The Josh Bolton Show
The Josh Bolton Show
Unlocking Real Estate Success: Jose Berlanga's Journey and Insights
Jose Berlangas explores his extensive entrepreneurial journey, detailing the joys and trials of business ownership. The episode emphasizes the importance of resilience in the face of economic downturns and the necessity of maintaining humility and an open mind in entrepreneurship.
• Jose's initial aspirations and unexpected path into homebuilding
• The business insights from his book "The Business of Homebuilding"
• Key elements of land investing discussed in "Dirt Rich"
• The dangers of leverage and high-risk growth strategies
• Importance of flexibility and open-mindedness for entrepreneurs
• Advice for newcomers on pursuing passion and skill in business
if you enjoyed the show be sure to check out my info:
https://app.wingcard.io/ROB3SA64
Hello, hello everybody. Before I play that awesome intro music, like usual, I just want to give a little introduction to Jose. He was just spitting bars right when we first met in the meeting, just getting to know each other. I didn't know when to hit the record so I just did a rough start. He properly introduces himself a couple minutes in. But yeah, this is going to be a really good, eye-opening episode. He talks about his journey, this real estate tycoon that he is, and his journey from the different sectors and what it's done and the risk of leverage as owner and entrepreneur, and so much more. I also looked into his audiobooks he's going to talk about later on. Definitely something to look into. If you want to just get his unabridged knowledge, I think a simple credit will do to buzz in that. Like I said, let's play that intro music and hear Jose's story. Welcome to the Josh Bolton Show. Welcome to the Josh Bolton Show, where we dive into interesting and inspiring conversations. And now your host Josh Bolton.
Speaker 1:I have it recording, so let's do a proper introduction for you. Sure, do you want to start, or how do we go? It's usually I have you, you just tell your story, kind of thing.
Speaker 2:All right, all right. Well, it's great to be here. As I was mentioning, I am an entrepreneur, I'm an investor, a real estate developer, builder. Now I'm a writer. I'm enjoying this new stage of my life where I'm finding it now important for me to move on to a different part of my life, which is to perhaps reflect on my business career by writing some of the experiences, anecdotes, some of the wisdom that I've acquired over the years in the business world.
Speaker 2:First of all, I started with my first book, the Business of Homebuilding, which is an industry that I find extremely interesting. I have a love-hate relationship with it because I invested close to 30 years of my life as a residential construction company, while I was doing other things, while I was engaging in other types of businesses and industries, but the bulk of my time over the last few decades has been devoted to building residential communities. So I wrote this book as cathartic, as a very important process for me, to be able to tell the story as to how a business that I intended only being a part of for a year or two at the most, somehow I ended up being involved with for a few decades, and still am. As a result, I ended up running, owning and operating a number of real estate and construction companies a number of real estate and construction companies but the irony is that I never intended to do that. My initial interest, my aspirations and my passion was more geared towards entrepreneurship, not necessarily home building. So the book that I wrote talks a lot about that industry, but it's truly an entrepreneurship guide, other than it's using the construction industry as the bay, the fundamental concept. But it talks about how to start a business, how to build a business, what are some of the different things that need to be thought of and planned before one starts a company of any type, of any kind, and I enjoy that process quite a bit that I moved on to more topics now, a little bit more broader.
Speaker 2:Now I've completed a book called Dirt Rich, which is about land investing, land development, land speculating, and it's not really only about how to make money by investing in land, but how to honor our roots, how to understand how things happen in the world of investing from A to Z, how it is that our communities evolve, how it is that they're built by individual speculators, developers selecting a piece of property, selecting the right piece of property for the right purpose. And this is how this multi-trillion dollar industry all begins by selecting a piece of property for the right purpose. And this is how this multi-trillion dollar industry all begins by selecting a piece of dirt to develop your dreams and your hopes and your business and perhaps begin your career. So I talk a lot about the history of how this world of real estate began and I think it's a fun book. I enjoyed talking about it. It's very provocative. It makes you think about land and real estate from a different perspective, so on and so forth.
Speaker 2:Now I'm on my third book, which is more about entrepreneurship and the mentality and the lifestyle, the life choices that an entrepreneur must take and make in order to succeed. So there it is. I've spent the last close to 40 years owning businesses. I know I look young, I feel young in many aspects, but I started young.
Speaker 2:I started this career of entrepreneurship as a teenager, essentially, and one business led to another and another, and my obsessive, compulsive personality and behavior never allowed me to stop. During good years I was expanding. During bad years, I was trying to figure out how to get out of trouble and how to look for better and newer opportunities in multiple industries, and it has been a very, very interesting, exciting journey, but also a very tough, difficult, exhausting at times, where it was never boring. Where it was never boring, there were many, many, many times when I just couldn't find the will or the strength to keep going, when industries got difficult, when economic cycles were against me, where luck was not on my side, which it often happens to many entrepreneurs. We perceive things a little bit different when we start a business, although it is scary, but we always think that our plan is going to work the way that we intended for it to operate, and it rarely does.
Speaker 2:In the world of business, everything is very unpredictable, everything is a surprise, everything is confusing and everything is challenging.
Speaker 2:There's competitors.
Speaker 2:There are too many people attempting the same businesses, whether they are a little bit different or not.
Speaker 2:So this world of entrepreneurship is not for everyone, and I often talk about how you must have the right personality, the right level of tolerance to pain, to stress, to pressure, to deadlines, having your brain always on, having one of those personalities that never stops, that never has a moment for him or herself, with clarity, because you are always overwhelmed with a in order for things to move forward and be responsible for other people's activities, not just yours grows, the more things depend less on your actions and more on collective efforts of everybody around you, and it becomes harder and harder to control everybody's activities.
Speaker 2:And for that you need a vision, you need a mission, you need a clear message, you need an identity that you bring to the table as an entrepreneur and clarity for everyone around you to understand what it is that you're trying to do and where are you heading with this business of yours. So all of those are things that entrepreneurs with experience understand and the new ones will learn perhaps the hard way. So, anyway, that is a brief, brief interruption. I can obviously go on and on, but but that's that's kind of where I've been spending the last few decades of my life.
Speaker 1:That's interesting. That's really good. I like it. The biggest one I was curious about is you never mentioned any of the titles of your books. What were the books titles?
Speaker 2:Yes, yes, the first one is the business of home building. Ok, this is, yes, this is the one that it does not train or teach anyone how to build a house by any means. Build a house by any means. It teaches, it talks about the business side of things. It teaches you and helps you how to build the business that builds homes, or that builds anything else, for that matter. So that is the first book, and the second one is Dirt Rich.
Speaker 2:That is the one that talks more about land speculating and land investing and land development. The third one that I'm working on is I won't disclose the name yet because it has not been finalized but it's really about just about entrepreneurship, the mindset of an entrepreneur and the mentality, the personality that it requires for you to succeed in the business world I'm just curious do you have audiobooks for your books also?
Speaker 1:I'm sorry uh, do you have audiobooks for the, the ones you mentioned?
Speaker 2:dirt rich, yes yes, well, dirt rich. It will be published in in the next few weeks. But, yes, for for the, the business building, that there are, uh, it's, it's out there, uh, in the ebook version and, um, I'm I'm hoping to also translate it soon into other languages. But, uh, well, I, I suppose I will start with spanish being my, my first language and hopefully eventually it will go into other markets. But I essentially wrote that book as something that I needed to do personally, something that would help me move on to the next stage of my life, not necessarily to sell a lot of books, although I think that it is a helpful tool for anybody that's starting a business and that wants to understand the challenges, not just the success portion of this career, but the obstacles and the adversity that comes with it.
Speaker 1:Yeah, no, it's the biggest thing, as I've been doing this podcast for two-ish years is that's the biggest one? People like you said, there's a lot of people doing the same thing you're doing, so what's different, kind of thing. Um, there's a lot of people wanting your position, and what are you going to do to keep it? It's true there's it's a very special breed of person. You can learn it, but generally you kind of just need to have it, kind of thing.
Speaker 2:Yes, yes, yes, because we confuse the meaning of building a business or the word entrepreneurship. Starting a business is one thing that is very, very challenging and very difficult. It's dangerous, scary, it's speculative. But remaining in business, even if you don't grow, even less when you begin to expand your business, that's when most businesses fail, because that building a business, growing a business, is the equivalent of starting a business on steroids. Moment when everything changes the responsibilities, the process, the concept, the team, the obligations that every member need to bring into the equation in order for things to move.
Speaker 2:You're inventing things as you go, you're creating things as you go, you're coming up nonstop with better ways of ensuring that your business is going in the right direction, and you need to not only be very effective, very precise, very intense, but also you need to be very open-minded. You need to know that you may need to pivot and make changes. That perhaps are things that are not working, and a lot of entrepreneurs happen to be very, very stubborn. They want things to work one way, or the highway, as they say. If there's not their way, if it's not the way that they envision things, and they start getting discouraged without realizing that. No, what I want is for my business to succeed, not for my ego to succeed.
Speaker 2:And removing that arrogance and removing the ego from any business transaction and from the growth of any business is important, and not every entrepreneurship has the ability to leave that at the front door and be able to listen to others and have conviction about what you're doing.
Speaker 2:But also an open mind to be able to listen to others and have conviction about what you're doing. But also an open mind to be able to be flexible when things start getting difficult and when the need of new ideas and new concepts are required for your business to expand. So it's easier said than done and of course, there are different business models some that are very intensive in the growth sector. Some of them are not. Some of them are more regional or local or very specific, attending one niche of a sector in the service industry or one product. But there are others that can grow very fast and you have to be prepared for it. So bringing in understanding the business model that you choose is very, very important for you to accomplish the outcome that you anticipate. There are many, many ways to go about it in the business world.
Speaker 1:Oh, absolutely yeah, the one joke I always tell people there's a million ways to the top of the mountain. Not all are the best. So the one thing I've been thinking about, as you, thank you, the one thing I've been thinking about for you, as you've been talking and you mentioned, you've been in this game for about 30 to 40 years, so you've seen a few downturns of the market. How did you adapt and learn and grow from those downturns? Because, especially, I know, in 08, and then 2020 was a unique special too. That was unexpected kind of thing.
Speaker 2:Oh yeah, yeah, yeah kind of thing. Oh yeah, yeah, yeah, I've been through some horrible times and terrible cycles in, not just in in real estate, but in every business that I've been in. I don't know if it's been luck or destiny or by choice, but the businesses that I've been more deeply involved in have been very, very cyclical and very speculative, starting with the energy business where I began my career, where I was dealing with commodities in the petrochemical industry, building petrochemical plants for companies that had ups and downs. In one year we had a plans to build a few plants and there was expansion, and so you had to hire people and train people and invest and all of a sudden they turn off the switch and you have to figure out what to do with the, the infrastructure that you created. Nothing that you wrong, but it's just something you have to deal with. Commodities, petroleum and other resources change, their values change, they fluctuate and businesses have to figure out how to deal with those, and if you're not a public company with deep pockets, it's an extremely difficult thing to handle. It happened to me.
Speaker 2:Uh, unfortunately I won't get into every business example and I will not call them failures. They were experiences in which the business did not get to where it needed to, to to the, the level that it needed to reach for one reason or another. Let's call them these downturns and and economic changes, but I had several, several uh in in when, when those happen, it's. It's a very terrifying experience because, all of the sudden, your income goes away, the, the, the circumstances change, but your overhead is still there. Your expenses, your investment, your life, the amount of time and number of years that you've invested and devoted to this project, all of a sudden look like they're about to fall apart, and it's not like having a job. That, yeah, it's scary, but tomorrow you can go and find another one.
Speaker 2:Starting and building a business is not something that happens overnight. It may take you another decade before you're able to build another one successfully and 10,000 or 10 million headaches before you get there. So it's a petrifying experience when something goes wrong and at that point, well, it depends on the type of industry, depends on the level of. Unfortunately, when I've been through these experiences, these bad cycles, I was also caught by another ingredient that was terrifying, which was leverage. We were talking about growth. I happen to have been in bad economic cycles, operating and building a business. While it happened, I was highly leveraged, meaning I had borrowed a lot of money to go to experience the growth, to be able to achieve the growth, and when the economy changes and those cycles turn and it catches you in a growing mode, it can kill you overnight because all of a sudden, your income goes to nothing while you're having to sustain a humongous debt, carrying costs and a world of other expenses that your company has to carry. And at that point it truly becomes mind over matter. Your mind needs to start processing these issues one at a time and just focusing on surviving.
Speaker 2:There were many, many days. Let's skip several experiences and go to the real estate business where at some point, we had an endless amount of inventory homes for sale, land being developed, institutions, banks, lenders, investors, multi-million dollar operation with hundreds of contractors working simultaneously and all of a sudden, everything came crashing down on us and processing it, understanding what's happening was very difficult, just coming to terms with a new reality where now your new task was not to grow and was not to make money. It was trying to figure out how to get out of trouble and how to begin this process of decompression and destroying in pieces what took you decades to build, and this is very demoralizing. This is very, very difficult to process. It's depressing, and these are moments in time in someone's career as an entrepreneur where you must find so much strength within you to just get up in the morning and deal with these things, when these are moments when all you want is to run away and hide and not have to deal with all of the problems that are coming your way, the demands that are coming your way, and I remember those every morning, struggling to just get up and figuring out how to deal with a situation, how to move things around, how to negotiate with banks. All of a sudden, all of the time you were devoting and building a business and creating systems and procedures and dealing with a growing moat, now you're devoting it to putting out fires. Your activities completely change overnight. Now it is how to pacify everyone that you owe money and how to gain time to just live, to see another day and deal one day at a time, managing things.
Speaker 2:And one of the lessons that I've learned and that I give to new entrepreneurships is to manage leverage, to understand that growth needs to be gradual unless you have deep pockets behind you that are supporting that growth. But if you're doing it the way I did it by leverage and without much outside capital, it's very risky and you have to pace yourself. You have to do it slowly and you have to understand that when things start doing well, you need to begin to put money aside, because we tend to think that business is going to continue doing well. You need to begin to put money aside because we tend to think that business is going to continue doing well forever and ever. We're just creatures of habit and creatures of simple, simple mentality and psychology where we feel that when things are doing well, we get greedy and when things are going bad, we fear circumstances. But there's never a middle of the road and we need to find that middle of the road. Even when things are doing well, we need to figure out how to put money aside. Thankfully, we did in most of our companies.
Speaker 2:Part of the mission was to build reserves and build resources and not reinvest everything. Or well, let's call it not spend everything. We would definitely reinvest in growth, but we would always have reserves and those reserves helped us survive those difficult years. So your activities need to change when an economic environment occurs and, believe it or not, they happen to many, many industries, more than what people think.
Speaker 2:Whenever there are, there is uncertainty economic uncertainty, now that information is globalized and now we know what's happening in the Middle East, we know what's happening in Asia, we know what's happening in South America. If there's a war that breaks out, if there's an economic issues in another side of the world, if there is some uncertainty, business owners and investors tend to get a little bit concerned. People buying homes, people buying goods and services, people going out and all of a sudden, business owners begin to suffer. Some of them don't even know what's happening or why their sales are slowing down and they need to keep up with information and understand that, even if you own a little mom and pop shop, anything can affect it A new competitor, currency exchanges, economic changes, elections, interest rates, the environment of the media that might be feeding us with something negative at any particular time, which is what the consumer index reflects.
Speaker 2:If consumer confidence drops, our business may drop, and all of us, as entrepreneurs, need to understand that things can change overnight and that we need to be prepared for it. Hopefully they won't. As they say, you know, hope for the best and prepare for the worst, and that's the way that businesses need to be ran. The more I stay in business, the longer I am, the more cautious I become, because now I know that things do happen and the younger, the newer entrepreneurs are perhaps too optimistic. It's great to be positive, it's wonderful to have a positive outlook in your business and in the future and in the economy, but it's also smart to know and to understand and agree with the fact that those good times may not last forever and bad years and bad cycles do occur. Once you experience a few of them, you begin to become a little bit more skeptical, perhaps just cautious and careful in the way that you approach each decision.
Speaker 1:Oh, absolutely. Yeah, that's. I'm working for, um, a young company right now and they're they're growing like crazy. And that's where I keep telling them on my, hey, you need to set something aside or, like, delegate more. But, um, they're like, oh, it's just Josh or whatever, and I think so. It's interesting to see he, the guy I am working for his business taking off in a season when it normally doesn't take off. So he's like this is great. I'm like, well, let's see what next year does.
Speaker 2:Yeah, yeah, yeah, yeah. And, of course, every business and every industry is different. There are some exceptions, perhaps, and even those are difficult, but whenever you invent a new way of doing something, a new concept, a new product, you want to move fast, because copycats will be out there very soon trying to duplicate what you're doing and you want to gain as much market and as much credibility in the brand as possible. There are some exceptions, where time is of the essence and you need to grow and expand, but even those, they need to be done carefully and they need to be done with a plan, with a plan of attack. So, yes, the growth is a double-edged sword and it is something that needs to be well thought of according to your industry and according to what it is that you do, so that you can better prepare for it.
Speaker 1:Absolutely. Yeah, that's a big one. I talk with the owner about, oh Mike, your industry that he's in. I'm like it's generally safe, but there are going to be seasons where you it's like a boon and bust kind of thing. But there are going to be seasons where you it's like a boon and bust kind of thing. He's kind of listening to me, he's, he's very stubborn, has to control everything, and I get that too. But it's like, dude, it's also good to listen to some outsiders not all of them, but some where they actually have your interest in mind.
Speaker 2:So well, some leaders, entrepreneurs find it hard to listen to other people's advice, and I don't blame them. This is another irony that having that perfect middle of the road where you're not too stubborn, where you're not so square minded as an entrepreneur and so obsessed with your reality but at the same time, you stay your ground and you follow your mission and you don't change your model just because everybody's giving you opinions, because it is easier for outsiders to find solutions to problems. By nature, it is always easier for us to fix someone else's problem because we don't bear the consequences of the outcome. So, as an entrepreneur, you will always hear everybody telling you how to fix problems and how to find these solutions and how to improve and how to grow and how to expand and how to make more money. But they don't have your business as their priority. It's not their livelihood.
Speaker 2:So you need to mix and match pieces of information. You need to be open-minded, listen carefully, pay attention to opinion, different opinions from the people that you care about and that you respect and something I always say listen to opinions from people who have done it, who have been there and done that not fully, because not everybody has gone through your journey or dealt with your precise examples of businesses and activities, but they've traveled the difficult journey of building a business. I hate to listen to people who have never done it. It's very easy for everyone to tell you how to improve your operation when they've never done it before. So be careful to who you listen.
Speaker 2:To improve your operation when they've never done it before, so be careful to who you listen to. And then come up with your own conclusions. Create your own dish, your own salad of information the good, the bad and the ugly and make your decision. Don't operate based on somebody else's decision, because if you fail and you didn't follow your gut instinct, it's going to hurt a lot more than when you fail based on your own decisions.
Speaker 1:Oh yeah, jose, the meeting's about to end, so, before the meeting cuts off, is there anything you want people to know or go to?
Speaker 2:No, no, no. Visit me at joseberlangacom. It's been an incredible journey. I always recommend this young generation, this new generation, to not wait too long before to get into an industry because you like the industry, because there's an interest, a deeper interest, in just making money, but, at the same time, find something that you happen to be good at, because that way you have much better chances of succeeding. If you like the business and you're good at it, when you combine those two, that's the right formula for improving your potential, improving your chances of success.
Speaker 1:Wonderful. I love it. Thank you, Jose. This has been honestly an eye-opening conversation with just the information you were just giving me. Truly appreciate it.
Speaker 2:Thank you, josh. It's great being here, great talking to you, and I hope we can do it again soon.
Speaker 1:Definitely.