Charles
Welcome to our Global Investors podcast. I’m your host, Charles Grillo. Today we have Diva Russia. She brings over 20 years of real estate investment experience to the multifamily space. She is a CBRE multifamily specialist. We are. Her and her team have executed nearly $1 billion in multifamily transactions across Los Angeles and the Inland Empire through Ratio Properties. She and her partners have grown a portfolio exceeding $900 million in assets under management across California, in Sunbelt markets before real estate.
Charles
She built a successful career as a news anchor with Fox News and Univision. Eva, thank you so much for being on the show today.
Diva
Thanks, Charles. I appreciate you inviting me to honor to be here.
Charles
So tell us a little bit about yourself, both personally. Professionally. Prior to getting into selling and investing in real estate.
Diva
Sure. You want to know, like the nitty gritty stuff, how it started.
Charles
You like kind of what everybody has a different way of how they got in. And that’s what really interests me of knowing what was what brought you to it.
Diva
I think it would be best to be very transparent. That’s the type of person I am when I speak to people and telling my story. So I actually started as a news anchor, but at that time, my parents, I was living at a state, I had a contract, and that contract paid me about 35000 a year. And my parents kept pushing me to do real estate for about 2 or 3 years.
Diva
And I was just so focused on my career because I went to school for it. And I loved journalism. And then one day I was sitting having breakfast before going into work, and light switch went off and I was like, you know what? I had already saved money, so I saved about $100,000. And I was like, you know what, f this?
Diva
I’m actually just going to take a leap of faith and, you know, go flip properties and see how it goes. So I ended up dropping my contract at Fox News. I came back to California. I bought my first property in the boonies. I call it the boonies because you have to walk in there with like, a bulletproof vest.
Diva
Very dangerous city. One of the most dangerous in San Bernardino County. It was called Colton. And I bought that house for about 80,000. At that time, I didn’t have, like, a lot of capital. So I had to ask my dad for a little bit of capital to to kind of fix the property. So I lived in that property for about six months because I didn’t have sufficient money to hire a crew to do all the labor works.
Diva
I picked up a couple guys at Home Depot just to do my plumbing and my electrical work. So it took me about six months to flip. I learned on YouTube how to put drywall, paint, epoxy flooring, do all the labor hands on. It was very hands on. And just to put into perspective, this house was very inhabitable. I had to buy a cash because I couldn’t get a loan on it.
Diva
It didn’t have a toilet, so I had to go do my necessities out in the backyard in a Home Depot bucket. I mean, it was nasty. I slept on the floor. I got a free mattress off, like, I think it was Craigslist. And so I lived like this for about six months. I sold that property, and I made 20,000 bucks.
Diva
Not a lot of money, but that was a pivotal moment for me because I said I have to be at a new station for one year for a contract of 35,000, when I just made in six months, 20,000. So that was just a game changer. And since then I flipped about 30 properties and, you know, I got burnt out at the end.
Diva
I was making good money, like 100,000, 200,000 off. And so I was managing, I was able to rack capital. And then about seven years ago, I started going on YouTube a lot, and I came across a GC, Grant Cardone. So I went, I was like, this guy’s talking about, you know, all this multifamily, what is he doing?
Diva
So I kind of submerged myself into it. And I started studying the game of multifamily, and I started going to the conferences, all the meetings, and he kept talking about these brokerages. So I said, I’m going to go all in. I ended up getting my first job over at Exp commercial because I wanted to work with the big dogs.
Diva
I wanted to sell big buildings. I want to learn the game. So once I got into there, I had access to software to see, you know, what are these guys doing that’s so different because their portfolios like look at their portfolios and the portfolios had a bunch of zeros at the end. I couldn’t even read these numbers anymore.
Diva
And I was like, they must be doing something different. So they understood the power of leverage. I come from a Hispanic family where they taught me to buy everything cash and never get a bank loan. So once I learned that game about putting leverage on a property and really getting educated on that, just like my whole life changed in that aspect.
Diva
So fast forward my work for Exp commercial. Then I went to Marcus Miller and then I said, I want to work for the biggest company in one of the toughest markets, which is Los Angeles, because of all the legislation that’s going on. And I worked the capital market side on CBRE, and I help clients now, you know, that have been burnt out in operating these buildings and all the regulation that’s going on.
Diva
And they can’t really they kind of breaking even. So my strategy is to help those clients, you know, kind of double their cash flow of what they’re currently making or see how we can capitalize on that debt equity that they have on their properties and on the rest of property side. Since I’ve, I’ve come from a principle background.
Diva
So I started to partner with a great team within the network. So I joined a few real estate clubs and made some great connections. As business is all about relationships, and when you provide value to individuals where they can make a return on their money and explain the tax advantages of these assets and how you can write off a lot of things and still make a return, while instead of putting your money in the bank.
Diva
So that’s the strategy on the property side. So we’re always looking to acquire more multifamily and build our portfolio. And the same thing on the brokerage side kind of teach those clients that same, that same place so they could create generational wealth.
Charles
What are some of the ways that you use for yourself during your investments, and then also for your clients through CBR, you’re helping them to increase their income on the property, maybe without just doing a huge value add. I mean, obviously that’s kind of fixed. I mean, you can change rates a little bit here and there, but it’s not going to be a huge difference in getting more cash flow out of it.
Charles
What else are they doing? Are they doing full renovations on these properties? I mean, you’re inside of Los Angeles. A little bit more difficult is there’s rent control or something like that.
Diva
Yeah. So if I understood your question, like, how am I helping my clients, like, create that more cash flow? Is that what your question was?
Charles
Yeah. So for your properties in this area where there’s a little bit more, government regulation, if you’re going into some of these properties that might have run control, whether it’s done by the state, whether it’s done by the county, whatever, it’s done by the city, how are you going in there and increasing the income of these properties, the value of these properties, cash flow, what other ways are you utilizing to be able to do that?
Charles
If maybe you’re not able to do it as much with collecting rents or increasing rents just from your your tents alone?
Diva
So that’s where we come in as an advisory role. We actually look at the spreadsheets in the D12, like where can we increase? Where can we implement a program to drive the NY up? So whether that’s, you know, putting a company that you partner with to put more washer and dryer, because a lot of the operators, they’ve owned the assets for 40 years, they’re breaking even.
Diva
They can’t really afford to put a washer and dryer in there or they don’t want to. That if they got sufficient space, they could put solar panels, partner with the solar company to generate income. That way, the Rubs program, the racial utility build back, a lot of operators don’t have that installed in their assets. And then there’s the auto hop program, which is a gas program that you can also implement.
Diva
But most of the clients they built their buildings for about, let’s say, 20 plus years, and they’ve been hands on managing everything. So the strategy there is, they built up all this appreciation and all this equity and they’re getting squeezed. So we when we come in as an advisor is, hey, maybe look at a different market where you’re not tied to, you know, strict rent control at 3%, but maybe a secondary or tertiary market where the rent control bump could be I mean, the rental increase could be 7.5% per year, which is very doable in the outskirts of Los Angeles.
Diva
So a lot of our owners that are inside Los Angeles, very strict metro at 3% kind of educate them, see. And hey, if we migrate maybe to the outskirts, you might be able to get a better return on your money.
Charles
What would you say are some of the characteristics of a good market when you’re bringing people outside of maybe Los Angeles, or you’re finding them maybe in the secondary or tertiary markets.
Diva
I think is what is the supply and demand in that market? How many, how many units are under constructions? How many units have been absorbed? Because if we look at exchanging clients are going into these other markets, what are the driving factors? The employment, the traffic count, what’s being built, what developers are going there? What is the home price versus the rent cost.
Diva
And you know the gap. So you’ll know if you have a demand. But it’s becoming more of a renters nation. But I think the most important one is the population of the market. And when I look at certain numbers of the population of the market, I also want to look at, you know, what big major employers are there that are driving, you know, people to move to these markets and also what’s under construction, how many units are being delivered and how many units are being absorbed.
Diva
Just to give you an example, a lot of people took out pre-COVID money, cheap money, and they went and they developed in Texas, Arizona and Florida. And now a lot of these new constructions is like they have to offer concessions because how do you keep your vacancy up? You have to offer concessions. So you’re competing with like, hey, how do I keep my property full?
Diva
So it’s supply and demand. Like how many units here in California we have a housing shortage. So you just have to know what pockets to be into if you decide to stay in California.
Charles
How do you normally handle property management. Do you guys self-manage these or are you using mainly third party firms?
Diva
We use third party firms that we’ve already built relationships in these markets. That’s the beauty about being plugged into different real estate clubs. You we we know other operators. I got maybe 3000, 4000 doors under their belt in these particular markets that we invest in with Russia properties. So we have already had our relationship. They plug us in.
Diva
So it’s through our own network but it’s usually through third party management.
Charles
Interesting, interesting. Do you have money sitting in the stock market and you’re worried about it? Or worse, you have money sitting at the bank not keeping up with inflation. My name is Charles Carillo, founder and managing partner of Harborside Partners. And since 2006, I’ve been investing my money and my family’s money into income producing properties. These are real assets, real properties with real addresses that produce real cash flow.
Charles
At Harborside Partners, we provide passive investors who love real estate with a turnkey investing solution. If you want to put your money to work in real estate but can’t find deals, don’t have the time to get funding. And the last thing that productive people want to do is manage real estate. We find the deals, we fund the deals, and we manage the tenants, the termites and the properties.
Charles
Partner with us and invest with harborside.com. That’s invest with harborside.com. Go to invest with harborside.com. If you love real estate, you like the idea of passive income and believe that income producing properties will appreciate over time. Go to invest with harborside.com that’s invest with harborside.com. When you’re coming from being a real estate investor doing that first flip, which I imagine you learn so much more than a course or any podcast or YouTube channel you could ever listen to.
Charles
What else? From being a broker or an agent in a house flipper kind of have you brought with you into making you a better commercial multifamily investor?
Diva
I think most of it has to do with the due diligence of the property I’m looking at, you know, what’s the piping, what’s the electrical? Does it got old panels? Because then that’s another big issue here in California. What’s the replacement cost in this particular market? How is how much is it going to cost me? Is there labor workers in this market that I can hire at a good cost?
Diva
But I would say mostly what I can bring from the flipping to the commercial side is the due diligence and also the programs that you can implement. How can you force value into an asset? And if you plan to exit the asset, how are you going to exit? Who’s going to be your buyer or are you planning to refinance?
Charles
So interesting. Interesting. When you’re working with a lot of investors that are buying properties with CBRE, what is do you get a mix of people that are trading up to larger properties, or do you have people that have they want to get started and they have a chunk of money? Is it kind of like a mix of everything that you’re dealing with when you’re finding people that you’re sourcing your own deals from, or whether they’re going to list those properties with you?
Diva
Yeah. So we don’t we’re not the type just to go chase listings. I have a different approach. It’s like if I could really create double your cash flow. That’s kind of the clients that I help on the I’m on the capital market side for CBRE. So when they’re trading up, it’s like, I’ll give you an example. We had a client that had a six unit that was paid off in Pasadena, and she was netting for about 4500.
Diva
We exchanged her into a 91 unit. We got the management, we got the loan directly from the bank, and we were able to increase her cash flow just here, one close to 10,000, because this property, property in Pasadena was not leveraged. And then we helped her leverage the asset and get a loan on that and double down on her, on her doors and not have all that regulation.
Diva
She invested out of state. But we plugged her in with the management company and kind of guide her. So we got her clients, even after they transition for a year and kind of handhold them still.
Charles
Would you kind of in if you were kind of a educating, training, a potential multifamily investor, a future investor, what would you suggest? Kind of what they do beforehand? Would you say them to kind of follow a path like yours, maybe flipping or maybe getting in on the brokerage side, something like that first or no, as you’re smiling.
Diva
Yeah, I’m like, no, you don’t want to flip houses. That takes you want to compress time. People don’t see that. Like, if I knew what I would have known ten years ago, I would not be flipping properties. Yes, it’s a good learning experience. I’m never going to forget it. I learned a lot, but there’s easy way people think you need a lot of money to do real estate you don’t like.
Diva
If I have a good deal and you understand that this deal is an opportunity for individuals that want to get into the game, is you just have to know maybe how to raise the money for this deal. But I would say investing yourself, I think that’s the biggest, the biggest piece of advice I can give anybody that’s looking to transition or has already transition is just keep investing in yourself, learning.
Diva
You got to learn your pitch, learn how to talk to family offices. And I wouldn’t say maybe if you want to do brokerage and that’s part of what you want to do, then that’s a good avenue. But I would say education is the biggest part. Having a mentor.
Charles
What would you say are some of the common mistakes or than not having a mentor and maybe putting money as an object that you would see multifamily investors normally make when you speak to them?
Diva
They probably got I would say some of the mistakes is they want to do everything them selves, and to get into these larger assets, you have to partner. You have to develop a team. I know on the Hispanic side, Hispanic culture, we’re very adamant that, you know, partnering with people because we have this perception that we’re going to get they’re going to steal the money from us or it’s going to be just bad business.
Diva
So I think we have to learn how to, you know, kind of not trust people, but that whoever your your team is going to be, vet them, understand them. Why are you guys coming together to do these deals? But real estate is a team sport if you’re going to do this team, so it’s going to take you a long time.
Diva
So if you want to compress time and build generational wealth, the way is to do that is, you know, having a team under your belt.
Charles
So going in, building up an empire of what you’ve done for your own portfolio exceeding $900 million, what was kind of the changes that you had to make in mindset? And then also, what were some of the main changes you made in your business to kind of initially to get that ball going, rolling that way?
Diva
I think the biggest transition is, you know, don’t put a price tag on what is attainable. Just because I look at it at an apartment building that’s worth maybe 100 million, don’t let that stop you from achieving that apartment building just because the price tag is 100 million, it’s very achievable. I always say there’s. And I learned this from my mentor.
Diva
There’s an abundance of money. You just got to know how to bring that money in to buy these type of assets. And it’s just having confidence in the way you speak. So I invest in hundreds of thousands of dollars in, you know, perfecting my pitch, learning how to talk to investors, how to go to these high net worth individuals and, you know, present them with actual an opportunity, what the differences are of investing in, like, let’s say the the stock market versus the real estate market and how that how that differs.
Diva
And then also building a team, because when I was flipping properties, it was always doing everything by myself and going to Home Depot and coming back. So I did not have that mindset of, you know, actually forming a team with Russia properties. And we have like an asset manager, acquisition manager, the relationships with the loans, people that are boots in the ground in these particular states, the management company.
Diva
So I think the team is crucial. And that’s kind of the mindset that I had to shift. And then not also buying everything cash like, you know, learn how to use the banks money to work smart and, you know, by real estate.
Charles
So I started buying multifamily real estate, maybe, I think, 2006, my first property I purchased emerging from Connecticut. So I bought it there in an area that is tenant friendly, maybe not to the degree of New York or LA or California in general. What were some what are some of the things that a real estate investor has to get their head around?
Charles
Some of these, like, maybe best practices to be successful as a landlord in a very tenant friendly area.
Diva
Ten and friendly or non-tendered, friendly.
Charles
Tenant friendly, non landlord friendly area like Los Angeles?
Diva
No, not landlord friendly. You have to know your laws like you cannot be. I attend all the apartment owners association meetings. I go to all the events. I have good relationships with attorneys. You have to know your laws. Just to give you an example here, we got a law called SB 721 which is a balcony inspection. And it hit a lot of landlords because they didn’t know they had to get these inspections on these on these balconies.
Diva
So. It’s being part of apartment owners associations, different real estate clubs in your community. So you’re aware of what’s going on, but obviously know all the laws in these certain non landlord friendly states. And you have to know what pockets to be into.
Charles
Not some great information. Yeah definitely have a great real estate attorney. When you’re going into any type of properties no matter what state or area they are. So diva thank you so much for coming on today. How can our listeners learn more about you and your business?
Diva
Sure. So we we offer mentorship so they could just check out your properties.com or they can follow me on Instagram. It’s at rest, your real estate. And then I also have a YouTube channel where I put out educational content, and that’s real estate news. I transitioned from doing a news to like, rest your real estate news.
Charles
Okay. Fantastic. Fantastic. Well, thank you so much for coming on today. We’ll put all those links into the show notes and looking forward to connecting you with you here in the near future.
Diva
Thank you. Charles, I appreciate it.
