ll never know unless I make an offer on these properties.
Jessie Alvarez 19:44
Exactly. Exactly. And you said
Sharad Mehta 19:46
you have a couple of other businesses in real estate, whatever business do you have? So
Jessie Alvarez 19:51
I own a business called Suncrest digital we do 3d virtual tours and real estate photography. So we do web websites. For real estate, we do marketing flyers, we do marketing videos, we do pretty much everything you could for agent, pretty much primarily for agents, we also do a lot of 3d virtual scans for, like remodels, a lot of commercial buildings. A lot of like Nike, Jamba Juice, Baskin Robbins, anytime they’re trying to do a remodel, we’ll go in there and do a 3d scan of their property so that they have a BIM model to do the remodel. Yeah.
Sharad Mehta 20:25
So that’s going to be cool with that if an agent reaches out to you kind of know that property is coming on the market, and sometimes you’re able to make a deal on that. Yeah,
Jessie Alvarez 20:33
yeah, that’s, that’s how the last two have come along, is from agents I actually have relationships with that I work for on a regular basis. And they know, they know we’re actively buying in the area, are
Sharad Mehta 20:44
you doing anything actively to, like, nurture these relationships, you know, new relationships, or you just have like a small group of agents that you’re working with.
Jessie Alvarez 20:54
So right now, I’ve probably got about 75, to 100 agents that I work for on a regular basis. And yeah, a lot of it’s, I see them on a regular basis. And I think that’s, I very easily could hire somebody to do my job for me. But that would take out the relationship part of the business and, and I actually enjoy what I do so. And I like being able to show up at a property and I like walking properties, even if I’m not planning on buying them. So I see a whole lot of real estate and I get a really good feel from what the markets doing in certain neighbourhoods, why people are selling, I get to talk to sellers all the time daily. And in kind of get the inside scoop from sellers from agents from from contractors, what I’ve basically got my ear to the ground to be able to hear what’s happening in our market. That’s
Sharad Mehta 21:43
fantastic, good. And then you’re doing some pretty big rehabs you have a contracting background, are you the one who’s, you know, coming up with the estimated value, I mean, estimated rehab number or once you get the property under contract, and you have a contract a walkthrough.
Jessie Alvarez 22:00
So I’m basically the GC on all of our projects, my dad is a contractor up in Oregon. So I grew up slinging hammers and helping out with that type of stuff. So when we first started investing, I think more seriously, a lot of it was us staying at the property till midnight painting walls. And so I think the value in doing it that way, at least to begin with is you start learning how long things take to, to fix, how to fix them what the cost should be. And so then when you’re starting to get to a higher level, where you need to start bidding out jobs to different people, you know, what stuff should cost so I’m able to walk through a property now and say, okay, that toilets gonna cost 120 bucks to replace this is going to cost 50, this, and I’m able to walk through the property pretty quickly and figure out what our rehab budget is going to be on that property. Because we’ve done it so many times. And one of the things that we do is we hold all of these properties long term as rentals. But we use the same exact, lowering the same exact paint the same exact cabinets, and every single one of them. So there’s not really much of a guessing game on like, how much is this one going to cost? And then whenever a tenant moves out, we already have the paint, we’re already have the flooring, we already know what’s in that property, there’s no going back to my notes, trying to figure out what we did on that one specific property because we do the same thing every single time.
Sharad Mehta 23:31
And anyone that’s listening to the show, and they live in a, you know, more higher priced market, you know, either in California or New York or you know, on the coast or other markets, like what would you what would you tell them on getting started? Should they look for, you know, just to get started, like you buy something out of state or just you know, who know in their backyard, even if it’s expensive,
Jessie Alvarez 23:57
it depends on your specific situation at the time. I had a very good income and I wasn’t concerned about cashflow nearly as much I was more concerned about long term appreciation. And I also wasn’t home very often. So the the California house hack worked very well for my situation. There’s other people that they are trying to leave their nine to five job and cash flow is very important to them. I think investing in the Midwest where you’d get a lot more cash flow might be the right thing for for some people out the gate. If you have a higher income and you’re trying to invest in your specific market, there’s obviously a lot of tax advantages to it being owner occupied, you’re able to I guess know your market quite a bit better because you live there. So I think I think there’s pros and cons to both, both of it. But I think if if you’re in a high cost market and you’re trying to figure out what to do, I think The first thing you have to do is just learn your market, learn what you can afford, if you can’t afford it, and you can’t find a way to sell or finance it, or you can’t find something, maybe 1520 minutes outside of town that’s a little more affordable than then out of state might be your best option. And I know when I was trying to buy my first place, San Jose seemed very, very, very overwhelming. From a price standpoint, I came from Oregon. So moving to the Bay Area was like numbers, were mind boggling. So once you live here for a while, you start getting used to and you’re like, oh, that’s $2 million. Okay.
Sharad Mehta 25:37
Adding an extra zero to after the Oregon prices, right?
Jessie Alvarez 25:41
It’s crazy. Yeah, pretty much.
Sharad Mehta 25:42
Would you buy anything? If you felt confident about appreciation if the property did not cash flow from day one?
Jessie Alvarez 25:51
In our current situation? Absolutely. We’ve got enough cashflow now that we’re not overly concerned about the cash flow. So with where the interest rates have gone over the last year, we’ve got a refi, we pulled all of our money back out of it on the Burr and it barely cash flows. But I still really liked that community, we’ve got eight doors on like the same two streets. And so we feel confident about that community, we feel confident about that property, because we just went through every bit of it, rehabbing it, we’ve got good tenants in place. So I think I think there, it really comes down to what you’re comfortable with. And if you if an extra three or $400 a month makes a difference to your lifestyle, then you should be investing in the Midwest, if you’re not concerned about that extra three or $400 a month per door, then then maybe you can, you can go with some of these more high appreciation, longer term holds where the appreciation is going to pay you back probably a lot more than that three or 400 a month.
Sharad Mehta 26:53
Yeah, when you look at like, even if you’re cash flowing, I mean, you have negative cash flow three to 400 bucks a month. That’s like, you know, let’s say 5000, for the effort of $500,000 property, it just has to appreciate 1% For you to like break, even including the you know, on the equity side of it, if it appreciate, you know, let’s say 5%, and you have extra $20,000 After the negative cash flow, to definitely I mean, if appreciation, you could rely on appreciation, the amount of money you would make an appreciation would, I think far outpace what you’re going to make from cash flow. That’s not what I personally recommend anyone like I bind Midwest, but cash flow is very important for us, my thought process is okay, if I buy something, I know cash flow, I can count on it from day one, it’s only gonna go up after that. But if the police station happened, that’s a bonus. But someone who’s buying in California, there’s a friend of mine I was talking to the other day, he’s playing a million dollar property, and it’s got a negative cash flow, like 600 bucks, I said the same thing to him. If it just the property just appreciates 1% for the year, you’re going to be positive in equity. But it’s up to you, if you can hold that six $700 negative cash flow for a couple of years because the rent is gonna go up eventually, and then you’ll start breaking even then you’re gonna start having positive cash flow. So it’s very interesting like buying for me buying everything in Midwest and looking at these California properties and investors feeling more comfortable with buying, you know, breakeven or in some cases negative Kashmir, knowing that the appreciation is something that they can rely on is totally different.
Jessie Alvarez 28:35
We I don’t think we’ve ever purchased anything that was negative cash flow from day one, it’s all value add to be able to get the cash flow, also to pull the money back out on the refi. When you’re
Sharad Mehta 28:49
buying properties now, like how big of a factor it is in your cash flow, the higher interest rate and the fact that hopefully you’ll be able to refi in two or three years for a much lower and happy additional cash flow. Are you going in saying, hey, worst case, this is going to be my high interest rate for next 30 years?
Jessie Alvarez 29:09
Yeah, that’s kind of how we’re underwriting and everything right now, as we’re assuming that interest rates are going to stay high. But you know, it’s going to be icing on the cake. As soon as they do come back down. And and they have to come back down eventually. Are they ever going to be 3%? Again, I don’t know. My crystal ball is broken now. But I think eventually they will come back down and like I’ve told my wife, the second that they do come back down, we’re going to do several refires We’re going to be able to plot a substantial amount of equity that’s just sitting there. And we’re going to cash flow even better at the lower interest rates. So I think it’s going to be a it’s going to be a wild time as soon as interest rates come back down because the market is just so repressed right now. Yeah, and I think that’s
Sharad Mehta 29:53
the smart thing to do is like if it cash flow is if the numbers make sense with a higher interest rate. It is only going to be a bonus, you know, if, if and when the interest rates come down. So are you working with a local bank? I see you
Jessie Alvarez 30:07
have a broker that we go through and he he finds us really, really, really competitive rates.
Sharad Mehta 30:12
Okay, so it’s not just one bank, you just work with that broker, and then he’ll get you the best terms. Okay. And then you refi 30 year fixed. Yep.
Jessie Alvarez 30:22
And one thing that we sometimes do on these is, as long as it’s still cash flows, we’ll take a lender credit for a higher interest rate on the purchase. And then when we refinance it, we pay down to get a lower interest rate on the refired. So that I think we have a investment property that’s at like, 3.25%, because we bought it down 30 year fixed. And so that seems like a dream now after seeing what rates are now, but
Sharad Mehta 30:51
it’s like literally less than half of what investors are getting right now. Yeah, I have a friend of mine who as his primary residence in California, 30 year fixed like 2.5, or 2.6%. That’s crazy. That’s like 1/3 of the interest rate right now. That’s insane. Yeah, just our
Jessie Alvarez 31:12
primary or primary is that 2.6? So I told my wife, we’re probably stuck here forever,
Sharad Mehta 31:17
right? Yeah, it’d be that’s just like, Who wouldn’t want to just get rid of that? You know, sub three 4% interest rate? Yeah, yeah. That’s insane. That’s crazy. Cool. Bye. All right. Moving on to the next section of our podcast. What do you do for fun
Jessie Alvarez 31:32
travel? We’re really, really big on travelling and we do many getaways. So we’ll go away for the weekend to Vegas or getaway to Hawaii just for the weekend. Or probably favourite places. Cancun, close seconds. Probably. Bora Bora.
Sharad Mehta 31:49
Yeah. So do you guys have any kids? My wife is
Jessie Alvarez 31:52
actually pregnant right now. So she’s expecting in June. Thank you so much. We’re super excited. So we’re about to have a new hobby.
Sharad Mehta 32:00
That is a boy or girl. Are you gonna keep it? It’s a boy. Yeah, it’s a boy. Oh, man. That’s really congratulations. Yeah. Thank you so much. Like, you know, you’ve had these, we can get away. So I was wondering if you have kids. I have two kids. So the weekend getaways? Don’t always? Yeah, yeah.
Jessie Alvarez 32:17
Yeah. So we’ve been trying to maximise the we can get away as the last month or two.
Sharad Mehta 32:22
Absolutely. Well, they still get that get that all out of your system. And then next year, it’s going to be very, very interesting. Yeah. Congratulations to you and your wife.
Jessie Alvarez 32:31
Thank you.
Sharad Mehta 32:32
What’s the one book that has had the biggest influence in your life? It could be personally it could be business could be one of each. I
Jessie Alvarez 32:40
hate saying it. But it’s the truth. So I have to say, Rich Dad, Poor Dad.
Sharad Mehta 32:45
I was just I should have guessed that. Yeah.
Jessie Alvarez 32:48
I hate saying it just because it’s so cliche, but I think that was really when like the light switch in my head clicked about liabilities and assets and being able to understand my parents and my grandparents were very, very good at making investments. But they never explained any of that to me, right. Yeah, yeah. That it just I guess it was just out of habit. They did what they did, right. But they never understood why they did what they did. So Rich Dad was able to put that into words and just make the light switch click in my head of why, why it works. And so I think that was the biggest one.
Sharad Mehta 33:27
Isn’t that amazing? Like after you read the book you like so just such common sense. Almost like it should be something they should teach it in school? You know, absolutely such a basic thing. But when you really like holy crap, like, this is amazing. Yeah, our
Jessie Alvarez 33:42
schools don’t teach the right things. I’m convinced. And I think every I think that should be required learning for like every grade schooler 100%
Sharad Mehta 33:50
agree with that. All right, man, if there is one person dead or alive, that you could spend a day with, who would you want to spend the day with? And why?
Jessie Alvarez 34:00
It’s a good question. So I’m torn. I’ve got I’ve got like a personal one, and then like an entertainment one. So I’m gonna give you two answers. Yeah, I’ll give you two answers. So from like a personal standpoint, I think Tony Robbins would be amazing to spend a day with his thought process and the way he understands things. I’ve seen him a couple of times in person and I leave every time just like in awe with his understanding of us in why we do things the way we do them and, and what works. And so I’m blown away by Tony and I think it’d be it’d be a pretty cool day a pretty cool experience. Oh, 100% a day with Tony. From an entertainment standpoint, I think Elon Musk, I don’t know. I don’t know anybody that would probably be more entertaining for an entire day. Absolutely.
Jessie Alvarez 34:51
And he’s also next level. Yeah, next level smart, where he’s just thinking different and that that’s intriguing to me.
Sharad Mehta 34:59
Yeah. Uh, maybe you can talk to him and start buying some properties on Mars. You know? I, Jesse, this has been great Ben, if someone wants to connect with you learn a little bit more about what you’re doing what’s the best way for them to connect with you.
Jessie Alvarez 35:14
So we share some of our real estate journey at on Instagram at rehab hackers. And so we used to be a lot more focused around rehabbing properties and finding inexpensive ways to do these rehabs. And right now, it’s more focused around just real estate in general. So we try to give tips and if anybody has any questions about real estate, or we go to a lot of the real estate mica meetups in the area, so we like meeting new people building connections, and so reach out to us, especially if you’re in Northern California. Absolutely,
Sharad Mehta 35:50
man. Well, we’ll put that in the show notes. Thank you, Jesse. This has been absolutely wonderful talking to you, man.
Jessie Alvarez 35:55
Thank you so much.
