Rafael Gutierrez

Quick Facts:

  • Profit Strategy: Buy & hold
  • Number of Units: 40
  • Personal Money Invested: 30% of the purchase price
  • Amount Earned: 20%
  • Prior Experience: Prior to Lance’s training, Rafael had purchased and rehabbed multiple 2- and 3- family buildings, accumulating 20 doors, however, all using his own money as he lacked the knowledge and confidence to find and use other people’s money

Rafael’s Call to Adventure

Like most immigrants who come to this country, Rafael came with a dream. He came to the US in 1990 from the Dominican Republic. He was a chemical engineer in his country. Obviously a smart and ambitious man, but his English was limited. However, that dream — to make money, and lead a good life — was something he couldn’t do in his country. America was the answer.

He started working in a field related to his education. Then in 1994, he discovered his passion. That passion: real estate. He read every book he could find. Attended seminars. Thought about it constantly, but he was afraid to take that first step.

His lack of English-language skills in combination with a pattern of procrastination and little confidence caused him to stay stuck. He was a man with determination, though, and finally, in 2004 he started investing in real estate.

His first purchase was a 2-family rehab. He and his wife lived a frugal life. They saved a lot of money. Not knowing how to get financing from others, he used money from a home equity line of credit. He rehabbed that building and sold it — a flip. He was expecting to profit $50K from this deal, but he didn’t factor in all the added fees. None of the books told him about the fees. None of the gurus who lead the seminars he attended educated him about that expense. As a result, his profit was reduced to about $10k. He was really disappointed, but he had taken the first step. He used his new knowledge and pressed on.

In 2005, he started purchasing other 2- and 3-family buildings. He continued to look for “value-added” properties. His goal continued to be one of rehabbing and holding for passive income. After a while, he had accumulated 20 doors! He set his personal goal at 100 doors.

He was using his own money though, so the speed with which he could acquire units was limited. He had no knowledge of how to put together a proposal or presentation to enlist the help of a financial partner. And the fear… the fear could be debilitating.

Things started to change — in an amazing way. In 2019, he got a free book from Lance. This book changed his perspective. Lance’s influence and his Bootcamp (equipped with coaches) inspired a passion for larger multi-family buildings. This would help him get to his goal of 100 doors so much faster!

Rafael’s Quest

He had read books about investing in large apartment buildings, and he’d attended many seminars. He tried to invest in multi-family using other people’s money but wasn’t successful. But 2019 was a turning point. When he started training with Lance, he got clarity and confidence. He started sending letters around the US.

His first response was from an owner in Dayton, OH. The seller had a 5-unit building. At first glance, the building looked like a good investment, so he discussed the deal with one of Lance’s trainers. They looked at the deal with him. After the analysis, they agreed it was a good deal. “Go after it,” they said.

His confidence was boosted. He went to Dayton and interviewed the owners. After negotiations, he purchased the property. While it was 5 units, only one was rented. And it was a rehab project. Work needed to be done and tenants needed to be found.

Next, he initiated a relationship with a broker. The broker started sending him properties. This was during 2020 and 2021. The real estate market was booming. He found a great 6-unit.

Then the pandemic hit. He lost his job. Remember, he’d been using his own money for investments. This was a very stressful time.

The broker presented him with a 29-unit property. It was priced at $1.6 million. “I can’t do $1.6 million,” he told the broker. He admitted, “I never thought I could purchase something over a million.” He was comfortable with 100-, 200-, or 300-thousand dollars. But not $1.6 million!

Between math, negotiations, and soul searching, he was able to purchase this property for $1.4 million. He told the seller, “If you fix everything, I’ll give you the 1.6 million. If you don’t, I will give you 1.4.” He converted a retirement account to a self-directed IRA to purchase the property.

Reaching beyond his comfort zone — and being successful — was extremely impactful. “Now when I see a property at 1.5 million I think, ‘I can do that!’”

He admits, “I need to start using other people’s money.” That objective is necessary for him to hit that 100-unit goal. That’s his next big area for growth.

His Dream

He explains, “I don’t need to be rich. My dream is to maintain my current level of living — my current status — but not work. Making $10K/month wouldn’t change my life because I’m living that way now. I just want to keep having what I have. And I want to be able to travel and visit people.” He shares, “you program your future, so maybe it will turn out even better than I think. If I can leave a legacy for my grandchildren, that would be great!”

He says it again and again. His goal is 100 units. He feels this is a worthy target because it should create the income he’s looking for. But this target has to be adjusted all the time. “I don’t believe in making excuses, but life can hit you hard.” He continues by explaining his wife is ill and needs a transplant. This time is rather rough. She’s not working and she’s struggling with her health. There have been a lot of changes for them.

So, how does he keep himself focused on real estate when he’s facing all these life challenges? “I have the goal of 100 units written in my office, on a board, where I can see it every day. The goal says ‘2022,’ and I don’t think I will do it this year. But I will do it. I know it.”

The properties aren’t creating as much cash flow as he anticipated. Lance has explained to him that value-add properties can take a year to see the expected cash flow. Rafael thinks that in 6 months he’ll be getting about $4K per month.

A New Man

Rafael reiterates that he has confidence now that he didn’t have before. “I owe it all to Lance, his training, and his coaching team. I now know how to analyze a deal. I feel comfortable. I’m not afraid to talk to anyone. For this, I owe Lance. I feel so lucky. He increased my confidence by more than 100%. I’m no longer afraid of talking to anyone.”

He admits that procrastination used to be a problem. Well, it’s still a problem. “But I have tools! I have a board in my office, and I write my to-do list on the board. When I see a task day after day that I still haven’t done, I embarrass myself and I finally do it!”

Another transformation he experienced was around his accent. He struggled so much in the beginning because he didn’t understand other people. When he’d send the letters, he’d be afraid to answer his phone when he’d get calls.

But he did answer the phone. Even though he didn’t have confidence. Even though he wasn’t fluent in English. And, after the first 5 or 6 calls, he realized, “I can do this.”

In addition to language struggles, confidence issues, and procrastination habits, he was also unfamiliar with computer technology. He’s improved so much. He is still learning, and he asks his kids how to do things when he needs help.

Always Growing

Rafael has achieved amazing accomplishments — even with his struggles, insecurities, and limitations. “I stuck with it because passive income stuck in my brain. If others can do it, I can do it. I lost my job, but I continued my life. I know that there is a great future in front of me if I just continue what I’m doing.”

His next step is to learn how to get financing from others for deals. “That’s my big problem at this time.”

New Lessons

As a landlord, he realized a part of him that he wasn’t expecting. “I love to treat good tenants like persons. People love me a lot. In fact, they love me too much. They treated me like family. But if you are so good with them, it may not be right for you on the financial side.” He wasn’t increasing rent as he should have been. His solution? He switched from self-management to using property managers. “I am a good person and I am very weak.” His new challenge is learning how to deal with property managers. He has learned that a good property manager can make a big difference.

Rafael’s Final Advice

“Get prepared, get the knowledge. Start. Any way you can.” Remember, he studied real estate for 9 years and never did anything. He explains, “I finally realized I had to start. I had to do something. I thought I was going to make $50K on that first deal. I only made $10k. But it was great! I did something.”

He believes, “even if I lose something, I realize I did it! Anybody wanting to get into real estate just needs to start. You have to do the first step. You may be afraid. That’s okay. Just do something.” 

Just. Start. Do. Something.