Sports teams are just one of the important features of a thriving metro community. In this video, Jorge and Rafi explore the importance of attractions, like professional sports teams, when it comes to finding the best locations to invest in real estate. And they are joined by Sam Ally, who is with HIS Capital Group.
00:00 Rafi: Good afternoon. Yeah, good afternoon, it’s 1:00, yeah. Good afternoon and welcome to the Graystone Brown Bag sessions. I am Rafi, chief operating officer of Graystone Investment Group.
00:13 Jorge: I’m Jorge Vazquez, CEO of Graystone Investment Group.
00:16 Rafi: Excellent. And we have a special guest today with us. Let’s introduce you to Mister…
00:22 Sam: Oh!
00:23 Rafi: Sam…
00:23 Jorge: Whoa, whoa, whoa, whoa, whoa, whoa, whoa, whoa, whoa, whoa!
00:23 Sam: Wait a minute guys. Wait a minute guys. Wait a minute. Wait a minute. Well, all right. Here we go. There we go. All right. All right.
00:29 Rafi: That’s what you told me.
00:30 Sam: Get with the program, I’m sorry. I’m sorry, man.
00:31 Rafi: Okay, we good? We got Mister…
00:34 Sam: I’ve gotta be part of the clan.
00:35 Rafi: Yeah, we gotta get closer here.
00:36 Sam: Gotta be part of the group here.
00:37 Rafi: There you go. There you go. Mr. Sam Ally from HIS Capital Group. Sam, thanks for being here today.
00:44 Sam: Guys, thank you so much. Thanks especially to Tampa traffic. Thanks for waiting it out for me, guys.
00:48 Rafi: There you go.
00:49 Sam: I know we’re a little past lunch hour but, much appreciated, fellas.
00:52 Rafi: Awesome. And, of course, if Sam is here we have to say hi to Rick and his team over there in Orlando, doing an awesome job there with HIS Financing and all that kind of stuff.
01:03 Sam: Really, I promise, guys, I am working.
01:05 Rafi: There you go. He’s working. He’s working. Now, Jorge, where can they find us?
01:10 Jorge: Rafi, they can always find us at homes4income.com. That is homes, the number four, income dot com.
01:17 Rafi: Excellent, excellent, and, before we get going, I have a personal thing to say. I have to congratulate first the US baseball team for winning the World Baseball Classic, but, in my case, more importantly, the Puerto Rico team for such an amazing job that they did during these two weeks of the World Baseball Classic. We got second place. We have a better record, we end at seven and one, but they won the big one. That’s okay. And, again, thank you very much for what you guys did uniting the nation, Team [01:51] ____. This what I have left, man. I was blown for two weeks. But now, I left a little bit here, just to keep going. And, since we had such an amazing great two weeks of sports, we decided to use that as part of our theme today. Basically, the theme today is The Impact of Sports Teams in Real Estate. Because a lot of people, yeah, you follow your team, whatever, but there’s actually an impact on the city, on the economy of the city. That’s why you see some cities going head over heels trying to get a team to join their city and subsidized stadiums. Some people agree, some people don’t. That’s a different topic. But, we wanna talk today about how sports impacts the real estate market. So, Jorge, tell me a little bit about why you think sports have a matter in terms of real estate.
02:48 Jorge: So, you guys know I’ve been doing this for 15 years, and I get that question a lot. Why Tampa? Well, Tampa’s got a lot going on, guys. And, we have three major teams down here and just to give you some…
03:01 Rafi: Tampa Bay Buccaneers.
03:02 Jorge: Tampa Bay Buccaneers.
03:04 Rafi: Tampa Bay Lightning.
03:05 Jorge: The Lightning.
03:06 Rafi: And, the Tampa Bay Rays. I have to do something to that payroll. We need to get better in the baseball, man. I have to say…
03:11 Jorge: The Yankees spring…
03:13 Rafi: Oh, spring training. Yeah, Yankees spring training here. Philly’s in Clearwater. So Tampa Bay area actually has four spring training teams here. Yeah, sports is big. Why should that matter for a real estate investor?
03:24 Jorge: Well, there’s a few reasons why it would matter. Obviously, jobs, because they bring a lot of jobs. Also, according to the [03:32] ____ data coming from Trulia, property values can potentially be higher on properties near stadiums. The data that I got here from Trulia is 15%. So, if you have a property near a stadium, and in the case of the Tampa Bay area, we’re all near to the stadium, pretty much. There’s a stadium close by.
03:55 Rafi: Basically.
04:00 Jorge: It’s gonna help your real estate. It’s gonna ensure your real estate continues going up.
04:04 Sam: Can I ask a question?
04:05 Rafi: Yeah.
04:06 Sam: Now, you guys are from this area. I’m a Chicago guy, so sports is definitely big. And, as we talk about, I’ve got the Bears, the Black Hawks in the wintertime. We have two baseball teams. So, sports constantly constantly, our city revolves around them. But the difference in perspective now, is in several of those areas, the neighborhoods are blighted where the stadiums are put. Why is that different down here? You guys live here.
04:32 Rafi: Well, I think one of the main things that first, in Florida, for example, and in Tampa, it’s specific, there’s so much stuff to do. You have theme parks within an hour, actually you have Busch Gardens in 15 minutes. I remember a couple of times I went lunchtime, I would go, do [04:50] ____, then came back. So, it’s a very diverse tourism market in that respect. Again, theme parks, beach, the weather is so great. I’m sure that hey, November, December it’s Bears town and that’s it, right?
05:08 Sam: Pretty much. Pretty much. The Black Hawks… And that’s the funny thing about it too, what’s dominating? Is it football? Is it hockey? Now the Black Hawks have won three Stanley Cups. And yet, it’s still a Bears town. And, we beat the Lightening by the way.
05:19 Rafi: I know, I know, they beat the Lightening.
05:21 Sam: Just so you know.
05:22 Rafi: I know, I know.
05:23 Sam: I’ve got to rub it in when I can. [laughter] But, from that perspective, you’ve got so many things, and we were talking about that a little earlier, guys. We’ve got California with all the great weather, so how do those sporting teams survive? When you go down to USC, University of Southern California’s an example. You go down there, and you’re kinda in the hood, getting to Olympic Stadium. So, I don’t see an improvement from a real estate side here. But yet, I come down here, I just drive by, I see the Bucks stadium across from your office. I see the neighborhoods around it as I drive around and seeing what’s going on, and some of the homes that’ve been [05:53] ____ and now new construction taking over, so that’s an interesting phenomenon from my perspective coming from the midwest because we don’t see that here because you do have so much to do. Right? You can go skiing, you can do whatever the heck you want, you’re on the water, you can do all of that. Why the heck do I wanna go to a ball game? Or why do I wanna live next to a park because of all the congestion? But I guess because of all the traffic you have here it doesn’t matter, it’s congested all the time, based on what I found out getting down here today.
06:17 Rafi: And actually, it’s one of the challenges that a lot of teams have here. If you go through Miami, for example, the Marlins have issues with attendance. If you don’t have a winning product, it’s harder to bring people versus the Bears. The Bears have had some five, six, seven seasons of struggling, yet they’re sold out every single game. So here, you have to have that winning product and I think that once you have that winning product then everything kind of stands up. And then, you have a lot of people moving here to Tampa Bay area that are from other areas. So, you have Chicago… Florida is really a mix of people from different places. And the cool thing about that is, when the Steelers come to town, unfortunately, but half the stadium is Steelers’ fans. So, you have a very diverse market here in terms of real estate and in terms of finance that translates to real estate. And I think that’s part of the reason why you see those markets going up.
07:14 Sam: So, do you see that as a favorable position then when you’re marketing real estate? Now, you guys are out knocking on doors and hustling, that’s a favorable spot to be in, right? Because we do offer that.
07:22 Jorge: Right. Especially us when we’re seeking foreign nationals or people out of state. If there’s teams that are good at bringing those type of investors to come down here. Might not be local, but it’s money that is coming from somewhere else.
07:37 Rafi: And not only that, it has helped us with awareness. I think that’s the one item that you see the sport teams really bringing awareness. We had Canadian investors that learned about Tampa through the NHL. They saw that big run that we had against the Blackhawks, and they were like, “Okay, so that’s Tampa.” And remember every time there’s a home game, the TV Station has a beautiful… They always that shot of Clearwater with sun, whatever. And if you’re in Canada, or if you’re in Chicago, in the middle of January, February, and you see that beautiful shot of Clearwater beach and you see actually people walking on the beach in a February afternoon, that attracts people. And that attracts market. Just today, there was a great article by the Tampa Bay Times. We are the fourth highest growth, in terms of population, major city in the United States. A lot of cities are actually having a decline. People moving to the suburbs, and stuff like that, and Tampa is actually fourth highest growth. So, that’s something that as a real estate investor, it excites me. Because those people need somewhere to live, they need somewhere to call home. And if you’re an investor that plays it well, leverages with financing and everything, plays it well, this is a great market to be in right now. And the sports, definitely something that helps with that. Regardless of if you’re a Blackhawks’ fan or a Lightning fan.
09:03 Sam: When you get the ring, you can talk, fellas.
09:04 Rafi: That’s okay, that’s okay. We got one 2005… A long time ago. But anyways…
09:11 Sam: Let me ask you this then, Jorge, with as much as you’ve been around the market, right. You know I come back and forth so I’m not as familiar with everything that’s going on here. What have you seen now, in the evolution over the last five years? Because honestly, as somebody from the midwest, I scratch my head, and again, I lend all throughout the State of Florida so it’s a wonderful thing that I’m seeing the dynamics everywhere, but the appeal… Now Jacksonville’s had a run, now they’re coming back now to reality, no more double digit returns where we’re kind of getting back to normal here, but Tampa has consistently been a performer. Orlando’s seen it’s… We’re maxing out frankly from…
09:48 Jorge: You’re referring to value?
09:50 Sam: Absolutely.
09:50 Jorge: Property values?
09:51 Sam: Absolutely.
09:52 Jorge: Well, Tampa was undervalued, big time, for a long time. Based off location, we’re a bay, because of we’re a big city, but we’ve been the underdogs for awhile. So I think that we’re still in the process of becoming the big city, and that’s what gives us the edge right now. We’re still on that path. And talking about the stadiums, and you’re talking about the parking and situation, a lot of the infrastructure in Florida is a lot newer. It is based, keeping in mind, okay, the growth in that area, if you look at the stadium here, the new Buccaneers stadium, it’s brand new, it’s only like six, seven years old. In the area surrounding, it’s not like a downtown or nothing, where it’s extremely congested. So most of the stadiums that we have are relatively new to other cities that have stadiums that are… How old is this stadium?
10:53 Rafi: The structure…
10:53 Sam: Oh, Soldier Field has been there… It’s been there forever. It’s older than me. Okay, so that’s…
10:57 Jorge: So, the street’s infrastructure, those properties, the low income housing that you’re referring to, has been there forever. So that’s the difference [11:06] ____.
11:06 Rafi: I think the other difference, it’s in Tampa, we’ve been very lucky that we have a very vibrant job market and diverse. So, you see in Orlando, it’s very service driven, very tourism driven. Here you have a lot of financial companies coming in, call centers… From that perspective the average salary here in Tampa is a little bit higher than in other areas in Florida, without getting to the point where it’s completely off the market. Like, maybe Fort Lauderdale, Miami, where it’s so high and the demand is so high versus the supply that then the prices are out-leveraged. We’re in that sweet spot where we have a little bit higher average salary, but then it’s still affordable in terms of… You can still find, if you’re an investor, you can still find a good home for $50,000, $60,000, that you can put 10,000, 20,000 and for 80 grand you have $1,000 rent. That’s very hard to find in some other spots either. I love watching HGTV and those channels, when, “I’m doing a two-one flip for $350,000 in La Jolla, California. This is the most affordable thing I’ve found!” And I’m like, “That’s like a state, [chuckle] in Florida. That’s a mansion.”
12:23 Rafi: So, you have that mix of affordability, but at the same time you have a low unemployment rate. And even through the down turn, Tampa was able to keep… For example, rent barely took a dip during the down turn, because we have a strong job market here that supports that, and diverse. It’s not like, for example, I know Orlando took a big hit, people were not vacationing as much, so the service industry took a hit, which brought basically the overall job market down with it. We didn’t have that much in Tampa. In Tampa, it was very much… I don’t wanna say unscathed, because prices, they went way up and then way down, but in terms of for investors that did the right thing, bought and hold, and rented and all that kinda stuff, we pretty much just hung on, and then came out good on the other side, floating.
13:14 Sam: So then using that now, let’s use Orlando as an example, about 60 million people a year flocking to the House of the Mouse. That’s created a market of Airbnbs, short term, long term vacation rentals, what’s the difference down here? It seems more permanent, is that what you’re chalking this up to, then? And then, using the sporting teams as another attraction?
13:37 Jorge: Well, if you think about those type of jobs, the service jobs, they’re low-income jobs. But the housing, at the same time, is very high. Housing is high. So what that creates is, it creates where the cap rate for investors when they’re looking for a property to invest on, raise the cap rates to be lower. In Tampa, unlike Orlando, you have better jobs like Rafi was saying, is more diversified, and makes a big difference. We’re a good value. We’re undervalued right now, out of the metro areas, metro cities, Tampa, I think, is one of the cheapest ones, and we have it all. We have an international airport, we have the teams, we have big Fortune-500 companies here, so I think we’re just undervalued, but eventually I see us the Jeff Viniks of the world start investing here, that’s gonna…
14:37 Rafi: Yeah, he’s making a… He’s a billion-dollar…
14:39 Sam: Tell us about that, yeah.
14:39 Jorge: Billion-dollar investment, development.
14:43 Rafi: You want to talk about that?
14:45 Jorge: We could talk briefly about that. The owner of Lightning is investing about a billion dollars. That’s what he said a couple of years ago. I think it’s gonna be a billion…
15:00 Rafi: Plus.
15:00 Sam: Billion or a more, right? Yeah.
15:00 Jorge: Plus, yes. With that, it’s gonna be another nine buildings, it’s very exciting.
15:07 Rafi: He’s taking all that channel-side, basically all the channel-side district.
15:11 Jorge: They’re renting the whole thing right now.
15:14 Rafi: Well, USF is building their college of medicine there, in 2019-2020, so that’s gonna bring all those students that are right now a little bit on the north part of Tampa, it’s gonna bring them down to downtown. He’s taking all that channel-side and re-developing it into a waterfront, walkable kind of district that attracts people. And we’re seeing that shift, especially with the millennials. Before, our generations, our goal was get a house in the suburbs, so that we can get the wife and kids, and then come back. Millennials are coming back downtown, they’re coming back to inner city, and saying, “You know what? I wanna be able to go to that craft brewery within walking distance and have brunch at this other place.” So you see that turn, and I think he’s banking on that turn. He’s banking on that being a more permanent move, once the baby boomers phase out, he’s banking on that, on those millennials and generation X-ers, to say, “Okay, I’m gonna back to inner city,” and make it more walkable. Actually, I’m one of those. As soon as the kids grow up, and don’t show this to the kids… But as soon as they leave, I’m probably either renting or selling my house, I’m moving downtown here, down to [16:26] ____, somewhere where I can just walk in and out. I still think that we have one big challenge compared to major cities and major states, and I think it is the rail system, the public transportation.
16:38 Rafi: I think that’s, if you ask me, the one thing that is holding the Florida market.
16:42 Jorge: Uber.
16:43 Sam: Uber.
16:44 Jorge: Uber.
16:44 Rafi: Although we have Uber. And, actually, there are some cities that are subsidizing Uber. There was an article I read, that instead of creating a public transportation, he was subsidizing low-income people, giving them Uber credits. So maybe that’s the answer. But I think we have to have a better public transportation system, concept, it’s Uber, it’s something else, because I think that that is the one thing that I will say will take Tampa to be in conversation with the big cities in the United States. But in the mean time, love the affordability, and love the fact that we can…
17:19 Sam: It’s interesting that you said that, too, because I think when we look through history, and at HIS I mean, we always use history as our guide to dictate what may happen, because it’s already has. So now, it’s not necessarily timing the cycles, but understanding the cycles, how they happen, what to do within them, to keep you moving forward. Now, as I look at Tampa, and those that I’ve worked with in referral partners, you have separated yourselves, really, from the pack. Tampa is the guru heaven, everybody that’s in real estate, for some reason they’ve all landed here, [chuckle] right? And doing everything, and the wholesalers just spawned off, trying to do it but you’ve maintain consistency, you’ve been able to build a business over the course of time. How is that changing, now, from a perspective of we’ve got new construction going on. There’s flippers in other markets that are competing with new construction and failing, right? I’ve got a rehabbed home versus… And it may be a great quality rehabbed job but I can get a new one now for just a few grand more so I’m gonna buy that. What’s happening here that allows you to stay afloat and is that making you transitioning your business into other avenues now?
18:22 Jorge: Absolutely, you always gotta be looking ahead. And we’re actually ourselves looking into new development. But, Tampa, we’re lucky we’re still prices are cheaper on a rehabbed home than a new development still. 2018, 2019, in the next couple of years, we’re gonna have to question that because as prices go up on rentals or rehab properties and they’re gonna start balancing out to new construction, but we’re already looking into it. I think it’s always studying the market and trying to be ahead of the game and trying different things out. Not putting all of your eggs in one basket and saying, “Okay, this is all we’re gonna do.” Expand your area. From Tampa, go to… There’s a lot of other areas near Tampa that are doing well as well, and expand your horizons as we are right now. We’re going to Pasco, we are going to Polk, maybe looking into Citrus as well, because Tampa is gonna get tapped out at one point. So, expand your horizon and also be able to be flexible. Start educating yourself for the next curve or whatever the case may be.
19:40 Rafi: The other thing from a company perspective and HIS is similar to that. It’s, from a company perspective, you have to focus on service. How do you differential yourself from other wholesalers, whatever? Well, you always have to think client first. You always have to. And this applies to companies, if you are a landlord out there, tenant first. If you have several properties out there and have property management, always service has to be first. And that would be an internal differentiator because if you have someone that gives you great service, you’re willing to pay a little bit more to get that kind of service there. So, from a company perspective, that’s something that you have to do. And I think the other thing that it’s… You’d need to willing to say no sometimes. You need to. You will see that deal that looks too good to be true, gentleman sometimes it is. So, sometimes you have walk out and say, “You know what? It looks great but based on my disciplined approach, on my numbers, I have to say no.” So, it’s a combination of that.
20:47 Rafi: You have the market but then as a company you have to have service. We have conversations about deals that initially look great and then we are like, “Hmm. It didn’t work for HIS or it didn’t work for Graystone,” and you have to say, “You know what? Walk.” And someone else is gonna make money on it, by the way. Someone else is gonna make money on it. But based on your principles, your values as a company and as a person, that was not your money. That was someone else’s to take that risk. And it’s not that you don’t take risks, but you need to have those values in place that say, “Okay, based on those, here’s where I stand,” and go from there. And that’s why we have done a lot of business with you and we will do it blindly because we shared some of those values and we said, “Okay, if I have someone on the other side that I can share those values, I know that everything is here.”
21:38 Jorge: Transparency.
21:39 Rafi: Everything is here.
21:39 Sam: Transparency.
21:39 Rafi: Everything is here. And that’s how you create those long-term partners that are willing to put on glasses on a Facebook [21:46] ____.
21:48 Sam: Exactly. And you touched on something important, right, getting back to concentric circle of how generations move outwards to the suburbs, right? And at full circle happens within, there’s a timeline somewhere, 50 years, 75 years, everybody winds up back downtown. Well, there’s a reason for that. But now as you mentioned, the millennials are typically underemployed, so the money is lacking. Now, you see a lot of that happening and yet the building going downtown, is this affordable housing that’s going to take effect here that’s being built? When we talk about stadiums coming up, and what he wants to do. Anytime you’re by the water, you’re paying top dollar.
22:21 Sam: So, we’re going downtown because it’s away from the water, does that make the emphasis for somebody looking to buy or somebody to start building their business, is it… How is the affordable housing scenario? Is that where somebody… Student housing, I think we were touching a little bit on that yesterday. Right? You’ve got colleges in the area. So, what, if put your future glasses on, where do you see a hot spot? What area? What is it, affordable housing? Is it gonna be the 100… Typically, the range for flippers, the most successful area, is $150,000 to $300,000, that’s where the most money is made. Everybody thinks it’s in the luxury side. We get that big number, it’s a $900,000 buy, now I can ARV maybe $1.4 after I do what I’m gonna do it, You’re really betting on a long shot with that. So where are we at?
23:06 Jorge: Affordable housing for sure, as interest rate continue going up, as prices continue going up. Some other people gonna get priced out, so affordable housing. Affordable for that matter new construction at that moment. So, we’re gonna see a lot of the areas, the C areas become B as people seek out for affordable options. I could see the east Tampa area taking off, Seminole Heights is taking off big time.
23:39 Sam: Seminole Heights is going off the roofs. Super high.
23:41 Jorge: You see a crack house and next to it you see a $300,000 home. So, yeah, affordable housing will be the way to go.
23:49 Rafi: And I think if you talk about region, right now we have that West Pasco area that is really an area that we are focusing on.
23:57 Jorge: It’s underpriced as well.
24:00 Rafi: Because it’s underpriced. It’s a great rental area, working communities.
24:02 Jorge: Newer build.
24:04 Rafi: And newer build, 1950s and up. So right now that’s probably geographically…
24:09 Jorge: If we go back to the crash, to where we are now, and everybody, “Where the values at?” We dropped down to 30,000, 25,000, but the top end is probably gonna be 125. 130, 140, in and around that area. So that’s the playground that you’re operating with, which is still good rentals even at that level.
24:28 Rafi: Yup.
24:28 Jorge: And we’re still not there. We’re still not there. I recall when you were buying stuff at eBoard, around 125, 130. We’re not there. So that gives you an indicator of maybe perhaps we have a couple more years into it.
24:42 Rafi: Excellent. Well guys, we always promise that it will be 20… 15 go up. We started 15, 20 minutes, then 20, 25. But today we had a guest, so we got all the way to almost the 30-minute mark. We appreciate very much Sam being here.
24:55 Sam: Thanks for having me guys.
24:57 Rafi: Tell them a bit about HIS so that people know what HIS is and stands for.
25:02 Sam: HIS Capital Group. We’re a direct lender. We’re also investors, and that’s probably why we get along so well with Jorge and the team down here. We understand it from the bottomline. We’ve been at it long enough, over a dozen years serving Central Florida. We’ve got our own portfolio here as well. So, we’re on the field with these guys everyday. So, if you’re fixing and flipping, you’re buying and holding, no matter where you are, we have an understanding of the marketplace. We’ve got an understanding of the timelines, the cycles. Frankly, if you’re looking to build a rapport and have somebody with you long-term, we might be the company that you want to talk with. But if you’re shopping for rates, I’m definitely not your guy.
25:39 Rafi: Again, you pay cheap, and you get cheap. You pay whatever… And again, it’s not that we’re saying, “Hey, your overpriced. It’s fair pricing and you get excellent service.” So, thank you Sam for all you do for us and our clients. Thank you for Stephanie back there. Say hi Stephanie.
25:58 Stephanie: Hello.
26:00 Rafi: She’s back there. She thought I was not gonna ask her what…
26:01 Sam: The brains behind the outfit by the way.
26:03 Rafi: There you go. There you go. And by the way, we’re gonna be at HIS next week right?
26:06 Sam: Monday, you guys are coming up.
26:07 Rafi: Monday we’re coming up to strategize, look at that crystal ball and see what we see, if we see the same things. So, be on the lookout we’re gonna do a Facebook live about that meeting in the coming weeks. Again, hi to Rick and the team over there. See you on Monday. Make sure that rice and beans with the chicken’s ready to go.
26:27 Sam: I got the perfect spot for that too, perfect spot.
26:30 Rafi: Jorge, where can they find us?
26:31 Jorge: They could always find us at homes, the number…
26:35 Rafi: Four, baby.
26:35 Jorge: Four, income dot com. See you guys next week.
26:38 Rafi: Awesome, see you guys.
Graystone Investment Group
Graystone Investment Group is an experienced real estate wholesaler in Tampa Bay. We serve clients who flip homes in as little as 30 days, as well as clients who hold high cash flowing rental properties.
Unlike other wholesaling groups, we provide clients with a turnkey process at no extra charge. We find properties that we resell to investors at discount prices, while also connecting them with private financing. We also coordinate with rehab and management companies we’ve worked with for years.