What is going on everyone? This is investor thrive, the podcast, the painless wholesaling podcast where basically our goal here is to bring you in to learn about real estate. And so you can learn how to do it through the experience of others. And today we have Charles Williams in here. Charles, you’re from Dallas, Texas, right, is that we’re in
the Dallas area. I live in Arlington, but yeah, but generally Dallas, Texas.
I love it. Yeah. So I’m grateful to have you on here today. And everybody, we’re going to learn some important stuff today. Charles is on a mission. He’s on a mission. And we’re going to learn more about his mission because guys, it’s not all about just you flipping houses wholesaling, making money. It’s about helping and serving others and loving God’s children. And so this is what we’re going to talk about today is dive in into how Charles got into real estate and how he even stumbled into and is doing what he’s doing right now. So Charles, can you give us a little intro of yourself a, you know, quick, 30/32 minute intro? You know about yourself?
Yeah. So I started my career off as an engineer, worked for an engineering firm then started, my own engineering company decided that I wanted to make some money. So I went back to grad school, got a master’s in accounting and finance, and then ended up in the commercial real estate business started out as a commercial mortgage broker. And then eventually, a correspondent lender, where institutions paid us to lend out their money, then we became a direct lender. And now we mainly focus to focus on real estate development, where we turn dirt into money. So that’s kind of a quick down and dirty history about me.
I love that. And it sounds like you’ve really made some big jumps. And I’ve been reading a book called 10x is easier than to x sounds like you’ve made a bunch of 10x moves over your journey from you know, being an engineer, that is a big move, but you just kept going and going. Is that Is that true that you feel like, you know, looking back, you’ve just been leveling up? Every so often
what I’ve learned over the years is bigger deals are a lot easier to do those small deals.
Yeah. Wow. That is powerful. That’s a powerful statement right there. Because I think a lot of people probably think the other way around, right? Yeah.
Yeah, a lot of people want to try to start with residential real estate, and then get into commercial, but they are two totally different businesses. You want to make real money, commercial, real estate’s where it’s at, you can apply some of the same business principles. But understand it’s not the same business. And so, but But yeah, you make significantly more money on commercial real estate than you do. Residential my first transaction in commercial real estate, I made $146,000. And I didn’t even I was like, Man, did I do something illegal? I couldn’t believe I made that much money and didn’t owe it to anyone. And so So yeah, you make us significantly more money doing commercial thing you do residential?
Do you feel like it takes longer to do a commercial deal? Then it would like or residential?
Oh, well, yeah, I think I mean, to close or commercial transaction can take, you know, anywhere from 60 to 90 days. It’s hard for me to really compare. I’ve never done a residential transaction other than buying my house, but I bought my home in less than 30 days. So I would imagine that’s probably the difference.
Oh, well, yeah, I think I mean, to close or commercial transaction can take, you know, anywhere from 60 to 90 days. It’s hard for me to really compare. I’ve never done a residential transaction other than buying my house, but I bought my home in less than 30 days. So I would imagine that’s probably the difference.
Well, that was when I first started in commercial real estate. So I worked as a commercial mortgage broker. So my job was to help someone who needed capital or financing to acquire this property and to match them with a institutional investor who was willing to give them the money to acquire the property for being that matchmaker. I made $146,000
Amazing, amazing and the property was it on? Was it listed? Was it? How did you find the property?
Well, my client found the property because you remember, I worked on the finance side of it. Okay, gotcha. properties in small town in Mississippi, they got it for a really, really good price. That’s why it was really easy to finance. I’m not sure how they found it. But a lot of times, when you find those off market opportunities, it’s because of relationships. That’s why it’s so important to build your network into build, you know that that reputation where people can trust you and your honest, business will flow your way, if you have integrity. A lot of people that know how to cheat and steal and lie. They might get one or two deals, but their reputation will kill them in the long term. Great reputation business will flow your way.
Yeah, it’s a long term game right here. You want to do one two deals, maybe you can be lie, cheat and steal, but you’re not going to last and nobody wants to get into this business just to do one. Under do deals, that’s not not worth it.
But we have been doing this for over 20 years. So we protect our reputation. We’re a company, we’re business of integrity.
That is amazing that on the finance side, you’re able to bring in that much, because in my my side of the business, what I teach is wholesaling, or finding the property, and then, you know, purchasing it and then selling it. So you made that offer financing. Wow, that’s
Oh, what do you think about it, we earn anywhere from depending on how we structure the deal. We earn anywhere from one to three points on the transaction, my average deal was $20 million. So three points on a $20 million transaction and $600,000.
Amazing, amazing. Yeah, so that 100% makes total sense, because you’re you’re dealing with the points of the purchase price, right like of how what you sold for with wholesaling and kind of what we deal with on the residential side, depending on what how well you get it, and what you can sell to someone for that’s your spreads. So we make it depending on what you get it for and what you resell it for. But that’s, that’s amazing to know that you’re you did that, and you do that. So let’s let’s talk, let’s dive into your mission. So tell me how you you what does your mission is and how you came across doing this after you know, your journey that you’ve kind of let us know about?
Well, that’s a very good question. You know, obviously, I’ve had a great career, I have a home and in Arlington, I had lived in a very nice high rise also in Houston. And you know, you walk outside of these very nice places or outside my neighborhood. And you see people laying on the street, and it’s becoming more and more common these days. And then you know, you also just being in the industry hearing tenants complain about rising rent and how they can’t afford it. We hear about stories where people may work in a community, but they have to drive 3045 minutes to live outside the community because there’s no affordable housing. And I just decided one day, that if people like me, don’t come together, and do something to give back just a little that our entire community is going to suffer.
And and when I say community, I’m talking about our nationwide community, we have to give attention to the affordable housing issue and the homelessness issue. And that’s why I was one of the individuals who came together to start this organization called Project PRC. It is an organization that, whose mission is to end homelessness provide for affordable housing for our workforce, our C C collar workers, sorry, our gray collar workers or blue collar workers, and to make sure that we have suitable student housing for individuals seeking an education. You’ll be surprised at some of the even the prominent universities that have poor student housing for their students. So this nonprofit organization is designed to address those issues.
So can I ask you questions deeper into the project and how it’s going to get you’re going to fulfill that mission? Yeah,
What’s the goal is to attack it in one market at a time to just do it all over. Well, how are you going to accomplish this mission?
That’s a very good question. So we’re focused right now in Texas, because I’m in Texas, but our charter from the federal government allows us to create or, you know, to duplicate our efforts here in Texas, all over the United States. The goal is for Project PRC to purchase 100, minimum of 155,000 apartment communities in addition to hotels and assisted living facilities. So we have also, in addition to that, a rental assistance program, and we can talk a little bit about that. We also are looking at putting together a downpayment assistance program, but the properties we own will be set aside for affordable housing so that individuals who can’t afford a market rate apartments, they can move to one of our for affordable housing communities.
Wow. Okay. So the government is is are they helping you with financing? Is that what their their part is in on this? Like, how do they bro play into this?
This is an excellent question. So what a lot of people don’t know is that prior to the 1980s, there were programs that provided a safety net for individuals requiring affordable housing, but when the Reagan administration came, they eliminated all those social programs. They decided that they didn’t want to be considered a socialist country, right. So, you know, let’s not care about people. But one interesting thing that they did was they allowed private citizens to create nonprofit and certain nonprofit organizations have the privilege of doing something that only a government entity can do, and that is to issue tax exempt municipal bonds to access public capital on the bond market. By creating this organization. We kind of became come like a de facto government agency in In that we can issue tax exempt municipal bonds to fund the acquisition of these multifamily properties and convert them to affordable housing.
Wow. And you said 155,000 us doors is that what is the goal is
1000 apartment communities, that could be over a million dollars. And now the reason that number comes from Yeah, there are 155 million apartment communities in the United States.
Okay, so it’s 10 1%. So we’re saying, hey, take down 1%? That’s right.
And let’s use that to make sure that individuals who are our service workers, who are our manufacturing workers, people at the lowest income levels, let’s take 1% of our current inventory your properties, and make sure that those people have a place to live in the communities where they work.
Sounds like a giant project to be like a big undertaking project, maybe.
So let’s just take down one a community. So if you take one, you said you’re closing on one, correct
Yeah, so So in that. So pioneer Realty capital, which is Corporation, I own we are a real estate development company and 80% of the multifamily development that we engage in, we develop, and then we turn around and we sell to the nonprofit, okay. Okay. And so so the project that we’re currently we just finished a student housing project outside of Houston, Texas, and now we’re going to sell that to the nonprofit, we have another portfolio of 19 properties about a $750 million transaction, those 19 properties we’re going to acquire, and then we’re going to turn around and sell that to the nonprofit. So that’s how we’re building we have a mission to acquire, at minimum 1000 units a year. But right now we’re on track to acquire anywhere from six to 7000 units a year.
Wow, we’re How are you finding these these deals of relationships on the market? How are you finding all these opportunities?
Well, you know, it’s kind of luck of the draw, because now with this new economic climate, where interest rates are going up significantly, there are a lot of people that were in the apartment flipping business, right, that are now upside down. And so now they need a way out. Okay. And so so it will just happen, that our federal government, in its infinite wisdom decided to significantly raise rates. Now, it’s hurting a lot of people, but it benefits project PRC, because now there are a lot of properties on the market that we can acquire, put in our portfolio and convert those and use those for affordable housing.
So do you have do you have a certain amount of funds that you’re that they’ve enabled you to use that you’re keeping track? Okay, we can’t overpay on this property?
Or like, how are you deciding to make a smart business decision, of course, because of the fact that we are issuing tax exempt municipal bonds, the credit rating of the nonprofit, as managers of the nonprofit, we have to maintain. So the nonprofit has to have good assets in it in order to maintain its credit rating. And that’s going to induce bond buyers to purchase those bonds. Okay, so we can’t go out and buy properties and make bad decisions. So properties that we purchased have to be economically feasible. But we are able to make properties more economically feasible because of the fact that as a nonprofit, we don’t pay property tax. Wow. So if that property, it may not pencil out as a market rate transaction. But when you subtract out the property tax, it might be a good deal. So that’s an advantage to us as a buyer, we can come in be a little more aggressive on the buy, because of the fact the government has given us a way to create a significant discount. And then in addition, remember, because we are a charitable nonprofit, we’re also collecting money through our charitable efforts in our donation programs.
So for me as a wholesaler, or as a lot of my listeners are they’re constantly looking for deals for people, for buyers that are on market or off market, whether they get it under contract on market or off market, they negotite would that be something where they’d be able to reach out to you if they had an apartment complex community under contract, and they could sell, you know
Are you buying apartments, hotels and assisted living facilities, but we like portfolios is an easier transaction. And we talked about scale earlier. It’s easier for me to do a bond transaction that’s $100 million or more, okay, if it’s one or 2 million, then that’s not something We’re interested in we’re looking for someone to go out and accumulate a portfolio that’s at least $100 million.
Okay, and in the deal pencils out, then it’s definitely something we’re interested in,in a portfolio of 100 million in taxes, how many communities apartment complex communities? Is that usually?
Or how many doors generally?
Well, right now we’re buying, we’re seeing prices from about 160 to 185,000 per unit. So, you know, if you take 100, you take $100 million divided by 160,000, that tells you it was at about 300, maybe 400. unit apartment complex, right. So you know, it’s not hard to get $100 million deal.
Yeah. Wow. So so if I wanted to, I could say, Hey, forget the single family game, let me go find some deals for Charles in the PRC.
And maybe we can work something out a portfolio,we’re a buyer, that’s what we’re doing. And we’re a buyer with a purpose. We need affordable housing and communities that will not let a developer come in and build affordable housing. We need to go into those communities, buy those market rate deals, convert them to affordable housing, so that the service workers in that community have a place to live? Is there
like a map or like a heat map or something that would show you okay, this is where the service workers mainly live. And maybe we can work something out a portfolio,
And maybe we can work something out a portfolio,workers in every maybe every major market. Right? There’s a McDonald’s and every major market right there. Yeah, he has a Walmart in every major market, right? I mean, where did those people live? It’s a great question.
It’s expensive, very expensive. Yeah. So let me ask you some a little bit more personal. So is the mission just to provide affordable housing? Are you going a little bit deeper with air the goal? Is it a little bit deeper to solve the issue, the underlying issue of why maybe they can’t afford their properties? Maybe they’re just not that good at finances? Maybe they have addictions or have issues that they’re spending their money? Not wisely. Is that mission to to kind of tackle that? Or is that not even some you’re remotely interested in?
Question, but let’s look at economic history in you can look at the rate in which costs have gone up, okay, income, and then add inflation to that, and then look at wages, wages don’t go up at the same rate that our costs go up. Now, will you put inflation in it looks even worse, you know, a worker for 30 years ago, you know, which would have been in the late 1990s. I will give you an example of just based on me when I came out of school as an engineer, I made $1,000 a week. I graduated in 1988. I went to work for Johnson Controls I made $1,000 a week, my rent was $350 a month, engineers coming out of school right now. And this is considered a good job. Make about $75,000 a year. It’s about $1,200 a week, right? The rent today. I mean, if you want to live somewhere decent, you’re looking minimum 1500 a month. It’s true. Now that that’s a good job. Now, just imagine if you’re making $10 An hour or $15 an hour, the reason that guy can’t pay his rent has nothing to do with addiction or improper use of their money. True. They’re not earning enough money to keep up with the cost of living.
Yeah, no, that’s that’s a good point. That’s a very good point. Because I think a lot of the times when I listen to podcasts is that they talk about, you know, people just they have issues, right? That’s what they attribute it to. And I, you know, I was wondering, meeting recently with a very, very wealthy individual.
I won’t call his name, because this story will probably embarrass him. But we’re at this very nice restaurant. This guy’s had a phenomenal career. And literally, it just kind of fell in his lap. And we were talking about a portfolio he owned a huge portfolio of apartments. We were having the same conversation. And he was like, Well, you know, they’re raising minimum wage to $15 an hour, and these people should be able to afford to rent and I asked him, I said, at your worst apartment, how much is rent at your worst apartment? And it happened to be somewhere between 17 and $1,800 a month?
Wow. That’s a lot. And I askedhim, I said, so he didn’t even know what $15 An hour equate it to is $600 a week in case you’re wondering. Right, right. Okay. I said so that person has to work three weeks just to live in your apartments and you think they’re doing they’re doing good? Yeah, it seems that’s the disconnect between the thinking of the rich upper middle class and the poor, the rich and the upper middle class. They don’t get it at all. Trust me, I run in those circles, right? And so in their mind, it must be their mishandling their money. They don’t have any money to mishandle. That’s the problem.
That’s not that’s absolutely crazy. So the solution is to project PRC for you. But do you feel like there’s anything else that will happen or can help out these service workers and people who can’t afford because you’re right, it’s going to keep going, at least I think it has to because costs are going up, our labor costs are high.
We created this crisis where we can’t get in inexpensive labor, for a lot of reasons. We can’t our material costs go up, we have so much that and I’m a developer, remember that. So it cost me a certain amount to build it. Right, right. And so I have to charge a certain amount for rent, I have to, because it costs me so much to build it the solution long term, I think this is a start. But we have to do more that have to be more organizations like mine. And but here’s the thing I want you and your listeners in anyone who cares to think about, it only takes a little bit, guys to make a big impact. We have this program called our 10 for 10 program, where we’re asking individuals to go to Project prc.org and donate $10 and then have 10 of their friends or more, donate $10 and then tell those 10 friends to ask 10 of their friends individually to donate $10.
And in doing that little bit, we can provide a safety net. Because imagine a world where we don’t have service workers. Imagine a world where we don’t have people who can come and cut our yards and wash our windows and clean our homes and you know, service food. Just imagine that world, okay? Imagine a world where you have 1000s of people living on the street. When people become desperate, they become animalistic, and I don’t care where you live, it will impact you now if you don’t believe that’s the case. Look at some of the South American countries where that’s happened.
Yeah, it’s wild. Well, I really appreciate you coming on here. So project prc.org Is that right project prc.org Go today donate $10
Tell 10 of your friends to donate $10 If you have $10.10 friends you’re golden There you go hopefully you got at least him for it.
Hopefully you got him friends Well, I a pleasure and honor to have you on here I wish you the best of luck in your mission and please everyone go check out project PRC and man yeah it’s a I was a little Miss Miss lead I put your right if you really break down the math, they’re not making really anything enough to pay their rent. It’s honestly it’s honestly crazy. That’s honestly crazy.
We are going to pay don’t think that we’re going to escape. We will pay and it’s easier to just participate and try to provide the safety net.
You talk about food, just normal essentials like food, a cell phone now that is normally essential for people and rent. That’s they probably barely got enough for that. That’s wild. Well, Charles, appreciate your mission and everybody here at the paintless wholesaling podcast. Let’s do what we can to change the world for better. Right. Thanks, Charles.
Thank you. Appreciate it.
