From Management Consulting To Commercial Real Estate Investing

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Ernest has more than 12 years of experience as a management consultant providing technology and business consulting to Fortune 500 companies His project program management business development executive background an entrepreneurial mindset provided him with opportunities to merge his enthusiasm to work in the technology sector and real estate as a broker and investor in residential and commercial RE since 2010 In this episode Ernest Peralta discusses his journey from corporate consultant to successful real estate investor He advises listeners to seek out mentors and learn as much as possible about the industry before jumping in and to focus on specific asset classes during turbulent times Highlights 00 00 – 05 35 How to Scale Your Business in 6 Months or Less Ernest Peralta started 12 years ago and has experience in management consulting and real estate Took the route of consulting after he graduated with his undergraduate degree He networked with people in the industry and took courses to learn more about the business Right before the pandemic hits Ernest educated himself about real estate and did some research He considers Covid as a time of education and Post-Covid as implementation 05 35 – 10 50 How to Scale Your Business and Attract Investors with Strategy Ernest uses programs such as Microsoft Office to create a project plan outlining steps to scale within six months to a year and where they could be to where they are today He also recommends reaching out to potential investors through mailers conference calls and mastermind groups Ernest shares that bad advice often includes telling people to find their passion 10 51 – 16 00 Follow Your Passion But Work on Your Daily Plan One of the main things Ernest recommends is to not only follow your passion but also to work on your daily plan and action plan Ernest has found that the current market is challenging but he is still optimistic about the future One of the biggest challenges Ernest faces is finding investors who are willing to pay a high price for his properties Tweetable Quotes I would say it would be better advice to not only follow your passion but work on your daily plan work on those things that you don t want to do on a daily basis because those are things that you actually need to do in order for you to accomplish your goals – Ernest Peralta —————————————————————————– Connect with Eric Peralta on LinkedIn or visit their website at mvpequitygroup com You email him through ernest mvpequitygroup com Connect with me Facebook LinkedIn Like subscribe and leave us a review on Apple Podcasts Spotify Google Podcasts or whatever platform you listen on Thank you for tuning in Email me sam brickeninvestmentgroup com Want to read the full show notes of the episode Check it out below 00 00 00 Ernest Peralta How can I scale within six months to a year And where could I be to where I am today So you know the first thing that I wanted to do was really understand the business 00 00 08 Ernest Peralta So I always go back to COVID because to me that was my learning year And then the following year after that was my implementation year So the first year was all educational for me just really trying to understand put together a plan of how can I learn as much as I can about the industry 00 00 24 Ernest Peralta But aside from learning a lot of it is trying to to implement can learn as much as you can but if you don t implement you re never really gonna pursue or grow 00 00 45 Sam Wilson 00 00 45 Sam Wilson Ernest Peralta has combined his passion for multifamily investment management consulting and personal development with his personal philosophy of goal setting envisioning and manifesting success to help people who wanna live their best life Ernest welcome to the show 00 00 58 Ernest Peralta Thanks a lot Sam thank you for having me 00 01 00 Sam Wilson Hey man The pleasure s mine There s three questions I ask every guest who comes to the show Can you tell us in 90 seconds or less where did you start Where are you now And how did you get there Yeah 00 01 08 Ernest Peralta absolutely So I started about 12 years ago My background entails management consulting but my family had a small portfolio of residential real estate 00 01 18 Ernest Peralta And so that s kind of how I got my start was kind of through my family And over the years I basically had always had real estate in the back of my mind but I took the route of consulting cause I had finished my undergraduate degree My master s degree kind of did the whole educational thing worked in corporate arena for several years long and long story short is that I ended up stumbling into commercial real estate right before COVID and tried to find out what asset classes or what areas could actually help me sustain if anything was to come again like this to impact me and my family in the future 00 01 51 Ernest Peralta And I came across commercial real estate Man that s and that s 00 01 54 Ernest Peralta where I am today Tell me real quick I mean the term corporate consultant for somebody that has no experience in the corporate world doesn t mean much to me 00 02 01 Sam Wilson Can you break that down for us 00 02 02 Ernest Peralta Absolutely Yeah It s always a confusing thing 00 02 04 Ernest Peralta When you say corporate consulting or management consulting it s like what is that Right So what it is basically is I provide advisory services whether it s project program management for fortune 500 companies So you name the big retailers I ve consulted for companies like and I ll say this here like Microsoft AT T Costco 00 02 24 Ernest Peralta Bill Melinda gates foundation all of their companies basically I come in and I provide strategic type of guidance whether it is pushing an initiative a business initiative that they have a new application or a software Sometimes it could be data privacy or security type of issues These are things that I help them 00 02 40 Ernest Peralta Either document work with a team It s usually a global team that I work with and we have timelines and processes that I typically kind of project manage until delivery of these products and service Is 00 02 51 Sam Wilson that something you re still involved in today or have you switched completely to commercial real estate 00 02 55 Ernest Peralta I did Yeah I actually had switched over about a year now Okay And so I ended up making that switch over I spent about a good 16 plus years in that arena and I decided like I mentioned earlier before jumping on COVID actually had impacted me So this is where that pivotal moment for me actually happened is when I decided to look back into commercial real estate since I had done residential real estate many years ago And so that was my pivotal moment And this is where my focus is right now 00 03 26 Sam Wilson What was your strategy jumping into commercial real estate just before COVID probably had to be a little bit unnerving but what was your strategy 00 03 34 Sam Wilson Once you said okay I m stepping out of corporate consulting role what did you do to get involved in commercial real estate 00 03 40 Ernest Peralta Absolutely Yeah Great question Sam I think for me one of the one of the things that I always like to do is I like to strategize like okay I don t know too much about commercial real estate 00 03 50 Ernest Peralta Where do I start So the first thing I ended up doing was trying to find individuals out there that actually could help me as a mentor or maybe I could take courses So I did a lot of research online and I came across a couple of individuals like the Michael Blank of the world the Peter Harris and Dylan Borland those individuals were folks that I had actually looked at research prior to me jumping on board and really dedicating myself into commercial real estate So that was number one was trying to find experts in the industry Secondly I networked with people at that time a lot of zoom calls 00 04 23 Ernest Peralta So a lot of interactivity in in in the social media realm if you will So I did a lot of Connections through LinkedIn social media with individuals that already had experience in commercial real estate Now at the time I was really trying to focus on okay what aspect of commercial real estate do I wanna focus in 00 04 40 Ernest Peralta Cuz there are various different asset classes I realized at the time that multifamily mobile homes as well as different types of retail could potentially be lucrative In times of turbulent recessions if you will that happen in our economy So I ended up just focusing on multi-family for the fact that it was kind of a segue for my family and I when we had owned a couple of duplexes in the past 00 05 03 Ernest Peralta So for me that was kind of a no brainer to kind of step into that arena that had became my focus going forward So kind of to where we are today I ended up just really networking very well with individuals that are in the industry tried to learn what it was to be like as a limited partner 00 05 20 Ernest Peralta What is a cog what is a GP And also how do you equity raise All those things kind of came into play for me to really understand okay what aspect of this business do I want to focus in And how do I get involved So that was basically my start 00 05 36 Sam Wilson I love it I bet From the corporate consulting side you did a lot of strategy in planning 00 05 42 Sam Wilson So what did you do Find the experts network on social media Did you lay out like a 10 step plan and said okay I m gonna do this first and I m gonna do this And here s how I m gonna raise equity What did that blueprint look like if you had one and I m sure you probably did 00 05 56 Sam Wilson I did 00 05 56 Ernest Peralta Yeah I created an Excel file Basically I used a Microsoft Excel document or basically it was Microsoft And I pulled up my document created a project plan if you will Basically it was my steps to how can I scale within six months to a year And where could I be to where I am today So you know the first thing that I wanted to do was really understand the business 00 06 17 Ernest Peralta So I like to use I always go back to COVID because to me that was my learning year And then the following year after that was my implementation year So the first year was all educational for me just really trying to understand put together a plan of how can I learn as much as I can about the industry 00 06 35 Ernest Peralta But aside from learning a lot of it is trying to to implement you can learn as much as you can but if you don t implement you re never really gonna pursue or grow So about four months into it after I put my plan together my whole intent was to have a 90 day plan And so that s kind of what I got 00 06 52 Ernest Peralta It was kind of the theme after a networking with various folks that within 90 days I should definitely try to know go out there and start making some deals So that s what I ended up doing So one of my plans of action was learn as much as I could And then also start reaching out to potential investors whether it was through mailers just cold calling and really trying to get exposure in that sense 00 07 12 Ernest Peralta So that was basically my first 90 days to I would say four to five months of just doing that and then also trying to make offers So I would get on these conference calls Or mastermind group calls with my group and basically talk about these different scenarios and go through different ways of how we re approaching it 00 07 32 Ernest Peralta If we did get a deal how would we evaluate and analyze it So it there was a lot of brainstorming and just working with individuals that I team with to really understand the business as much as I could One thing that I d like to say is that there is a really good underwriting course that that I actually well it s more of a conference call but it s a an underwriting conference call that I attended on a weekly basis for almost a couple of months 00 07 58 Ernest Peralta And this gentleman I can name him here in a little bit but he is Exceptional And I would say that he was the foundation of me actually really trying to understand the underwriting process and everything for multifamily 00 08 12 Sam Wilson That is really I love the multi step approach 00 08 15 Sam Wilson Hey we re gonna line this out and then we re gonna go do it I guess You ve brought up a few questions I have along the way I mean you talked about mastermind group calls I mean that s something that a lot of people like the idea of but even just selecting a mastermind can take an enormous amount of time and going gosh especially if you re new to the industry it s like there s How many a thousand masterminds you could possibly pick from there is a thousand ways you can reach out to investors I guess 00 08 37 Sam Wilson How did I mean it sounds like you you broke this down on a very granular level Like how did you even go about selecting Let s just start there with your mastermind 00 08 44 Ernest Peralta Yeah Well a lot of it was Mainly geographic I looked at folks that were geographically located to where or an area that I wanted to invest in 00 08 53 Ernest Peralta For me one of the lucrative areas outside of the state of Washington is kind of the Southwest if you will and the Midwest So I tried to find mastermind groups that kind of focused in those areas and just through social interaction just meaning them online That s how I developed a lot of the relationships 00 09 08 Ernest Peralta So a lot of it also was based on building relationships folks that I just connected with right away I think that s very key And just developing that trust factor when you invest in real estate you just wanna make sure that you align yourself with the right people The people that probably have done at least a few deals under their belt 00 09 24 Ernest Peralta So they ve got a track record that is good at the same time You wanna be able to be able to Talk to these individuals and to just be open with them So I think having that connection and that connectivity as well as a history of success would be ideal Right 00 09 38 Ernest Peralta right 00 09 38 Sam Wilson No that s really cool Tell us the the conference call you were on for underwriting I think that s a valuable tool and resource that our listeners may really appreciate it 00 09 45 Sam Wilson Oh yeah So gentleman s name is Charles seamen and he is incredible As of this call I believe he s still doing it every Saturdays 00 09 53 Sam Wilson That s right If that s something that your audience members or folks that are listening here on the conference call one 10 I would say reach out to Sam or myself and be happy to connect you to him Yeah But I would say he is ideal and 00 10 04 Sam Wilson certainly Charles has come on the show 00 10 05 Sam Wilson Gosh it s been maybe a year and a half ago So you can go to our website at brickandinvestmentgroup com slash podcast and just type in Charles Seamen S E A M E N yeah look up Charles Seaman and you can find their information there right on our website 00 10 18 Sam Wilson And you can probably attend that that conference call So there s a great tool and resource Thank you for sharing that earnest that actually absolutely forgotten that Tell me is there been any bad advice that you were given along the way that you either implemented or immediately knew it was bad 00 10 33 Ernest Peralta Bad advice I would say you hear this a lot It s like find your passion And I believe that to some extent passion I think is something that is relatively gets you moving gets you motivated But I think it s short term to me by following my passion I ve done many numerous things prior to getting into into commercial real estate 00 10 51 Ernest Peralta But I think one of the main things and things that I would say would be better advice is to not only follow your passion but work on your daily plan work on those things that you don t want to do on a daily basis because those are things that you actually need to do in order for you to accomplish your goals 00 11 06 Ernest Peralta I think that to me is an advice to where if I were to flip that I would say work on things that you don t want to do that you need to accomplish what you want in life If it s commercial real estate you have to put in the work you have to put in the grind making your daily calls working your action plan 00 11 23 Ernest Peralta Passion comes out of doing that for a number of days until it becomes a habit then it becomes a passion because you re gonna end up liking some of the things that you do whether it s the grind or it s gonna be talking to people or putting a deal together I think that to me is probably one of the most misconceptions that I hear 00 11 41 Ernest Peralta And I think that if you flip that around a little bit I think it would be better advice that s from my perspective the least no I think 00 11 47 Sam Wilson that s great I mean there s the it s always I think it s always a a blend there right There s like the Hey you gotta get your reps in Right Yeah If you wanna stay fit you it doesn t matter 00 11 55 Sam Wilson If like I read that in the on the workout plan for yesterday it was something like Hey you know what maybe you don t love the day s workout but it s just it s a matter of showing up and doing the work and then you ll get the results you want Yeah Do you love it every day Maybe Maybe not But I think there s a blend there of like finding what your skill set is and what really you can bring value to the table 00 12 13 Sam Wilson How can you bring value to the table but also going Hey what is it at times Do you just have to say I just gotta get through this So It s it s a nice but I like the idea of maybe not necessarily following your passion but following your plan at first and then your passion will certainly come out of that 00 12 26 Sam Wilson What does your portfolio look like today 00 12 29 Ernest Peralta Yeah so portfolio today we own over 600 units It spends across the Southwest I m basically an LP a GP co GP and a capital razor for for these assets They re mainly multi-family their class B and CS We typically look at little bit of capital improvement 00 12 48 Ernest Peralta We don t come in and do huge renovations but something to where we can come in and do some potential upside whether it s mainly raising rents or just adding different things to the To the property itself And for us that s been our stronghold and kind of our focus for now 00 13 02 Sam Wilson Gotcha That s really awesome Tell me you mentioned this earlier in the show where you said that you were reaching out to investors before you d ever had a deal Like yeah What did how talk walk us through that conversation Because for me I would think that would be a hard conversation of like Hey I m planning on getting into this but I don t have a track record 00 13 19 Sam Wilson How d you overcome that 00 13 20 Ernest Peralta Yeah well for me I always try to reach out to folks that have the experience whether you re a VP SVP or an investor in any situation I ll definitely go to you because you have the knowledge So for an me going out to an investor my whole plan of action there was basically to reach out to them to say Hey I understand that you own a few properties 00 13 42 Ernest Peralta I m kind of getting into the industry Do you have any best practices or any anything that you could provide me in terms of how did you get your education and how d you get your start That was basically my segue and most people are very cordial Those that have as you probably know Sam those that have success or have tremendous success they re willing to help for the most part and provide you advice 00 14 03 Ernest Peralta So to me that was my segue because You never know what opportunities come out that way And that was the way I started Yeah 00 14 10 Sam Wilson No I think that s absolutely great Ernest tell me what s one of the biggest challenges now that you ve kind of gotten your I m gonna call it your feet wet Obviously you re firmly in the business now you ve kind of developed your plan 00 14 20 Sam Wilson You ve implemented part of it What are some challenges that you face scaling from this point going forward 00 14 26 Ernest Peralta Yeah that s a very good question I think one of the challenges that we have right now is that it s definitely a seller s market for the most part So I think there s a lot of individuals now I think over just even a couple of years now there s a lot of individuals such as myself that have done 00 14 42 Ernest Peralta Corporate work and are now starting to look into investing So I think there s an influx of this group this kind of group Now that s getting into the industry So it s challenging It s more challenging at the same time You have a lot of savvy investors Now a lot of these individuals are smart 00 14 57 Ernest Peralta They know how to come in underwrite And so they re making it fierce in that sense think in combination with a lot of folks coming now into this arena because they understand that it s a great niche to be in for longevity but at the same time I think the investors also have the certain mindset of what they think their price is for their their assets 00 15 18 Ernest Peralta You know they re thinking six months ago that the price is still relevant today So they re asking for a pretty hefty price on on their assets So it s a challenge there it s a double-edged sword You wanna make it work but at the same time you wanted to be able to 00 15 32 Ernest Peralta Get the property and also make it lucrative for your investors as well So I think that s probably one of the biggest challenges that I 00 15 39 Sam Wilson see Yeah And it and I think as we see who knows where interest rates for those of you who are listening to this this is being recorded on May 12th 2022 00 15 47 Sam Wilson So we don t know right now where interest rates are going what effect that s gonna have on a as a on a cooling are we gonna see a continued rise in especially in multifamily in rent rent increases things like that And so when you say six months ago I wonder just because it is fierce and it is competitive though 00 16 06 Sam Wilson Are we seeing a tapering in the prices in multifamily or at least a leveling off or is it that people are still looking for that kind of almost vertical trajectory in sales 00 16 14 Ernest Peralta price Yeah Well one thing is that I notice is that A lot of the investors are holding firm on what they believe their property is worth at this point 00 16 24 Ernest Peralta And so I think for right now I know inflation kind of I think it slowed down a little bit last month from what I read But you know it s very minimal It s probably not too impactful at this point but For the most part I think a lot of investors are still holding on They re still holding firm 00 16 38 Ernest Peralta I don t think they re gonna budge anytime soon but at the same time I think investors are willing to pay what they re asking Right So I think you really have to underwrite look at the market and when you re doing your deals just really make sure that you re coming 00 16 51 Ernest Peralta You re coming to the table with something that s worthwhile and you re not just paying just to pay and I think that s kind of the challenge right now for us I think we re taking the standpoint of we re gonna hold onto our portfolio for now but we re definitely looking at properties on the daily basis we re just underwriting and if there s a good deal then we ll definitely pursue it 00 17 09 Ernest Peralta But for right now I think a lot of it is just kind of looking at the way that things are going right now in the market And just evaluating things as we move along We ll see what happens here in the next six months though 00 17 20 Sam Wilson right Right Like to say time will tell last question for you Is this 10 year plan 00 17 26 Sam Wilson Where do you wanna be in 10 00 17 27 Ernest Peralta years Well yeah in 10 years we d like to have at least close to 50 million in assets If not more what we d like to do eventually is look at other asset classes right now As I mentioned we re looking at we have a multi-family portfolio but it would be nice to diversify that 00 17 43 Ernest Peralta Potentially get into mobile home parks or maybe into storage facilities too as well Those are other asset classes that we want to get into but I think over time that will definitely happen But for right now our focus is on multifamily It s a great area for us to focus our efforts in but that s our tenure plan 00 18 01 Sam Wilson I love it I love it Ernest Thanks for taking the time to come on the show today and really break down your business and tell us your awesome story I love the the precision with which you have enacted your plan and even putting the plan together So many bullet just lack that out of the gate 00 18 14 Sam Wilson So some great tips some great tools Appreciate it If our listeners wanna get in touch with you or learn more about you what is the best way to do that 00 18 21 Ernest Peralta Yeah the best way is you can look me up on LinkedIn You could also reach out to me mvpequitygroup com That s basically our private equity company 00 18 30 Ernest Peralta And yeah you could just reach out to me also ernest mvpequitygroup com 00 18 36 Sam Wilson Awesome Thank you for your time Ernest 00 18 37 Ernest Peralta Appreciate it Thank you Sam Appreciate it Click here to visit this podcast episode