Juan is a licensed California Real Estate Broker that has acquired his Certified Commercial Investment Member (CCIM) designation. CCIM’s are recognized experts in brokerage, valuation, and investment analysis. Juan specializes in selling multifamily apartment units as well as residential properties. He prides himself on locating value-added properties that maximize the client’s investment yields. Juan is a detail-oriented entrepreneur.

Today he handles everything from finding, funding, designing, managing, and selling investment properties. His diverse experience in commercial and multifamily real estate allows him to develop and navigate a wide range of projects.

 

Watch the episode here:

Listen to the podcast here:

 

From Working the Fields To Working The Deals with Juan Huizar

 

Brett:

I am excited about our next guest. He’s a licensed California real estate broker that has acquired his certified commercial investment members that were called as a CCIM designation, and it’s really, for those who are recognized experts in the brokerage valuation investment analysis. He prides himself on locating value-added properties that maximize his client’s investment yields. He specializes mostly in the Southern California area, but we’ll learn more about that and he’s located in Long Beach. He is the president of Sage Real Estate. Please welcome the show with me. Juan Huizar, Juan, how are you, sir?

Juan:

Brett, good morning. Thank you for having me on the show. Super excited.

Brett:

Absolutely, and for our listeners getting to know you for the first time, would you tell us a little bit more about your story and your current focus? 

Juan:

Got it, I’ll try to be brief here, Brett. Part of our title is from working the fields to working in the deals, in my world. I get people who tell me, like Juan, “I can’t get started, Juan, it’s too expensive to buy an apartment building in Southern California is outrageous.” There’s no return on the cap rate and the yield is too low. Why would I ever buy? How can I get started? There are all these concerns. I can’t do it and I hear that all the time. I can’t do it and I just want to share this story A little bit about me, my family comes from Mexico, a small rural town, Codina, Zacatecas when I was four, migrated to the US crossing the border illegally, because that was the only way that my parents could provide a better living, housing and education opportunity for us. My parents only had a sixth-grade education. I started my life in the Central Valley of California, and there in the summers when I was eight 9, 10, 11, we would all have to work in the fields picking garlic. I’m learning to work hard in the sun. If anyone who’s listened to the show is familiar with Avenel Kalinga, L’amour in those areas in the summer, when it is the garlic pick picking season, we’re at 100 plus degrees.

You’re working out there. It’s hot. Sometimes there’s no water. But we had a family of eight. We all had to work. My parents did not speak English. My mother did not drive and so everyone had to do their part, fast forward to today. The reason my parents came to the US was they wanted us to get an education. All eight of us, all eight children, four boys, four girls have degrees from various colleges. We’re talking UCLA, UC Santa Barbara Cal Poly San Luis Obispo, Fresno State Long Beach State, and so we’re really living the American dream. When I talk to people, and I hear this negative, leave California, it’s too expensive. California is going down the drain. Do you guys know how fortunate we are? For a couple of reasons, one, we live in the US, and to be American is the best thing you could be given as a gift. Okay, it is to be an American, and because in America, we have opportunities.

And the reason I share my story is to let you know that someone who comes from Mexico, who’s an immigrant, who’s worked in the fields, who has had to work hard, learn English, and deal with a lot of kinds of uphill battles. It’s possible for that person to get some success, and a lot of the success that came for me was through apartment ownership. The number one thing that we teach we preach here is building wealth or apartment ownership. When you’re talking about wealth creation and all this stuff that you do in your show, that’s hand in hand with what we teach, what we preach, we do sell apartment buildings. Our main focus at Long Beach, to be specific, is a few years ago, we decided that we were going to niche out our market and we decided to become the fourplex market leaders. No one, no other firm before me has sought out to be that So not only did I create my own game. I made the game. No one’s focused on four-unit buildings. We know all the sellers. We know the buyers, and where the market leaders are when it comes to four-unit apartment buildings. That’s a little bit about us.

Brett:

Amazing, what a background, what a story, and which leads us really to the next part where I want to dig in a little bit more about your personality as well and your background and your gifts, and the question is this. I want you to go back to those early days. It can be high school, can be junior high, and I believe we’ve all been given certain gifts in this life and these kids correct it to be a blessing and help to others. People call them welcome strength superpowers. I believe, their God-given gifts. I’m just, what are those one or two gifts you believe you were given, and how does it help how you help and bless people today?

Juan:

Relationship building. I’m able to build rapport quickly. I’m sincere, naturally, so I don’t come off easily or I hope I don’t have a lot of people come up to me. I have the ability to motivate folks, even when I’m not trying to write, a lot of people will reach out to me for advice. Sometimes it’s fitness advice. Sometimes it’s not even about real estate. But I’ve had this ability to build rapport with people from a very early age, and when we’re talking about junior high, one of the things that I was a newspaper boy. On top of working in the fields, I was a newspaper boy delivering the Hanford setting on the Fresno bee from age nine to 18. The only reason I left my newspaper route was that I had to go to college, otherwise, I would have kept it forever. I loved being a newspaper boy, but news beats a newspaper, what you do two things, sales because you have to increase the numbers of subscribers, and so there’s a lot of door-to-door knocking. That helped me become who I am today, and then two was customer service. Certain customers want the newspaper, in their backyard, on the porch in a certain location, and doing work in the fields, being a newspaper boy, you realize, a couple of things. I think I realized that I was a businessman early on; I got a degree in accounting; I realized that I was a businessman, and then, looking back, I’m like, I was a newspaper boy selling newspapers door to door. That probably has helped my career with what I’m doing now in real estate.

Brett:

Amazing love, that’s really cool. Relationship building, building rapport, motivating others, being an entrepreneur, and all of the above, this is really cool. We’re going to dive into the best-kept secret to moving from early humble beginnings to working deals, and what is that, and by the way, you can find Juan Huizar and it’s spelled a little differently. If you’re listening, watching this on YouTube, it’s HUIZAR is the last name H, U, I, Z, A, R, and you can find him at SageReGroup.com, that’s sage, SAGE RE GROUP dot com. Juan, talk is the biggest secret to these fourplexes. I think that’s a good place to focus on, niching down to a specific product type to be able to add maximum value. Tell us about the why behind that, and here’s the current opportunity for yourself and your clients.

Juan:

Perfect. For anyone getting started, the four-Plex is the perfect place to get started when it comes to buying multifamily units, and the reason for it is 30-year financing. This is the best way to describe this. In Southern California, and I can’t speak to other states. Here’s what we have in Southern California. The four-plexes they’re expensive. Do they make financial sense? Absolutely, you buy a four-Plex, if you’re lucky, maybe you qualify for an FHA that is a little difficult. If you’re really lucky, or if you’ve served our country, you qualify for VA. The amount of money that you need to get in for a four Plex is very little Okay, which is a very good thing. Now the best part is qualifying for a 30-year mortgage, and so the best way to describe this is the biggest expense out with any property is going to be the mortgage right, and so when you get a 30-year mortgage, you are capping your biggest expense, okay, that’s a great thing to do. It’s never going to change, like a watch, when you get a commercial loan, they’re going to give you that loan for five 710 years, then it’s going to change, guess what the markets different the interest rate, you don’t know what the interest is going to be down the road. You do with a four-Plex, you do with a triplex or duplex. But let’s just talk about four for now. You’re going to cap your biggest expense, smart thing to do, and the one thing that doesn’t happen. The one thing that we have in Southern California is we have a housing crisis. When a tenant moves out, typically a landlord could adjust the rent to market rents, and so you cap your biggest expense, but the income is never kept. Okay, it’s not kept, and that is where we see growth, and that is where we see two types of things. One cash flow, maybe not in the first couple of years. But ultimately it will come.

But the biggest growth in all of this is appreciation. What we have in Southern California is on average, listen, on average, a property’s going to double every 12 years. Okay, we are seeing the appreciation of 6.7% year after year and that’s on the purchase price and that’s compounding over and over and over again, and so let me tell you something, Brett, because this idea just came up because I do teach this often. It’s almost as if, if you take the risk of buying your first property, it’s like money grows on trees. It really is because outside just managing and dealing with some maintenance and some tenant stuff that you can live with, that’s part of the business. It literally grows on trees, guess what, it’s going to double. You paid a million. You’re gonna make a million. If you paid a million, you’re gonna make a million dollars. How do you become a millionaire by a fourplex? It’s very simple. It’s not like Wall Street. It’s stocks go up and down. It’s none of those two very simple things.

Brett:

Got it. I’m going to try to encapsulate that the first thing is a 30 year fixed financing. You’re able to qualify for that one to four units. The government has some really cool stuff FHA lower down payment, especially if it’s owner-occupied, then it’s like house hacking, which made me know there’s so much we can do, we can touch on versus commercial, which is five units and above right now you’re having to qualify in a whole different realm, higher down payment, fluctuating interest rates, yet some of those are typically five to seven-year fixed, and then it’s adjustable, and, and or the loan is amortized over 25 years or less, and then sometimes you have a larger, larger payment. Whereas if you’re on a 30, year 30, year am 30 years fixed 30 years am you lower payments, and I also like to touch on the fact that you now have inflation that’s rapidly going, and so if you’re borrowing it the fixing at 3%, for 30 years, and you’re paying over a 30-year amortization, guess what, tomorrow’s dollars or next years or five years dollars from now? It’s going to work in your favor. Any thoughts on that one?

Juan:

all I could say is the biggest hedge for inflation, I repeat, the biggest hedge for inflation is real estate. Nothing else will beat that, if you’re buying real estate, you’re putting yourself in a good position, not just for you, your family, and when you’re gone. I mean, let’s talk about generational wealth. I mean, that’s what you’re creating when you’re buying real estate. Beautiful.

Brett:

The last thing he talked about is that your income is never kept. You might have tenants, especially in California, with rent control laws, especially in Los Angeles. I have a six-unit complex down there right now. Some of these tenants have been there for 20 plus years, and the rents would be somewhere around 2000, and they’re renting for, 795, and they’re never gonna leave, and people are writing to cash for keys. But when and if they do leave, that rent, obviously can be increased, and so that’s, that’s a beautiful thing about the income never kept, and so having some staying power, having some reserves, going into it with the long-term view, and then if I buy it at a million, it’s going to be within about 10 years. If I can hold on and keep even if the cash flows are minimal in the beginning, is that a fair summary?

Juan:

For anyone listening. Is this is my thing, for anyone who tells me when I want to work with you, but I wanted to cash flow, and I wanted to do this, let’s figure out how much money you’re going to put in. I don’t care about making $12,000 a year and cash flow, when if it goes up by 6.7%, which historically it’s been doing, that’s $60,000.

I’m okay with making zero if I’m going to be making 60,000, and then on top of that, the next year will be more so cash flow to me is not that important, and it could be that sometimes it depends on age, but cash flow to me is not, or anyone who calls me and says, I’m looking at Texas, I’m looking at Ohio, and nothing wrong with those states. But what’s important? Do we want to build massive wealth? Do we want to make a million dollars or do you want to make $12,000 and if that’s the case, it’s pretty easy to me, I want to make a million dollars, and so that’s why I invest in states areas that appreciate and we know because it historically it’s been doing so it’s done in the last 30 years, it’s going to continue to do in the next 30 years.

Brett:

I like the way he put that right and I do think its cash flow is king but appreciation can also be king I think about saying not in my world.

Juan:

Well, let me just say I understand, cash flow is not King. Cash Flow is not king. Biggest misconception out there is that cash flow is king appreciation is keen. Appreciation woven will truck that cash flow is the smallest piece of the pie when you’re factoring a decision in an investment, the smallest piece of the pie. When does someone say what cap rate do you buy? And I’m like, That doesn’t matter. I’m not worried about what I’m worried about, what it’s going to be worth 20 minutes, 2020 years from now. That’s what I care about. It makes me a couple of 100 bucks a month. I don’t care. I guess for me, it’s much, much different. I see. We look at our graphs and we track all the trends and we look back to see what happened 30 years ago, 10 years ago, seven years ago. We’re like, it’s obvious appreciation is where wealth is made, not cash flow.

Brett:

I like it. See, I cuz it is definitely a little bit different than what most people are saying, but be California you’re at, and that’s probably why you specialize later. Let me ask you this, what fourPlex do you say no to. Is there like give me that, what do you say no to or do you give me a break. Break that down for me.

 

From Working the Fields To Working The Deals with Juan Huizar

From Working the Fields To Working The Deals: “Buying real estate is not only the best way, the quickest way, the safest way, but the only way to become wealthy.” – Marshall Field

 

Juan:

Recently, on my show, I interviewed an investor, and I said what do we tell people who say don’t buy right now it’s too high, and I’m like, do you wait for it to drop for you to be wealthy? Is that what you do? He’s like, no. He says if the environment is giving me good interest rates, if the environment is giving me a property that at least breaks even, I buy it. I don’t care if it’s the top of the market, I don’t care that it’s the bottom of the market. He says ultimately, like we all know, 12 years, it’s going to double so to say, listen, the one thing that I will tell people is, I will not advise someone to buy something where there’s a lot of negative cash flow upfront, it is possible to buy a fourPlex and for you to own it, you’re going to be putting in money. Now, if it’s some simple matter, we need to stabilize it. We need to improve it. The rents could go up. We are allowed to go up some. Maybe one unit will vacate. I don’t mind buying a property being negative for the first 12 months as I stabilize it, because here’s what I tell folks brats are these are important things to know, and, I tell this to my clients is the income of today will not be the income of tomorrow, and the income of tomorrow is going to be so high because of the scarcity that we have here, Southern California that you can’t even like, it’s hard for me to pick up. Let me give an example. We bought a building, and we forecasted that the rent would be 2750 a month, okay. Four years later, each one of those units is getting 30 $500 a month. What I’m saying is, there was no way that four years ago, I could have said I’m going to get 30 $500 a month No, I would have been lying to myself, and guess what, that is what’s happened, and that’s what that’s not it’s happening with me, and any other person, was in this area, they’re gonna tell you the same story.

Brett:

Got it? That let’s take another step back; I guess it would be the staying power. Indeed, the market may shift. The market may go down. Rents may go down, who knows? And if, and how that looks right? This is no crystal ball. But if you have the staying power in the reserves, right to be able to weather the storm, and go through that, like give me your how, if someone’s coming to say, this is my only 100,000 bucks or I’m worth 5 million bucks, I can weather the storm. Walk us through just the global debt coverage ratio that you like to use on an individual basis.

Juan:

I got into real estate, right out of college. Okay, so instead of becoming a CPA, I became an investor, and so I’ve seen the ups and downs, and so here’s what I know, and I’ve only seen rents drop one time. Okay, and so then typically, what we do is, for me, when you’re buying a four-unit building, I don’t really so much worry about staying power, like that’s, that’s an easy thing, because for the most part, rents will not go down, and the whole thing is if they go down, they go down to maybe the rents that when you first bought it, but when you first bought it, you were probably under breakeven, to me, Brett, the holding period is not so hard for other investors who are like, one, but you’re only talking about a four-unit building, and that’s why because my mortgage just kept that’s why I’m not worried about it. I worry about the folks who bought bigger units. Now, although that does put them in a position for greater appreciation. That’s another show, and I don’t say that that’s the wrong route. But for people getting started, the four-Plex is the right route for savvy investors, of course. Trading, trading, retreating, pulling out, and buying more. That’s to show that we teach that we have classes about that, but what I’m talking about today is the folks just getting started. I don’t worry about staying in power. I don’t because it’s just that I have such a housing shortage. I mean, if one of my tenants moves out before I even go to Zillow to advertise for rent, or for rent sign outside, they’ve contacted their friends via social media, and they’re reaching out to me like, Hey, I heard that was going to be vacated in 30 days before it’s even vacated. That’s what’s going on. That’s reality, what I tell people is this, Brett, when you’re buying apartment buildings, you are buying a business. It’s a business that you don’t have to go to every single day. It’s the best thing if you go to it maybe once a week, maybe once a month, maybe after you stabilize it, you don’t hear from them in six months, and everyone’s paying rent and everyone’s happy, you’re providing good housing. You have good tenants. Everyone’s working together to make this work. It’s a business that you don’t have to clock in every single day, and that’s really the best part.

Brett:

Yeah, no, I love it. This is really great. I love all of it. By the way, you can maybe find Juan Huizar at sageregroup.com that’s sageregrouup.com. Let’s shift a little bit right, and I want to focus a little bit on what the podcast is, and while we’ll touch on brokerage here in a second as well. But the biggest frustration with Capital Gains Tax Deferral could be with a 1031 Exchange. It could be selling a high-end primary home that doesn’t qualify for a 1031 or clients that want to sell businesses. What’s been your biggest frustration when it comes to capital gains tax deferral and or the 1031 Exchange. 

Juan:

If the program is great for me equity growth, anytime that you’re in a position and we show people like listen, after a couple of years of owning an apartment building, you pay down debt, guess Guess what? Your return on equity drops. People don’t know that, and so the 1031 exchange is important. There are a couple of things that go on oftentimes, during a sale, sometimes we’re not compliant. Sometimes the person taking the tax benefit is not the person buying it, and then you find out in the 11th hour that it’s not going to be approved, and then you do have that tax penalty, the timeline is short. The biggest part right now that’s really difficult is locating the Upleg, which puts tremendous pressure on us brokers, and certainly on the seller, would it be the buyer moving up? It is the time crunch and the pressure and the fact that there’s just not enough inventory to move up, that is the real-life story.

Brett:

I agree with you, and it’s part of what we found Capital Gains Tax Solutions, right and offer the Deferred Sales Trust, which is an alternative and can save a failed 1031 Exchange, because seven of these in the last 40 days will cause another seven in the next 40, and the biggest thing we found is it gives people back their flexibility and takes off the pressure. You don’t have to do anything right you can just defer the tax, you can wait on the sidelines, purchase back into real estate whenever you want all tax-deferred, no equal or greater value rule, you can buy multiple four-plexes, you can put the minimum downpayment to get the maximum amount of leverage on those fourplexes, and it’s a really cool thing, and it works for cryptocurrency public stock, private stock, primary homes, and you should check it out at capital gains tax solutions comm if you want to learn more about that, that’s capital gains tax solutions calm. Let’s touch on a little bit about Biden’s proposal to take away the 1031 limit and eliminate the stepped-up basis and or double the Capital Gains Tax Rate. Any just general thoughts on those potential changes in the tax code?

Juan:

Got it. I mean, I guess as of today, nothing has been passed. We’re okay with that. But it appears to me that they’re limiting. They’re putting, over a certain price where they’re going to apply it. The way that I look at it is the discussions that I’m having with the folks that I serve, it’s not really applicable to the database, the clients that I serve. There’s, listen, no one wants more taxes. No one wants that. People work really, really hard, and they take big risks to do this, and again, when we talk about the long term, like no one’s making millions in a year, I’m saying you’re making it 2030 years, guess what, that’s a long time you’ve committed to an asset, and so yeah, we like it. Absolutely not. Do we want to pass it? No way. I see that there is a certain number. I know what that number is, where it’s going to apply, and I guess that number is pretty big.

Brett:

Cool. No, absolutely. We are running out of time. Are you ready for the lightning round?

Juan:

Let’s go

Brett:

All right, knowing what, you know now, what if you go back to your 25-year-old self? What is the one Golden Nugget you’d make sure to tell yourself to do?

Juan:

Buy more properties with 30-year financing because you’ll never lose them?

 

From Working the Fields To Working The Deals with Juan HuizarBrett:

Absolutely love it. Question number two, what is the number one book you’ve recommended or gifted the most in the past year?

Juan:

The fish that ate the whale, it’s an amazing book. Read it is awesome.

Brett:

Question number three What are you most curious about right now?

 

Juan:

That there’s no limit to knowledge and growth, it’s there’s no limit to how good one could get it, that is a very, it’s crazy with it like that, just it makes me shake to think that if you want to go learn something, if you want to get good, you could go do that, and there’s no stopping that. That’s the scariest part, not that it’s scary. It’s almost like, man, how good can you get bread, how good can you get right, you’re good? How much better can you get and the whole thing is you can support your whole team, can everyone listen to candidates, that to me is pretty special.

Brett:

I love that. What’s the biggest obstacle facing investment real estate brokers today?

Juan:

A lot of investment real estate brokers are stuck in the old ways of hammering the phones, bothering the apartment owners nonstop. I mean, they’re calling them 100 times a day like that’s their way of lead generation. That’s the old way. That’s not what we do here at Sage real estate. We’ll never call you a bug. What we’ll do, what we do, why we’re different, is that we’re going to provide you value. We’re going to be here as a resource. We’re gonna do the interviews. We’re involved with a partner Association at the city level, let you know about the changes, so we’re going to be here giving, so that when it is time to sell we don’t just call these brokers to pop up. They just pop out of nowhere when it’s time to sell, and what we tell people is that’s not us. We’re here involved in our community. We live here, our offices are located here. We’re heavily involved in Long Beach. We love Long Beach. We’re very pro-Long Beach, and we’re very involved, and so that makes a difference with us.

Brett:

I love this. This is really refreshing. Amazing. Second last question, How do you stay centered on new values? After all the stuff you’ve achieved? Everything that you’re doing for your clients and for your team members? How do you stay centered in your values and encouraged to reach new heights?

Juan:

I mean, going back to my story, I have parents with a sixth-grade education who brought young children here, taking them through the desert, getting deported back coming back again, fighting, not giving up on the American dream, and what they achieved with a sixth-grade education of pushing eight kids through college masters and PhDs and all this other stuff my sisters have. That’s what keeps me centered. That’s what reminds me of what I’m doing, I sometimes ask myself, Brett is if they were able to accomplish that, what is it that I could accomplish? And that, I love that?

Brett:

I love that too. That’s beautiful. Thank you so much, Juan Huizar, for being here and sharing so much about your story, wisdom, your passion for the four Plex investments, the marketplace, and growing wealth. For our listeners who want to get in touch, would you remind them one last time what’s the best place for them to find you?

Juan:

It’s Juan Huizar website is SageReGroup.com. if you want to follow me on Instagram, it’s @MultifamilyLongBeach. Give me a follow, give me a message if you’d like something you heard today. If you disagree with something that I said, by all means, no one has all the right answers. Everyone comes up learning different things. I’ve been doing this a long time. I tell people that I am an investor first, real estate brokers second, because that’s how I got into the business, and so when I look at properties, or when I deal with folks, I see them differently. They’re not just a transaction. There’s someone just like me trying to make the best decision, and sometimes the best decision is for them to utilize your services in terms of deferring taxes, and it’s a really good alternative. Thank you so much.

Brett:

Amazing one, thank you for being on the show, and again, thank you for sharing a lot with us, and I want to encourage you to keep building great relationships, building great rapport, motivating others to create and preserve more wealth, and also want to thank our listeners for listening to another episode of the Capital Gains Tax Solutions Podcast, also streaming on expertcresecrets.com or we believe most high net worth individuals and those who help them they struggle to clarify their capital Gains Tax Deferral options not have any clear plan is the enemy and using a proven tax deferral strategies such as the Deferred Sales Trust and or getting with one to buy some fourplexes at 30 years fixed financing for 30 years, and making sense of that for you is the best way for you to grow your wealth. Please, please, please go to capitalgainstaxsolutions.com if you want to learn more about how to eliminate the need for the 1031 Exchange, how to defer tax on the sale of cryptocurrency or primary homes. Again, that’s capitalgainstaxsolutions.com. Thanks, everyone for listening. We appreciate you out there.

 

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About Juan Huizar

From Working the Fields To Working The Deals with Juan HuizarJuan is a licensed California Real Estate Broker that has acquired his Certified Commercial Investment Member (CCIM) designation. CCIM’s are recognized experts in brokerage, valuation, and investment analysis. Juan specializes in selling multifamily apartment units as well as residential properties. He prides himself on locating value-added properties that maximize the client’s investment yields. Juan is a detail-oriented entrepreneur.

Today he handles everything from finding, funding, designing, managing, and selling investment properties. His diverse experience in commercial and multifamily real estate allows him to develop and navigate a wide range of projects.

 

 

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