Flipping Our Way Into Commercial Real Estate

So my background was single family fix and flip, we actually still own one of the largest wholesale and fix and flip businesses in New Jersey. So we'll do about 200 flips this year in that business, but as we all know, that business is very active. So there's moving parts to, it's not passive and I think whenever anybody wants to get into real estate, they're thinking about the freedom that they're trying to provide for them and their families versus this really great job. And that's what we've kind of created it as a really good job in that other business. So, Integrity Capital Group was born and the three partners are all fix and flip and wholesale guys that recognize that the freedom comes from these larger multifamily, complex self-storage unit, student housing complexes, things like that. So we decided to start focusing on those asset classes. And what we found was nobody cared about how much we were going to flip. They didn't care about how many wholesales we were going to do, how many deals are going to do, the ones know about assets under management.

And it became kind of a difficult thing to get deals, we couldn't see the deals that we wanted to see, they're going to guys that have a thousand units under management. So we just couldn't really see good deal flow and that's why we chose syndication. We said if we could figure out a way to raise capital and we've been doing it for years on the fix and flip side, why don't we raise the capital and then go find a sponsor that has a good deal, that has a good track record and just say, we have some money. We would like to partner with you on your next deal and that time came just about nine months now. And that was a self-storage facility that we're building out in Orlando to 1,193 units. CubeSmart is going to manage it, it's ground up development, it’s going to be done in two phases, but a really exciting project for our first one out of the gate.

We always knew that the real freedom and the real passive lifestyle that we were, that we wanted comes from passive income and passive cash flow. Maybe it crossed our mind once or twice to say, well we have a lot of this deal flow, why don't we just keep them, rehab them and rent them. But every single mentor of ours that owns, hundreds or even thousands of units was like, look, yes, it's a little bit harder to break in, but you don't want a 150 roofs, you don't want 150 boilers, you don't want 150. And the third party management on single family is near impossible and the 40 management over a hundred units gets absorbed, so yes, it's going to take longer, yes, it's going to be harder, but it's going to be worth it. And we just trusted those guys, just put yourself around people that are doing it and you can systematize that process and you can see how it really does create true freedom in the long run.

And some of those people, they've been through the pain points, they've gone through their management, they've gone through their personnel problems, they've gone through their asset problems, they kind of have systems and processes in place. So they'll kind of take us under their wing and walk through the entire process because we were able to bring the Apple to the table. Now we get paid to them, eventually we'll probably do some of our own deals, but it's been a huge blessing on the front end, not have to deal with the headaches and the learning curve that I think the first person through the gate usually does. So basically we've become the capital company, I feel like that is going to let us go further faster and we kind of get to be a little bit pickier with the assets that come to us because we're betting sponsors and we're vetting deals and if they don't fit the box that we want them to fit into, it's okay to say no. And what I've found is that once you say you have some money, deals fall out of the sky, they chase you down. And I was chasing deals down for a long time, our whole team was and they just weren't coming to fruition, but now we have some money and on is right.

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