Isaac Sebbag is the founder of Golden Sky Equities, which generates long-term value through strategic renovations in the condo and multifamily sectors with a focus on the New Jersey and Florida markets. In this episode, Isaac shares his expert insights on condo conversion projects, including what makes an ideal condo, amenities to focus on, and ground-up vs. value-add deals. He also discusses how he uses LinkedIn to attract investors and structures deals depending on the level of value-add involved in the project.
Isaac Sebbag | Real Estate Background
- Founder of Golden Sky Equities
- Portfolio:
- Multifamily
- Mixed-use
- Development
- Office
- Based in: NJ and PA
- Say hi to him at:
- Best Ever Book: Rich Dad Poor Dad by Robert Kiyosaki
- Greatest Lesson: Choose your market wisely, especially with ground-up construction as they will be issuing permits and helping you through the legal process if needed.
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TRANSCRIPT
Ash Patel: Hello, Best Ever listeners. Welcome to the best real estate investing advice ever show. I'm Ash Patel, and I'm with today's guest, Isaac Sebbag. Isaac is joining us from Jersey City, New Jersey. He is the founder of Golden Sky Equities. They purchase multifamily mixed use and condos across New Jersey, Pennsylvania, and they typically do heavier value-add deals. Isaac's portfolio consists of multifamily, mixed use, development and office. Isaac, thank you for joining us, and how are you today?
Isaac Sebbag: I'm good, thank you. How are you?
Ash Patel: I'm very well. Isaac, before we get started, can you give the Best Ever listeners a little bit more about your background and what you're focused on now?
Isaac Sebbag: Yeah. My background is I started flipping houses when I was younger, seven, eight years ago. So I started flipping houses, got into a couple of rentals, and about five years ago got into condo [unintelligible 00:02:18.17] So we bought a lot of four or five unit buildings, and we converted them to condos. I was in Jersey City, Hoboken, the Gold Coast areas... And more recently, the last couple years we've been buying multifamily value-add, typically 20 to 100 units, across New Jersey and Philly. And we're just expanding and building our unit count.
Ash Patel: Isaac, what do you say to all those people that say it's too hard to find a deal in New Jersey, New York, Pennsylvania?
Isaac Sebbag: I get calls from brokers before they list stuff, and the owners that want to sell... So I'm looking at typically at least five or six deals a week, and a lot of them are solid deals, that I entertain and negotiate. So now more than ever, there's a lot of deals out there. Deals have never really been a challenge to me.
Ash Patel: What's the secret to having brokers give you their deals first?
Isaac Sebbag: Close the deal with them?
Ash Patel: Yeah. Good advice.
Isaac Sebbag: That's the secret. Because ultimately, they just want to sell, right? They want to make sure it closes, and they get paid. So if you can prove that you can close, and you're relatively easy to deal with, they're going to bring you the next deal.
Ash Patel: Yeah, that's a good point. What's a typical deal cap rate that you do or cash on cash that you do out in Jersey?
Isaac Sebbag: So that's another question I get asked a lot, is like, "Are you still buying in this environment?" and my answer is yes, but my numbers change. So I'm buying based on what the banks give me in financing. So a year or two ago, I was buying five and a half, six cap deals, with value-add, to get me to maybe a seven or an eight. Now I can't end up at a seven or an eight, because I'm not able to refinance respectively. So now I need to be going in the mid six-es, around six, six and a half at least, and I have to be getting to close to 10 on some of these deals, because that's honestly the only way you can pull out money, and pull out equity and give a good return to the investors.
Ash Patel: So you're going in at a mid six cap. I'm assuming these are pretty heavy value-adds.
Isaac Sebbag: They're not majorly heavy, but 15% vacant, hallways need to be redone, some exterior work, maybe a roof needs to be done... So yeah, we're not doing any additions, or anything.
Ash Patel: And because of the population density out there, filling vacancies shouldn't be an issue.
Isaac Sebbag: No, it's not an issue. Usually, it's badly managed buildings; those are the ones that we target. The reason they are vacant is either they just haven't been managed well, or [unintelligible 00:04:31.15]
Ash Patel: So tell me about the condo development. How many units were these buildings that you transitioned into condos?
Isaac Sebbag: Back about five years ago we started buying, and we probably bought about 12 to 15 projects. The reason we did that actually was because they did a tax reassessment in Jersey City, and all the four-families that were paying $10,000, $12,000 in taxes all of a sudden we're paying $25,000. So they couldn't make their mortgage payments and tax payments and keep rentals, so they were just trying to sell. And we didn't care about taxes, because if we're doing condo conversions, we're selling them separately [unintelligible 00:05:04.11] anyway. So we bought a bunch of these buildings, probably 10 or 12, we did a ground-up construction also, a 38-unit ground-up construction in Jersey City, and we just started -- and it was what I enjoyed, because I flipped houses, and I was just doing that on a bigger level. So I was doing high-end renovations, getting designers involved, spending crazy money, finishes, just to get those buyers... And that's what we did.
Ash Patel: That's a brilliant strategy to basically escape that tax increase. Let's dive into the numbers. Let's take one of those units. What was it bringing in in rent?
Isaac Sebbag: A typical deal, let's just say maybe $2,500 a floor. Let's say a four-family, each paying $2,500. So let's just say $10,000 in income between them. Maybe 120k a year. [unintelligible 00:05:49.22] traded for about a million, a million and a half. So taxes going from 10k to 25k made a huge difference. It really just took away that profit, essentially.
Ash Patel: Yeah, so $2,500 per unit is what you're receiving in rent.
Isaac Sebbag: Yeah, on a renovated unit, usually. Yeah.
Ash Patel: Okay. And when you convert it to a condo, how much more money do you have to put into this?
Isaac Sebbag: Let's just call it a 1,200, 1,500 square foot unit, you're putting about 50k to 75k a unit. So a typical deal that I did actually last year, an example was I paid one and a half million for four units, delivered vacant. They can actually [unintelligible 00:06:27.20] condo converted. He'd already started it, but he stopped mid-construction. So we paid 1.5 million; I put in about 300k, because he'd already done half the work, so I've put about 300k into it. So 1.8. And we sold out for a total of about 2.65, 2.7 in nine months. That means from purchase to full sale of all four units, it was 1.8 all-in, to 2.7.
Ash Patel: And the previous seller had all the legal docs completed.
Isaac Sebbag: Everything. [unintelligible 00:06:51.23] He even had appliances for all the units. So I moved into my rental units because I didn't want to use their Whirlpool appliances. So I moved those over, got new appliances... So we did a few strategic things. We added a washer/dryer in the bathroom. So kind of a small bathroom, but there was a little bit of space; we created that space, and we put a washer/dryer in the bathroom, so every unit had their own washer/dryer; that was huge over there.
We put one air conditioning unit, and split unit in the living room/dining room. So every unit had some sort of air conditioning. We completely redid the kitchens. So new cabinets, new appliances; we made that nice. We did new lighting. Floors - only one unit had to be replaced. So we did some small, but smart things over there. And they sold out so quickly. We had multiple offers, and the net profit within nine months on the total there was about $650,000.
Ash Patel: Yeah. So 50k to 75k per unit. I'm assuming you're gutting the bathrooms, redoing those as well...
Isaac Sebbag: Yeah.
Ash Patel: Okay. So very high-end renovation. What did you buy this building for per-unit?
Isaac Sebbag: 1.5 divided by four, so 375k/unit. And we sold out at around 600k to 650 a unit.
Ash Patel: Yeah, that's a great value-add.
Isaac Sebbag: The most important thing - and that's what I realized with hard money and bridge and all these sort of deals... It's speed, because you're paying 10% or 11%, you're not getting any income, so there's nothing to support that... And if it takes you two years, because you're waiting for some planning approval, which is -- I went through that, and I waited two or three years on deals... That eats up sometimes all of your profit, sometimes a big part of it. When you can complete that in nine months, which is great feat, investors were over the moon, obviously. It's short-term capital gains, so that presented a bit of a problem...
Ash Patel: You couldn't keep it for those next three months? C'mon!
Isaac Sebbag: Honestly, I couldn't, because it was selling so fast, and I knew that it was only the summer months, and it was gonna be harder to sell in those months. So I knew I had to sell it in the beginning of the summer.
Ash Patel: You couldn't extend the closing date for three months? Oh, that's a tough hit.
Isaac Sebbag: No. I actually did something different. So I didn't want to do a 1031 because it was tough... There was one other investor, and they wanted the money out. So I ended up taking my profit and putting it into an opportunity zone fund that I started, and then I bought a development site, which I'm developing. So that worked out for me.
Ash Patel: Good for you. You're all about maximizing income and using strategies effectively. So you made essentially $200,000 per unit, less holding costs on this conversion.
Isaac Sebbag: About 150k a unit.
Ash Patel: It was the final net? Okay. Now, a lot of the Best Ever listeners are going to say "Wow, wait a minute. I'm going to convert all of my apartments into condos." What makes an ideal condo conversion?
Isaac Sebbag: Well, location, number one. So you can just go to outer Jersey City and do a condo conversion. You can't go to a random town in Bergen County and do a condo conversion. It has to be in a condo location. And then also, when it comes to that, I've had deals like an eight-family that someone gave to me where there were three people still living there. So I have to buy them out, and they have so much leverage. They can be like "We're not leaving", and then I've got to fight with them, pay them who knows how much to leave. So it has to be vacant. That's a huge thing. It has to be vacant. It has to be in a good location, it has to be vacant... And we actually got lucky on the one that we bought, that one that I mentioned, that it was brown stone, but it wasn't fully attached. So I didn't realize the value of it till we actually went to market. But one side had windows, in the front. So when we compared to the comps, everyone else just had front and back windows, and we had so much light. I didn't even realize that until [unintelligible 00:10:14.05] people were like fighting over the units, and then I got the message.
Ash Patel: Yeah. And Jersey City is one of the hottest markets in New Jersey, and has been for probably 10+ years, right?
Isaac Sebbag: Yeah. I joined in like five, six years ago. And it wasn't my idea to go there. I was following people that were already doing well over there. And I'm like, "Let me go there." I wanted to do high-end renovations, I wanted to do it on a bigger scale, and I wanted to develop also eventually, so let me start by buying four-unit, five-unit buildings, and just converting them. And there's a bigger need for it out there.
Ash Patel: Isaac, if you have an apartment building in a suburban Pennsylvania town, what would make it ideal for a condo conversion? I'm assuming there has to be demand for people wanting to own, versus rent.
Isaac Sebbag: Condo comes from gentrification more than anything. And a suburban Pennsylvania town - I don't see that happening. Downtown Pennsylvania, sure. Jersey City, Hoboken, Manhattan, obviously. It's an idea that you don't want to put much effort. You want to own house, you want to have an HOA, you don't want to shove your own snow. You want to just do your job, come home, and pay a fee, and have some amenities, whatever amenities there are. So it really has to happen in those locations. I don't really see it in other locations.
Ash Patel: Alright, so all of you listeners out there that have apartments, put the brakes on, because it's not ideal in every location. Isaac, what kind of amenities do you offer in a four-unit?
Isaac Sebbag: So washer and dryer in the unit, and then there's a basement. So in that project I mentioned to you last year that we we sold there was storage in the basements; we had four separate storages, each one had their own locker. But besides that, not really. I mean, the first four got the backyard; we made a really nice backyard. We opened the door in the back. Instead of them going around, they had direct access from the unit in the backyard. So that was an amenity that we added to that specific unit. But yeah, besides that, no. Yeah, on our ground-up construction one - yeah, we put a gym, we had a game room, we had a wine cellar, we did all that stuff. But [unintelligible 00:12:01.15] deals, besides the storage and washer/dryer, there's not really much you can offer.
Ash Patel: Yeah. Isaac, what was the total cost in legal fees to convert the apartments to condos?
Isaac Sebbag: Not that expensive. Everyone asked that question coming from New York, because New York is a challenge. Okay, so we're gonna do the condo conversion, it's gonna take us nine months. I'm like, "No, it's not." It didn't take us 9 to 12 months, like in New York. You literally just submit an application, and maybe it cost me $5,000 for the four-family.
Ash Patel: Do you have to appear in front of the city council, or do they have to vote on it?
Isaac Sebbag: No. It's just literally signing a document with my attorney, and he takes care of the rest. You do have to put together a budget, obviously, based on the units. I'm actually selling out -- I have one last condo project that I'm selling out. I have my first closing tomorrow, God-willing, and then three more closings scheduled in the next couple of weeks.
Ash Patel: Congrats on that.
Isaac Sebbag: Yeah, that's my last condo. It was not easy to sell that one, mainly because of the location. So I moved out of downtown Jersey location into [unintelligible 00:12:56.28] location; less of a condo market. And also because of the market, because the rates have been tough for end users nowadays. But thank God [unintelligible 00:13:05.08] people are picking it up.
Ash Patel: Interesting. And then once you have the HOA in place, are you still a part of it? Or do you turn it over to the residents?
Isaac Sebbag: I've stayed a part of it sometimes, but it's not something I want to do. I'm not trying to make money off that. I give it to the residents and say "You guys figure it out, or hire an HOA company."
Ash Patel: There's better ways to make money than managing an HOA...
Isaac Sebbag: Yeah. Definitely.
Ash Patel: The ground-up construction, 38 condo units - what inspired that? And how did you find land in Jersey City? Was it a tear-down?
Isaac Sebbag: It was actually fully approved when we bought it. Someone approached me and said he put together a few properties, it's got full approvals, and he offered it to me fully approved. So yeah, it was three and a half million dollars for it, it was fully approved, 38 condos, no parking, and we basically -- something we're doing now is we want to step up the game. So we've done 10, 12, 15 condo projects, small ones, and we wanted to -- we're ready for the next. We wanna become developers; we want to step up the game.
So we closed on that, and we closed on a $10 million construction, which was a big deal for me back then. I hadn't done big loans. But then once we did that, it wasn't the simplest process. We started construction, the neighbor sued us, we went to court in the middle of COVID... We racked up $150,000 in legal bills in 30 days, on just that, but then we won the case... And then insurance paid for it all, so it worked out. But yeah, we had to go through that; the neighbor was stopping us. And then actually, because of us, the entire Jersey City now anytime you want to develop in Jersey city, they make you put the monitor in the house [unintelligible 00:14:32.12] to test for the shaking, so they can prove whether the crack in neighbor's foundation have to do with you. So after our court case, they made that new mandate, that everyone has to do that going forward... Because they couldn't prove it. He was trying to prove that we did that, and we said we didn't do that, and it was a he said/she said.
Ash Patel: Yeah. You know, I'm laughing... I was born and raised in Jersey. As soon as you said "The neighbors sued us", I'm like "Yeah, that's how we do it in Jersey."
Isaac Sebbag: Not only that, the neighbor was trying to sell me his property, and we had a deal at like 900k. And I was like "I'm not gonna change my plans right now, because it took a long time to get the plans. I'll build eight units", because you can put eight studios on that lot. "I'll put eight studios, I'll kind of design it the same as the next door, I'll use the amenities... [unintelligible 00:15:16.28] But we were like $50,000 apart, and I'm like -- my number was fixed, his number was fixed, no deal. And he sues us, and then we hear from the grapevine he just accepted this offer, and then lawsuit falls away. And I'm like, "Welcome to Jersey City."
Ash Patel: Man, that's how we do it in Jersey, right? You pissed him off, so he's gonna sue you.
Isaac Sebbag: Yeah. I'm not gonna buy a building because you have a lawsuit against me, even if the lawsuit costs a lot more. But yeah.
Break: [00:15:45.21]
Ash Patel: Isaac, what was the hardest lesson learned on that ground-up development?
Isaac Sebbag: Probably the subs. We're not used to paying $450,000 to one sub. So we had cases where we said "Okay, we need to save money, because [unintelligible 00:17:55.11] and we're looking through our subs and we're like "Let's renegotiate." And there's a lot of room in these quotes. We had some quotes that were literally hundreds of thousands of dollars apart. And sometimes if you're not careful - well, yeah, we used this plumber for our four family, and he has the capacity to do our 40-unit building. Let's just give it to him. And then we just do the numbers based on the four family, and we time this by 10, and then boom, okay, does it makes sense? He's charging us $425,000. And then we bring in someone else, and the guy's like, "Yeah, I can do it for 275k." And it's like, these are big numbers. It can make all the difference. In terms of pricing out subs and pricing our construction -- because we did the construction in-house on that project. So in terms of that, that was a big lesson. There's a lot of money to be saved in that.
And then also, choose your township, because if they're going to hold you back from getting permits, if they're going to shut down your job site because of a lawsuit... We had to sue the city, and we sued the city. And we were warned by our lawyers that if you sue Jersey City, they might not work with you on anything else. And all your other projects might be in jeopardy. And we're like "We have to take the risk. What are we gonna do? The city's shutting our job, that's who we have to sue." And thank God it worked out. They were nice to us. It was even better with us [unintelligible 00:19:04.15] So it worked out really well.
Ash Patel: Man, I miss Jersey. Did you have to use all union personnel, or was it half and half, or what?
Isaac Sebbag: No.
Ash Patel: No unions? Okay.
Isaac Sebbag: No requirements. Yeah.
Ash Patel: Okay. So things have changed a little bit from back in the day.
Isaac Sebbag: Yeah.
Ash Patel: Alright. What's your next project?
Isaac Sebbag: So right now I'm focused on multifamily. I have a bunch -- I guess I'm buying Philly, I'm buying in Jersey, I just closed on a project a couple of weeks back, about $10 million of real estate in Central Jersey, three buildings in Middlesex County... And I'm just buying more multifamily. I'm looking at a big package in Hudson County now, that I'm looking to take over. And I also have a development site in Elizabeth, which I'm developing... And yeah, just looking for -- always looking for more multifamily projects.
Ash Patel: That was gonna be my next question... You've developed one building. Was it a one and done? Apparently not, because you have another one in Elizabeth. So you're not opposed to doing ground-up development.
Isaac Sebbag: I'm not opposed. The one in Elizabeth happens to be an office conversion. So it's a retail and office, and we're adding two floors. So we're converting the office to residential, and then adding two storeys. And that was the opportunity zone, because it was in an opportunity zone. So that was the fund that I set up from the other deal, to fund this one. So that kind of worked out, and we're going in front of the board next month. So if they pass us, then we can get started. But I wouldn't say it's ground-up, because we're not doing new structural, we're not doing [unintelligible 00:20:24.06] we're not doing foundation; we're just doing a two-storey addition, and gut renovating.
I am looking at some ground-up projects, but I'm looking at it a little cautiously. It's not my ideal right now. I like the idea of buying something and seeing the cashflow day one.
Ash Patel: Yeah. And often it's cheaper to buy used versus build new.
Isaac Sebbag: Yeah. Also, like when we were in that situation, it wasn't easy. We had over $100,000 monthly in mortgage payments, and zero income. Some of these things [unintelligible 00:20:54.00] planning boards, with approvals of plans, the permits, waiting for windows to come... You wait a month for windows and you're paying $25,000 a month on your mortgage with no income. That was a tough time. Now, obviously, when you sell, you make money, but you know, if things just get on too long, you're trying to figure out how to get through the month. And you don't have that first of the month cash flow that comes in.
Ash Patel: Yeah, how profitable was that ground-up development?
Isaac Sebbag: We're actually selling it as a rental building now... So we'll find out. I mean, [unintelligible 00:21:21.07] a pricing, but it wasn't a homerun. It never is, the first deal.
Ash Patel: Yeah, every time I do one of these developments, I always say "Okay, next time I'll just leave it to a developer." And then here we go again, right? Did you have the same thoughts? It's like, "Okay, listen, leave this to the people that develop all day, every day."
Isaac Sebbag: Yeah, that's why I kind of centered my focus on multifamily. Another thing I had here in [unintelligible 00:21:44.14] He's a big developer, huge developer. He owns the Sony power, he's a big guy. He had a line that said "To be a good developer, you have to wake up angry." [laughter]
Ash Patel: I love that.
Isaac Sebbag: I don't wake up angry.
Ash Patel: Isaac, can you tell me how you structure these deals to take on investors?
Isaac Sebbag: Yeah, so it really depends on the value amount. And so adding significant value... So for example, if I'm, let's say, adding a storey or redoing a facade, and roof, and if it's a complete mess, and I'm really changing the face of it, then my basic structure is that whatever I'm raising the equity that I'm raising, I do 50/50. So it's aggressive, but it works on the small deals, and the returns speak for themselves. I don't take any acquisition fees or any of those fees. I'm strictly incentivized by the upside on the backend. So I always say 50/50, 60/40, 70/30 - it doesn't make a difference; if your number... And I'm showing you conservative numbers, and you're doubling your money in nine months, 12 months, it doesn't really matter.
As my deals got a little bit more conservative, and now I'm buying cash-flowing assets, and I'm raising rents, I'm not as much as -- I'm not doubling the rents; I'm raising the rents by 20% maybe. So then now my deals are more conservative, so I'm raising -- I'm doing 60/40, 70/30, depending on the deal. So I'm becoming more like -- basically like institutional standards, but... Initially, on my heavy, heavy ground renovation, that's what I was doing.
Ash Patel: And now it's more of a pref split type deal?
Isaac Sebbag: I try not to do pref. I did one recently, but I try not to. Just eat some of the cashflow, even if it's accrued, but I try not to... But yeah, it's 60/40, 70/30... Obviously, invested money is out first, and then the split. I'm really selling the end goal, the sale, that's what I'm selling. I'm like, "Look, we're gonna be all-in for 10 million at a six cap, a six and a half cap. In two years time we're gonna sell for 15. Total profit is going to be three and a half, $4 million. X amount gets you 10%, 10% of $4 million is whatever, and you're gonna make 65% on your money, or 70% on your money."
Ash Patel: Your investors are not in it for the monthly cash flow. They're in it for the big payout at the end.
Isaac Sebbag: Yeah, monthly cash flow typically doesn't start for the first 12-15 months while I'm doing the construction. Any dollar that comes in, I want to go straight -- even though all my bank loans have construction budgets; I structure them with the banks. Even the non-bridge loans. But still, every dollar that comes in, you want to have money in the account; you're not doing distributions, you want to just put it back into the property, you want to renovate units, you want to renovate hallways, you want to fix elevators, you want to do stuff that's going to bring the value, and then eventually you can reap the rewards.
Ash Patel: Isaac, how do you attract investors?
Isaac Sebbag: LinkedIn is my biggest.
Ash Patel: What's the secret to getting investors on LinkedIn?
Isaac Sebbag: The secret is being consistent, and posting stuff that's interesting. So I post a lot of before and afters, I post a lot of stories, like "This is what I did, this is what I bought this, how I did it, how I renovated it, what I sold it for..." I post a lot of that. That's interesting to people, even if you're not in real estate. And then I'm going to reach out to you right away and say, "Hey, I saw you posted. Here's my money." They're gonna see you, and they're gonna stand, and they're gonna see you again... And one day, when they have money, you're gonna be the number one person they think of, because that's what you have established yourself as on that platform, as the real estate guy.
So you want people to know you as the real estate guy, and they won't to reach out right away, but when they do, when they [unintelligible 00:25:05.09] they know someone that has something, they're like "Well, I know Isaac. Isaac does that."
I have a case with someone - he invested with me; he found me on LinkedIn and he invested with me, and then he referred me to someone else... And I spoke to that guy, and he's like a doctor. And I'm like "Do you want to [unintelligible 00:25:22.17] investing?" "Okay, fine. I'll do --" I think it was 200k, or whatever it was. I was like "Do you wanna meet? We should probably meet." And he's like "No, no. If you know Sam, then we're good." And PS, I know Sam for like 25 minutes.
Ash Patel: [laughs] Wow.
Isaac Sebbag: So it's very much like that. You establish a real reputation. And also, when you're going and meeting an investor that wants to invest with you, you need to sell yourself, right? I'm 80% sold before they meet me. Because they've seen my track record, they've seen my projects, they've followed me for two years, they like what I do, they like the idea that I do small stuff; I don't do big stuff, I don't compete with big guys. I'm not too big for them. I'm super-responsive in communication etc. And they're like "I'm already sold now." All they have to do is just put a name to the face, they have to have a nice conversation, talk about some family stuff, or something like that that they can relate to, and that's it. The deal is closed. So I'm not really -- social media helps you get to that point where you don't have to sell yourself as much.
Ash Patel: Are you on other platforms, or strictly LinkedIn?
Isaac Sebbag: I'm on Instagram also, a little bit. But mainly LinkedIn is mainly where I've -- I mean, I've had actually had a post recently... Not recently, a couple years back, where I bought a house and I had a picture of me and this guy and his girl. And I'm like "This person I met on LinkedIn, this person on Instagram, and we're closing the deal."
Ash Patel: Very cool. How often do you post on LinkedIn?
Isaac Sebbag: I try to do it maybe once a week-ish; maybe once a week, once every 10 days, maybe. So a couple times a month.
Ash Patel: And we'll put this in the show notes, but what is your LinkedIn profile, if you know it offhand?
Isaac Sebbag: It's just my name.
Ash Patel: Spell that please, if you don't mind.
Isaac Sebbag: Isaac Sebbag.
Ash Patel: Awesome. Isaac, what is your best real estate investing advice ever?
Isaac Sebbag: For who? For someone that's in real estate, or someone not in real estate?
Ash Patel: You pick.
Isaac Sebbag: For example, I have a lot of people that invest with me that are brokers; they do insurance, they do title, they do mortgage brokering, they do all that sort of stuff... And they always say to me, "I can invest with you, or I can do it myself." And I'm like, "If you're going to do it yourself, you should do it yourself probably. But if you've figured out the system in what you do, you're a good sales broker, but you don't try to figure out, put deals together, try and make the payments, be on top of the finances, deal with banks, deal with tenants... You have to focus, and it's easy to lose focus. But if you really know what you're doing in your specific business - again, if you're not really happy in your business and you know real estate, you should totally just buy the first deal." That's what I did, I bought my first deal, I fell flat on my face. And that was my college. I learned every single mistake in that first deal. That's my favorite question, when investors say "Have you ever lost money?" I'm like, "Yeah, I lost money. I lost in my first deal. It was horrendous." Wrong town, wrong architect, wrong investor, wrong lender... I made every mistake. It was great.
Ash Patel: That's good. You got the first one out of the way.
Isaac Sebbag: I got it out the way, and yeah, lost 100k of money that I didn't have... And it was really tough. And I spent hundreds and hundreds of hours picking out the backsplash, and [unintelligible 00:28:14.07] for three hours. Now I'm like thinking back to myself, "If I'm gonna lose money on this deal, why am I spending three hours picking out backsplash?" But then again, I was brand new to it. It's what I need to do to get there. And it gave me credibility with banks, because I actually bought and sold a deal... And that's how I built myself. That's why I've done probably 60-70 projects since then.
So I definitely needed that one. But again, the advice to someone that's in real estate, but maybe not investing in real estate - if you have a passion for it, and you can see it and just love it and enjoying it... Because it's not going to be easy. So if you don't really have a passion for it, it's not gonna work out, and you're gonna be down and out. But if you have an excitement for it and it's something that you enjoy... And 100%, buy your first deal. That's the advice. Just get into your first deal. Don't sign up to any course for $20,000, don't look at anything online, just buy your first deal.
Ash Patel: Great advice. Isaac, are you ready for the Best Ever Lightning Round?
Isaac Sebbag: Yeah.
Ash Patel: Alright, Isaac, what's the Best Ever book you've recently read?
Isaac Sebbag: I don't read that many books... But Rich Dad, Poor Dad is my go-to.
Ash Patel: And Isaac, what's the Best Ever way you like to give back?
Isaac Sebbag: Charity in my community, and my family, and the people around me. So charity is a big thing, especially in the Jewish culture. We give 10% of everything, and then obviously more than that, but... Charity.
Ash Patel: And Isaac, how can the Best Ever listeners reach out to you?
Isaac Sebbag: LinkedIn is a great one. My email, if they want, Isaac@GoldenSkyEquities.com.
Ash Patel: Isaac, thank you for your time today. It was great talking to you and hearing your story about starting out not too long ago with house flipping, and then moving on to condo conversions, ground-up development, and now a conversion from office to multifamily. Once that's underway, please send me an email. I'd love to have you back on the show and hear more about that project. But thank you.
Isaac Sebbag: Sounds good. Thank you.
Ash Patel: Best Ever listeners, thank you for joining us. If you enjoyed this episode, please leave us a five-star review. Share this podcast with someone you think can benefit from it. Also, follow, subscribe and have a Best Ever day.
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