We caught up with the brilliant and insightful Erick Gallegos a few weeks ago and have shared our conversation below.
Hi Erick , thanks for joining us today. What’s the best or worst investment you’ve made (either in terms of time or money)? (Note, these responses are only intended as entertainment and shouldn’t be construed as investment advice)
One of the most impactful investments I’ve made, both in terms of time and money, was acquiring a duplex in what many would consider a less desirable area. I made this decision in 2017 amidst widespread warnings about an imminent housing market crash. At that time, I was earning $80,000 annually as an electrical engineer, with $30,000 saved in my Roth IRA and $30,000 in cash. With a purchasing power of about $500,000 and a 4.75% interest rate, I remember making multiple offers using an FHA loan, which allowed for a lower down payment of 3.5%. Despite putting in numerous offers, I wouldn’t even receive a counter. My broker assured me it was a numbers game, and it was only a matter of time before I succeeded. When my lender mentioned a duplex on a main street, I reached out to the listing agent and inspected the property. While one unit had been recently remodeled, the other required some work. Despite its location, the property’s size (over 5,000 square feet) and the presence of two 2-bedroom, 1-bathroom units appealed to me. Crunching the numbers, I realized that if I could increase the rent on the second unit and find a tenant for the front unit at market rents, I could cover my mortgage. There it was, purchase price $450k, 3.5% down, 3% closing cost, and I got paid for the transaction, my first since I represented myself. I was all in for $30k. However, this left me without a place to live. Then it hit me – the garage! I ended up residing there for 18 months, saving my entire income during that period and eventually leveraging this investment to purchase another property. It took 18 months for me to refinance the home, get into a fixed conventional loan at a lower rate without mortgage insurance, and ended up making the property go from a breakeven to cash-flowing property with over $500 surplus, with more than 20% equity built in. The very investment everyone advised against became the stepping stone to my next acquisition.
Great, appreciate you sharing that with us. Before we ask you to share more of your insights, can you take a moment to introduce yourself and how you got to where you are today to our readers.
EJG Consulting Inc. was founded with the aim to assist individuals in building wealth through diverse financial avenues. EJG Consulting Inc. provides three core services: realtor representation, education on stock market strategies , and comprehensive support (covering planning through implementation stages) for Accessory Dwelling Units.
In 2015, motivated partly by the necessity and partly by the aspiration to achieve the American dream to homeownership, I embarked on my journey in real estate. Recently graduated with a B.S. in Electrical Engineering from California State University, Long Beach I felt compelled to explore the advantages of owning a house versus renting. I immersed myself in intensive reading and concluded that practical experience was the ultimate teacher. Therefore, I took the initiative to obtain the required real estate license In 2017, I represented myself in my first real estate transaction, acquiring a multi-dwelling housing unit, a duplex. In 2021, I strategically converted the garage to an Accessory Dwelling Unit and rented it out. .
Choosing a multi-unit dwelling unit over a single-family home allowed me to simultaneously serve as both a homeowner and a landlord. This arrangement generated the cash flow required for acquiring a single-family residence in 2020. And by 2022,I expanded my portfolio by purchasing an additional out-of-state multi-dwelling housing unit out of state. Each progression in my real estate journey has complemented the next.
This journey has brought me to a pivotal juncture, where I am dedicated to advancing and refining my skills in real estate. In order to empower clients and enable them to make well-informed decisions, I have created a user-friendly landing site offering access to financial calculators for evaluating various financial situations. Recognizing the sensitivity of financial discussions, I have prioritized a secure environment where clients can familiarize themselves with these tools before engaging in discussions.
In addition to these resources, I provide courses for purchase and consulting hours for personalized, one-on-one sessions designed to assist individuals in reaching their specific financial objectives. These services are customized to meet the needs of those seeking further guidance and support in their financial pursuits.
Have any books or other resources had a big impact on you?
Several influential books have significantly contributed to my development in time management and fostering an entrepreneurial mindset. Among these, noteworthy titles include “Think and Grow Rich” by Napoleon Hill, “How to Win Friends and Influence People” by Dale Carnegie, “The Richest Man in Babylon” by George S. Clason, and “Atomic Habits” by James Clear. These seminal works have provided invaluable insights and strategies, fostering personal growth and professional efficacy.
Can you tell us about what’s worked well for you in terms of growing your clientele?
Word-of-mouth referrals and leveraging social media platforms has emerged as a powerhouse strategy for cultivating and expanding my clientele. Word-of-mouth referrals, driven by satisfied clients and customers, carry a genuine endorsement that resonates deeply with potential clients. This organic form of marketing not only builds trust but also extends the reach of my services or products through personal networks.
Simultaneously, harnessing the power of social media amplifies this effect exponentially. Platforms such as Facebook, Instagram, LinkedIn, and Twitter serve as dynamic channels for connecting with a broader audience, engaging with potential clients, and showcasing the value proposition of my offerings. By strategically crafting compelling content, fostering meaningful interactions, and leveraging targeted advertising, social media enables me to extend my reach far beyond traditional boundaries.
Together, these complementary strategies create a dynamic ecosystem that fosters client acquisition and retention, fueling sustainable growth and fostering a robust clientele base.
Contact Info:
- Website: egcashflow.com
- Instagram: https://www.instagram.com/Erick_geee/
- Facebook: https://www.facebook.com/erick.gallegos.1840070
- Linkedin: https://www.linkedin.com/in/erick-gallegos-pe-9a856658
- Twitter: https://twitter.com/Erick_G3E
- Youtube: https://www.youtube.com/channel/@egcashflow8662
- Yelp: https://posts.gle/mf211c
- Other: Google Profile : https://posts.gle/mf211c