May 22, 2018

JF1358: Relationship Based Lending For Long Term Partners with Ramon Gonzalez

Ramon got his start in real estate when he left the corporate world to be an entrepreneur. A large part of his success he can attribute to being able to identify what he is good at and sticking to where he is wanted. After multifamily investing in Miami didn’t work for him, Ramon tried the fix and flip model. Ultimately neither strategy was fulfilling, now he lends money to active investors, and loves it. Hear what he looks for before lending to an investor and why being able to put your ego aside and focus on your strengths is key to being a successful entrepreneur. If you enjoyed today’s episode remember to subscribe in iTunes and leave us a review!


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Ramon Gonzalez Real Estate Background:

  • Summitt Home Buyers, Chief Investment Officer
  • Places capital with amazing operators that share the same core values
  • 100% relationship based, looking to form and nurture long term relationships with partners
  • Based in Miami, FL
  • Say hi to him at  
  • Best Ever Book: Unique Ability by Dan Sullivan

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Joe Fairless: Best Ever listeners, how are you doing? Welcome to the best real estate investing advice ever show. I’m Joe Fairless, and this is the world’s longest-running daily real estate investing podcast. We only talk about the best advice ever, we don’t get into any of that fluffy stuff. With us today, Ramon Gonzalez. How are you doing, Ramon?

Ramon Gonzalez: Awesome, excited to be here.

Joe Fairless: Alright, we’re excited to have you on the show. A little bit about Ramon – he is the chief investment officer at Summitt Home Buyers. He is really 100% relationship-based and looking to continue to form and nurture long-term relationships with partners. The primary focus of his company now is lending their own capital that they made through fix and flips and multifamily transactions to other operators that share the same core values. Based in Miami, Florida… With that being said, Ramon, do you wanna give the Best Ever listeners a little bit more about your background and your current focus?

Ramon Gonzalez: Sure. I have a corporate background, General Electric… Once I graduated, I worked in Connecticut for a little bit; I left the corporate environment, tried doing multifamily with a partner in Connecticut, then moved back down to Miami. I wasn’t able to do the multifamily model [unintelligible [00:02:04].00] didn’t really work for that, and thank god they didn’t.

We did a lot of wholesale and fix and flip in that timeframe, and then we got out of most of the assets in that timeframe. Then throughout that whole cycle we just fix and flipped and made some money like that, and then kind of [unintelligible [00:02:18].28] cycle again; we started picking up assets, we held them, as well as fix and flip throughout the cycle, and we just kind of exited the majority of our assets last year and this year.

Now we’re kind of just in the lending business. We’ve been doing lending, JV, transactional funding with great operators. We find that that’s been our unique ability, our niche. We were good operators, and as I started to mastermind and connect with folks where that really is their passion and unique ability, they’re just better. I focus on what I’m great at – connecting people, adding value, running masterminds, helping these guys really take their businesses to the next level. I’m a lot more happy, and I have a lot more time, and I kind of go where I’m celebrated, not where I’m tolerated.

Joe Fairless: I’ve never heard of it put that way… Did you create that?

Ramon Gonzalez: No, I actually heard that from a part of my mastermind, but I love it; it’s so simple, but it’s really true. It’s really this concept from Dan Sullivan, from the Strategic Coach – he talks about finding your unique ability. I think a lot of entrepreneurs or investors – I think there’s a big difference here: they don’t know what they want, they don’t know what they’re great at, they’re not really self-aware, and then they kind of resign to a life of doing a lot of different things, but not really knowing what you’re passionate about, what you naturally do easily.

[unintelligible [00:03:29].08] from listening to your podcasts, you have a partner on the multifamily business, because you don’t wanna be day-to-day on the operations, right?

Joe Fairless: Well, he’s better at it than I am, that’s what it boils down to. He has better experience than I do, and as you said, I recognize that I am a good operator, but I have a team member and I’d put him up against anyone else… So he takes the charge on that.

Ramon Gonzalez: And it takes putting your ego aside on that, you know? A lot of guys – when you let that ego run the show, it’s no good; it’s “What’s best for the team?”, and if there’s somebody better that can do that, then let’s split capital up with them and figure out how we can do more together.

Joe Fairless: So with your business now, lending your own capital – you’ve evolved that, and I want to focus the majority of our time on that, but I would like to back-track a little bit just to learn a little bit more about your background. You said you were doing multifamily in the North-East, when you were in your corporate background, GE; you left that and you came to Miami, that model wasn’t working, so you did fix and flipping, and it sounded like you were doing fix and flipping during 2008. Is that correct?

Ramon Gonzalez: Correct. 2008, 2009, maybe even 2010. In 2010-2011 we saw the market start to correct, some of the metrics I was tracking in terms of economic cycles… My degree is in economics, and I’ve always had a passion for markets, market cycles, and I could just tell the market was turning; we started buying and holding at that point in the cycle. It’s not that we’re that intelligent; we definitely forced some appreciation, but the market gave us a lot of that appreciation, and having been through my second cycle now, the market has done a lot of the heavy lifting for us, and I’m grateful for it, but at the same time I’m not taking credit for it.

I think there’s a lot of people out there saying “Hey, I’m a genius”, and the reality is the market — rising tides floats all boats, and I’m not taking credit for that. I know that the market did that work. I did some of it, but the market did the heavy lifting, for sure. So we took some profits, and then from those profits we’re now able to scale up the loan business, and through our network as well.

Joe Fairless: You said you were looking at the metrics and you were tracking the metrics; you’ve got a degree in economics, and you were focused on markets in different market cycles. For a Best Ever listener who is now in the fix and flip — or just an active real estate investor, and they want to look at the market cycle through the same lens that you were looking through, what should we be looking at?

Ramon Gonzalez: One of the key metrics I look at, and probably if I had to boil it down to one key metric, it’s probably the supply of inventory. In a normal market is 5,5 months, in a stable market. When the market corrected, that number went way up. What that number means is how long would it take if no new inventory was brought to the market to sell all the existing inventory.

When you have a number like, let’s say 15 or 16, properties are sitting there, no one’s really buying… So what you can do is come in there and buy the best deals; a lot of inventory is on the market. As you see that number come down, you see foreclosures start to come down, a lot of buyers come back on the market – right when that starts to happen, that’s when you wanna start picking up these properties.

I call that “seasons.” You wanna be buying in the spring, because summer is gonna come and then fall is gonna come, and then eventually winter always comes… And again, winter is not a bad part; like, “No, people freeze in winter.” Yeah, but they also go skiing, so you can still make a lot of money in the winter, especially if you’re in a coastal market; you’ve just gotta adjust your strategy.

Joe Fairless: The month’s supply of inventory – how can I find that?

Ramon Gonzalez: All the realtor boards report that. Your local realtor board reports that, all the properties that are traded. When they report new listings, new inventory, you can also look at days on market and how long the current property was sitting on the market; you can track all the data there. The big one is month’s supply. I like to be in a market where if we’re fixing, flipping when there is very little inventory, the little inventory that comes on the market moves very quickly.

Right now, Fort Lauderdale, which is the market above Miami, for single-family houses it has about four month’s supply, whereas Miami has a little closer to six. So if I had a choice between the two counties, I’d rather be in the one where they’re just moving faster…

And then the other thing you wanna look at is at what price points things are moving. Sometimes under 300k-400k  in these markets no one’s building. So you wanna go where there’s a lot of demand and very little supply. [unintelligible [00:07:52].01] the moment you get over 400k-500k, affordability becomes an issue, things sit on the market longer, there’s softening in the pricing, days on market goes up… So you can be strategic in terms of — this is a business, and when you take on investor capital, we don’t take that lightly at all. We’ve never had to file bankruptcy and never not pay someone on time. And it’s not that we’re so great, it’s that we’ve been able to just really be conservative in our numbers; do what you say you’re gonna do, and be strategic.

Joe Fairless: You were a multifamily investor initially, and then you went fix and flip, and…

Ramon Gonzalez: And then we started picking up both singles and multis, and doing both, and fix and flips that generate the income to buy and hold.

Joe Fairless: Okay, perfect. So since you have a background in both single-families and multifamilies, does the month’s supply of inventory metric apply to multifamily purchases the same way it applies to single-family purchases?

Ramon Gonzalez: Not as much. Multifamily is more job growth… It’s a different metric. There’s a website called They provide a lot of great data on multifamily, commercial, where things are in the economic cycle. Even what they call things are different – they call it recovery, expansionary [unintelligible [00:09:06].24] What they track is different on the multifamily and commercial side. IRR tracks all those markets, and it’s what we then use.

In the multifamily space I like to buy for the recovery, and up to late expansion. I think that’s where a lot of the rent increases and everything else, a lot of the value-add is in that space from the market, and then you can refi or do what you want. If you wanna hold it through the down cycle, you definitely can, as long as the properties cash-flow; it’s one of the great things about multifamily. And yet, if your expectation is to have a lot of high appreciation from the market appreciation during a down cycle, I think that [unintelligible [00:09:40].25] during that down cycle, so I think a lot of people are gonna get squeezed if they’re buying at high basis right now, and there’s no value-add.

Joe Fairless: So now let’s talk about your current business. You’re lending capital to operators that share the same core values. I’m repeating what I have in my notes here for your bio… So I’m assuming those are your words, is that right?

Ramon Gonzalez: Yup.

Joe Fairless: Okay, cool. So what are the same core values that you’re looking for?

Ramon Gonzalez: At the high-level are that they’re loyal (loyalty is important  to us), that they think long-term, that they’re relationship-based… So if someone reaches out to me and says “Hey, let’s do a deal together” and they’re like “Alright, what are your rates and what are your points?”, I want them to win, and they also want us to win.

Our loan portfolio right now is gonna be 10 or 15 different borrowers, and we can go deep with a few guys, versus wide with a little bit of guys. Our goal is to help them do more and make more, and ultimately how do we do more together. So they think long-term, they’ve gotta wanna grow… A lot of folks are okay doing a couple deals here, a couple deals there, but that’s not what we want. Most of our guys are doing anywhere from 5 to 10 deals a month, maybe more, depending on the market and depending on what the strategy is… But they can consistently keep a fair amount of capital at play and still keep liquidity high. So high-level that’s what we’re looking for: integrity, thinking long-term, that they invest in themselves and are always growing…

When stuff happens, Joe, in this business, that they tell me about it, that they’re vulnerable and open and say “Hey, you know what? There’s an issue here. This is taking longer than what I thought”, or whatnot.

As long as we have those core values together… And really, the biggest one is that if something went wrong, they’ll do whatever it takes for being resourceful… Take a job at Burger King, whatever it takes to actually pay us back.

Joe Fairless: How do you evaluate for the Burger King example? How do you determine that someone has that characteristic?

Ramon Gonzalez: It’s the hardest part, Joe, because they asked JP Morgan, “Do you look at the deal or do you look at the opportunity? What do you look at?” The answer was “Character, character and character.” I couldn’t agree more. It takes time to know someone’s character, because character is tested when things get tough, that’s when character is tested.

I’m in a lot of high-level masterminds, I’ve spent a lot of time with the operators, and you just start to see how they do things, you start to see how they treat their people, you start to see how they treat a waiter. I run the background checks obviously, and I actually like that they have something – a bankruptcy in the past, or they’ve been through something… I actually prefer that, because I know that they’ve been through it. My thing is not that you’ve been through stuff, but what did you do about it, how did you treat your people…?

So I look at the integrity, I look at how they do things… And really, I like to see how open and vulnerable they are with what’s going on in their business, because all of us being entrepreneurs, there’s challenges we have – hiring people, scaling out the business, emotional challenges… Our holistic being, relationships side. If someone’s looking for help and they realize that there’s an issue and they’re open and vulnerable and coachable, that tells me a lot about somebody.

Joe Fairless: Speaking of challenging stuff – that you and I and everyone else has come across as real estate investors, I’m sure – what’s a challenging moment you’ve had in your business?

Ramon Gonzalez: Oh, wow… I’ve had all sorts of challenging moments. I think the most challenging thing as an entrepreneur… I differentiate an entrepreneur from an investor. An entrepreneur is someone who wants to build out a business, hire people, create staff, processes and systems, and there’s a transactions side of the business. To me, an investor is someone “Hey, you’ve got capital, you put capital at play.” So when we do more of the loan piece, that’s more of the investor piece, even though we are actively growing that business… Yet, it is “Hey, we’re putting capital at play for a return” – that’s more of an investor.

When we were doing a lot of the fix and flip transactions, and in that space – we did some JV deals in that space – the hardest part I think about being a business owner is bringing someone on board, training them, making sure that their core values are aligned with the company’s, and then really helping them grow. Some of the worst parts is letting someone go. I care so much about my team and bringing people on staff that if something doesn’t work — you do everything you can; [unintelligible [00:13:30].00] when we hire people and everything else, but sometimes it just doesn’t work out. Sometimes you go to three or four people, five people, and it can definitely be frustrating and a little bit discouraging at the same time.

I’ve had employees come on staff starting at $30,000 become multi-millionaires through our organization. Outside of my daughter and my wife, maybe even the masterminds, it’s the single biggest thing that I’m most grateful and proud of, when someone in the organization becomes a multi-millionaire. Sure they did the work, but you were there as a coach to help them, inspire them, influence them… And that’s what you can do as a coach. You can’t do the work for them, but it sure is gratifying.

Joe Fairless: If you can think about one of those individuals who came into the organization making 30k and then becoming a multimillionaire, what transactions did they do to get them to be a multi-millionaire?

Ramon Gonzalez: They were always very up-front on saying “Hey, whatever you guys are doing, I want to start doing some of this as well. If you can teach me, I’m here to learn, and I’ll take less of a salary, but I wanna learn everything you guys are doing”, and they were willing to pick up tasks on the weekends, or willing to pick up extra work. So they didn’t limit themselves to that role, and we were almost like a partner; whatever was needed from them, they were willing to do.

And then also it’s the organization – me as a leader, if I came across a deal, and rather than sell it to the market, and even though we were gonna make a substantial profit, this person in our organization [unintelligible [00:14:50].11] and she said “Look, I’ll buy this deal at this number.” And again, she saw what was happening with the market, she picked up a few condos, and as the market increased in value, she started refinancing, recapitalizing, and continue to save. And again, deferred gratification, and just followed the footprints we were doing. She followed all our property management  systems, how to find properties, how to do direct mail… She figured all those pieces out on her own, and she was very intentional and said “Look, I’m not gonna compete with you. I’ll do this [unintelligible [00:15:17].17] I’ll do this through the MLS”, and I was totally on board.

I knew she was gonna become wealthy by working for us, and I’m so proud of her. She is family. I only had one employee do that. She isn’t my family, but she is family, you know what I mean?

Joe Fairless: Yeah, I hear it, and I’m sure she’d say the same thing about you, that’s for sure. So basically it was the method of buying condos, them appreciating in value, refinancing out the proceeds and using those proceeds to put into new deals?

Ramon Gonzalez: That’s it.

Joe Fairless: Great stuff.

Ramon Gonzalez: Yeah, just being persistent, just continuing to persevere and not bang our head against the wall… And there’s people out there like that, you can change their lives. So as an entrepreneur, outside of the profits and everything else – the money is temporary; that’s single biggest impact that you could do as an entrepreneur – the lives of the people you touch.

Joe Fairless: Based on your experience as a real estate investor and entrepreneur, what is your best real estate investing advice ever?

Ramon Gonzalez: When you look at a deal or you look at an opportunity, identify if it’s an opportunity or distraction based on your unique ability. What is it that you’re uniquely great at? What is it that you’re here to do? There’s 1,000 doors to financial freedom; what is your thing that you have a unique gift at? Follow that course to your financial freedom path. It’s gonna be different for you. Don’t copy anybody else; listen to them, take advice, but find your unique way, find out what you’re great at, and then double and triple down on that. That’s gonna be your unique way to financial freedom.

Joe Fairless: Powerful, powerful. I’m gonna repeat what you said, the Best Ever advice, and then I’ll recap it later, because it definitely needs to be mentioned again. Identify if it is an opportunity or a distraction based on your unique ability. I always talk about identifying the unique ability that we have and leveraging that, but I never thought about assessing it based on new opportunities and seeing if it’s a distraction or if I can leverage what I’m doing. That’s great stuff.

Ramon Gonzalez: Awesome, I’m happy to add value to your listeners. I think what you’re doing is amazing, and it’s definitely needed, man. I think you’re creating a huge impact, and I’m really proud of you, man.

Joe Fairless: I appreciate that. We’re gonna do a lightning round. Are you ready for the Best Ever Lightning Round?

Ramon Gonzalez: I am, I’m ready!

Joe Fairless: Alright, let’s do it. First, a quick word from our Best Ever partners.

Break: [00:17:29].19] to [00:18:09].13]

Joe Fairless: Okay, best ever book you’ve read?

Ramon Gonzalez: Best ever book I’ve read… I’m gonna go with A Unique Ability by Dan Sullivan.

Joe Fairless: Oh, man… Okay. I did not know that was an actual book. I will check that out. Best ever deal you’ve done, that wasn’t your first and wasn’t your last?

Ramon Gonzalez: Best ever deal I’ve done was an 18-unit deal we purchased in Miami, Little Havana, upcoming neighborhood. We thought we were buying it high; we came in there, redid the whole thing and sold it, and netted about a million dollar on it.

Joe Fairless: Why did you buy it if you thought you were buying it high?

Ramon Gonzalez: I didn’t really know the market and I didn’t really know the pocket that it was at, and how good the pocket was. It wasn’t until later a Marcus & Millichap broker – him and I are great friends – told me “You don’t understand how good of a quality location this is”, and what was going on in the area. I thought it was a good deal, but yet the area and everything else, really… I was able to get higher rents, I was able to get better quality people just because the exact corner it was at.

It was still in a hot spot, it was still in a touristy area; I didn’t know that, but I was right at the fringe of that. Had I been on the other side of the street – a completely different property. This just goes to say, know the areas, because that building generated an extra couple hundred dollars in rent a month, and it filled up a lot faster just because where I was at, I could justify the rent increase and I could just find the extra value in the improvements, and someone was gonna pay for that, whereas on the other side of the street they wouldn’t.

Joe Fairless: What’s a mistake you’ve made on a transaction that we haven’t talked about already?

Ramon Gonzalez: A mistake I’ve made – we purchased an 84-unit building in Baton Rouge; it was in a D area, it was a half property contract, the whole building had like a Section 8 subsidy and we weren’t equipped to handle that kind of asset. We didn’t have the infrastructure, we didn’t have the know-how, and we got our butts handed to us.

Joe Fairless: How much did you lose?

Ramon Gonzalez: I wrote off $364,000 last year.

Joe Fairless: That was last year, so I imagine it was more than that?

Ramon Gonzalez: We wrote off the whole thing. We had bought this in ’07, so at the peak of the market (or ’06), and just recently I just wrote off the rest of it. Luckily, we had a lot of gains from the other things, so we were able to kind of tax harvest that, but it still sucks.

Joe Fairless: If presented a similar opportunity now, what would you look at differently that you didn’t look at before?

Ramon Gonzalez: Just knowing that unique ability, and sticking to that. It wasn’t a unique ability; I don’t do a lot of Section 8 stuff. I was missing an operator at that Section 8 stuff, that that’s all they do. So I have an operator now who I’ve just found today actually, and they do a lot of turnkey Section 8 stuff, but that is all they do. They don’t do anything but that. They do C-, D stuff. They have a real turnkey model, they have scale, and then I’ll do that through them, but that wasn’t a unique ability for us. Really staying in a lane…

Joe Fairless: What’s the best ever way you like to give back?

Ramon Gonzalez: The best thing I’m gonna do when I give back is my mastermind. I run masterminds, I have high-level investors coming in, different spaces of real estate, whether it’s mobile home parks, self-storage, whatever it is, or fix and flip business entrepreneurs… And I look to just really connect people together, connect amazing together that share core values, and “How do we do more together?” That’s the best thing I do to give back – the power of masterminds and getting together with like-minded people and just collaborating.

Joe Fairless: How can the Best Ever listeners get in touch with you?

Ramon Gonzalez: You can go to, that’s my website. You can find out more info there if you’re interested in masterminding. I’m on Facebook, I do a weekly Facebook live within real estate and I help people become financially free. [unintelligible [00:21:31].25] is to help a hundred million people become financially free.

Joe Fairless: How many people?

Ramon Gonzalez: A hundred million.

Joe Fairless: That’s what I thought I heard you say. Yes, do that! Please do that, I’m kind of speechless; do that, please. That’d be incredible.

Thank you so much, Ramon, for being on the show. It’s a sprinkle of real estate and a dash of mindset, and I think that’s the approach to take in our business, because mindset is critical to what we do… But we also talk specifics about deals, and lessons learned, and as I mentioned earlier, I’m a huge fan of what you said – identify if something is an opportunity or a distraction based on our unique ability. And it sounds like a good book to read on that is Unique Ability, by Dan Sullivan.

Thank you for talking about your thought process as someone who studied economics. Month’s supply of inventory for single-families, and then for multifamilies it’s more job growth, and you gave a reference or a resource, Great website. They have a (I believe it’s) annual report that’s really good.

Ramon Gonzalez: It’s amazing.

Joe Fairless: Yeah, it is amazing. Thanks so much for being on the show. I’m really grateful you were on the show. I hope you have a best ever day, and we’ll talk to you soon.

Ramon Gonzalez: Thank you, Joe. I appreciate it.

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