Preview Mode Links will not work in preview mode

How to Scale Commercial Real Estate


Apr 7, 2022

Can you mix faith and business together?

Stuart Grazier and David Gutierrez could and so can you. They are the co-founders of Storehouse 3:10 Ventures, LLC, which acquires and adds value to cash-flowing rental properties that will help their investors gain financial freedom through rental real estate. They donate 10% of all their net profits to their partner non-profit organizations. 

In this episode, they will talk about how they built their business based on their faith, the journey they had to take and the challenges they had to overcome, and strategies that other investors can apply to their real estate investing. 



[00:01 - 02:23] Opening Segment

  • How Stuart Grazier and David Gutierrez become business partners
  • This was their motivation to invest in real estate after retiring from the Navy

[02:24 - 07:02] Building Systems and Processes

  • The importance of building a team and the right systems and processes.
  • Stuart shares a few secrets on how they do turnkey business from a distance
  • David tells a few tips to scale a real estate business

[07:03 - 12:40] Managing Worst-Case Scenarios

  • Stuart and David capitalized on their military network to diversify
    • This was how they did it
  • This is David’s favorite exercise before doing a deal, and he explains why
  • You will learn something from how Stuart and David handle crises
    • Listen to this segment

[12:41 - 17:02] Investing in Real Estate Founded on Faith and Passion

  • Stuart and David offer their outlooks on the future of real estate
  • This is how they educate their investors about potential deals
  • Learn the story behind the name of their company

[17:03 - 18:47] Closing Segment

  • A real estate mistake you want the listeners to avoid
    • Not taking action
    • Don’t overanalyze
  • Your way to making the world a better place
    • Donating a portion of their business earnings to charity
  • Reach out to Stuart and Ben
    • Links below
  • Final words



Tweetable Quotes

 

“The biggest piece to having a successful real estate business is just fostering and creating relationships.” - Stuart Grazier

“Real estate is a team sport…you got to create that know, like, and trust triangle. ” - Stuart Grazier

“Focus is key, but also think that being diversified is also a great way to figure out where you're talented, where your highest and best is.” - David Gutierrez

“Choose partners and choose teammates that compliment your weaknesses, and in order to do that, you have to know yourself.” - David Gutierrez



-----------------------------------------------------------------------------

 

Email grazierinvest@gmail.com to connect with Stuart and David. They are also on LinkedIn:

Turn the key to your future by investing in real estate. Visit Storehouse 3:10 Turnkey now!



Connect with me:

 

I love helping others place money outside of traditional investments that both diversify a strategy and provide solid predictable returns.  

 

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:



Stuart Grazier  00:00

Networking and building relationships, honestly, I mean, I think that's the biggest piece to having a successful real estate business is just fostering and creating relationships. You know, real estate is a team sport. I've learned that the hard way. You know, I tried to do a lot of real estate, investing on my own, trying to do everything by myself for a long time. And it's just not the way to do business in real estate. You got to build relationships, you got to create that, you know, that know, like, and trust triangle. So I think that's it, man. 

 

Intro  00:27

Welcome to the How to Scale Commercial Real Estate Show. Whether you are an active or passive investor, we will teach you how to scale your real estate investing business into something big.

 

Sam Wilson  00:39

David and Stu, welcome to the show.

 

Stuart Grazier  00:41

Sam, what's going on, man? How are you?

 

Sam Wilson  00:42

Hey, man, I'm great. Same three questions I ask every guest who comes on the show. In 90 seconds or less, can you tell me where did you guys start? Where are you now? And how did you get there?

 

Stuart Grazier  00:50

Yeah, so David and I, we actually were college roommates way back in the day from the Naval Academy. And we've finished up a 20-year career in the Navy, we've both been investing in real estate on the side and about every different niche and strategy we could possibly think of, started a company together about three and a half years ago, and we have a podcast, we have a turnkey business in Wisconsin, flipping 30 to 40 to 50 houses a year, turn them into rental properties. We've also syndicated some mobile home parks, and we are lenders and we do all the fun stuff in between.

 

Sam Wilson  01:23

That is amazing. Question for you, David, when you hear all that, is there ever any consideration of saying, hey, let's streamline operations and really dial down into one niche?

 

David Gutierrez  01:33

Yeah, absolutely. You know, I think focus is really important. We are about to retire from the Navy. So in about five months, that'll really, hopefully free up some time, we've done a really good job of filling up the time that potential we are going to free up. So we need to, we definitely need to focus but and I would encourage absolutely encourage your guests and your listeners that focus is key. But also think that being diversified is also a great way to figure out where you're talented, where your highest and best is. And it gives you a chance to see if you really enjoy certain things and don't enjoy certain things. We love single family homes, a lot people think you graduate from single family homes go to multifamily and commercial deals. But we found that we really enjoy single family homes, so probably maintain a portfolio doing some of those. But at the same time, we also enjoy multi use buildings and multifamily. So I do think you do have to somewhat of a focus area. But I also think the diversification is good for us.

 

Sam Wilson  02:24

Right? What have been some things that you guys have done? I mean, these are a lot of different moving pieces, you know, doing a turnkey business in Milwaukee from Denver, while you're full time in the Navy. I mean, how have you effectively managed all of those? I mean, again, being full time in the Navy, like that's a lot of moving pieces. How have you done it? 

 

Stuart Grazier  02:42

Yeah, so I think the biggest thing is building a team to help you and surround you with all the things that that we're not good at. David's like not good at really much anything. So we have to find a lot of things that can help us out on that end. But honestly, you just build out a team, building systems and processes and putting things in place where you know, we don't have to be in the business full time all the time,

 

David Gutierrez  03:03

You should also have a face to the business. And that would be me, anybody of your watchers on YouTube, you'll see students face and recognize why that's not the case for our business, that he's not the face. But I think there's also a component of outsourcing some of the things you're not good at, there's a couple things, one, choose partners and choose teammates that compliment you know your weaknesses. And in order to do that, you have to know yourself, right? You have to spend some serious time analyzing what you're good at admitting being honest with yourself being self aware and admitting the things that you're good at, and you're not good at. And then when you I'm a believer in taking your strengths and really maximizing those, the best that I can be for our team are the areas that that I bring my strengths, I don't need to spend a ton of time on my weaknesses, because my weaknesses, that effort will never do my weaknesses up to where my strengths are. Right. So I think you really focus on building that and outsource your weaknesses. And luckily for Stuart nine, we are so different. We have a great relationship, we get along great. And that's a key component. We trust each other, we love each other. But then there's the element of he brings things to the team that I just do not bring the analytical side things that I don't really care to do. And he's really good at that stuff. So it's a great partnership.

 

Sam Wilson  04:06

I love that. Ttalk to us about doing turnkey from a distance. That's a really unique anglem, and Milwaukee, how did you pick the market? And then how did you scale the teams effectively? I mean, that's, I know, a lot of turnkey providers. I don't know any who do it from a distance.

 

Stuart Grazier  04:23

Yeah. So a lot of things that we've built are out of past failures. And a lot of lessons learned along the way. You know, David and I were actually both living overseas in Italy. And we decided to purchase turnkey from a distance as a way to scale our own personal portfolios. And we both had really, really bad experiences with it. And David had way worse experience than I did to where it was like fraudulent he was possibly like going to court over some stuff. But along that journey, we really kind of figured out like there's some good ways to do things and some not-so-good ways to do things. And out of necessity, David really had to kind of build out a whole new team. His investments were in Milwaukee, he has family there. So he had to build out a team, I was going through some struggles, we were comparing notes, we'd also, you know, already had been doing stuff in the past. And we decided to take this and build on those lessons learned and build out a company to try to do it the right way. And so, you know, through those struggles, and through those failures, we were able to build out a team build out a model that we could be proud of, you know, using kind of those core values that we stand for. And, you know, build our team that way.

 

Sam Wilson  05:29

Yeah, that's really intriguing. I mean, it's one thing to do it once or twice on your own, maybe from a distance, it's another thing entirely, to develop an entire replicable system. What was that process like?

 

David Gutierrez  05:41

Yeah, you know, it's interesting, because there's, and I think you have to recognize what you bring to a situation, right. So when we're looking to build a team in Milwaukee, we're analyzing, you know, what we bring. So if we bring a network, we bring funding, we bring these different elements to make it easy for the team to acquire a property, then, you know, they kind of put some people together, they do some hiring and bring some contractors in that, you know, can hopefully embrace what we're looking to do. And then on the back end, we have a network that wants to buy these beautiful products, and we can continue to replicate that. So I think as you look at those things, and you try to build a system, I'll tell you, one of the things that I wouldn't recommend, I would not recommend doing it from a distance. Now that we've done it from a distance, I think the best way to build systems is to build a culture and to build the way that you do business and to be present for that every single day. So that you can your face is seen and you can really communicate the desired outcome of the business is the most effective way to do that, barring being able to be permanently there, if you do it from a distance, I would encourage you to get some really good frequent flyer credit card miles and spend a lot of time there and be present so that your team can see you and you can build that the system's weather, you know, we like EOS from traction, right? And, you know, willing, and we love that those processes. But whatever it is that you choose, the system you choose, is something you got to be dedicated to your team's got to be dedicated to. And a lot of times you have to be really present to build that culture.

 

Sam Wilson  07:02

Right. That's absolutely fantastic. So tell me, you know about building out then you guys have also syndicated mobile home parks, that's another kind of left turn outside of, you know, doing single family turnkey, doing a debt fund, syndicating mobile home parks, what does that look like? How are you finding opportunity? And then how are you growing that side of your business?

 

Stuart Grazier  07:21

Yeah, I mean, again, it's still not that team, you know, finding the right partners, the right people that compliment you, you know, one thing that we kind of saw early on in our investing careers was, you know, we had a great network, you know, being be military guys, we had a lot of people in our network within the military that were really interested in investing in real estate, but didn't really know how to, we were able to kind of capitalize on that and educate and help and teach. And we started a podcast, and we started seeing that we were able to do really well with our network. And so we use that as a source to then partner with someone that was knowledgeable about a market about an asset, and about, you know, kind of the nuts and bolts of the buying and managing and operating the asset. And we were able to kind of partner with them and bring the network and raise some capital and provide some, you know, investor relations to the team. So again, just building out a team, and then working with our strengths to do what we do best. 

 

David Gutierrez  08:21

I think one thing that's really important to emphasize here is the partnership piece. And I think real estate is an area that a lot of people very quickly formed partnerships, and like, let's go do a deal. Hey, you're my neighbor, we've talked about five times I know you got somebody, I've got some money, we draw the same color car, so let's go do a deal. You know, I would highly recommend against that, you know, for Stuart and I, our partnership started developing 25 years ago, in the context of a hard situation, the Naval Academy, going through some tough times, and building a relationship, founding that 20 years of service and friendship and seeing each other's kids be physically seeing each other's kids be more, but shortly after, when the baby came out, you know, going to each other's weddings, you know, doing all these things, we have this very, very strong partnership, we build partnerships. Now, before we do deals, there's a lot of time spent relationship building, getting to know and doing worst-case scenario, that's my favorite game before doing a partnership, we say, Okay, this is the deal. And this went completely wrong. We lost money here, we have these investors, what do we do? What are you going to do in that situation? I think when you go through that exercise, and you put rigor towards relationship and partnerships, then when the tough times come, it's easy, it's automatic, right? You know exactly what you're going to do and you face contact and you make a decision and you move forward. And I think that the partnership piece, I see it so many times in real estate, especially when you start getting into bigger deals, commercial syndication multifamily investors. And if you don't want to have a beer with the guy or gal, do not bring them on as a partner. Do not bring them on as an investor because you should know that you're going to be together and somewhat of a marriage for a while.

 

Sam Wilson  09:48

For sure. What are some things you guys are writing into your agreements for when planning for worst-case scenarios? It's one thing to talk about it but it's another thing to have, hey, if you don't perform this perfectly, whatever it is, how are you protecting yourself in that way?

 

Stuart Grazier  10:03

Yeah, so we early on, David mentioned the book, Traction, you know, we read through that they had a thing called the The Vision/Traction Organizer, and it has you specifically write out like your vision, your core values, your 10-year vision, your five-year goals, your three-year goals, your plan, we do quarterly, you know, rock statements where like, you got things going on what you want to work towards. So we do that on a regular basis on a quarterly basis. We write those in and we update it every single year. So we always have that to go by, you know, obviously, like, we have the operating agreements for our businesses. And you know, we're best friends, like, you know, our families are incredibly close. And, you know, like David said, like, we're not gonna put anything in writing that says, if you fail on this, I'm not going to be your friend anymore. But we had those, like, serious talks ahead of time, from the business aspect. And, you know, our friendship and our family come over anything, you know, related to money in business. And, you know, we had this hard conversation before we decided to go into business together. 

 

Sam Wilson  11:03

Well, that's between you two, but let's assume you're working with your mobile home park operator, that's a very different relationship, how have you guys kind of WarGames that relationship and made sure that you know, when things go awry, how they're handled?

 

David Gutierrez  11:17

I'll tell you one of the really good beneficial things that we have currently, as our business partners on some of these deals are lawyers. And so they write very effective lawyer ease into these contracts into the operating agreements. And so the paperwork is legit. Obviously, the paperwork is vetted very finely, and I think really were to get after what you're talking about, most of the times that we're doing these investments, we're raising money, these are with people that either we have a connection for the most part through the military, if we don't personally know them at that point. But I'll tell you the Speed of Trust, right, and we hear it all the time, it's a Speed of Trust, if you have that the speed of the deal is very quick. And so we spent a lot of time whether it's through again, for your listeners, podcasts are amazing opportunities, not only for us to get great guests on or to be, you know, guests on on amazing shows. But it's an opportunity for someone to click on a button and hear who we are. And if that can, that message is consistent over and over and over. By the time we get on the phone with them, and they want to invest, they feel like they have a good foundation for who we are. And then we have to obviously, if we're not being genuine, it comes out pretty quickly, right. But I think we are very genuine and honest with our audience. And so it's really enhanced. The legalese, all the stuff that nobody understands or necessarily reads anyways, and really builds it into foundation of a relationship, where then transactions are taking place, and they'll tell you pay your investors back, then back on time pan back and forth, and you do it over and over and over again. And that's really gonna the words gonna get out, right? 

 

Sam Wilson  12:41

Yeah, absolutely. What are some things you guys are doing right now to find opportunity?

 

Stuart Grazier  12:44

Networking, and building relationships. Honestly, I mean, I think that's the biggest piece to having a successful real estate business is just fostering and creating relationships. You know, real estate is a team sport. I've learned that the hard way. You know, I tried to do a lot of real estate investing, on my own, tried to do everything by myself for a long time. And it's just not the way to do business in real estate, you got to build relationships, you got to create that, you know, that know, like, and trust triangle. So I think that's it. 

 

Sam Wilson  13:11

And yeah, I love it. Tell me when you guys look forward, talking about the, you know, three, five, and 10-year plans? What does the future look like for you guys?

 

David Gutierrez  13:20

Yeah, you know, it's an interesting question. I think the, there's always times in life where you have these significant transitions, you really try to have to redefine and refocus. And I'd say that we're in that stage right now. But I think what the most important thing is that, whether you're doing your first deal, your 100 deal, or you know, you're kind of redefining I was listening to a podcast the other day with 10X Guy, Grant Cardone, thank you very much. But he in his state currently is redefining every year, and he's getting on these podcasts, and you can see a transition. And so I would say in the midst of those things, what we're doing now is still taking action. So for example, we came back to Colorado both moved back here recently, as we're transitioning out, we went down to the area where we have the mobile home parks and put a multi-use building on a contract. We're like, Okay, let's get this. We like this area, like this town, we can analyze this deal till the cows come home. Let's do it looks good. Numbers, pencil, we have some great partners. And let's take this thing down and, you know, get our feet wet here and figure out what the Colorado market because vastly different Milwaukee, right. I mean, Colorado is an extremely different market. But I think taking that action and always having the passion, we have a passion towards real estate, and team building. So you put those things together, we're going to go find a market, we're going to see where the numbers make sense. And could you do deals I would see for us in the future, to continue to do these mixed-use in these areas that we're looking at kind of tertiary markets. I see us growing that business that portfolio, those opportunities for our investors. And then I also see for us we love investing in the veteran community. And so there's a lot of guys out there starting to do operations, you know, whether it's multifamily or they're doing turnkey stuff and building funds to be able to enable them to not have a cash issue and help them to get their businesses up and running is something We're super passionate about so we see growth on that side of it as well.

 

Sam Wilson  15:02

It sounds like you guys are really opportunistic, like you're not tied necessarily. I mean, clearly from your initial intro they're doing turnkey debt funds syndicating mobile home parks both, I mean, you guys got your hands in a lot of things. I would classify that as opportunistic. How do you educate your investor base with so many different opportunities that you're looking at?

 

Stuart Grazier  15:21

So we have a podcast ourselves, and we have amazing guests come on, we don't really, truly focus just on real estate. It's a business podcast, but we focus on everything that we're passionate about faith, family, financial freedom, entrepreneurship, giving, you know, so we have continuous guests on they're talking about different topics. We're also a part of mastermind groups, we're a part of a military veteran mastermind group that focuses on real estate. We're part of some other mastermind groups. And so it's just pouring in getting on phone calls, teach and talking, you know, through our experience of trying these different things. And I mean, you know, a lot of people say, hey, focus on one thing, but I feel that, because we've tried so many things, we're pretty well versed, and we kind of know what to look for what not to look for. And, you know, there's a lot there's some good to that too. 

 

Sam Wilson  16:06

Right, yeah. Absolutely. Last question before we jump into the final three, Storehouse 3:10. That's the name of your business. Tell us about that.

 

David Gutierrez  16:14

Yeah. So you know, one of the big tenants that when we found our business and all our business are found down is giving. We're big into tithing. So Molokai 310, is the traditional tithing verse from the Bible. And so it's something that we really are passionate about giving to organizations that we love and care for. So for example, we've given to a warrior's heart, huge supporters of them and the Exodus road currently have a really good partnership with them to try to enable and empower them as best we can. So we have a huge passion for giving, we feel it's part of our mandate, it's part of our faith. It's part of who we are as men. And so that's really the foundation of you know, the first business we started and, and really carried through to, you know, now we've got about four or five different businesses we started and with the general theme of giving first.

 

Stuart Grazier  16:58

So the 10% of our profits from all of our businesses go to charity organizations.

 

Sam Wilson  17:03

Cool. Very, very cool. Well, you took one of my last three questions. So now it's down to two, what is one mistake you can help our listeners avoid and how do you avoid it?

 

David Gutierrez  17:10

Yeah, you know, I think that for me, one is I'm a relationship guy. I'm very passionate, I'm very quick to make decisions. I think that's a huge benefit in the military. But it also has a dark side to it, right? It has the, you're too quick to jump in, you're too quick to do things you maybe don't analyze enough. And so I would say that, you know, allowing my emotions and excitement to get me into a deal or even do a partnership is a mistake. But I think a bigger mistake, oftentimes is not taking action is seeing opportunities. And you know, it's good. You've analyzed, you've analyzed 100 deals at this point. And you know, this one is good. Or maybe it's maybe something home run, but it's an opportunity to get into the space to do something about something and you sit on the sidelines, and you continue to do that and justify it with well, I'm analyzing, we can analyze forever. So I think not taking action is a big one for me as well.

 

Sam Wilson  17:58

Fantastic. I love that. Last question for you, if our listeners were to get in touch with you, what's the best way to do that?

 

Stuart Grazier  18:03

Yeah, so Dave and I are both pretty active on LinkedIn. You can check it out. Check us out there and connect with us. And then our website is storehouse310turnkey.com, and we have links there for our podcast as well the tab there, so check out our podcast filling the storehouse. 

 

Sam Wilson  18:19

Awesome. Gentlemen, thank you for your time today. Do appreciate it.

 

David Gutierrez  18:21

And they say appreciate you.

 

Sam Wilson  18:23

Hey, thanks for listening to the How to Scale Commercial Real Estate Podcast. If you can do me a favor and subscribe and leave us a review on Apple Podcasts, Spotify, Google Podcasts, whatever platform it is you use to listen, if you can do that for us, that would be a fantastic help to the show. It helps us both attract new listeners as well as rank higher on those directories so appreciate you listening. Thanks so much and hope to catch you on the next episode.