Name: Founder Friday: Sidney Torres, Real Estate Magnate
Uploaded: 2017-03-06
Duration: 17 min 9 s
Description: Torres went from being Lenny Kravitz's assistant, to a self-made millionaire in the real estate world.

[ BLANK_AUDIO ] Hi Facebook, my name is Paulina Minerva. And this is Founder Friday. I'm here with Sidney Torres, the host of CNBC's new show, The Deed. Sidney, welcome to Founder Friday. Thank you for having me. [ LAUGH ] [ LAUGH ] Of course. So tell me about your new show, The Deed. How is this different from every other home improvement show out there? It shows the real side of house flipping. It shows what does it take and how do you get into. Buying that first fixer upper. Mm- hm. And it shows you how to look for a hard money lender, instead of going to a bank. Because you don't have the returns, the tax returns to show the income to buy a flipper, or to buy your first First house. So it kinda shows a side of real estate that those other shows don't show. And it's a show that you learn about if you don't do your homework, what happens? If you pay too much for something and you think that you can renovate it for less, and make up the difference. The contractor charging you more than what you originally agreed to. Teaches you how to work through those things before you get into them. Yeah. And you actually have a very fascinating story before you ever did this show. You dropped out of college, you worked with Lenny Kravitz, and at that point in time, you wanted to do music business, right? I did, I was working a radio station doing the graveyard shift If I was talking to myself at night cuz there's probably only one listener. And I did the graveyard shift for a little while and Lenny called me one day and he's like, hey, you come to LA and hang out for New Years. And I did and I ended up staying and working with him. And then he fired me after a year and a half. Why did he fire you? Because he was waking me up, and I was supposed to be waking him up. No, I mean, I wasn't like the executive assistant. I was like, go get my toothbrush, go get the luggage. Okay. But it was a good lesson, and it was a great lesson. And I'm glad he fired me cuz I probably wouldn't be where I am today. And we're good friends today, so it's not like we are on bad terms. And that was Years and years ago, when I was basically just trying to figure out what I wanted to do and I went and got a job working for a construction company and I would sweep the floors at night. My job was when they would sell a house or a condo, I was the guy who went in and cleaned up everything. Cleaned the windows, dust the floors and Got it ready to hand over the keys. And you worked your way up at that construction company until you got a contractor's license and you wanted to buy your first property but you didn't have the money. Who did you go to to get as a co- sign? So, it started out where every day I get off of work, I drive around and look for a place, like, find a location that I wanted to be in. So I said, I need someone who knows this area. So I got with my old soccer coach to kind of like, he was a real estate agent. And he said, you wanna be next to like, two [ UNKNOWN ] Loyal. Those are great colleges, people come in. A lot of money is brought in through that area. You want to find between the fringe and the hot spot. It's called the sweet spot. [ LAUGH ] And you want to find that area. Once you do that, You wanna do your homework on how much money to put in it, because you wanna see how much rent you can get for it. Then, I said, well, okay, I'm doing all that, but what do I do when I find that and I have to buy it? And he says, you need to find someone is a hard money lender because it's going to be difficult for the bank that's going to help you with this. So I went to my Grandmother. [ LAUGH ] Who's 95 today. Wow. And she, I went to her and I said, I want to do, I want to buy a house. I have my income from the construction company, but I want to buy a house and would you help me with this? And she says I wanna do this. But, what we're gonna do is you have 60 days to 90 days to go around and figure out what you're gonna do. Cuz if you're still passionate about it in 60 to 90 days. I'd be willing to co- sign, where you go to the bank, she'll co- sign so I can get my first deal done. And she did. And from that deal to 2005 and to current, I had developed over $ 300 million in real estate. Over 300 million so before I get to this [ UNKNOWN ] question I wanna ask what are some of the biggest mistakes you made in your career and what did you learn? The biggest mistakes is getting passionate about a project and getting emotionally involved in it to where it's like I'm completely not really looking at the market [ UNKNOWN ]. Thinking that I can renovate it for less or thinking that I can do something different with it. And in early parts of my career, when I didn't have the capital in reserve to be able to come back and say Okay, I made a mistake, I can cover it. And so I've done that through the process. And I was lucky enough to be able to get out of those deals, but you've gotta be really careful. Cuz you can really lose everything. And another Facebook question, what has been your greatest failure and what did you? My greatest failure? Not taking advice from people that I should have and really keeping an open hand. Give me an example .>> Well, for example there was a guy that I was developing a building on Exchange Alley and I was pride my second- Development. A large development, you know, and then smaller flips and it was a condo project. And I was converting it. And I kinda drew the thing on a napkin. I had the owner finance the deal for me because I didn't have enough money to go borrow. That values $ 700, 000. So I convince the guy to take a hundred thousand dollars in cash and finance the difference. Okay. But in order for me to start construction, I have to get sales of the individual units. I didn't have enough money to pay the architect to start drawing. So I start drawing on napkin, like the sketching out the inside of the building. And soon as I started selling some of this, this units. It took off and I'm like my god, this is gonna be a huge success. I ended up developing that building, I made a million, that's my first $ 1 million I made. I was 22 years old and I thought everything was great, but this is the mistake I made. I buy the building behind me, I pay more money that I should have for it, because of the fact that I thought I made $ 1 million and I was doing to great. Yeah. And It didn't have side windows. It was a building, very similar like in New York where you have the front of the building and the back. But the sides don't have windows. And they're very long. And I was lucky enough to be able to sell it and basically get out of it. I think I lost about 10, 000 on it. Wow. But if I would have developed it and gone forward with all the excitement, because I just made a million on this deal, I probably could have lost a lot. And you're also a serial entrepreneur. You've had a very successful sanitation company. So we have a Facebook question that says, how do you write a realistic business plan? That's a great question, because I think that, for me, it's I don't always look at a business plan as something to get started. I actually like a very simple one or two pager, kind of laying out explaining the deal. A lot of times people put in too much energy in doing an elaborate business plan and spend a lot of time doing that. Rather than spending time trying to figure out what subject you're trying to do and really understanding and knowing it. So to me I say focus more on understanding the project in which you want to do. And for a hard money lender like myself. And everybody's different. I like it simple. I like to see the passion in the person. That they really are committed to this. That to me says a lot. That's great. Have you had the opportunity to co- sign for someone and pay it forward? I do it all the time. Yeah? Yeah, I do it all the time. I work with individuals who can't go to the bank and get financing and you'll see that in The Deed. This show is amazing because I work with individuals who can't go and get money from the bank. Some of them have been contractors that want to become developers, some of them have involved family and friends in buying something. So you'll see that I am paying it forward because I think that's what it's about, that for me, if I didn't have the help that For me to get started, I wouldn't be where I am today, so I think it's important to pay it forward. That's so interesting, and what advice, I mean you started on a salary that was 40 thousand Well it was less than that, that was with bonuses, my base salary was like 25 to 30 Wow Yeah. So, okay, so for people who wanna be entrepreneurs but don't necessarily have the capital to get started. What advice do you have for them? I think if you're working a nine to five job and you're like, you know what? I think I like real estate. And I get these questions all the time because I have friends that have kids ->> Right. That wanna do, don't wanna go to a regular job. They wanna become a real estate developer And I always say find something when you're off of work, or commit a certain amount of time a week to do your research about what areas you wanna invest in. Look at those areas, become friends with the local real estate agent broker who represents that area, study that market, really look at it. And once you do that, you put that in a box of things that you're working on Then you talk to contractors, and you figure out what the prices are. Good contractors and you check their references and you get a price. Once you put all your stuff, and it doesn't have to be a fancy booklet but. Enough to know what you're talking about. You go to your local bank and you say, you know what I have a checking account here. Can you tell me who your commercial lender is that I can speak to? And you go to that commercial lender and you say, do you know any of your customers that do hard money lending? Because if you do, I'd love a chance to meet with them. [ LAUGH ] And that's how I. Would do it because I have so many people, so many people come to me and say, I got your name from Bob. I got your name from Jim at this bank and that bank. And to me it works great cuz these bankers know the hard money lenders in different communities. Yeah, and also, kind of going back to this notion of paying it forward. You are very involved in the community in New Orleans. And tell me about this crime fighting app that you developed. So I, again, talking about paying it forward, New Orleans gave a lot to me. A lot of people give back to their colleges. They wanna give, build a dorm or build a gym or, and so when I was developing, I developed a resort in the Bahamas called The Cove. And a lot of people know The Cove and I bought it at a bankruptcy and developed it. Everybody said, you're crazy. You're going to another country To different rules and what are you doing? But I felt passionate about it. I had just sold my garbage company to a national chain, and I said, I paid off all my debt, and I did very well. I was very blessed to do that. I worked hard 7 years. And I went to the Bahamas, I bought this resort, completely redid the whole thing. And so Wait, what was your question again [ INAUDIBLE ]? It was about the crime fighting. The crime fighting. Yeah, great. Good to remind me cuz I" m getting into the [ CROSSTALK ]. No, no. So the guy who bought my resort. Right. The guy comes along. He buys my resort. And he's 80 years old. He's a billionaire. Okay. He owns all the KOAs. The campgrounds. And he says to me I give back to my college. I love giving back. Millions of dollars, like $ 30 million to this college. And I said why do you do that? He says if it wasn't for that college, I came here as an immigrant. And that college took me in as family and really helped me out. And I believe in giving it back. At the time New Orleans was at an all time high in crime. And I'm thinking to myself, that's gonna cost a lot of money to fix. Mm- hm. But it needs to be fixed. So I called the mayor he wouldn't return my call. [ LAUGH ] Called him again he wouldn't return my call so I said you know what? I'm gonna make a 30 second commercial and I'm gonna call him out on it. So I made a 30 second commercial Put it all over TV and the mayor gets on TV and says tell Sydney to put his money where his mouth is. He's made millions upon millions of dollars. Wow. So this a very public feud. Exactly. If he lets me, I will. So I met with him and he says, well if you have a plan, come up with something. And also we don't have the money to pay for it, so you're gonna have to pay for it. So I said okay, will you let me? And he said, sure, if you have an idea. So I went back and I took the napkins and I said this is Bourbon Street, this is Royal Street, and I did all the long streets and then I said, these are the cross streets. So, I had another napkin for the cross streets, and then I had another. So, it was like six. You love napkins. I love napkins. I draw on napkins all the time. Amazing. I saw my garbage company on a napkin. My, this is a whole different story I need to hear. But basically I had it all in a napkin and I took a picture of six different napkins. When you see the crime, you take a picture and you submit it, it's like Uber of policing. Okay. The citizens are able to communicate directly with the officers and the reason I did that is cuz I didn't Everybody kept saying boots on the ground. I said no. We need technology so we can be more efficient and get to the crime, and we need the citizens helping us self- police. So I did that, and we dropped crime in 30 days we dropped crime by 45 %. And the New York Times did this article, and now there's a show out called the APB App, which is on Fox, and that's my story. It's inspired off my New York Times article. [ UNKNOWN ] and so we have kind of an interesting, I've developed a great app and need to get it out there, how do I do it? You know I always believe in giving it and trying to work with someone that needs the app. I don't know what kind of app you have, but for me I didn't do the app trying to make it a huge think, just New Orleans need it my help, I came up with an idea. I did it and all of sudden now people wanted and we started to put it in other places But what I'd would say is that if you have an app that you develop, think what you wanna do is find who ever you created for or what ever industry is for and you have to sometimes donate or let them use it, let them try it to see how effective it is. Before making people pay for it >> Before making people pay for it, and kind of let, and if it you don't have the capital to. To do that, again, go to your local bank, find out who in those banks deal with IT type of stuff, app building and talk to them and kind of get an idea of who would help maybe find those individuals to help you demo the product. My final question is I've seen you talk about this notion of the A to Z mentality, what is that and how can people train themselves to think that way? I don't know if you can train yourself to do it. [ SOUND ] You think it's like you're born with it? [ LAUGH ] And the reason I say that is because I'm dyslexic, so I struggled in school being dyslexic. I've learned how to deal with it today, when I'm reading something and I look at it before and I read it But my brain, when I say my brain is programmed to A to Z, what I mean by that, is that like, my office, like, I have all, it's amazing. I have all women that work for me. I love working, I think they work very, I work very well with women. [ LAUGH ] And they think I'm crazy. They say because When I say this A to Z thing, but when I see an issue like the crime, or I see the city of New Orleans was the biggest, largest national disaster ever, and it had to be cleaned up. I don't look at all the little things in between like, this guy's gonna stop me from this, this is gonna happen, you gotta watch that. I look like I'm gonna start at A and I gotta get to Z. I'm not worried about all this, I'm gonna do it. And then you have to have the person other people. Your other staff, your mentors, pick up the B- C- D- F- G because it's important. But a lot of times, entrepreneurs have that attitude where I'm going to get from here to here. And they don't let things get in the way like the crime app. Yeah. People t --," well we can't do the crime app because the mayor the city council. You have to get approvals ." No, you can do it. Yeah. If you do a cooperator endeavor agreement, where the mayor signs an agreement allowing us to use the police officers, we can get it done if they wanna do it. Mm- hm. And a lot of times I always say the A to Z is because I don't let all the little detail stuff, the minutia Get in the way to stop me to get to " Z" and so. But it is important that you have staff or people that work with you to pick up the pieces along the way. Cause that's what makes it a, at the end, a great product. That's so interesting and you're incredibly involved in your community. I've seen some reports you might be considering to run for mayor. Is that? I don't know. Have you ever heard of anybody in reality run for office. [ LAUGH ] I don't know if that's possible. So [ LAUGH ]. But yeah, I mean if the polls obviously are snapshot in time, and the polls show that I could win if I wanted to run today. But for me, I've gotta feel passionate about it. And when I say I need to feel passionate. When the time of qualifying, like maybe ten minutes before it's over. Maybe if I still have this. Burning desire that nobody has stepped up, that I think, can really fix the city, maybe I will. But I really think I would be better off serving with working with someone who's going to be the mayor. And that's really what I'm gonna look for cuz I think I'm better behind the scenes rather than on the front end of it, but we'll see what happens. I love my city The show has taken a lot of my time. We've been busy filming. It's been doing very well, so I'm excited about that. I definitely would love new viewership. So. Yeah. Please tune in if you [ UNKNOWN ]. And your show is every Wednesday? It's every Wednesday night at 10: 00 PM. And it's a really good show. It really shows the real side of house flipping. And I think every Wednesday is a different. Deal. It's really cool cuz you get to see all kinds of different sides to the real estate business. Great. Well, thank you so much, Sidney, for being here today. Thank you. Thank you, Facebook, and we'll see you next time on Founder Friday. [ BLANK_AUDIO ]

Founder Friday: Sidney Torres, Real Estate Magnate 

Torres went from being Lenny Kravitz's assistant, to a self-made millionaire in the real estate world. 