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Strategic Growth and Real Estate Success with Joao Macavila

• Courtney Twiss • Episode 43

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Imagine standing in a bustling mall, only to realize you can't afford a simple meal. This was the pivotal moment for Joao Macavila, founder of STF Capital, which sparked his transformation from struggling beginnings to becoming a real estate powerhouse. Our conversation with Joao unpacks his courageous move to the Carolinas with nothing but a dream and how diving into "Rich Dad, Poor Dad" reshaped his financial outlook and set him on a path to success. Through his compelling story, Joao underscores the significance of resilience, embracing discomfort, and the transformative power of networking with like-minded individuals.

Joao also shares invaluable insights into leveraging other people's strengths to expand your business footprint. From enhancing his social media presence by recruiting the right talent to nurturing budding investors without expecting a return, Joao's approach is all about strategic collaboration and mentoring. He recounts a fruitful partnership on a 12-unit property, showcasing the art of negotiation and cost management, while his plans to launch a construction program for new investors promise to equip them with smart purchasing strategies and solid industry connections.

As we explore investment prospects in the Southeastern U.S., Joao opens up about negotiating tax deals with cities to drive community value and his ambitious expansion plans, thanks to his North Carolina contractor's license. His advice for aspiring investors—resilience, learning from missteps, and the indispensable role of networking—forms a cornerstone for anyone looking to make their mark in real estate. Concluding with a lighter note, Joao dreams of growing his social media following to 200,000, promising future collaborations and sharing personal tales that blend seamlessly with his professional journey.

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Speaker 1:

Joao. Joao, that's like the band I mean, you could do a lot with that. Wow, joao, and my marketing brain is just going wild right now. So you lost me at. Joao, okay. Macca Vilca, yes, welcome to Now. Making Moves in Real Estate episode 42.

Speaker 1:

Joining us today is a seasoned real estate professional and investor with a proven track record in residential and commercial contracting. I feel like we do nothing but bring baller real estate professionals to the podcast. He is the founder of STF Capital, helping nine to five employees build wealth through strategic real estate investing and passive income strategies. With his expertise in property acquisition, renovation and value maximization, he's committed to delivering exceptional results and empowering others to achieve financial freedom, which we are all about that. So let's dive into his inspiring journey and expert insights. And I'm going to do my best not to butcher your name, because it's such a fabulous name Joao. Joao Makavilka, did I say that right? Yep, you got it. Yep, okay, and you get a trophy. Joao. Welcome. And he's coming to us from South Carolina, north Carolina, north Carolina, near the border. South Carolina, north Carolina, north Carolina, near the border, south Carolina, yeah, you know, get it right In that vicinity, in the Carolina. Welcome, tell us all about who you are.

Speaker 2:

Thanks guys. So yeah, I don't want to sound cliche but it's kind of the same story we hear from a lot of people where I grew up pretty much poor. Same story we hear from a lot of people where I grew up pretty much poor. Of early memories I have are living in an attic with my parents, who are both you know. They came in as legal immigrants um, saw them struggle hard growing up, not having much. Um, I was never the best in school grammar school, high school, none of that stuff. So not because I was dumb versus I just didn't. It didn't catch my attention. I was always a C plus B minus student and just it never interested me. But I always did want to be well off financially. So I would take on odd jobs at one point, multiple jobs, and never had enough to be okay and always struggling. And everyone has a pivotal moment in their career okay and always struggling. And everyone has a pivotal moment in their career success, something that changed.

Speaker 2:

For me it's always been the same where I was dating somebody at the time who had a daughter and I forget how old I was I'm pretty old now. I had to be around 19 to 23, somewhere around there. But we were at the mall and they were hungry and it was an embarrassing moment because I had to go to the bathroom and check my bank account to see if I could even afford lunch for us and I could not. I had enough to buy one slice of pizza, pepperoni and a drink. So the camera doesn't show it that much here, but I'm a pretty decent sized guy. I'm 200 pounds, so I can eat. It was hard for me to say I'm not hungry. That was pretty much the moment of self-realization I can't provide for our family. I'm working two jobs. I dropped out of college and I'm not doing enough. I can't survive. Something's got to change and I'm not doing enough. I can't survive. Something's got to change.

Speaker 2:

So it took another few years after that, just reading and looking, and it ended up being finding out later on. It was my complacency, that was the issue, my comfort. I had a job as a manager and had I not taken that leap of faith of moving to the Carolinas, which I think I had like $9,000, so I moved down here, didn't have much furniture, because if I stayed in jersey, where I'm from originally, I'd probably still be doing that job because it was guaranteed. It was easy. I was getting my yearly raises of promotions here and there. I needed to either go all in on myself. I was either going to make it or fail horribly or go back home. I didn't want that safety net, so I made that plunge. It was hard, but I made it, started reading, doing things myself and I bought my duplex with my first purchase, bought it for 91,000.

Speaker 2:

And, and again, I was very hard-headed. When I first started this career, no one could tell me better. No one could do it better than I can, no one could do it cheaper than I can. So I'd work nights and weekends, painting floors, appliances, tile, and while, yes, I saved some money, I lost so much physical time that it just wasn't beneficial. It took me about a year and a half after that to get my next duplex and I thought I was doing great, I'm making some money per month, I'm scaling up, which is what I thought.

Speaker 2:

Then my accountant, who I still have today, said read this book, rich dad, poor dad, read it. It didn't. It didn't hit. The second time I read it a few months later is when it clicked and I was like okay, well, this makes sense and I'm an introvert, so I can't I've got partners that can you know do a backflip in a room with not knowing anybody and just shaking everyone's hand? I can't do that. I'm gonna wait till it dies down. I'm gonna get a table in the back and relax, um, and do it that way.

Speaker 2:

I'm not an extrovert by any means, but being out these people, they forced me to go to these events, networking events, meeting other people, it was. It was just so eye-opening seeing other people that have the same mindset, have that same hunger, same goals, that have gone through things I have gone through or that I will go through eventually, and giving you advice and insight and helping out. So much it was. It's just been game changing. I've been able to scale from four to I think I'm at 89 right now and we've got more pending as we speak. And then the next book that helped me a lot, which I recommend a lot, is um, who not have I? Dan Sullivan. That's an name changer for me. Um, yeah, it helped me hire more people and let them do what they do great at. So I mean that that's just a quick uh background on me. Yeah.

Speaker 1:

Well, how does that look like your structure as far as hiring Like, what does the composition look like for you?

Speaker 2:

So that book helped me a lot with like social media. For example, I'm on Instagram checking out funny videos all day, but that doesn't help me post. I can't. I won't say I can't. I can make posts but they're not. I'm not good at it. I can't do it every single day. I don't know what's you know excuse my age. I don't know what's hip right now. I don't know what's trending. I don't do the little dances Like I can't do that.

Speaker 2:

So, but reading who, not how, that's fine, it's just not where you excel. So I needed to find someone that does excel in that and I interviewed I think it was 100 social media managers, got down to 20, got down to five, got down to one, and she just took the ideas and just went for us to hey, share your photos, my photos for construction and everything. Share them, Share all the markets you've done. And she takes them and makes posts. She engages with people. She's wrote my social media. I think I was at like uh 210 when I first started and last I checked we were at 89 000. Um, I think I have a. I do have a tiktok, I don't know the name. She does all that um, and there's all the emails and whatnot and just tells me hey, how do we answer this? What do you want to do here?

Speaker 2:

She's grown that tremendously where that also has networked more people that in my eyes, I could always do more, but it's amazing to see brand new investors reach out. Hey, I saw your post. What can I do and be able to guide them to how to do it, where to go, or tell them hey, you know I'm going to be at this project on this day. Come by and now for the day, let's grab some lunch, ask whatever questions you want, see how I order, see what my guys do, and just grow. And I tell them all the same thing. I don't want anything in return, because they're always like oh, I can pay for your time, I don't need that, I just want someone new to help the next person. So you're going to want somebody, just like I did, that needs help. Help them out because it's a scary. Investing is pretty scary. You got to know what to do and find E, C and D ready to go.

Speaker 1:

Yeah, so no coaching program or mastermind group. It's literally just like hey, you're going to give some advice if somebody reaches out to you.

Speaker 2:

Not yet. That's the next step. We're actually doing a construction run because I have two partners that bought the buildings with me. They're like, listen, when something hits you, you take it on right away. You need to help others and I was like, yeah, just call me, just text me, and people do, but sometimes it takes too long. But one example was we bought a 12 unit in North Carolina and I'm used to just being hired to do the work and sometimes they've got equity, sometimes they won't. This is the first time I became part owner, so I thank them for that. Oh, and they have been amazing partners and now really close friends, like brothers to me.

Speaker 2:

So the day we closed was Monday at 10 am. At 1 pm we get a call but the main drain from the whole building burst, so everyone had a little bit of water and it's it's yours now. It's ours, like we're, it's our issue to deal with. So we do what we always do. We call up three or four people. I forgot what I was doing, that I was on those first calls. The first bid came back at I want to say 19,000, 16, and then around 15 and a half thousand and I and then I get in the call and like, why, what for? Walk me through, why it's that much? And they sent me their scope of work and I was like, no, we don't need this, we don't need this, we don't need this. We do need these three things. How much for just these three? And end of the day with getting it checked how much for just these three and end of the day with getting it checked, repaired and fixed. We walked away with like 3.6 thousand dollars versus the initial, and you know I was pretty happy. They were ecstatic. They're like this is crazy. And I was like they're like how'd you do it? I'll say I've been doing this for years. They're not going to pull a fast one on me. Like I speak their language. I know what we do need, what we don't need. They're not going to get over on me. So ever since then it's just been hey, this is the budget, what can we do? And you know, one of the like the introduction value add has been amazing on everything we're doing, to the point where we're starting to make money on day one of a closing. And it's been, it's been great.

Speaker 2:

I can't ask for better partners or better people. And that's to your earlier question. They want me to help create a construction program for new investors. What do you look for? What should you buy? Where do you buy? How do you ask for discounts? Because one thing everyone asks me is where do you get things from? For me it's usually depending on what it is like for renovations Home Depot oh, the price are too expensive. Or the store. Talk to the manager, tell them you're an investor, tell them you're part of CREA, bia, whatever group you are there's 40 of you in there or more and just say, hey, we can buy it as a bulk. What can you do to help us out? And they want your business, so they're going to work with you on some kind of discount, some kind of program, like I have one Home Depot by me where I have six bays or pallets dedicated to just my company, so I can order things six months in advance and they'll hold it for me and deploy it as I need. Well, I mean, that just came from talking.

Speaker 1:

And is the properties that you're purchasing primarily multifamily? Do you have an avatar for what you look for?

Speaker 2:

So I started with residential and small multifamily. Now it's commercial 30 plus. We realized very quickly buying a 12 unit is almost identical to buying a 30 plus unit as far as numbers go and work and paperwork and everything. And I like multifamily a lot more than residential just because I have, I don't know six or seven residentials on me now and each one is built by a different builder, different year, different timeframe, different HVAC, plumbing, everything's different. The commercial they're all the same exact thing. So I have more buying power with my HVAC guy, more buying power with Home Depot or Lowe's, whoever I know. It's pretty much lick and stick. It's the same thing over and over and I can have extra materials on site versus. I don't know what I'm going to run into with this next house next year, next build.

Speaker 1:

And then you sorry to keep asking. I'm so intrigued because I love all this. So do you renovate and hold, or do you renovate and resell digitally?

Speaker 2:

95%. I'm holding it just because I've sold them before and I'll make an example. I sold one prod reef and I made probably $45,000. Had I held it on the reef I would have made maybe $16,000, $17,000. But two years later with depreciation I would have easily made $100,000 more on that. So, going forward, I don't sell unless I have to. Otherwise I'm holding it long term because again you've got tenants paying the mortgage and insurance and you might make something monthly but be more in there for the appreciation.

Speaker 1:

I'm not in this for quick cash versus the long term and building that generational wealth it's like a lot of investors like yourself when they look back on their deals they're like man. I wish I would have held on to 99% of them instead of flipping quick cash.

Speaker 2:

I was talking to my buddy today earlier and she was like it's hard to find things in Greenville, south Carolina and I was like I see it all the time. I got a duplex there. I bought it for 205. I put 70 into it, kept it and I had appraised three years ago at 415 and I could have bought the house next door. I lost it by 10 grand. I could have bought the house across the street, lost that by 20. Had I just forked it up and not been stingy, that would have been an extra 300-ish equity. I'm like I can't do this and monovator just for the trigger.

Speaker 1:

So you're. You're about mainly on the multi-family housing. You're buying existing structures and then renovating them.

Speaker 2:

Yes, right, you're not doing new builds no correct new builds from a lot of gc's. I'm also a commercial general contractor from north and south carolina, so, speaking of a lot of gs, I meet up just like investors do, and it's actually a lot easier for new building than it is for renovation, which makes sense now to me. I never put the two and two together, because you don't have to worry about the size of this wall, the depth of this, the inspections, the new codes. It's all brand new. There's nothing in your way, there's nothing that isn't leveled correctly or off. It's brand new. So, okay, well, it's something I'm open to.

Speaker 1:

Have a mix of both.

Speaker 2:

Exactly, diversify.

Speaker 1:

Yeah, and then contribute to building neighborhoods and contributing to the…. Yeah, that's exciting. Yeah, I have a question regarding the tax side of things. Most of the people listening to our podcast are realtors and many of us invest, and one thing that I did not do on our…. We have a boutique hotel, my husband and I. We didn't do cost segregation and I'm thinking that was a big mistake, and I also didn't realize you could do it on single family homes. Is that something that you guys utilize for tax breaks? Yes, are you familiar?

Speaker 2:

Yeah, we got it brought up before you did a month ago. We got the cost segregation done two days ago so it can help a lot paper losses and everything. So we get them done as everywhere we can. I mean we want to make it like as much as a loss on paper as we can and also city and say, hey, we're renovating this whole community. Obviously taxes will go up but we're bringing more value to this community. Can we keep the back? So it's an abatement for however many years, so they won't raise it on us.

Speaker 1:

And they usually.

Speaker 2:

Is that programs already in place where you have these buildings, or are you literally negotiating that we're negotiating with the city, because they do want to bring more money and more people, more stability, to the area, and that's what we're coming and doing. We're making sure everything is modern to date and there's so much more construction going on. I highly doubt they're going to prescribe. If anything, they'll give us a tax credit for it.

Speaker 1:

That's great. So you're doing all of your deals in South Carolina, north Carolina and Georgia. Are you going to be expanding, gosh? There's so many states over there that are open door for people like yourself to build.

Speaker 2:

So I explained because I'm part of a group called the BAA it's a Nate Barger owns it. I'm part of one of the four masterminds. Now I was always against them originally, but after joining the first one, it makes sense. I've surpassed so many things that I would have run into that could have hurt a lot, and they helped me get around it. But to your question I have my North Carolina commercial GC license who has 11 state reciprocity. So I've got a buddy, she's in West Virginia. She reached out a week ago and said she's buying a hotel, wants to convert it to assisted living and can I help with that so called, in the city. All I got to do is take the state law exam. Once I pass that, I'm licensed there. On florida, the same thing. Just got to go down there, take the state exam. As always, there's reciprocity. I just got to take that state exam and pass it and then I'm a commercial general contractor licensed in that state. So I'll expand anywhere it makes sense. I think my 2025 goals are tennessee, because it's right there. West virginia because there's an opportunity to right there, and then just put another one or two and then see you know what, what we can do I?

Speaker 2:

The biggest thing I bring on is, like you said, the value add, taking that pressure off with construction and things like that. We got a bid because I've got a certain amount of guys working for me, I've got my subs, so the 54 unit, for example. Right now we're all in with materials, labor, everything going around $13,500, $14,000 per apartment. And we got a bid from a local contractor Because, you know, just in case we have 10 going on at once, we need backup. There's a reverse bid came back at $18,000, just labor.

Speaker 2:

Then we're like this isn't, we're nowhere near where we need to be. We're like it was $16,000. And my partners are like, well, this is right, this is in your field and you do it. And I was like no, I'm going to raise my price at this point, but no, I'm not going to do that. That's the whole reason we value rad and it's been eye-opening. So I've always had that mindset of I can do more, I can get better, I can make it more efficient. So it's good to see what people are charging out there and how much stress I'm taking off my partners.

Speaker 1:

I've seen all those pricing, some great to me here in California. Yeah, you don't want to come out our way. They're not. There's no red tape. County totally works with you. Oh God, it's so cheap here.

Speaker 2:

All her cars.

Speaker 1:

Sorry, In California's rules and regulations I was like oh yeah, no, no, but the houses with your company that you founded. How many people do you have in your organization.

Speaker 2:

So direct employees working for me. We've got about seven or eight as far as my subs go. Who are you? My hv guys, my electric guys?

Speaker 2:

we're in the 30s somewhere on there oh, okay but I, I can't afford an hv guy full-time or a luxury guy for time. So they just I call them up hey, I got this, what can you do for me? And they'll give me the good pricing. Right, I've got a full system installed, uh in my house. It cost me like 10 grand and local market rate, because it's uh, three floors, 43 in this great feet, would have cost me $31,000. So I'm like no, I'm not doing that, they take care of the eat because I take care of them.

Speaker 1:

Right, it's got to be a win-win. Exactly so it sounds. We love stories like yours, with like humble beginnings and like taking the risks great, learning a lot and leaning into resources like books, and like taking the risks Great, learning a lot and leaning into resources like both mentors and so forth. So for our listeners, what would be like your biggest you know, piece of advice for those that are like is what you're doing is on like a next level, come on, yeah, right. So for somebody that's like trying to check their baking and cap their checking account and the and the restroom to buy pizza to you know, the investor that you are what, what advice would you give people that are listening to to persevere and do what you've done?

Speaker 2:

I would say take that leap, believe in yourself. If you really want it, it's going to happen. Don't get me wrong. I mean I'm comfortable now, but I've fallen many times and the difference is I'm getting up every single time I'm going to realize what went wrong and not do it that way again.

Speaker 2:

Network even if you don't have money to buy a property network Go to these events and meet other investors. Get their phone number, get their Facebook or whatever social media, ask them questions. I had yet to meet an investor new or a hundred millionaire status that won't take your call or won't sit down with you and talk to you and guide you. There's so many ways out there. If I have a friend that said I don't have money to get invested Okay, well, you know. Do you have a friend that says I don't have money to get invested okay, well, you have a computer. You could wholesale in different states. You can be someone's boots on the ground. There's ways to get in there. It's just how bad you want it. So I mean I don't take an open answer.

Speaker 2:

Find a deal, you'll find the money Exactly I mean, if you find a deal, you'll find the money exactly. I mean, if you find a good deal and you can't buy it, I'll give you five thousand bucks for it right, what about?

Speaker 1:

how about? You want to get hungry? You always got to be hungry.

Speaker 2:

Anyone that is successful is curious and hungry yeah, it's always especially growing up seeing everyone having something and me not being able to have it so why can't I have it? And realizing now my parents work 12 hour shifts just to be okay, and it was an amazing experience. I think it was two years ago. I'm Peruvian by descent, so my father's 72, grew up in Peru for 35 years and visits there every year. He's never been to Machu Picchu like hiking here and he's from there. So two years ago I was able to go with him and do the five-day hike um and experience that with him.

Speaker 2:

And a few months later we went to Europe Italy, greece, rome and you know my father was different today than he was growing up Very strict, very hard, very, very macho.

Speaker 2:

Now he's talking all that and he just tells me it was last year where you know, I know you had a hard life coming up, you and your sister. His father walked out on him so he never had that figure and he just wanted to say he's proud of what I've done and what I've built and he wishes he can be around as I bring this out to the next generations. And I don't know why it hit me so hard. I was not expecting that and it made me stop and just look around. I do have more than I thought I'd have and I'm I'm nowhere near done of where I need to be, so it was just very, very touching to hear that from him and to just, you know, hear from someone like you know. I'm proud of you, of what you've been able to accomplish, and I can never do this. I'm glad you were able to break that well on that note.

Speaker 1:

That's incredible, because some people don't ever get that, so that's wonderful that he gave you that you know acknowledgement also. Congratulations thank you so much very impressive all that you've done. I can't wait to follow your journey and see your next projects. You mentioned you're on instagram. Is that the best place for people to find you? He doesn't even know. He knows he didn't take it on, he knows he's been joking. I was just saying like you know, you don't know. He didn't know what's going on.

Speaker 2:

We should have reached out to his people, yeah the funny thing is I have instagram but I don't know the username. But I can get that sent to you.

Speaker 1:

Oh snap, I'll look it up so that way people know, so we can get you over the 90,000,. Marty, you're not there yet. Let's see, let's see, let's see. I know I'm Joao. Yeah, whoops, I just think it's like amazing. There should be some kind of marketing pitch on that, joao.

Speaker 1:

Oh you're at 102,000 followers, by the way. 102,000. That's awesome. You went up so it's Joao, so J-O-A-O Mac M-A-C. Underscore S-T-F For your S-, your STF capital. Just so you know and everyone else so they can follow you. I guess we're going to try to get you to 200,000. Yeah.

Speaker 2:

That's awesome. There you go. It's funny because Hyra, she's my social media vendor. She made me a background, so when she sees this she's going to during our meeting she's going to bring it up.

Speaker 1:

She made me a background that has my name, the company, all the tags, all that. When you said that, I was like, oh crap, I forgot to use it again. Uh, oh, you're in trouble. Yeah, we might have to do this again, photoshopping in there somewhere out there. There you go, we'll see what our editor can do likewise, do you guys? Maybe um, next time we're out there, we're going to miami next year. Maybe you could come.

Speaker 2:

Yeah, not too far, miami, the carolinas always a reason to go out to colorado. By all means, let me know when I'll be there okay, we will all right.

Speaker 1:

Okay, thank you so much and we will, uh, like I said, we'll have to do this again sometime. I have to thank you, thank you guys likewise, and we will, like I said, we'll have to do this again sometime.

Speaker 2:

I also don't need you. Thank you guys Likewise.