Business Innovators Radio - A Leap of Faith in Real Estate: An Interview with Jacob & Arleene Garza

Episode Date: March 7, 2025

In this insightful episode, Alicia DiBrell sits down with Jacob and Arleen Garza—an entrepreneurial couple who transformed their careers to conquer the world of multi-family real estate investing. From transitioning from traditional jobs to building a thriving real estate portfolio and authoring an international bestseller, they share the lessons learned on their journey, how they mitigate risk, and why education is key to financial freedom.Key Discussion PointsBackground & Career Shift:From Corporate to Real Estate:Arleen, a former banking executive, and Jacob, a software entrepreneur, recognized the need for sustainable income and turned to multi-family real estate investing after questioning the longevity of their previous careers.Inspiration Behind the Book:Sharing the Journey:“A Leap of Faith” was born out of a desire to pay it forward. By blending personal experiences, successes, and failures, they crafted a narrative that educates and inspires.Fictional Narrative Approach:They chose a fable-like storytelling method—introducing characters like Elena and Gabriel—to simplify complex investment concepts, making them relatable and engaging.Why Multi-Family Real Estate?Risk Management & Income Stability:They discuss how multi-family investments offer advantages over single-family homes by reducing vacancy risks and basing property values on income potential rather than comparables.Market Selection:San Antonio, Texas, a landlord-friendly market where they began by purchasing eight properties, served as their testing ground. Their strategy emphasizes investing in familiar, well-researched markets.Investor Education & Partnership:Resources & Transparency:The Garzas stress the importance of educating investors through blogs, podcasts, investor dinners, conferences, and even bus tours. They advocate for transparent communication and personalized investor relations.Choosing the Right Partners:They advise potential investors to “bet on the jockey, not the horse,” encouraging thorough research and direct conversations before investing.Current Trends & Future Outlook:Housing Shortage & Market Fundamentals:With millions of rental units needed across the U.S., the demand for multi-family housing continues to rise—especially in markets like Texas with strong job growth and population increases.Diverse Investment Strategies:They highlight the benefits of diversification, including the option to invest in real estate through self-directed IRA accounts, thus reducing reliance on traditional stock market investments.Giving Back:Supporting the Community:Profits from the book contribute to The THRU Project, a charity dedicated to helping foster kids in San Antonio secure a brighter future through mentoring, education, and essential support services.Final TakeawaysFinancial Freedom Through Education:Empower yourself with knowledge and build passive income through strategic multi-family real estate investments.Leverage Expertise & Partnerships:Don’t invest alone—partner with experienced professionals who value transparency and have a proven track record.Take the Leap:Whether you’re new to investing or looking to diversify your portfolio, the Garzas’ journey shows that with the right education and support, anyone can succeed.How to ConnectLearn More & Get Involved:Website: reepequity.comEmail: [e-mail] Availability: Find “A Leap of Faith” on Amazon (an international bestseller)Call to ActionReady to transform your financial future? Dive into multi-family real estate investing by picking up a copy of “A Leap of Faith” and connecting with the experts at REEP Equity. Take that informed leap of faith today!Source: https://businessinnovatorsradio.com/a-leap-of-faith-in-real-estate-an-interview-with-jacob-arleene-garza

Welcome to Business Innovators Radio, featuring industry influencers and trendsetters, sharing proven strategies to help you build a better life right now. Hi, this is Alicia DeBelle from Insight Media. Today, I have two very important guests. First of all, not only did they publish their first book, but they made their first book on international bestselling book across two countries. That takes a lot. So what I would like to do. to do is I like to invite Jacob Garza and Arlene Garza, an amazing couple that has really put it together for people to understand how to deal with multi-real estate, multi-family estate. Hi, Jacob and Arlene. How are you doing today? Hi, Alicia. We are great. How are you? Great to be on. Yes. Thank you, Alicia. No, I appreciate. I appreciate your time. Like, I've read the book, and it gives a lot of information

that most people wouldn't think of looking at. And you guys put it from a different perspective, which I love. So can you tell us a little bit more about what made you want to get into multi-family real estate? Why would you want to get that arena? Well, like many people, both of us were working full-time. Arlene was an executive with one of the major banks and absolutely having a wonderful career. And for me, Alicia, I was a software entrepreneur and had, you know, a software company with

over 100 employees. And it came a point where Arlene and I turned to each other and said, you know, is what we're doing sustainable. And, you know, I think that the long question was no. and when I had my last exit, when I sold my last company, we turned to each other and said, why don't we buy an apartment complex? Because we hear there are so many benefits, which is why we wrote the book. Sounds because I was just about to ask you why you wrote the book

and what drove you to do that. And you wrote a book that was amazing because it's a number one international best-selling book. So like how does that feel for you guys to be? able to put out your, I guess, your failures and your benefits of what you've gone through and how you've learned to do this? How does that feel to take that information, give it out to other people, and teach them how they can make more money? You know, Alicia, I think for us it's a way to pay it forward. So many people shared their

experiences, shared their journeys with us along the way. And that got us to where we are. And so I think one of the most important things we wanted to do was to be able to share this knowledge, share this journey with others who are seeking to build real wealth. And, you know, having been in banking for 20 years, I worked with clients on investments daily. But I never heard about alternative investments like multifamily investing. And when I found it, I thought, wow, where has this been my whole life? And so what we want to do is share that this is for everybody. You don't have to be a millionaire or multimillionaire to get started in real estate investing. But you do have to know how to get there.

And so our book is going to hopefully teach people how we got there and how maybe they can follow a similar or same path. I appreciate an answer because my next question would be a leap of faith, that's the book and tell that we're talking about. right now, what inspired you guys to use like fictional narratives, like a fictional narrative to teach others how to build multi, multifamily living, like investing? What made you guys use it fictional instead of going straight on? Yeah. So we have, I've been doing this for a while now. And every time someone would ask us, hey, I read one of your blogs or I saw you on Facebook or someone on social media. Tell me more about real estate investing. You seem to have really found something that works.

Our best answer to them, Alicia, was just telling a story. And that worked much better than going into explaining debt service coverage ratio, net rental income. And that resonated with people. So we turned to each other and said, why don't we document what we do on a daily basis and use a storyline, a fable, if you would, that people can relate to, and it grew from there. That was the basis for us doing that.

You have succeeded because the book has done phenomenal, and it's obviously educating people left and right. So my guess my next question is, why did you guys choose San Antonio, Texas, as a setting for the story? Was that, like, on purpose? Did you guys, or was it just like the example? of the near earth. Well, I think for us, you know, San Antonio is where we live. It's where we bought our

first property. And, you know, one of the things we teach in all our work is that you want to buy in landlord-friendly states in landlord-friendly markets where the landlord is supported by kind of the rules and regulations that are in place in the city. And so that was one of the big, things we were looking for initially. And then, you know, when we moved here, we found that, wow, this is a great place to live. And we can be experts in our own backyard. And starting out, you want to eliminate as many of the unknowns as you can. And knowing a market, knowing the good parts of the city that are more conducive to investing in multifamily properties was important.

So, you know, for us, we picked workforce housing that's providing nicer, safer homes for teachers and policemen and that kind of middle market group that's often overlooked when it comes to housing. And so it made a lot of sense in San Antonio. We're over 50% of the households rent to start here to really build a base. We bought, you know, eight properties in San Antonio. San Antonio before we moved to another market and we felt like we had a great foundation. Now, I will say as an investor, you don't have to invest in your own backyard, but invest with people who are experts in the markets where you're investing or where you're buying. Ma'am, that's right.

So the main characters that are in your book, Elena and Gabriel, now do they have a, they have a compelling different personal and personal and personal? professional journeys. Are these characters inspired by your eyes as own experience? Because that's what sounds like. Yeah, I think we can both respond to this. We have had dentists. I don't want to give too much away so people read the book, but we have dentists and engineers and business owners who invest alongside us to build their wealth. You know, they operate their businesses or their practices is kind of their day-to-day main income, but oftentimes they're looking for what will retirement look like in the future and how do I create passive income, which is income that

you don't have to do any work for. We do the work on behalf of our investors. And so these were two characters that resonated with us because we have investors that are pretty much identical to these characters. analogy and how you guys put it out there. It kind of makes it more personal, like, because you can read a real estate book and not completely get it, but you guys made it personal. And I like that. So do you think the process of writing this book differs from your usual work in real estate because I'm assuming it does? When you say that, I'm, I think I'm misunderstood.

So the process of writing the book and writing everything down that's different from your regular real estate day to day. right so how did you like that what was it different what did you get out of it what did you like out of it and everything you wanted to give to your your potential clients or if you read it yeah i think you know what we do every day becomes kind of second nature to us uh writing a book is out of the normal scope for us but i think what um this allowed us to do was to really say okay our goal has always been to educate our investors, to educate the community about multifamily investing. And so this was another outlet for doing it. And I'll tell you, I always loved to write. In high school, that was what my English was like my number one subject. And so for me,

it was a passion of love, a way to get to use that again in our day-to-day life. And to write about something we were intimately familiar with. So it was a great process and it was fun to really see Jacob's viewpoint on certain chapters, certain elements of the book, and, you know, compare that to mine and compare in contrast and deliver something that we both felt like carried the story well. That very well. And I appreciate that. So I have another question for you. So the readers, they're introduced a difference between multifamily and single family. Can you share what is far as you guys to emphasize on the strategy of the book? Sure.

We did spend quite a bit of time on that on the book. I'll give you two examples for this scenario. One of them is when a single family home is rented and someone moves out, you lose 100% of your income. and it may take you a couple of months to bring in a new renter. And during that time, the expenses are still happening like the mortgage on the property. So it's very risky. The second one is the value that these properties are based off of. The single family home is based on when you go to sell it one day, your investment property.

It's just based on the comps in the area. So you're governed by other people's property and how they've kept it. Multi-family, on the other hand, is valued on the income approach. So the more income you can drive on the property, the more you're going to make. So those are two scenarios. One of them is while you're operating it, you know, 100% risk on a single family. And, of course, apartments, you have many, many. many renters, and the other one is when you go to sell it.

If somebody reads the book, what are some of the key elements that you would want them to walk away with? You know, for us, I think it's really, we're sharing our strategies on how we identify high potential properties, and then we show or really show readers how they can also optimize and maximize their investment by following what we've done. You know, we've leveraged our expertise. We've created incredible returns for our investors. But it's important that others realize that you don't need to be a real estate expert

or manage properties yourself to reap the rewards of this powerful asset class. You know, in this book, you learn about partnership. You learn how to work with someone who brings that expertise, but along the way, how you can learn to make sure that what you're looking at makes sense for your goals, you know, how much passive income do you want to generate? Ultimately, I think we always, as I mentioned before, look to retirement the day when we don't come in to work every day at a job or at a business. And the day that we can use that passive income, whether it's before retirement or even afterward, to travel, to use that time to volunteer in projects that,

make the most sense for us. And ultimately, you know, the message that we hope that people walk away with is financial freedom. Financial freedom is possible. And what that allows you to do is take control of your life. So these are the things we hope people walk away with. See, the personal fulfillment 100%. Yes. Yes.

So, I mean, the whole story, like there was a little bit of, I don't want to call it drama, but I'd like an apartment fire and what lessons and risks and resilience that you guys had to overcome and that you hope your readers can learn from. Do you want to talk a little bit about that? Sure. So it's all about adjusted risk returns in any investment. This can be anywhere from a technology company in Wall Street to a simple business on Main Street. So we wanted to put real life examples of risks. We call them mitigated risk, because that's what we take any risk on a property, and we put our policies and we put our procedures in place to minimize these risks.

And certainly one of them was the fire. It was that, well, giving away too much. Fortunately, no one got seriously injured, and everyone that was displaced found homes that night. It's part of our preparedness, disaster repairness, and the property was not only repaired, all the income while it was being repaired was replaced by the insurance company. So this really goes along with what Arlene mentioned earlier as far as trusting the people you do business with. So that was one of the examples we wanted to put in there because we felt like it added real life to apartment investing and how things are handled.

And I will say, Alicia, that it's happened, right? Not once, but a couple of times on our properties. And what it taught us is that managing risk is part of what Jacob and I do on behalf of our investors. You know, we carry insurance policies to make sure the properties are protected, that the income is protected. and we also do everything we can to protect the residents, the tenants that live at our property, because in the end, they're the ones that make this business work. It's their pain of their rent that allows all of us to benefit from that income to make the passive investment income distributions to our investors

and in the end sell the properties for a good price and help everybody build to their nest egg. It really makes sense. And that kind of brought me into the next question, because on both sides, as you guys want to be the trustworthy investors, but you also want partners that come along with that. And what do you look for when you're looking for quality investors to potentially be an investing partner with you guys? Well, one of the things we highly encourages for investors to educate themselves.

And we don't make it hard. We have a multitude of blogs and white papers, and there's podcasts that Jacob and I have done on the topic of multifamily investing. So we try to make it easier for investors to educate themselves by providing these resources, these tools that they can use to see how, multi-family investing can have tax benefits, for example. And so all of that is available in our website. And so that's important. I think the other thing is, you know, we talk to investors about making sure that the partners they work with have a solid track record. You know, we all hear the

horrible stories of investments gone wrong, whether it's Enron or others of that nature. And so we want investors to safeguard their money, whether they're not. they invest with us or they invest with someone else. Understand who you're investing with, first of all. I mean, we say you should bet on the jockey, not the horse. And so I think it's important for investors to really do their homework. But we help them do that through, as I mentioned, all the resources on our website. And this book, this book is also designed to be educational. That's all totally makes sense. And what I'm about to say, I actually already know the answer to. So, I mean, this is all based on you guys' personal experience getting into the multifamily

business, correct? That is correct. Okay. And the moments, is there anything that, is there anything else that we haven't talked about that are like particularly resident with you guys with lessons to learn in the themes that you put in your book? Yeah, go ahead, Jacob. Yeah, thank you. So I'll just tag off what Arlene said on the educational piece. We have a lot of virtual meetings and content, including the book that they can read. It also extends to physical presence with us. We host investor dinners across the country, I think 10 or 12. We have conferences that we host, and you can come and see us and ask us questions. And if we're not near you or timing doesn't work out, We also host bus tours in Houston or San Antonio that you can come and actually see and meet people in our properties.

So we believe we've kind of given people their choice when it comes to getting comfortable and building trust with us. And transparency is always a hallmark of what Arlene and I and all of our employees. strive to do with our investors. And I think the other thing I would add in terms of our personal experiences, you know, Jacob and I both come from humble backgrounds and we weren't taught by our parents how to manage money, how to invest money. And, you know, there's a story in the beginning of the book as to why I was interested in banking in particular.

And, you know, what came of that was, you know, living paycheck to paycheck and not investing dollars is difficult. And it's not only difficult on the head of the households, but on their kids. And so, you know, I highly encourage parents to talk to their kids about money, to teach them how to save, to teach them about debt. And if they're not knowledgeable, there's a lot of other resources out there. I know I used to work for Bank of America. And they have tools for kids to learn about finances.

And unfortunately, in the schools, there's not a lot taught as kids are growing up. And I read something preparing for a podcast that, you know, you should teach your kids by the age of nine as something about money and something about being responsible with money. And I hope that this also encourages parents to talk to their kids at a younger age. I'm not very important. I have a 10-year-old who I'm trying to teach about money because she thinks it grows on trees. But I want her to learn. Like, she doesn't use my credit card rather than that, no. So I'm like, okay, so if you were going to give me five different things,

that someone reading your book will learn to become, like, what would they learn to become a more informed investor and make a better judgment call, like who they're investing with? Well, again, I think it goes back to knowing who it is you're investing with. I will say that is the top thing that there is. Before we really allow investors to invest in one of our deals, we want them to join our investor network, and we want them to have a phone call with Jacob or I or one of our investor relations team members, because we want to understand as much about them and their goals as we want them to understand about us.

But it's an opportunity for them to ask us questions. You know, have we ever, you know, had financial issues? Is there anything where, you know, we've had trouble with the property and it didn't go well? I mean, those are things that investors should be asking. And so, again, know who you're investing with. that's the number one thing. The second thing is what is it about? You know, when you invest in a stock or a bond, sometimes you do research on them.

Sometimes you don't. You go based on what maybe a recent publication said about that particular company or that particular stock. But you might be investing, you know, $100, $200,000. But in this case, it's a more sizable investment. And so we recommend, again, do that homework. And that starts with knowing who you're partnering with, who you're investing with. And lastly, I'll say, I think they're going to walk away from the book, knowing how easy it is to buy a multi-million dollar property with a small investment as together, you know, pulling your resources.

And as Arlene said, it's not a black hole you've pouring your money into. It is a physical, tangible asset that you can see and touch and read reports. And it's a physical asset. that real estate always goes up. And I think that's some of the tangibles that they can walk away with. Yeah, and I think one other one is the location of the property is key. And it's not hard for people to read about a particular city. You know, what's happening in that city is their growth,

both from population standpoint and jobs, because those two things drive more renters to properties And right now, what we know is that there's a big gap between owning and renting, owning a home and renting. And a lot of that right now is driven by high prices for homes and high mortgage rates. And so everyone strives for that American dream. We support it. Sometimes living in an apartment will allow you to save some of those dollars to eventually buy your own home. but whether you buy a home or rent the location of where you do that is very, very important.

You want to be in a market that's growing, that's on the uptick. And so that's important to understand too. I totally agree. So if I were to ask you guys, what are like, what's a couple of misconceptions that people have, and the reason why they shy away from investing in multi-real estate, do you guys have any opinions on that? Is it more knowledge or just not the education? Well, yeah, I think it's something that they feel like they,

it's only for the big, you know, real estate investment trusts or for very, very wealthy corporations to buy properties. And, no, our average investor puts much more smaller amount of dollars into properties that most people would put in other type of investment. So it's anyone can invest in apartments. It's just finding the right sponsor to know and to invest with. Yeah, and I like that the fact that you don't have to have tons and tons of money to invest. Because the way we do it is we buy properties as a group.

It's our money and it's our investors' money all added up that allows us to buy you know, a $20 million property, which on our own, most people would say, wow, I can't do that. But together, as we say, together you can do more. And I think that's the beauty of what we do is working with investors to buy things as a group and work through it with a lot of expertise from our end and their input along the way because it's also important that whoever you work with is transparent and that their communication is consistent and that communication is good. I know when I've invested with, you know, the big real estate investment trust, you're

maybe one out of 200,000 investors and good luck getting through the 800 number to ask your question about the documents you need for your taxes or whatever. it's not that way with us. You can reach us. It's very easy to reach us. It's very easy to reach our team and get your answers. So it's important that that communication also be there. So give us the information so we have it,

how anybody would want to reach your team or reach you guys personally? Yes. Yes, please. They can reach out to us at invest at reap equity.com. that's R-E-E-P-E-P-E-PE-E-PE-E-PTECITY partners, which was definitely purposeful because we wanted our investors to feel like they are true partners to us. So come to our website and find us there,

and we will be happy to start a conversation with you. So that's the most important question when people are reading your book, when they walk away, how to begin their own journeys. And the first step to take us to call you guys, correct? It is. And then to take that leap of faith, but it's that leap of faith based on not the unknown, but leveraging the knowledge that we have gained along the way.

I love that. And I'm sorry, I've taken up a lot of your time. I still have a couple more questions for you, though. So what trends in real estate investing, like excites you more now? and how it might, like, I guess, shape your future prospects getting into the real estate business because everything has been changing, the multifamily, everything's been changing. So I guess what excites you the most about what's going on right now? Yeah, so a couple of things. There's still a massive shortage of places to live.

I think this latest, Arlene, 4.3 million? 4.6 million units are needed to meet. meet the demand of renters in the U.S.? Yes. So that's, you have to have a supply imbalance, and we certainly have that. The other one is the places where we buy, and we buy in the Texas market, we have very, very strong fundamentals. And what I mean by that is we've got very friendly business policies that continue to attract companies that want to relocate here or form here.

and that creates more jobs and jobs create higher incomes if you live here because there's more demand. So that just creates a very good environment for more demand and drives income for the people who want to live on our properties. And I would add that, you know, Jacob and I are on the tail end of the baby boomer generation and And the trend we're seeing from baby boomers and a lot of our friends is downsizing or a lock and leave, right, where you want to have a rental that you don't have to worry about mowing the lawn, taking care of the pool, any of that. You can basically lock your door and leave on vacation and come back and know that the property manager and the property is going to take care of your place.

And so we are seeing a lot of that also from that baby boomer generation. Millennials and Gen Xers are our biggest renter pool. And those two groups are growing by leaps and bounds. They're forming new households. And when you form a new household, you want a place to live. And so our goal is to provide them nice communities to live in. and that's what we invest every day, our time, and our resources to make sure that happens. Totally makes sense.

So if I was going to ask, what advice would you give anybody that's kind of hesitant, a little, like, weary about the situation to take their own leap of faith and kind of join and experience the things that you guys have experienced and to kind of go on that route, that entrepreneurial space? You know, the number one comment that we hear from people once they've had an opportunity to invest into real estate and have some success is they wish they would have done it earlier. So the natural temptation is to take the least path of resistance and to not invest. You're listening or they're listening. Someone's listening this for a reason. And it doesn't take much to pick up, well, I'll say pick up the phone.

I guess you could do that too, but to get online at reap equity.com or wherever. I'll just say wherever. And get the knowledge and invest into real estate. And the more educated you get on how real estate investments work, your fear factor goes down. And you start to learn and become more comfortable. and you will make your first investment. And there's so many benefits. We talk about it in the book, investing in real estate.

So that's what I'll say to someone who's hesitant is that's the number one comment we get from people is, gosh, I wish I would have done this sooner and place more money into the real estate investment. Arlene, is that something that. Yeah, no, I think the other thing I would add to that is diversification, right? You don't want all your eggs in one basket. and so many of us have a lot of our retirement savings or our other dollars invested in the traditional stock market. And so, you know, and what I found in my research is that a lot of times what we put into our retirement accounts, people aren't even looking at their statements to know how those

retirement accounts are doing. They're not looking at what they're invested in. And the beauty is that you can even invest in real estate through a retirement account, a self-directed IRA account, which is easy to establish using already existing IRA funds. So I would say that, you know, diversification is key. Don't just put it in the typical stock market. Take a percentage and put it in alternative investments like multifamily real estate so that you don't have all your eggs in one basket. Makes sense. So I do, like, first of all, I love how you guys bought personal stories into the book. And congratulations. But I do have one more question for you guys for let you go because I know you guys are busy. If somebody wanted to get a hold of you or your book, how would they go by doing that? Can we have websites numbers? Yes. Reapequity.com, R-E-E-E-P Equity.com is one way. You can email us.

at invest at reap equity.com. And you can find it on Amazon. I mean, that, it's an Amazon bestseller. So that's probably the most convenient way to define the book and get your own copy. And the profits. And the profits, that's the beauty of this too. We're all about it making an impact, not just with our properties, but the money from the sales of the book will go to our preferred charity called the Through Project,

THRU. It is an organization here in San Antonio that helps foster kids who age out of the foster care system, helps them kind of find their success in their next chapter of life. And because we own multifamily properties, we've helped. to house some of these kids who might otherwise be homeless because they don't have a parent or family to turn to when they turn 18. They've got to get a job and they've got to find a place to live. And some live in their cars if they have a car or they become homeless. And that was a story that really touched our hearts as parents to think that maybe our kids wouldn't have the advantages of home. And so we've made a considerable donation to the organization to the

organization already. They provide mentoring for the kids. They provide mental health programs for the kids, groceries, cell phones, bus passes. And a lot of these kids are enrolled in either vocational schools or in colleges or universities seeking their college degrees so that they can, you know, have the life that they want also. I love what you guys are doing for like the city and just for for the kids in general. I think it's amazing. So we know how to get a hold of you. First of all, I want to thank both of you because I know you're both very busy people and you obviously have a lot going on.

And you look out for all the people, your investors, for charities, you guys do all the right things. So I really want to thank you for your time, just like having the time to talk to me today. So Arlene and Jacob Garza, thank you so much. And congratulations on your number one international bestselling book, Alipa Faith. This is your host, Alicia DeBrell, from Insight Media. Thanks for listening to Business Innovators Radio. To hear all episodes featuring leading industry influencers and trendsetters, visit us online at businessinnovatorsradio.com today.