- 3 months ago
Join an active community of RE investors here: https://linktr.ee/gabepetersen
0:00 - Introduction to Ground-Up Development
4:12 - From Corporate Banking to Real Estate Entrepreneurship
9:09 - Why Shift from Fix & Flip to New Construction
14:38 - Deciding Your Build Strategy: BTR vs BTS
18:26 - Just Do It: Best Real Estate Education
20:29 - Stop Reading, Start Building
22:52 - Networking: The Ultimate Deal Source
24:09 - Cash Flow Lessons from Multifamily Mistakes
26:26 - 50-Home Portfolio Exit Strategy
GROUND-UP DEVELOPMENT IS THE ULTIMATE WEALTH BUILDER 💰
In this powerful episode of The Real Estate Investing Club, I sit down with Daniel Angel from Apex Investments to reveal why ground-up development might be your secret weapon for building serious wealth in today's challenging market. Daniel shares his incredible journey from corporate banking in Colombia to building a vertically integrated development company in Atlanta that's crushing it with both build-to-rent and build-to-sell strategies.
WHY NEW CONSTRUCTION BEATS FIX & FLIP 🔨
Daniel breaks down the exact moment he realized ground-up development offered better margins and more predictable outcomes than traditional fix and flip deals. With rising home prices squeezing margins on renovations, buying raw land and building from scratch has become increasingly attractive. The best part? No surprises when you knock down walls because there are no walls yet! This predictability allows for better planning, more accurate budgets, and ultimately higher returns when executed correctly.
THE FOUR-PACKAGE SYSTEM FOR PROFITABLE BUILDS 📊
Discover the exact matrix system Daniel uses to streamline his development process across multiple price points. From builder-grade to high-end finishes, his team has created four distinct packages with three variations each, allowing them to serve markets from $500K to $900K without reinventing the wheel every time. This systematized approach is what separates hobbyists from professionals in the development game, and Daniel walks us through how anyone can implement similar systems in their own business.
Want to learn more about our guest? Connect here: https://apexinvestments.us/
Want to learn more about the REI Club Podcast, how to invest with Gabe at Kaizen, or join our community of active real estate investors on Skool? Visit the podcast website at https://www.therealestateinvestingclub.com or click here: https://linktr.ee/gabepetersen
0:00 - Introduction to Ground-Up Development
4:12 - From Corporate Banking to Real Estate Entrepreneurship
9:09 - Why Shift from Fix & Flip to New Construction
14:38 - Deciding Your Build Strategy: BTR vs BTS
18:26 - Just Do It: Best Real Estate Education
20:29 - Stop Reading, Start Building
22:52 - Networking: The Ultimate Deal Source
24:09 - Cash Flow Lessons from Multifamily Mistakes
26:26 - 50-Home Portfolio Exit Strategy
GROUND-UP DEVELOPMENT IS THE ULTIMATE WEALTH BUILDER 💰
In this powerful episode of The Real Estate Investing Club, I sit down with Daniel Angel from Apex Investments to reveal why ground-up development might be your secret weapon for building serious wealth in today's challenging market. Daniel shares his incredible journey from corporate banking in Colombia to building a vertically integrated development company in Atlanta that's crushing it with both build-to-rent and build-to-sell strategies.
WHY NEW CONSTRUCTION BEATS FIX & FLIP 🔨
Daniel breaks down the exact moment he realized ground-up development offered better margins and more predictable outcomes than traditional fix and flip deals. With rising home prices squeezing margins on renovations, buying raw land and building from scratch has become increasingly attractive. The best part? No surprises when you knock down walls because there are no walls yet! This predictability allows for better planning, more accurate budgets, and ultimately higher returns when executed correctly.
THE FOUR-PACKAGE SYSTEM FOR PROFITABLE BUILDS 📊
Discover the exact matrix system Daniel uses to streamline his development process across multiple price points. From builder-grade to high-end finishes, his team has created four distinct packages with three variations each, allowing them to serve markets from $500K to $900K without reinventing the wheel every time. This systematized approach is what separates hobbyists from professionals in the development game, and Daniel walks us through how anyone can implement similar systems in their own business.
Want to learn more about our guest? Connect here: https://apexinvestments.us/
Want to learn more about the REI Club Podcast, how to invest with Gabe at Kaizen, or join our community of active real estate investors on Skool? Visit the podcast website at https://www.therealestateinvestingclub.com or click here: https://linktr.ee/gabepetersen
Category
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LearningTranscript
00:00all right we are back with another episode of the real estate investing club
00:10it is a good day it's friday it's nice and early in the morning this is the first episode we're
00:15recording 7 a.m here in tacoma so hope you guys are having a good day wherever you are and whatever
00:20day it is for you we got daniel on hill with us on the podcast today from apex investments
00:27investment groups they do single family and multi-family new construction for so for all
00:32you guys out there who are interested in that ground up development you want something new
00:36you want something fancy this is the episode to listen to i'm excited to jump into it daniel
00:41thanks for hopping on sure dave thank you so much for for having pleasure to be here absolutely
00:48i told you before we got on here we always like starting with stories we like to hear how people
00:52got to where they are so why don't you take us back to the your the beginning of your story
00:57in real estate and just uh tell us how you got here yeah absolutely and thanks for um letting
01:03me share a little bit about that background um i'll really back you know to earlier uh i was i'm
01:12originally from colombia so uh part of my uh first steps in real estate in the u.s had to do also with
01:20the transition from colombia to the states born and raised there um you know after i finished high
01:25school i i had the chance and the opportunity to go to school here uh actually in atlanta um and
01:33then i went back to colombia once i finished my you know my uh degree i i started my career in the
01:40banking world so it was more like finance driven um in the corporate world uh a little bit of
01:47corporate banking investment banking uh and then uh i got into real estate uh there where i had the
01:54opportunity to work for a development company in colombia um and that's where the real estate vibe
02:02started uh kicking and some of those uh juices flowing although it was always from from that um
02:09institutional kind of developer kind of approach and from the corporate world i had a chance to do
02:16that for a couple of companies there uh and then a few coincidences happened and i ended up uh working
02:24for a cement and ready mix company here in atlanta also that was like pure coincidence so back in the
02:30states corporate world from a different angle more like from the production side and i was part of the
02:37finance team uh corporate finance like mna team um which uh it was a great opportunity to get back to the
02:45states but but like from a different angle i i really missed the real estate portion uh of things
02:52in my life um and tried to do a couple of things within that company since they had some some land that
02:59they had acquired and and obviously they were more focused on their core business so that didn't
03:04really flow so at some point i was like hey you know if if i don't take the leap on myself i'll never
03:11do it and nobody will uh so i i decided to do you know a couple of investments on on the side put
03:18together a few like underwriting models understanding the how the process and and i guess like the business
03:25went here the residential space had been like the only uh class that i hadn't uh dealt with before
03:34because i was more like on the industrial and hospitality world when i worked for real estate
03:40uh companies in in colombia so a little bit of like step by step just got my feet wet wet with a couple
03:47of uh flips actually here in atlanta and and that's how it all started uh i'm talking back in 20 25th late
03:562015 early 2016 is when i uh did those first couple of flips uh we were in a in a different market
04:05clearly a different part you know moment of the cycle i was a that was a good a good time to get
04:11into it it's 2015 it was just going up at that point absolutely and and you know it was a great
04:18opportunities uh in terms of like inventory uh it was the i guess like the tail of that you know gfc
04:26kind of like uh residue in terms of like inventory what was going on but still uh there were like great
04:32opportunities of buying this stress and like you know like the typical textbook i guess uh approach
04:38worked uh you know whatever you can hear on on from anybody else that has done it like everything
04:45that that used to work back then that doesn't quite right now uh worked and and that was like the
04:52first stepping stone like for for our platform uh later that year i i met who is my business partner
05:00now uh she was living in miami uh doing something similar but not quite uh vibing with miami uh so
05:09you know he visited atlanta liked it and he liked like the opportunities that would happen here and
05:15decided to join forces in 2017 and that that's where apex really uh came alive uh after after a you know
05:23a few cycle of uh flips continued doing you know or staying in the flipping business for a while and
05:30then we put together a few rental portfolios and always in the single family space up to that point
05:36um that's basically the you know the in a nutshell the story nice man i love it so you uh
05:45we don't often hear people coming from the corporate side of real estate and then getting into
05:51real estate um usually you know people are just kind of hacking slashing it out there doing
05:55single family rentals and stuff so it's really interesting that you came from corporate side
05:59of real estate and you got and you started your own company especially because you started your
06:04initial experience was in a different country you're in columbia you were doing real estate
06:08in columbia and then you transitioned over to um to the united states i'm always you know i don't
06:13want to make this the point of the podcast but i'm always interested when people do have that type
06:17of experience how does it differ um how does doing real estate in columbia differ from doing it in
06:23the united states yeah totally it's it's very different i mean i would say like the the the main
06:32drivers are the same and i guess like the the the lingo so to speak is is the same thing yeah what
06:39makes it different other than the construction side of it of things more talking like real estate
06:47is the fact that uh like the the macroeconomics really work here and not so much there uh so
06:56everything that happens in the world like has like a direct impact here like pretty much immediate you
07:01know rates go up market moves rates go down market moves uh you know uh x thing happens market moves
07:09so i think it's a lot more dynamic now on the other hand you have a lot more tools i think here in the
07:15u.s in terms of like financing so you don't have private lending you have you know uh you know
07:23other types of companies playing in the in the stack so to speak so you know there's prep there's mass
07:31there's you know senior debt there's you know uh equity all sorts of equity so there's more players
07:40and i think more tools in your bag to make things happen but there's a lot more dynamic in the market
07:49i would say in colombia you have less tools it's like one or two types of loans there's pretty much
07:57like equity you know and that's it uh and it's i would say it's like you're 30 years behind
08:06in that regard in in the way you put deals together in the way you're i mean it's obviously
08:11catching up but but there's less players which makes it i think harder to put things together
08:18uh it's a little bit more reserved for like the seasoned like really seasoned companies whether
08:24it's from the development side or from the institutional side on the you know on the loan
08:28or equity uh side of things uh so yeah there's there's definitely i mean definitely differences
08:37in in the in the two scenarios yeah yeah no that's that that's always interesting for me to hear you
08:43know we have people that are from london from colombia from different countries and it's always
08:47interesting to kind of hear the different uh nuances between how people operate in different countries
08:51um in real estate so uh but getting back to your story so you guys you you did gotten into atlanta you
08:58found your business partner and you guys started doing flips um and then eventually you transitioned
09:03to ground up at what point did you make that transition and why did you decide to shift your
09:08attention from you know your traditional fix and flip to your ground up development right uh so
09:15there there's a an additional transition there so from from single family and like the flips and
09:21rentals we transitioned over to multi-family also and in multi-family it has been more like acquisitions
09:27value-add approach so we developed like a we believe it's like pretty robust and strong uh renovation and
09:36construction side we're almost vertically integrated uh but the construction side is part of our team
09:45so with that we transition into multi-family and kind of like looking for that edge into the value
09:50that space now you know the the the economics have changed after you know the you know 21 2021 and
10:002022 like went wild and everything exactly you know cap rates compression and then expansion and whatnot
10:06that dislocation between sellers and buyers so it just took us pretty much like back to like
10:13you know rethinking or or thinking deeper and how to keep transactionality going and you know
10:20looking back into single family which we never left from single family was more like having like the two
10:26lanes open so to speak now finding that specifically because prices have gone so much uh up um we started to
10:38find more margin and a better yield on buying lots and uh developing those whether it was for rental or
10:50for uh for uh for sale and it just it seems to be like an easier i mean not to say it's easy but
10:58it's like a more straightforward process so our team is already capable of building uh we have developed uh
11:09you know enough and i guess built enough more than developed built enough and we've we've found a good way to keep
11:19surprises out of the equation with the ground up i mean obviously there's more risk because you're you know
11:26transitioning from land to something built but at least there's no surprises once you start knocking things out
11:34it's yeah in essence one of the main reasons why we decided to get into new construction
11:38yeah and i i hear that from a lot of developers builders um you know who have done flips as well as that i've never i've never done
11:46development we do uh commercial we buy mobile home parks rv park self-storage facilities um and development
11:52always is interesting but just you hear those long timelines and all the the red tape that you have to
11:57go through but just what you said i mean that is why people are attracted to it is because it is
12:03predictable um insofar as you can you can really plan around it you know with a flip you put a hammer
12:09into a wall and all of a sudden you realize like all the you need to replace all the plumbing there's
12:13there's dry rot whatever there's all these different things that kind of come out so it's
12:18it's difficult to to plan it to know exactly what needs to happen but um as i've heard with development
12:24it's a lot more you know what has to happen and you can you can plan it down to a timeline and that's
12:28been your experience as well correct yeah absolutely and and i think what what has been challenging in
12:35the past i would say a year or year and a half uh or so well maybe longer for for those who tried to
12:42do or put together deals uh you know in late 22 and and up to i guess today is as long as you're not
12:51relying on on debt for those early stages and and you have like a heavier uh i guess like equity slice
12:59and willing to give up some of that yield or some of that uh return just to keep it like safer i think
13:07that's fine obviously it limits your i guess your uh capability of having like a broad pipeline or
13:16broad backlog if you have limited uh resources and limited capital but it's just a matter of making
13:23sure you're not burning uh cash on you know while you're dealing with the red tape that you were
13:29mentioning right because definitely i mean and the world has changed with that i know what's going
13:34what happened necessarily or if it's coincidence or what it is but post-covid municipalities just
13:43tend to be slower in general or at least it has been our experience in terms of permits entitlements and
13:50all the process you have to have in the first part of your development so if you know as long as you're
13:56not i mean as long as you have patient capital and you're not depending or relying on debt for those
14:03early stages you know once you got your permit at least you know what's going to happen you know just
14:08have to build you know and and that's pretty straightforward once you have it down to the team
14:14yeah that makes sense um so how do you guys decide the the type of product that you're putting
14:20in um so you let's just say you find a you know obviously it'll depend on on the zoning and and
14:25what you can actually put there but um let's just talk about residential for now how do you decide
14:29what you're you're going to be putting into the space um in terms of like the bed bath combination
14:34uh the the end the um the fixtures and the quality of the actual uh the house itself um take us
14:41through the process that you walked through to decide what you're going to be bringing to market
14:45yeah i know that and that's a that's a great question uh so we have two strategies you know
14:50it's so once we find an opportunity we decide whether it's going to be out like we call it in
14:56turn like for sale product or a for rent product and that comes from oh so you do build to rent as well
15:03got it we do build to rent also correct got it okay um so within the build to sell uh you know it'll come
15:11from whatever comps we find depending on on the market the sub market if it's a if it's a community
15:18or if it's just a standalone lot uh depending on you know what are the type of you know families
15:27demographics and whatnot and then we decide the you know room bath combination and the size of you know
15:35of the product uh depending on that price point that we determine from that we will know if it's
15:43going to be and we basically arrange from like four packages if it's like builders grade up to what we
15:49call like higher end but it's it's never like luxury we don't we don't get past like a 900 000 home
15:57so we range between mid 500 or let's say low 500 up to 900 000 depending on where we are and the size
16:07of the home range between 2 000 square feet to 3 500 square feet you know anywhere from three bedrooms up
16:14to five but yeah and you said you have you basically have four buying guide packages i'm sure you you
16:21you have a predefined set of things that you're buying for each of those package and so you can just
16:25you're not going in there and deciding each fixture you know what type of fridge is going in here what
16:30type of you know sink is going to go here you just you know where you what you're going to buy based on
16:34the price point of the house you're going to be putting in correct so think about it like a like a
16:39little bit of a matrix so we have like level one to you know from one to four and that will determine
16:45like the uh type of material so it comes from like flooring fixtures you know both electrical and
16:53plumbing fixtures and like appliances let's say right and then we have like different variances
16:58like a b and c for each level you know because we don't want it to be exactly the same so you know
17:04maybe the backsplash changes a little bit the tile color color of the tile changes a little bit
17:10between like i don't know three a b or c you know so depending on what price point we go from level
17:17one to four and then if we have multiple homes in the same area we can like combine a little bit
17:23of combination so we don't have to so the neighbor doesn't walk over be like you have the exact same
17:27house as me exactly exactly that's funny nice man well hey i just took a peek at the clock we are
17:34running it down um before we move into the quick question round though i i always like to ask you know
17:39what do you see for the future for your own future for your business what's your guys's goals and uh
17:43what are you trying to achieve i don't know of course and thanks for that um you know for us
17:49like the main thing is consolidating a a diversified portfolio between that btr and bts kind of like
17:55strategies uh adding multi-family again once once numbers start making sense and it's just you know
18:02cruising through that we're starting to offer uh construction services for third parties also and
18:07just consolidating a solid team i forgot to mention part of our team sits in colombia also so kind
18:12of like keeping some of our roots as part of our uh culture and and uh strategy uh that's that's
18:19what we're seeing uh moving forward nice man i love it all right let's uh let's hop into the quick
18:25question round you ready go for it starts with it starts with education it could be any form it could
18:32be a conference you've gone to a movie you've seen a mentorship program you've been a part of book you
18:37read any any form of education i just need two recommendations one for general life wisdom
18:42and then one for real estate perfect um for for real estate uh geez i mean i would say just
18:56going for it uh you know just testing the waters i mean i think my most everything i've learned it has
19:04been doing in the real estate world uh and then for the general one i would say the most recent that we've
19:11used is uh a book called traction the eos method i don't know if you're familiar with it it's something
19:17that's helped us as a company and as a team kind of like put things together and get aligned uh even
19:24if it's just for general purposes in life i mean it's geared towards companies but but i think it's
19:30been like a great tool in general yeah traction traction is a good book um and i love that you said
19:37for your education for real estate is just do it uh you know so so many times it can be easy to get
19:43stuck into that kind of especially when you you haven't done real estate you haven't done your
19:46first deal you can get stuck into that um analysis paralysis kind of thing where you're just you're
19:52looking at properties and you're not doing anything um and so whenever any guest says something along
19:58those lines i always point it back to you the listener if you have not done your first deal just go out
20:03there and get it done just go it doesn't matter what it is it could be uh just a small little flip
20:08could be a wholesale anything just get your first deal done 10 years down the line you will be happy
20:14that you have started uh today so go out there get it done and that leads us to the next question this
20:21is for your younger self let's go back to the daniel who was still working in columbia at that um
20:26construction company go back to him look him in the eye give him one piece of advice moving forward
20:31it's gonna sound repetitive but but honestly this is kind of like one of my my things in life it's
20:38just like start now that's that's what i would say just go yeah yeah no that's that's good advice uh
20:45you know fear is what holds so many of us back and if you don't if you don't just get started and just
20:51get yourself over that hump um it just never you know you never get the the feedback that you need in
20:57order to start making the correct decisions the correct adjustments um so yeah that is
21:02and you know what i would add something sorry
21:05one thing and and sometimes i repeat it is like stop reading and start doing uh sometimes you try to
21:11find the the additional thing that's missing and it's going to be this book it's going to be this
21:16course it's going to be this website it's going to be this i mean it gets to a point where it's like
21:21you've read enough just have to go out there and do it yeah that's that's my mantra beyond yeah no
21:27i i 100 agree all you need is just a general understanding of what you're doing and then
21:32everything else will be the gaps will be filled in as you take action action is what's going to
21:36actually inform your inform your understanding so great advice uh moving us on this is for the us
21:43it's a big place it is there's a lot about opportunity out there uh give me the single metro
21:48you're most excited about investing in today uh well it's it's it's the only metro where where we are
21:56but uh north atlanta for us it has been um you know has been where where we need to be
22:03and we keep seeing the expansion is there any like sub market within atlanta that you uh you know
22:09like a small city the north corridor like georgia 400 north and and you know the alpharetta coming
22:15you know even delana i mean it's it's just like keeps growing and keeps going uh it seems tertiary
22:21and i have this conversation with so many like institutional or like more sophisticated investors
22:27and like dude that's so far away from atlanta like what are you doing it's you know you need to massage
22:33it a little bit but but it's it's there and it's not the same no yeah i mean invest in the path of
22:39development that's uh that's the that is a great strategy so makes sense to me uh moving us on this
22:46is about finding deals it all starts with getting in contact with the seller and pen in that purchase
22:50agreement so what is your favorite way to generate leads and find new deals um we keep testing and
22:58trying like uh you know online uh you know social media and marketing digital i mean we we test it all
23:08we try it all we have a lot of those going on but uh it seems to be it all comes down to relationships
23:15so it's networking to be honest get out there and talk to people that are involved or that know other
23:21people and just broaden it broaden your network that's that's the key yeah networking is key i always
23:27say especially for real estate but that's not you know every business networking networking is very
23:32important um but i do feel like especially for real estate it's just the more you know friends
23:37you have in in real estate the more you learn the more you deals just start coming your way and so
23:43um and that's always why i like to say if you guys are at all interested in starting a podcast it's
23:48a great way to network it's a great way to make people like daniel um so and it's a lot easier than
23:52you think so get out there and uh and start networking all right next question is about
23:58lessons learned not every deal we get into goes the way we expect it in fact pretty much every time
24:03something goes wrong and that's when we get to learn lessons so what was a deal that went a little
24:08bit sideways for you and then what was the lesson you pulled from it yeah i think um one one that went
24:16sideways for a minute was uh our first multi-family deal uh we went in a little bit too hard on
24:23renovating almost all units at same time so our our occupancy drifted a little bit deeper than what
24:31we anticipated uh and cash flow is king so so that got us in a little bit of a pickle for a minute
24:38obviously once things were renovated and whatnot i mean we got new tenants in and stabilized cash flow
24:45and it made sense but my baby maybe my comment there would be be a little bit uh cautious with
24:52getting ahead of yourself and just follow your plan i like it all right and on the flip side of that
24:59sometimes deals you know everything just aligns and uh and everything goes right and you kind of walk
25:06off into the sunset so give me your highlight reel um what was the deal that everything just kind
25:11of seemed to work out what was your favorite deal and uh and tell us a little bit about it yeah
25:17definitely the we had a rental portfolio in that we built between 2018 and 2019 stabilized along those
25:29i mean in in that time and the the idea was put it together stabilize and and sell the original plan
25:38was uh that was civil family so it was trying to find either an institutional or a bit more
25:42sophisticated buyer buy the whole uh the whole deal um and it was like perfect timing early 2021
25:52when you know rates were like so down and it just made sense to sell it like one-off for
25:57to homeowners really so we you know rolled up our sleeves and started selling you know 50 homes
26:05one by one switching some uh actually applying some capex in them so that it would be more like
26:11appealing for homeowners and it ended up being like a grand slam we didn't really intend to do it that
26:18way but it was like the perfect timing something that you know if we would have planned it that way
26:23we would have missed it for sure but it just happened so it was a it was a great experience
26:29hey when luck comes your way you take it absolutely um 50 homes though man that that would be quite a
26:35process to get through those all those sales so good on you guys um that leads us to the very last
26:41question this is for the listeners you've given us a lot to think about i'm sure people want to reach
26:45out get in contact with you um this is a two-parter where can they find you and then what can they expect
26:50when they reach out perfect uh thanks gabe uh i think the best way is linkedin uh daniel angel mejia
26:57or angel mejia on linkedin or on our website apex investments.us uh and then you know i i like to
27:06share and to learn so what they can expect is an open uh candid conversation whatever i can help if
27:13it's somebody trying to take that first step or if it's some someone needing some kind some piece
27:19of advice or somebody wanting to teach me something always open so feel free to reach out definitely
27:25perfect i will put that link in the show notes so if y'all want to reach out to daniel all you got
27:29to do is click that little more in the description it'll pull down that full description and in there
27:34you can find his link all right man that wraps it up thank you very much for hopping on the show
27:39absolutely thank you so much gabe for having me absolutely for everybody who's with us thank you
27:46guys for showing up you are the reason we do this so if you guys have any questions reach out to me
27:50gabe at the realestateinvestingclub.com if you guys want to support the show just leave us a review
27:54other than that i hope you guys have a great week keep rocking real estate and i look forward
27:58to seeing you on the next episode
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