April 29, 2019

JF1700: NFL Tight End Double Dips In Real Estate Investing with Hakeem Valles | Syndicated Deal Analyzer


Hakeem is a tight end for the New York Giants (as of the recording) and a real estate investor. He shares how he became interested in real estate investing, and we also hear some deal specifics. Hakeem explains how he put together his first sample deal package to show to potential investors, and how he presented it to them to secure verbal commitments. If you enjoyed today’s episode remember to subscribe in iTunes and leave us a review!


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“You can work your way into real estate deals by adding value to others” – Hakeem Valles


Hakeem Valles Real Estate Background:


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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, Hakeem Valles. How are you doing, Hakeem?

Hakeem Valles: I’m great, Joe. Thanks for having me.

Joe Fairless: Yeah, my pleasure. Nice to have you on the show. A little bit about Hakeem – he is a tight end in the NFL. He has played for three teams – the Cardinals, the Lions and the Giants most recently, and most relevant to us, he has been investing in real estate for seven years. He started by flipping ten houses in college. I imagine you were playing football and also flipping homes in college; you were  a very busy man in college. Based in New York City… And you can say hi to him – we have his link to his LinkedIn profile in the show notes.

With that being said, do you wanna give the Best Ever listeners a little bit more about your background and your current focus?

Hakeem Valles: Absolutely. Thanks, Joe, for the beautiful introduction. Like you were saying, my name is Hakeem. I originally went to Monmouth University; it’s a small school in New Jersey, and it’s one of the few schools in the country that has a real estate program for an undergrad… My undergrad is Business, with a concentration in real estate.

While I was in college, I found a mentor who was essentially — the girl I was dating, her dad, at the time, had just started flipping houses… And he knew I was a real estate major and he kind of took me under his wing. And I just had to decide different places and facets in his business where I wanted to add value. So I was the guy swinging the sledgehammer, I was the guy driving for dollars, and I didn’t even realize what I was doing at the time. I was knocking on doors of pre-foreclosures and putting in offers. I was handwriting our direct mail campaigns. It was a lot of experience, and the wildest part about it is I didn’t even know about Bigger Pockets at the time; I was just experiencing and doing. It was wild, and it was kind of hard to do, playing division one college football; it’s not the easiest thing to do, but real estate is something that I’m passionate about and I love, so I made time and made it happen.

As I transitioned in my career, like you were saying, I went to the Arizona Cardinals as a rookie, and what I decided to do was to house-hack a fourplex using my FHA loan. I bought a 4-unit in Phoenix, lived in one unit, rented out the other three; it was awesome. It was completely the opposite of what my teammates were doing.

Joe Fairless: Oh, I guarantee you it was the opposite of what they were doing… [laughs]

Hakeem Valles: Yeah, and you’d be surprised of the neighborhood that the fourplex was in. One of my tenants was Section 8, and I didn’t mind it. It was the right move for me at the time… And it really protected me, because I have a brother as well who’s an NFL player, and I watched him while I was in college, when he got traded from the Oakland Raiders to the Buffalo Bills, he was still locked in on a lease and open for like another six months, paying 3k/month for rent. I’m like “Man, that’s $18,000 going in the air”, you know what I mean?

Joe Fairless: Yeah, yeah.

Hakeem Valles: So it essentially protected me… And when I knew I was inevitably gonna get cut from the Arizona Cardinals, when I got cut, I took that unit and now my property manager Airbnb’s it, and he does double of what it would do for renting it out. Then I slowly rinsed and repeated and did the same exact thing when I got to Detroit. Within a month I found a duplex, lived downstairs, and my fiancée, she handled the Airbnb upstairs, and it covered our mortgage.

We’ve just had a newborn, I’m the father of a five-month-old…

Joe Fairless: Congrats.

Hakeem Valles: Thank you, sir. After the baby came, we decided to stop airbnb-ing, and then moving forward, after I was released from the Lions, I have a property manager renting that property out now. Moving forward, I’ve just found mentors along the way. I’m currently working with a few partners out of Detroit and Miami, and we’re starting an opportunity zone fund. We’re headed over to Germany to start raising the capital for that at the end of February. We’re heading out to Germany to start this fund, so I’m really excited about capitalizing on the opportunity zones across the country.

But yeah, that’s essentially where I’m at. I’ve been investing for seven years and real estate is my passion, my lifeblood, what I eat, sleep. I talk to everybody about real estate. I love it.

Joe Fairless: So you talk to everybody about real estate… I imagine you were talking to everybody about real estate while you were playing for the Cardinals and the Lions and you were house-hacking. If that is the case, what were your teammates saying about what you were doing?

Hakeem Valles: Essentially, how I approached the process was — I’m sure you’re familiar with Michael Blank…

Joe Fairless: Sure.

Hakeem Valles: I took his guide on how to raise money… He teaches you how to create a sample deal package and present it to investors when you don’t have a property under contract. So after my rookie year (or second year) I built out the sample deal package – it was a 50-unit property in Phoenix – using his syndicated deal analyzer, which is amazing software; with that, I can analyze a deal in like ten minutes, but be the most professional-looking model that you’ve seen.

I essentially made this very nice sample deal package, I went to Staples, got it laminated… I had like 100 books. I started out actually doing it myself in my office, laminating and hole-punching, and I’m like “What the hell am I doing?” I went to Staples and just paid for it and got it all done… And literally, as the season ended – this was my second year – [unintelligible [00:07:00].09] I had the markets that I liked, I knew different players in those markets, and the former players that I’d played with; I set up an itinerary and I spent a month just traveling around the country, presenting the sample deal and getting commitments.

Over time – it took about a month, a month-and-a-half, and I had about 1,5 million in commitments, I would say… And from their perspective — I’d say they’re very receptive to the concept of real estate; you know, everybody loves real estate, and everybody knows somebody who invests in real estate… It’s just more about educating. Most NFL guys have different finance guys and different sharks throwing deals at them every single day, and not really knowing what’s good and what’s bad. I guess from my perspective, being a player, it helps with that certain level of trust, of being a player, going through the grind and all that…

Now, I didn’t saturate my market; I’m not “Real estate, real estate, real estate”. I was very organic about it. The guys who gravitated towards me, and that I like, trust and respect, and we all like, trust and respect each other, then we’d do dinner and it’d be almost like just an education session. I’m explaining how cap rates work, how markets work, the difference between commercial real estate versus single-family real estate, and then just giving them a walkthrough, play-by-play, of exactly how a value-add apartment syndication would work… Showing them the different structures, showing them my fee structure, how I don’t do an acquisition fee, because I’m not looking to make money upfront, and things like that. It was awesome.

And then essentially, whenever I’d get a deal, I’d hit them up. It works very smooth. I had one massive deal in St. Louis. 56 units. It was for 5.6 million, and I had negotiated with the seller to carry back a portion of the purchase price. Earnest money deposit is in, we’re in due diligence, and from the seller’s accountant I’ve gotten their actual numbers from their LLC’s bank account, their income statements… And from what they advertised from their proforma – it was an off-market deal – the NOI was off by about $200,000.

Joe Fairless: [laughs] That’s a lot on a 56-unit.

Hakeem Valles: Yeah, it was a lot, and I’m like “This can’t be real…” And they tried to renegotiate, drop the price, all this different stuff… And I’m like, “No.” The value of my network is too important to risk it on bending to make this deal work. I could have taken less and still made the deal work, but I didn’t know what the seller was lying about, so I essentially went back to each of those investors and — because after presenting the sample deal, I went back to all of them, sent them out the package with the syndicated deal analyzer, with the facts about the property and the market to all of them, and they were all in… And I had to go back and go “Look, this is why we’re not doing the deal – X, Y and Z.” The awesome part about it is that they respected me twofold, and now they’re just hungry and waiting to get on the next deal.

Joe Fairless: So you have your fourplex in Phoenix and you still have a fourplex in Detroit?

Hakeem Valles: It’s a duplex in Detroit, but yes, I still have it.

Joe Fairless: Duplex, sorry. Yeah, duplex in Detroit… And then once you got those two, then you were really hitting the pavement and preparing for some larger deals, and you rounded up verbal commitments of 1.5 million by educating players, and then you came across a 56-unit, the seller was not telling you the truth about what they were offering, and so you exited out of that deal… And now you’re focused with some business partners on the opportunity fund. Is that accurate, or were there any deals in-between that we missed?

Hakeem Valles: Yes.

Joe Fairless: Okay.

Hakeem Valles: Yeah, so with the business partner we’re doing the opportunity zones, and then with my NFL investors – I’m not gonna bring them in on the fund; with them I’m still working – like we talked about before the call – on a direct mail campaign and on a cold call campaign on a specific market that I’ve done research on across the country… And with those markets, I wanna stick to like the 5 to 50-unit range, with those markets and with those investors… Because these are deals that — I wouldn’t say I’m gonna take down myself, because I plan on partnering with different people and markets if the right opportunity comes about… But when I went out to raise all of that money in those different markets I liked, I also built up teams. I was meeting with property management companies, I was meeting with an attorney in each market, that’s familiar with that state; meeting with probably like 5-6 brokers per market… And then just local investors. Every time I was traveling to each market, I’d put out a message on [unintelligible [00:11:43].06] like “Hey, I’m in Vegas. If any investors wanna go golfing, please let me know.”

I met an awesome investor, and we’ve had an awesome relationship since. That’s where my life is kind of going and gravitating towards. With real estate, it’s one of those industries — with most industries there’s always a winner and a loser when it comes to competition; in real estate, I feel like competition just brings out the best in you, and everybody can win. The more people win, the better.

Joe Fairless: With the opportunity zone fund, I believe you said you were traveling to Germany… Why Germany, to raise money for an opportunity fund that’s gonna be in the U.S.?

Hakeem Valles: My partner – he’s also a real estate attorney from Michigan, and 30%-40% of his business is overseas, because he’s multilingual. He deals with a bunch of family offices in the Detroit market, from an attorney perspective… And it’s funny – one thing why I swear by Bigger Pockets is because I’ve met these people through Bigger Pockets… And they’re not even on Bigger Pockets, they’re a friend of a friend of a friend, just through networking on Bigger Pockets… But we went golfing with these people from Ireland, and they’re connected with a family office in Germany who my partner has done plenty of deals with in the past through these people from Ireland… And they deploy 350 million dollars of capital in the United States every year for single-family houses. And essentially, the pitch is having them allocate 150 million of their capital gains towards opportunity zones… Because it makes sense. The capital gains they’re seeing from that injection of all that capital – they’re getting taxed like crazy, and it’s a win/win.

Joe Fairless: What would be your role in that?

Hakeem Valles: My daily role right now – I’m literally finishing up the finishing touches, because we’re gonna send them a pre-pitch before we get out there. Then when we get out there, we’re gonna each take our own role on the pitch, section by section. Then as the fund rolls out, it’s gonna be more of a market perspective. My one partner has the North-East, my other partner has the South-East, and I have the South-West market.

My other role is — from the perspective of my partners and me, I’m the younger guy and I can move around a lot more… So I’m more of a networker and I make things happen. Because like I said, how I work is I like to add value to people’s lives, and one thing I try to tell a lot of young people is that you can network your way into real estate. The stigma around real estate is that you need to be 40 years old and rich in order to invest in real estate, or you need to be retired to invest in real estate. I’m trying to break this stigma; you can network your way into a real estate deal. You can add value and somehow work your way into a real estate deal; as long as you can just give up the concept of instant gratification and just hone delayed gratification. If you really wanna add value, it will work out in the end.

Joe Fairless: Yeah, I love that. Our society is conditioned to want instant gratification, and that’s why a lot of people don’t stick with one thing over a period of time and do it consistently, because they don’t see the immediate results… But I completely agree with you – you can network your way into real estate deals, and then once you network your way into a couple, then that builds momentum, and then you can not worry about the networking into a couple, because then you’re being presented opportunities and you go from there.

Hakeem Valles: Exactly.

Joe Fairless: The conversations you have with NFL investors or players who are wanting to invest in a deal that you put together – what are some questions that they have when you’re talking to them? Because you said the education piece is the important part of it, but then also they’re getting presented “deals” from all sorts of different angles, and for better or worse… So I’m sure they have their guard up as well, so you’ve gotta break through the guard that they rightfully have up, and then educate them on this… So what are some questions that are typically asked of you?

Hakeem Valles: I’d say one of the biggest questions is always “Who is your team and who else are you with?” That’s why [unintelligible [00:15:55].05] first building teams anyway. I instantly, no matter what, lose credibility — I gain credibility with NFL guys, but I also lose credibility, because I’m not a suit; I’m not some suit coming in, trying to present the deal… I’m on the field with you, and then in the locker room we’re talking about it.

Even in the industry as well, it’s the same exact thing, like “Oh, you’re just a football player.” I’m so passionate about real estate, and I hate that stigma. “You’re just a jock.” And that’s another thing – I’m starting a podcast that’s called “Not Just Jocks.” We’re trying to change the stigma of what jocks are, and highlighting what athletes do outside of their sport. Even for this pitch when we’re going to Germany, I don’t wanna be the dumb jock on the side of the room, so for the last 2,5 months I’ve been learning German; I watched Netflix movies in German, I watched TV shows in German, and [unintelligible [00:16:40].23] Why not, do you know what I’m saying? It’s the opportunity of a lifetime, and I take advantage of it in the lifetime of the opportunity.

But questions that they have – one is always the team, “Who are you dealing with?” Two is honestly the market. That’s why I was strategic with it; as I traveled market to market, in the markets that I liked, I like to talk to investors in that market… Because just to start with – a lot of NFL guys, like you said, [unintelligible [00:17:05].08] there’s so many deals that they see every day; they’re only gonna go with what they’re comfortable with. So I like to really frame it with the perspective of “We’re working on deals across the country, but to start with, I’d rather do a deal in a market that you already know, or are comfortable with.”

Perfect example, I have a couple teammates of mine — obviously, I’m not investing out there like Brandon Turner, but it really comes down to just educating… Like, I spend three hours breaking down deals to people, and it really comes down to… Also, they wanna do background checks on everything. We’ve gotta go through background service as an NFL player, and it’s annoying to some investors, even my partners, but it’s just a process that has to happen. And once it happens, and once everything is fluid, it’s a beautiful process.

Joe Fairless: The free background check service is a very necessary tool. I’m glad that that’s offered to you…

Hakeem Valles: Absolutely.

Joe Fairless: …with all the different opportunities that I imagine are sent your way and everyone’s way who’s in NFL. What’s your best real estate investing advice ever?

Hakeem Valles: Wow, my best investing advice is to just get going. Release those pre-conceived notions of whatever’s holding you back and just get going. The thing that held me back from getting my fourplex – I didn’t know if my dad was gonna be cool with it or not… And I remember telling him about it, and how excited he was when I told him; I was like “Wait, what…?” And then a month and a half later I was in a fourplex, because it was just like — that was what was holding me back. Just get going.

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

Hakeem Valles: Absolutely.

Joe Fairless: Alright. First, a quick word from our Best Ever partners.

Break: [00:18:47].07] to [00:19:50].01]

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

Hakeem Valles: The Go-Giver.

Joe Fairless: Bob Burgh, great book.

Hakeem Valles: Amazing.

Joe Fairless: Best ever deal you’ve done?

Hakeem Valles: My fourplex with the FHA loan. I put down 13k, and it cash-flows about $800/month. I’ve never paid a dollar out of my pocket, because the tenants pay the mortgage.

Joe Fairless: What’s a mistake you’ve made on a transaction?

Hakeem Valles: My duplex in Michigan. I was so eager to move in, I breezed through the inspection report and I had a cracked pipe going straight down the middle of the house.

Joe Fairless: How much did that cost you?

Hakeem Valles: Detroit is hard with handymen, so I had to deal with three different handymen and plumbers. It cost about 7k, and no kitchens on either floor for about a month, because they had to go straight through the wall. So that was a mistake.

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

Hakeem Valles: By giving my time. I like to take the time and just — you inspired me, actually. After booking the podcast to be on your show, that link of Appointlet.com. I was like “Whoa, that was really convenient.” And I literally went and signed up for Appointlet, and now it’s amazing; now people can kind of respect my time. I’m sorry, I went on a tangent, and didn’t realize what your question was and why I even brought up Appointlet.

Joe Fairless: That’s alright… Best ever way you like to give back.

Hakeem Valles: Oh yeah, talking to people about real estate. I have a lot of teammates, even just like college people, who just wanna know about real estate, and no one is giving it to them genuine. A lot of the stuff about real estate that you’re looking for out there, a lot of the best advice – sometimes you’re not even gonna find it on Google; you’ve gotta look in books. So I kind of just give my time to people, and I send them my appointment link. “If you guys wanna talk about real estate, Bam! Here’s 30 minutes. Whenever you wanna chat, we chat.” I have about three or four calls lined up for today.

Joe Fairless: How can the Best Ever listeners learn more about what you’ve got going on?

Hakeem Valles: My website is currently under construction. I know you said you’re gonna include my LinkedIn link; besides that, just social media. My Twitter and Instagram is the same, @hakvalles80.

Joe Fairless: Anything you wanna say in German before we take off?

Hakeem Valles: Das Boot! [laughter]

Joe Fairless: Rosetta Stone is serving you well.

Hakeem Valles: Yeah, right?! Or Beerfest.

Joe Fairless: [laughs] I really enjoyed our conversation, and learning about how you’ve been focused on real estate since college, and managing to excel in both school and football stuff, as well as the real estate stuff simultaneously; what a person who’s good at prioritizing your time, but then also maintaining focus. Clearly, you had to maintain focus in each of those things, so it’s not just prioritizing, but it’s channeling the focus when you’re prioritizing that. Very impressive. It’s tough to go to college and graduate for some people, and then for other people it’s tough to go to college and play a sport… And then I don’t know too many people who go to college, graduate, play a sport, and also flip ten houses while in college. Very impressive, and clearly it’s flowed from college to today and what you’re doing…

So I really enjoyed hearing about your approach and what you’ve been up to. Thanks for being on the show. I hope you have a best ever day, and we’ll talk to you soon.

Hakeem Valles: Absolutely. Thanks again, Joe. I appreciate you having me.

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