Jun 21, 2022
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
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Connect with Eric Peralta on LinkedIn or visit their website at mvpequitygroup.com
You email him through ernest@mvpequitygroup.com
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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.