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Yo, what’s up guys? Raphael Vargas, over here at my headquarters. The Real Step headquarters; we’re in national real estate wholesaling and house flipping company. And a lot of people asked me and asked me a question, you know how I went from my mother’s basement flipping and wholesaling contracts in my mother’s basement, a broke deadbeat with maybe $500 to my name to now scaling a multimillion dollar real estate operation to this degree. And so a lot of people ask me the step by step process of how I went from my mother’s basement to getting my first employee to scaling a team, to opening up eight different metropolitan markets. And then now having the funds to be able to invest in real estate and now owning a portfolio of single family properties and commercial properties, almost valued at $10 million. You don’t want to miss this IG Live TV. I go through step by step of how I go from nothing to something. Make sure to stay tuned.
Guys, thank you so much for tuning in. Um, we’re going to be going through this step by step process of how I went from my mother’s basement. Um, literally broke as a joke with about $200 in my name to now scaling a multimillion dollar real estate wholesaling empire, which again, wholesaling is not the end all be all like…yes, do I make $5 million a year just flipping houses, flipping contracts in eight different metropolitan markets, flipping real estate? I absolutely do. $5 million a year. Last year we made about uh, right shy of $4 million; in this year we’re going to shoot past $5 million. And collectively it’s been able to have me collectively have companies that now, my companies this year 2019, we’re going to be doing revenues collectively, my companies, over $10 million. I’m so blessed by God and I just want to make this video because one, it’s motivational, it’s a motivational to see you know exactly what is possible.
What a 27 year old knucklehead with, you know, barely any high school education, got kicked out of high school, everyone thought he was never going to make it to now you know, running a multimillion dollar corporation of real estate investment company from nothing. And so this is a motivational post, but at the same time, it’s also a super informative post about the details. This step by step details going from my mother’s basement broke as a joke, what list did I buy, what calls did I make to get my first deal? How did I get my first deal? Right? How did I then start building a small team to now building a large team to make $5 million? How did I take that cash and start investing in the rental properties, small single family assets, which then led me to buy my first commercial building, right? Which now produces me cash flows, you know, way over a $400,000 a year and a portfolio of rental properties valued at roughly $10 million.
So guys, I mean this is going to be a step by step video. You don’t want to miss this. This is a story of my life. So watch this video to the end. Okay? So again, this isn’t choreographed, scripted whatsoever. I mean this is all off the dome, okay? This is all off the dome and just coming to you and shooting to you straight. So I’m going to go through the details starting with my mother’s basement. Okay. I was 21 years old, so this was six years ago, 21 years old, and in my mother’s basement. And our family was struggling. You know, my mom was working two jobs, um, you know, she was going to school at nighttime. So I remember days watching her, days, she would not be sleeping like days. She wouldn’t even sleep. She would go from the two jobs to then studying all night to then going straight to night classes.
I mean, watching my mother hustle was such a motivation for me because my father wasn’t around at that time. He was out here, you know, he was gone. He, he wasn’t around. And, um, he left my, you know, my mother to be taking care of me and my brother who’s mentally disabled. And unfortunately we had to neglect, my brother. And it was a really difficult time to neglect my mentally disabled brother that way because you know, it, it got me angry, furious. And this is super key. What are you furious about? What are you furious about in your life that you will not tolerate? Because the things you tolerate are, you know, ultimately the things and your limiting beliefs, right? So one of the things that you’re not going to tolerate in your life, and one of the things that I did not tolerate was watching my brother in that fashion.
I did not tolerate it. And I said, I’m going to make a change in my life. And so guess what? I started studying ways and I started praying to God and asking God, how can I help my family out? How can I help my brother out? How can I help my mother out so I can retire my mother, make millions of dollars and live a life, a dream life? Like I live a dream life, right? I have the cars that I love. I have a BMW I8 that I paid cash for. I have a Lamborghini Aventador $300K almost $350,000 car I paid cash for, right? I have rental portfolios, I have single family homes, I have commercial assets. I’ve retired my mother. I take care of my brother and my family’s literally in Cancun right now from a trip that I paid for, you know, having a blast and I’m going to go later on today.
So I’m living the dream life guys. And this is what I want for you. Okay? This is what I want for you. But you have to start with: what am I not going to tolerate in my life? If you’re going to tolerate working a nine to five job working just above slavery, right, then by all means, that’s what you’re going to tolerate in your life. If you’re not going to tolerate that and you don’t tolerate anything less than greatness, you know that’s where you start having major moves. So first I started not tolerating my brother and his situation. So then I started working a job and I started praying to God. And when you start asking God for direction in your life, I guarantee you he will bring direction in your life without a doubt. So I started praying to God and say, God, give me direction in my life.
What should I be doing? How can I make millions of dollars, yada, yada, what am I supposed to be doing? And six years ago, at 21, this guy was working in a job. He comes in and he was getting veneers, spending 20 grand on his teeth. I said, “Dude, how the hell do you spend 20 grand on your teeth and drive a BMW Five series?” Like that was a successful car back then, the BMW Five series, right? I thought that was like you made it. And he was like, yeah, I do real estate. And I said, hey man, I was at such a desperate point in my life. I didn’t go to college, right? Oh, such a desperate point in my life. 21 years old. And my girl just broke up with me. I was in this depressed state. This is my girl broke up with me and my friends were leaving me.
I got robbed by a couple people in my life. And he said, “Yeah, I’ll teach you everything about real estate.” I was so desperate. You know what? He took advantage of me and he said, “”ay me $2,000 and um, I’ll teach you everything about real estate.” I was so desperate, but you know one thing that it taught me, I paid him the $2,000 and he took it. He didn’t teach me anything about real estate, but I praise God that that happened because God taught me some valuable lessons, resourcefulness, resourcefulness. How resourceful are you? Are you the person that needs to be handheld throughout the entire process or are you the person that’s resourceful, that goes on Google? I used to Google how to make $1 million. How to, how to buy a, how to you find a motivated seller, how to fricking wholesale real estate.
I used to YouTube this stuff because he took my money. He left me with nothing in my name, nothing in my name. And so guess what? I then quit my job and I said, I’m going all in on real estate. I told my mom, “I’m going all in in real estate, Mom, I’m going all in. I quit my job. I’m not going to college. I’m going all in on real estate,” and she said, “Rafi, it’s never going to work.” Yada, yada, yada. All in my ear. I did not listen to her. And so I went all the way in. I took all the money, I had $2,000 lost it, right? Lost it all. But then what it taught me is I went on YouTube, I want on Google. I said, how to wholesale real estate, free videos, free videos, free videos, eating that stuff up, right?
How to find a motivated seller. What is wholesaling real estate? Wholesaling real estate is really easy. You get a contract with a motivated seller, a owner of a property, right? So somebody owns a property, you find them, they’re motivated to sell that property because they’re going through the stress and they’re vacant. It’s distressed, it’s ugly, it’s a dilapidated whatever, right? It’s boarded up. And so you get it for a low enough price that you sign a contract, you take that contract and then you sell it to another investor and you make a spread in the middle, right? So let’s say I get it for $100,000 with the homeowner, I then sell it to an investor at $120K before the closing and then you make $20,000 you don’t even have to close on the property. So I was like, this is really, this is real, like this is possible.
And I believed it. You have to believe in your dream. And I believe that so much. I went all in; $2,000 lost it all. I went in resourceful. I went all in. I quit my job completely. Went all the way in. I didn’t go to college, I didn’t have a plan B. I went all the way in and this is what you guys have to do when you’re locked in on a dream, you have to go all the way in. You have to invest in mentors, you have to invest in yourself. You have to study, you have to read books, all the way in. You have to have one plan A, no plan B all the way in. That’s what I did. So at the age of 21 I started going all in. And so I started studying how to do wholesaling real estate, how to find buyers, how to find motivated sellers.
And what I started figuring out…,I used to put bandit signs out, that didn’t work. Direct mail, I tried direct mail that didn’t work. It was way too expensive. The way I supplied my business is I sold my frickin’, my frickin’ shoes, I sold my shoes, I sold my laptops, I had laptops ’cause I used to be a music producer, I had freaking Midi keyboards and like studio equipment. Again, no plan B, I wanted to become a music producer. But sometimes you know what? God has a different plan for you. God has a different plan for you and your life. And I thought I was gonna become this music producer, this awesome, you know, producer and hip hop and R&B. Nope. God had different plans for me in my life. Hold different plans and praise him for that. I sold all of my music studio equipment, my shoes, just so I can start supplying my real estate company all the way in.
I was all the way in on myself, all the way into my dreams to make sure it was going to become a reality because I was not tolerating the life I was living at that time. Okay. So how do I find my first motivated seller? I bought a list, an absentee owner list when I sold all my stuff, right? My junk. I bought an absentee owner or pre-foreclosure list, excuse me, and then I skip traced it. I found all the phone numbers of the homeowners that are going through pre foreclosure, right? Pre-foreclosure means you know your house is about to get foreclosed on because you stopped making payments to the bank. So a lot of them are very motivated. So I got all the phone numbers of all these homeowners are going into pre-foreclosure and I just picked up the phone and started calling, calling, calling, and guess what?
I made a lot of failures. Was it scary to make cold calls at that time? Absolutely. Am I scared now? Absolutely not because I developed the skills in sales. I used to read book after book after book, after book watch video after video after video, days without going to sleep. Days. People think that it’s easy to achieve this level of success. It’s not, it’s not. You want to achieve an eight figure level of success? It is not fricking easy. It’s not easy. It’s not easy, you know? But at the end of the day, it’s worth it. It’s worth it for you. It’s worth it for the family. It’s worth it for your community, it’s worth for the people around you. It’s worth it for God so he can give back and give all the glory to God. It’s worth it. So I went hard and I started dialing out pre-foreclosure list and I found my first person that said, “Yep, I’m interested in selling my property.”
Got that property under contract, right? I got it for I think a hundred…a hundred thousand and then once I finally got that contract, I found an investor. And how did I find investors? I went to local networking groups, Facebook groups online. You just literally go to Facebook and say, investor groups in Atlanta, Charlotte, Tampa, D.C. I was in D.C. At the time, right, and I remember throughout this, it took me nine months for the first person. Finally for somebody to say, you know what, I’ll sign a contract with you. Nine frickin’ months of hustling, day after day, struggle after struggle. My mom in my ear all day that it’s never going to work. Go get a job. Fighting and clashing with my mom all the time, we got to make payments to the house. “You got to take care of us. You got to help us, go get a job.”
And I said, “Mom, I promise you, I promise you I’m going to retire you one day, I’m going to retire you one day” and guess what? I retired her. Glory be to God for that. But not only that, in nine months finally got my first contract and I found my investor from a local meetup group on investors, investor meetup groups. I got my first contract by evaluating the property, using the MLS, the Multiple Listing Service, which is a tool that we use to literally evaluate properties and find out what a property’s worth. So you’ve got to get the MLS, okay, Multiple Listing Service in your market, Now, I evaluated that property. I got it for $100,000. I realized once it’s renovated, it’s worth about $250K, I found an investor and guess what? Sold it to him for $120,000 made $20,000 my first year.
I’m sorry…actually I sold it to him for $135,000. I made $35,000 my first deal and that was the start of my exact momentum. After nine months, I remember getting that check. I went back into my car. I was crying in tears, in fricking tears, crying because that moment changed my life in. The first thing I did was go take my mom on a vacation with my mentally disabled brother, me and my mentally disabled brother, and my mom took him over to California and you guys will see in this post there, I took them in California, was the first deal that I ever closed, that was the first level of my success. So now I got my first deal and I’ve reinvested, I reinvest in, in myself, reinvest in myself. I didn’t stop going hard, reinvested, kept wholesaling real estate. And then I was by myself. I was doing $200,000 by myself, $200,000 by myself.
And then I said, you know what? I need to start building a team. And so I started hiring mentors, paying mentors, $30,000 here, $20,000 here, $10,000 here and $5,000 year, going to events, investing in myself, investing in my education to learn how to scale the team. And guess what? I started building a team. I started building a team, it was me as a CEO, right? I had then an operations person, a COO, and then I had somebody on acquisition that just dealt with talking with homeowners all day, getting contracts all day, and then giving it to our disposition team, who all they did was just focused on talking to investors in selling our deals all day. So I did the marketing. The calls would come into our acquisition team. Our acquisition team would take the calls, lock up deals, evaluate them, make offers with the homeowners lock up the deals over the phone, we’ll get the contract, give it to our disposition team.
Our disposition team would then find the investors, all day finding investors, marketing the property, telling them, “Hey, we got this deal for $100K, we’ll sell it to you at $120K,” right? Getting and selling those deals. And then we’re making the spread. And then at the age of 24, I made my first million dollars in real estate, wholesaling real estate. And I said, this is not where I’m going to end this. I need to start buying rental properties because rental properties is wealth. And so I pulled a strategy called the BRRRR strategy. It is a phenomenal fricking strategy that I recommend everybody to start using when they buy, when they start having their own cash. You need to start doing the BRRRR strategy. It is the way to invest in rental properties with zero cash investment, zero risk, zero cash investments. So this is what I did, finding my rental properties; this is how I built a portfolio of almost $10 million worth of rental properties from my mothers frickin’ basement to now where we’re at today, 24 years old, I made $1 million and I said, how am I going to invest this money?
I started looking at rental portfolios and properties, individual properties. I said, you know what? Let me start with one property; this property, I bought it for $25,000 in Baltimore and I said, you know what, if this was rented, renovated, it’s worth $100,000 I bought it, for $25,000 I renovated it for $25,000 so I’m in it for $50,000 okay, follow the math here. I’m moving quickly. I’m in it for $50,000 it’s worth a hundred okay, so I bought the property in cash, renovated in cash, and then it’s, I’m in it for $50,000 it’s worth $100,000 now I’m renting the fricking property to Section Eight for $1400 a month. And I said, hold on, I’m renting it for $1400 a month. And then I went to the bank and I said, hey bank, can you refinance me out; and a refinance is pretty much saying the bank is going to put a loan on the property and give you back the money you invested.
So hey, can you refinance me on? They said, sure, let me do an appraisal on the property. Let me see how much the property is going to appraise that. They appraise my property at $100,000 and they said, we’ll give you 75% of appraised value. So I said, hold on $100,000 it’s worth, you’re going to give me 75% of $100,000 that’s $75,000 I bought the property for $25K, I’d put $25K in renovation. I’m in it for $50K so I’m going to walk away with $25,000 in my pocket. I’m going to have a payment to the mortgage for $600 roughly. And then I’m renting the property for $1400. I’m making $800 a month and I just made $25,000 in my pockets, sign me up. So I literally did that. My first property, it blew my mind and guess what? I bought almost 15 properties doing it that exact same way.
And so I own a portfolio of rental properties now valued higher, a lot of them, some of them are worth three hundred thousand, two hundred thousand you know, $400,000 a lot of them are worth, you know, between $100,000 and $150,000, that’s a sweet spot. And once they’re fully renovated and occupied with the tenant, and then I started buying these single family assets, building on this cash flow and then all this equity. And then guess what? When you refinance at $25,000 if you don’t sell that property, that $25,000 is tax free. That spread between the $50K to a hundred thousand to that $75,000 of what they refinance you, that $25,000 I put in my pocket tax free, I said, holy crap, boom. So now I started buying all these single family assets. I started growing my wholesale operation from $1 million to now we’re doing almost $5 million, $5 million in wholesale fees, flipping contracts, 30 to 40 to 50 deals on a monthly basis in eight different metropolitan markets.
Tampa, Philly, Charlotte, Atlanta. Because I started thinking, if I’m doing this just in D.C., why can’t I do this nationwide? There’s no risk. I’m flipping contracts, right? For the rental side, there’s risk on that because you’re buying it, you’re renovating it. You have to refinance with the bank. But once you refinance out with the bank, you have no cash invested in those properties. So guys, there’s two different strategies, right? The wholesaling, flipping contracts, no cash, no credit, no risk making a bunch of cash. I’ve made anywhere from $5,000 to $300,000 flipping a piece of paper, flipping contracts. So we make amazing, amazing cash on the wholesale side. Then you take that cash and you invest in rental properties using the BRRRR strategy: Buy, Renovate, Rent, Refinance, Repeat…the BRRRR strategy, research on the BRRRR strategy. So I checked that cash, did the BRRRR strategy.
Now I had single family cash flow. I have my wholesale property, my wholesale business that’s producing millions of dollars a year. I have my BRRRR, my single family rental portfolio that’s producing me cash flow that I retired my mom with that has a bunch of equity in it, over seven figures in equity in it. Then I said, how can I buy commercial buildings? And then I bought my first commercial building, uh, building a relationship with a nonprofit organization that gets buildings donated to them, built a relationship. It’s all about relationships in real estate. Built a relationship with a nonprofit organization that gets properties donated to them, but at a ridiculously low price, $3.9 million. Now it’s cash flowing upwards of $300 or $420,000 a year. I bought it for $3.9 million. It’s cash flowing $420,000 a year and we’re selling it now at the to this day we’re selling it for $4.75 million.
We’re getting cash flow where a selling it making huge profits and guys, this is where I want to get you guys. I want to get you guys with a single family portfolio of rental properties, almost valued at $10 million commercial assets, almost valued at $10 million from your mother’s basement–six years. I’m not saying it’s going to be easy, but it takes time. Persistence, hard work and with a lot of faith in God and a lot of discipline and a lot of intense, intense focus on one mission and a lot of non-tolerance to your current situation. No tolerance to your current situation. I guarantee you; it will become possible. I pray for you. I wish the best and hopefully this video from step by step from going to a $200 net worth, so now a multimillion dollar real estate investment net worth. I want to see you guys get there.
I want to see you guys take those step by step processes and I look forward to seeing your success. Much love, Raphael Vargas signing off and if you’re not coming into, excuse me, if you’re not coming to my event, April, I’m sorry, not April. Oh my God…what am I thinking. If you’re not coming to my event June 28th through the 30th you are missing out. You have to be at my event where I teach you exactly how to scale a wholesale operation to a $5 million one. You don’t want to miss it. I go through this step by step process of how to scale my wholesale operation, the marketing, the cold calling, the aspects of acquisitions, the dispositions, the organizational structure. You have to be there. I look forward to seeing you at that event. You have any questions? DM me. I look forward to your success and remember this, put God first above anything. Much love, guys. Signing off.