"Inspired to Invest" Podcast

STOP Losing Money On Your Property Investments

• Serena Holmes • Episode 71

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STOP losing money on your property investments. Here's how you can maximize the value of a property AND your real estate portfolio!

Welcome back to the 71st episode of "Inspired To Invest" with Joao Macavilca. Tune in and get ready to unlock the secrets to financial freedom through real estate investing with our special guest.

To watch rather than listen, click here

From his humble beginnings, inspired by "Rich Dad, Poor Dad," to becoming a successful real estate professional and general contractor in North Carolina, Joao's journey is a treasure trove of valuable insights. 

You’ll learn how his first duplex transformed his life and why appreciation is often more important than cash flow in property investments. 

Joao shares real-life examples from his properties in South Carolina, revealing the importance of building a robust network within the real estate community where seasoned investors willingly pass on their knowledge.

Join us as Joao recounts the trials and triumphs he faced along the way, from battling major plumbing issues to the pivotal role of having an efficient team. 

Discover how in-house property management has streamlined his operations and the benefits of continuous learning and mentorship. Joao’s advice on buying in the right areas, creating mutually beneficial situations, and leveraging relationships paints a comprehensive roadmap for aspiring investors. 

Don’t miss this episode filled with actionable tips and inspirational stories that could very well change your approach to real estate investing.

To connect with Joao, go to https://stf-capital.com or @joaomac_stf on instagram.

Thank you to Giancarlo Carangelo from Proventure Real Estate Corp for supporting this month's episodes. To learn more about how to scale your real estate investment portfolio with their support and guidance, go to https://www.realproventure.com/ online, @real_proventure or @carangelorealestate on social.

Need support underwriting potential property investments? Check out PropertyCast.io - https://propertycast.io?via=serena

“Inspired to Invest” is proud to support the Beyond Success Program, a not-for-profit financial literacy program for students, launched by More To Give & MAK Investments. Find out more at @more2give.ca.

 Join us again Nov. 6 to hear from the queen of capital and how she is providing amazing opportunities for investors to grow wealth with her multifamily properties in Moncton, NB. 

Thanks again for tuning in & remember, "when you invest in yourself, the sky's the limit!"

Sign up so you never miss an episode! https://serenaholmes.exprealty.com/ask/896312e0f685fdd06401c1e53ca6fd17

And, for everything related to real estate and real estate investing, please make sure you've subscribed to @serenaholmesrealtor on YouTube & other platforms. We also have a page dedicated to this podcast on Instagram and Facebook @inspiredtoinvestpodcast where we preview guests each week, highlight their episodes, top takeaways, tips, quotes and more. 

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Serena Holmes:

Welcome to the Inspire to Invest podcast, where we're sharing stories from real estate investors and how investing has changed their lives. This episode of the Inspired to Invest podcast has been brought to you by ProVenture Real Estate Corp. Hey everybody, Welcome to the Inspire to Invest podcast. I have Joao Makavilka here with me today. From North Carolina, he's got a background in residential and commercial construction and he's a seasoned real estate professional and general contractor. He's known for his expertise in property improvement and investment strategies. His journey from humble beginnings to thriving in the real estate industry showcases his determination and passion for empowering others to achieve financial success. He's got experience with the birth strategy and multifamily, so he brings a very unique perspective to navigating financing options, understanding credit and maximizing property values through renovation. So, with that being said, thank you so much for joining us today. How are you?

Joao Macavilca:

I'm good. How are you?

Serena Holmes:

Thank you. So, just in terms of getting things started, it sounds like obviously you've been in real estate for quite some time. What did life look like before real estate came into the picture, and how did it come into the picture?

Joao Macavilca:

So before I started real estate I had a standard nine to five job, you know, just working, trying to get overtime, trying to work up the corporate ladder, just work my way up, had success there. Different departments got to know more, become pretty well in that industry, and then just one day realizing, you know, getting two, three vacations a year, getting just enough to live and a couple hundred dollars more per paycheck is not going to give me the life I dream about or want. It's just not sustainable for what I want and what I need and being able to retire happy and see the world and do things with my family and friends.

Serena Holmes:

Yeah, that makes perfect sense. So then, who introduced you to the concept of real estate and put you on this path as a contractor?

Joao Macavilca:

So, pretty much, I just started reading and seeing other people that do have what I wanted, and some of them like real estate, some of them, like you know, owning small businesses like laundromats, things like that, and I was given by one of my friends the book Rich Dad, poor.

Serena Holmes:

Dad by Robert.

Joao Macavilca:

Kiyosaki, and the first time was it's all right. The second, third time I read it is when it hit and made sense and just started seeing can this work, do I have enough? And started that way and got my first duplex and from there just learned more and more through every milestone and to you know, thankfully, where I am today and I'm still not even done so.

Serena Holmes:

So how long ago was that when you purchased that duplex? And then how did you expand your portfolio to where it is right now?

Joao Macavilca:

So I bought that about five years ago as a duplex. The house hacking, did that for a little bit and realized you know, one side pays the rent, the other side is pretty much profit. But in my mind I just went to the side for another year or so, got another one, started building from there and I did things a little more difficult. And you know, looking back on it now there are just so many things I want to change. But just getting from there, finding the right areas, I was more focused on cash flow than I was appreciation. Later on appreciation makes more sense overall.

Joao Macavilca:

That's another one of my properties I got and just going to events, going to meetups, listening to different podcasts, I've noticed now more and maybe it's my nine to five mindset where no one will give you the time of day if you're at a super high level In real estate. It's actually the opposite. Everyone I've met, whether they have their own coaching programs, their own portfolios that are massive, they'll take the time to sit down and talk to you and give you some advice and things they've went through. And everyone I've met, knock on wood, they're just down to earth people and they don't mind helping out.

Joao Macavilca:

So, I'm all for what they've taught me.

Serena Holmes:

So, going back to your point about cashflow versus appreciation and you were saying that you know you're focused on one in the beginning and you realize maybe that wasn't the right thing to focus on Can you talk a little bit more about why you feel the appreciation is better for you and more of an asset? Pun intended.

Joao Macavilca:

Of course. So pretty much I have in South Carolina. I've got a duplex in Angers in South Carolina, for example. It cash flows pretty well around $300, $400 a month, which is good. And I've got a property in Taylor, south Carolina. It's in the Greenville County area. So everyone, whether you know South Carolina or not, has heard of Greenville, which is like Charlotte, north Carolina. So pretty much they both cash around the same $300 to $400 a month. The difference is my innocent property has gained per year maybe 7% appreciation while Taylor is being in Greenville County and so much new jobs, new construction, new things happening there has gained 20% per year. So while they both give me the same cash out per month, one has grown maybe since I bought it, $45,000, while the other ones are growing $175,000.

Serena Holmes:

Yeah.

Joao Macavilca:

So just buying in the right areas and you're still making some cash out. But over time you appreciate. Same with the BR, the birth process. Every few years I'll be able to do another refinance because, as we all know, rent goes up per year just like inflation does. So it'll cover that. Take out that capital and be able to buy more properties and keep expanding that way.

Serena Holmes:

So would you say that was a strategy that someone advised you on, just in terms of where to look for those properties, or is this something that you just happen to notice, you know, after you had them both, and then you're like, oh, this one, this market's really taking off, like you know. How would you say that that approach has kind of came to be? And then what are you looking at now, like in terms of your demographic research and like looking into optimal areas?

Joao Macavilca:

So I wish I could say it was me, but it was not. That's one of my mentors, nate Barger. He actually teaches, he has an academy and he started telling people appreciation is going to be the one making you wealthy. That's going to keep growing for you. You need to make sure you're buying the right spots and a lot of people. How do you find the right spots?

Joao Macavilca:

I'm not good at cold calling at all, I don't. I just don't like it. But you put the right person in the right spot. So one of my other partners inspired so that's helped me grow my team to see where I can put people that are good at cold calling, that are good at social media, that are good at this stuff take it off my plate. Well, yes, I can do it. I'm never going to succeed that great in that field, but those people can, and they're the ones doing it for me now, where I now have more time to go fishing or relax or, you know, just watch a TV series, something that I couldn't do, because when you're in real estate and you're your own boss, your mind is always on, you're always looking, you're always going. So having those people that have been there before have gone through those pains yeah, it's crazy how quickly you can succeed and how much they will support you and back you up yeah, no, that makes perfect sense.

Serena Holmes:

Now, um, what does your portfolio look like now? Do you just have those two properties or, like, give them any more?

Joao Macavilca:

So I think, as of I want to say 32 or 33 doors right now. Yeah Me, my partners Cole and Nate and Michelle, we just actually got a contract signed for a 54 unit last Friday, Nice. So if all goes well, we're going to get that one too.

Joao Macavilca:

And then the goal is 100 doors by end of the year and once we hit that not if we hit it when we hit it 200 next year and then just growing from there and helping teach more and expand more. Cause we all came from, you know, came from nothing and worked our way up. So we know the struggle, we know that hunger and desire and there's so many more out there that we want to help teach and grow.

Serena Holmes:

Yeah, no, that makes sense. Now, how are you financing that, like, are you engaging investors so that you're kind of funding the down payment, or what exactly is your strategy just to go into those larger acquisitions?

Joao Macavilca:

So for the commercial properties we're doing syndication deals. We pretty much we let others know that they don't invest or don't want to take that risk, because it is a risk in real estate. They may or may not buy something good or the rehab may be too much. We'll take that on for them and we'll show them how we do it. They'll be invited in calls or do walkthroughs with us and be able to see what their returns are, what it can be, and then they get paid first obviously through syndication, and grow that way and make sure everyone has a piece of it and we can all grow together. We don't have to sit on the sidelines or wait. I mean I forgot to say exactly, but the best time to invest is now. I mean, as long as it makes sense financially, why not?

Serena Holmes:

Yeah, no, I think that makes sense. Now, when you think about your path over the last five years, what would you say are some of the biggest challenges or obstacles that you've faced as you've been scaling?

Joao Macavilca:

I would say the rehab budget. So we always will walk through and, unless you can, take apart the floor, break down a wall in front of you. I'm a gc so I've seen so much out there. But until we rip the floor now the plumbing is, you know, damaged from the house or the main line, or then we have plaster as best. Whatever the case you could, if you can't see, yeah, account for it. Best case scenario you'll have an extra fund at the end that goes to us profits. Um, worst case, you'll be covered if something does go wrong. I mean, you know, I tell people all the time spend 100 bucks, get yourself an outlet tester, get yourself a moisture detector. Um, you know, make you get as you grow and you go to commercial, get the UV lights, get so many things that can help you out and help you avoid those mistakes. Later on They'll pay themselves off within the first flip, or whatever you want to do.

Serena Holmes:

Yeah, no, that makes perfect sense. Now, in terms of your successes, what would you say are you're most proud of?

Joao Macavilca:

I'm most proud of the scaling and that's all. That wasn't just me, that I was partnering with the right people and you know, going to events, networking, meeting more people and growing with them and that's the biggest thing like I was doing good on my own. But when I partner with people that had different niches, we've gone so far, so quickly and you, you know there's no stopping us yeah, oh, that's awesome.

Serena Holmes:

So obviously you talked about, you know just maybe, some of those lessons in terms of evaluating properties and how to avoid those costly mistakes. Is there anything else that you would look at back at as some of your greatest lessons?

Joao Macavilca:

So we had to assess the first two or three properties of my own. Looking back on it, you know randomly when you just sit back and think back on when you first started, I probably overpaid like $30,000, $40,000 in construction on one of my properties. Another one painted over things that should have been swapped out because the first one didn't know any better. They're changed now. But, looking back on it, spend the extra little bit of money for quality and you won't have to go back again. Little things like that just can come back and bite you really hard. So just make sure you do it right the first time. If you would live in it, great. If you wouldn't, then something's wrong there. You got to see what you can do to fix it up.

Serena Holmes:

Yeah, no, that makes perfect sense Now. On that note, we're just going to take a really brief break for a word from our sponsors and we'll be right back. Welcome to the wealth club, an exclusive community dedicated to elevating your journey towards financial freedom, wellbeing and success. The journey to 1% starts here. Join like-minded leaders and commit to growth for the mind, body, bankroll and soul. Learn all the proven techniques to change your life forever, with direct access to a massive team of more than 10 tried and true experts. Moreover, members enjoy priority access to investment opportunities, job openings and partnerships within the community. For just $1 a day, members gain entry to specialized forums covering a wide spectrum of fields. Discover diverse income streams, new opportunities, collaborations and employment. Partake in weekly Zoom calls with our team and join monthly live Q&A sessions. Compete and win cash prizes. Active members top the leaderboard for monthly rewards. Ready to get started? Join today to unlock your true potential. To sign up, go to scrollcom forward slash the wealth club.

Serena Holmes:

Thanks again for following along with this episode of Inspired to Invest. In addition to real estate investing and running my own brand experience agency for 18 years, I also published a book called the Accidental Entrepreneur in October of 2021. Called the Accidental Entrepreneur in October of 2021. This is my story and it chronicles how I turned tragedy into triumph to embrace my destiny in entrepreneurship. If you're interested in picking up a copy, you can find the link at serenahomesrealtorcom and you can also find my link tree with all of the retailers in the details below. Thanks again for your support.

Serena Holmes:

Inspired to Invest is proud to support the Beyond Success program. In today's complex world, it's absolutely crucial for our youth to learn how to take charge of their financial future. We believe that every young person deserves access to accurate, practical financial information. Designed to bridge the gap, the Beyond Success program leverages a comprehensive educational bootcamp to equip young minds with essential financial literacy skills. At Beyond Success, it's not just about teaching financial literacy. It's also about fostering a foundation for a prosperous and empowered future. Join us Together, we can build a brighter financial future for the next generations. Join us Together, we can build a brighter financial future for the next generations. Join us Together, we can build a brighter financial future for the next generations.

Serena Holmes:

Hey everybody, welcome back to Inspired to Invest. I have Joe Makovilka here with me from North Carolina. He's talking about how he's scaled his portfolio over the last five years and also working as a commercial and residential contractor. So before the break we were talking about some of those lessons and learnings that you've had. You know some of those things just doing it right the first time so you don't have to go back. But that being said, what would you say is the craziest thing that you've experienced as a real estate investor so far?

Joao Macavilca:

Craziest thing would be plumbing. Plumbing issues are always the biggest thing that I can't. I mean one duplex. I had fixed it from the garage brand new plumbing and then what happened? 10 feet down, laundry room. It came out there, fixed that and then it just kept more and more. Pressure kept bringing it elsewhere where I had to eventually cut from the garage. Yeah, laundry room, living room, dining room to the main, redo the whole thing and then she rock everything up. Residential um commercial building. The first building we bought was in kernersville 12 unit and we closed on a monday and then tuesday morning we had a main drain leak in front of the building that affected everyone's water and it was just crazy timing, bad timing learned so much from that.

Joao Macavilca:

Luckily, now, going forward, we have in-house property management. Before we did not, and we got these bids from residential plumbers that came out and said, hey, it's going to be $16,000, $15,000. Having some knowledge in construction looked at what they wanted to do. There was a lot of things there that we did not need. We were able to get it down to five thousand two hundred dollars, so it was a big savings there alone. But again, my partners were beyond happy. Just having the right person, the right spot, they knew the language they were speaking helped them save more money and got that off their plate.

Joao Macavilca:

So same with property management. I don't, you know, I've dealt with tenants before and it's just, it's very time consuming and I've got other things to focus on. So having that right person that now does property management for us, we can just sit back and they're taking care of it and we're doing other things. So building that team was just the biggest thing. And all these lessons they're exactly that. They're lessons you learned and it won't happen again and we make sure you just grow from it, you learn from it and make sure you adjust.

Serena Holmes:

Yeah, no, I think that's huge. Now you talked about some of the mentorship that you've had and going to different networking events and things of that nature. What would you say is some of the best advice that's been passed along to you?

Joao Macavilca:

best advice would be well, it's a good one. Um, definitely appreciation of a cash flow. Definitely buying in the right areas. Um, trying to create win-win situations. I've never done a sub-2 deal. I'm looking at some of them now. Um, just people that need support and help, but also where you can come out as well. Yeah, so just trying to create those win-win situations, whether it be partnerships or deals or networking, or even you telling another investor hey, I know this plumber, I've used them for 10 years. Here's his number. They're going to be beyond ecstatic on both sides. Your plumber's going to know you're recommending them.

Joao Macavilca:

Give them more business yeah they're going to take care of you just and you're helping somebody else out that may not know what's going on, but now, since you recommended them, you know you're helping them out a lot. So, you know, just bridging that gap and helping everybody else out, we're all trying to, you know, win and we can do it together. There's more enough houses for all of us, so, yeah, that makes sense.

Serena Holmes:

Um, now, in terms of your financial freedom number, I know you talked about a goal of 100 doors for this year. Would you say, say that you know that's kind of your next big step? Or like do you have an idea of how many doors you want to take it to in order to get you to? You know, however you perceive financial freedom, whether that's a particular number of doors, cash flow, you know work life balance what does that look like for you?

Joao Macavilca:

I don't think there's a number in mind that would get me to that goal, as much as just and it's just cliche Like I'll be hanging out and on a Wednesday and decide, you know, I want to get to the point where I can just say you know what, tomorrow's, Thursday, I'm going to go hop on a plane somewhere for the next week or two and be able to just be, okay and not have to worry about is this paid. Do I have enough for this or that?

Joao Macavilca:

And just be able to get that spot where if I want to take off November, December and do a cruise or something, then I can versus, okay, well, can I? Do it. I want to get to that point where it's like we're okay. And you know, just building that path. So we all have dreams of making those steps to get there. Make it a reality and give you those steps to get there and build that path to success.

Serena Holmes:

And that's what we got to do yeah, now, I know that you're still on your journey at this point, but how would you say real estate investing has changed your life it's changed tremendously.

Joao Macavilca:

I mean I've been able, but if my parents came into the country 30 plus years when I was you? Know before I was born and I've seen them struggle, seeing them take job at the job, working countless hours, and I've been able to take, you know, my father and mother just on vacation internationally to greece, um doing the machu picchu hike, um going to mexico and seeing the pyramids, just being able to take them somewhere, yeah, and nobody didn't have to pay out of pocket and let them enjoy the world and see everything yeah that's been tremendous for me and just I wouldn't be able to do it without the real estate I've done.

Joao Macavilca:

I still own those properties, those are the cash I refi's and growing and scaling my parents looking down and saying, hey, we came from a tiny apartment in the ghetto, Look what you've been able to build so far. It just meant a lot coming from them, knowing their work ethic and what they're doing for my sister and I, and just being able to get back to them and show them you know I'll be able to take care of us soon and we'll all be okay.

Serena Holmes:

Yeah, yeah, no, that's amazing. I think everyone would want to. You know, be able to kind of retire their parents or give them a bigger home, or whatever that looks like. I think that's probably one of the biggest goals really. Now, obviously, obviously, this podcast is called Inspire to Invest, so I always like to ask people what's a quote that motivates them or inspires them.

Joao Macavilca:

So quote would be I might be saying it wrong, but if you want to go fast, go alone. If you want to go far, go together. Yeah, networking has been the biggest thing that's helped so much. And I'm an introvert so it took me a while to be able to meet people and all that. And you're going to meet extroverts out there that can go do a cartwheel in a room and meet everybody. I can't do that. I'll get the back table and sit down and just relax, but networking, I'm forcing myself more to do it and it's just crazy. Everyone has a story. Everyone has a story, everyone has a niche. Everyone's been through something you've either been through or haven't gone through yet.

Serena Holmes:

Yeah.

Joao Macavilca:

Just by talking it'll help you avoid it or look out for it and learn and grow. It's just building a community of realtors together, real estate investors together, and helping each other out. So I think that quote and then just speaking on networking.

Serena Holmes:

Yeah, yeah, no, I think that makes a lot of sense, is there?

Joao Macavilca:

anything in particular that you want to leave the audience with that we haven't maybe discussed up until this point. So I would just say working nine to five is hard. Investing in yourself is also hard. You just got to pick your heart. We all have the same 24 hours in a day. It's just how we decide to use it.

Serena Holmes:

Yeah, yeah, no, that's perfect. I love that. So now for anyone that does want to get in touch with you, what's the best way for them to reach you?

Joao Macavilca:

I would say through Instagram. My account name is Joao Mac, so J-O-A-O-M-A-C, underscore STF, and just reach out to me there. I have no issue hopping on a call, helping out guidance and doing what I can.

Serena Holmes:

Great, so we'll include all those details in the show notes below, of course, thank you for taking time out of your schedule to be here for today For anyone that has tuned in, either watching or listening. Thank you for your time. Make sure that you have followed along with us on social at Inspired to Invest Podcast and, of course, you've subscribed here on YouTube if you've joined this episode. And, above all else, make sure you remember, when you invest in yourself, the sky's the limit. Thanks again, thank you to ProVenture Real Estate Corp for bringing you this episode of Inspired to Invest. The views represented on this podcast are for general information only and does not constitute investment or other professional advice or an offering of securities. The host and guests. Thank you.