Helping industry professionals stand out by magnifying their stories through podcasting.

The St Clair Speaks Show is an interview format podcast show where I highlight and showcase professionals in business from across the world, we discuss topics from within their industry expertise and dive into their backstory on how they got to where they are today.

Michael Dominguez is an award-winning sales representative, a member of the RE/MAX Hall of Fame, and the founder of Doors to Wealth Real Estate Group, a team of realtors focused on educating and assisting people in investment real estate. After becoming a realtor in 2008, Michael bought his first investment property and proceeded to add it to his portfolio for 10 consecutive years. Throughout his realtor career, he has completed over 300 investment property transactions. source: St Clair Speaks Show

St Clair Speaks Show with Michael Dominguez

StClair – All right, so let’s dive in. Real estate is very hot right now, right. With market, there’s a lot going on. Again, there’s a lot of outside noise, but there’s also what you specialise in and where you’ve seen the most success. What advice would you give someone that’s starting out, looking at, again, all this outside noise? Right. Investment properties, they want to start out, but they don’t have the experience.

Michael – Yeah, the first mistake that a lot of people make, I believe, is I call it sort of the squirrel syndrome, where you start thinking about a certain area and then all of a sudden squirrel, let’s go look in this area. And the action takers I know people that own property, one property, maybe in New York State, they have another one or two in Florida, they’ve got something in Texas because somebody told them that was a good investment. They picked up something in Arizona because they managed to somehow get something below market value or foreclose. But meanwhile, you’re not an expert in any of these markets. I would rather work with a joint venture partner or just simply as an investor myself. And I became an expert in one area, one market, and maybe even within that one town. Finding an area in that town where, honestly, I’ve biked or walked up and down this town. I’ve driven up and down a thousand times. I know every house on that market, basically. And so I know who the tenant profile is. I know where these people are working because there’s a few major employers in that area.

It’s growing, I know where they’re shopping. And so I find a property that fits that tenant profile. That would be my advice to people getting started, is to sort of become an expert in one area.

StClair – Well said. I’ve heard this before. No, stuck with me. Real estate is a team sport. How important is networking to your success in the real estate industry?

Michael – Yeah, well, it’s simply put, I would not have grown my portfolio to where I did. Now, some people have this massive portfolio, I don’t. I have a dozen investment properties, all with additional dwelling units. I do have a multi unit, but I sold most of my buildings because they were a pain in the neck. And now I’ve got great tenants that all pay me rent and stuff like that. So the short answer is that if you create that quality portfolio, you don’t need to necessarily add a lot of properties to portfolio. So what exactly is your sorry, I sort of went off tangent here. My apologies.

StClair – The importance of networking, right?

Michael – It was the team factor that sort of directed me in a certain way. I didn’t necessarily need to have 100 properties, but having a quality contractors, quality home inspectors, quality mortgage brokers, and I’ve got more than one of those Realtors. I’m a Realtor myself, but I do Realtors on deals, even in my own market. If it makes sense, I’m going to do it. Whatever gets me into that property. And I can tell you that some of the properties that I bought didn’t even go on the market because of my network that I had. I would have a Realtor or a mortgage broker or somebody sort of said, hey, I’ve got this property wholesaler, this property is coming up on the market. Are you interested? And I took action.

Importance of Knowing Your Market

StClair – Can you talk to us about the importance of knowing your market, the education behind, like, knowing what so you’re not overpaying and knowing what this property could potentially pay you in the next five years and ten years to your return?

Michael – Yeah, it’s funny you said overpaying, and that’s valid. There are sometimes some real values there. But I found in one of the markets I was investing in, I was finding that the retail value of properties I felt was too low. My clients and me were just snapping up everything because we could justify where the prices were likely going to go. And we were right. We were feeling the prices were going to be skyrocketing, so we were buying things at market value and just doing really well. You mentioned short-term rentals. Short term rentals and commercial. Those are both potentially very great industries for people. But in my experience, the people that dabble even within one market, they’re doing a little bit of short term rents, a little bit of long-term rents, a little bit of commercial. They’re trying to be a little bit for everyone. It’s almost too much. My advice to you would be find your lane and then become the best at that lane. And they’re the ones that are most believable, because if you’re going to be a joint venture, if you’re going to be wholesale, what people are looking for from you is a consistent product.

Michael – And so by you delivering that same sort of quality over and over again, you become known for that. But if you have a little bit of this and a little bit of that, it’s a little bit all over the map. So as much as like, I bought a lot of my properties from wholesalers, but you and I would not likely do business because I’m so specific for one market, that if it’s not in my market, I’m just not moving forward. I just don’t because I want to be the smartest person in that room when I sit down at the table. And if I don’t know the properties well, if you find something in upstate New York, well, I’ve driven through it three times, but that doesn’t mean I know it. So become good at what you’re doing and it’s hard to not be successful in this industry.

StClair – And that’s another you make a very good point, but exactly what you said is I’ve heard that so many times and it’s so true. But that’s another reason why so many investors are so successful. They stay in what they know in terms of their market. They niche down in their market, right? And they niche down and they find their success. So if it’s working in that particular market, I can understand there’s no reason to go outside that. But I want to ask you this resale value. What are some suggestions to rehabbing a property and getting a little bit more than what you just put into it? Right. There are little things that I’ve heard, like cutting the bushes, knock down some trees. What are some other suggestions that we could get more from doing a standard buy and flip or hold over time? Yes.

Michael – Now, the first thing I want to reiterate is me and most of my clients are buy and hold investors. I don’t hate flipping, but in my mind, that’s a full time job that goes against everything I believe in. Being an Armature millionaire is like when you’re a flipper, you are taking on a new job, essentially, whereas the buy and hold I’m a huge fan of boring. You mentioned that at the outset. I will often buy a single family home that has the zoning capabilities of adding an additional dwelling unit. Yeah, it’s nice to trim your bushes and stuff like that, but there’s nothing better than adding an additional dwelling unit. And that’s what this whole book is focused on. I wrote this book not for the investor that’s looking for their 15th or 30th property, but to get them to buy their first or second properties. So if you can buy a home in your community, assuming that the zoning allows you that ability, and that’s a conversation for another day, depending on where you live. But if, let’s say, you can buy that property and it’s in the neighbourhood, you know, or a town or two over, and it’s got two dwelling units, it’s got two quality tenants that are both paying enough rent to cover all your mortgage and debt.

What I often do, once I get everything all done, is I don’t sell the property. What I do is I refinance the property. And that’s how I grew my portfolio, because I didn’t necessarily have a million dollars to start with. Like, not many of us start with that kind of money, but by refinancing the property and getting the lenders to give you most of your initial down payment back and your renovation costs back, so you can take that money and then do it again and again and again. And that’s how I kind of grew my portfolio as I kind of recycled my money through burring and adding dwelling units, for sure.

Real Estate FOMO

StClair – What would you say is the number one? Definitely more like the number one don’t that you would suggest to just anyone, not only just for reading the book, but anyone that wants to be successful in the industry of real estate. What’s the number one thing like, hey, you can’t do this. If you do this, you’ll never be successful. What’s that one thing?

Michael – Well, I don’t want to say never, but it’s really tough. You actually brought it up. I talk about this in the book a fair bit is the FOMO factor. And so often in any investment strategy, you hear five or ten or 500 people doing it and you think that’s probably the way to go. And so right now the trends, short term rentals actually one of them. Everyone thinks they’re going to become multimillionaires doing short term rentals. There’s a lot of risk in that investment strategy. You’re running a hotel basically is what you’re doing. So the FOMO factor is like, you get some slick salesman telling you about this great deal on a property in Arizona, that doesn’t mean that that’s the one you’re going to take. So you have to stay true to yourself and follow a certain strategy.

One thing I like to share with people is I’m someone who has the experience of having heard hundreds and hundreds of people speak about their successes in real estate. And one of the classic examples you often hear are the people that make their million or millions lose it all, and then they build it back up again.

And then everyone applauds at the end and say, yeah, nice perseverance, and all that stuff. I’m one of these guys that I say, okay, I like how you made the first millions. I like how you rebounded. Tell me more about this part in the middle that you lost it all. How did that happen? Because nobody ever likes to talk about their failures so much.

And invariably what happens is they get into a development deal that has far too many cost overruns. They get into relationships with a partner and the partner kind of leads them dry or intentionally unintentionally. That’s what happens. But something goes wrong and they take on something that was out of their comfort zone to an extreme and then things went terribly wrong. It’s almost always that’s the story. And so I know it’s a boring answer to give for somebody, but my advice is to find that lane, stick with it and you could make yourself into a multi-millionaire doing that lane properly and just doing well with it.