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Lessons - How I Built a $700M Real Estate Portfolio Serving The 1% | Jonathan Campau - Luxury Hospitality Pioneer · Success Story with Scott Clary

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  In this lessons episode, discover how strategic use of lease options and distressed assets can unlock
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  high-value real estate deals. Learn how to structure contracts that protect upside while limiting risk,
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  understand the hidden dangers of cross collateralization, and explore how creative
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  negotiation turns short-term plays into long-term success.
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  So this is something that I'm interested in just again we're sort of going through the mechanics
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  of your business, but the options, the options are always key in these like rent-to-own scenarios.
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  So putting options on this for purchase really is that sort of like the play that you've
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  always used for since Kansas to luxury properties in Miami to not like some of the hotels.
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  Exactly. So it's not just when you work on this deal with the owner or the landlord.
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  It's not just I want a sub lease. It's always sub lease but then with the option.
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  Yeah, because if I say to you, can I rent your house, if you were a landlord,
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  can I rent your house and turn it into a commercial enterprise, turn into a hotel you're going to say no?
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  But if I say I want to buy your house in two years, it's a different contract than just a lease
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  with the option to sub lease. So I'm now coming to you saying I want to buy this house and you're like,
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  well, it's not for sale. You know, I want, let's say it's worth a million. I was like, okay,
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  I'll give you a million one and you're like, it's not for sale. I'll give you a million to
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  what's your cost. I can see what you paid for. So I know what your mortgage is. You paid 600K
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  for the house, let's say. And I know your mortgage is probably around 4,000 a month. So I'm going
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  to start offering you at your mortgage cost 4,000. That's where that's the starting point.
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  I understand. Okay. So I'll pay you 1.3 and I'll pay you 6,000 a month. I told you it's not for sale.
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  I'll give you 6,500 and I'll pay 1.4 million. Why would you do that? Well, I need five years to
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  get it there. Now the terms, the levers start to move. The lever is not now a two-year contract.
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  We're on a five-year contract because I need to get you one point. I need the proper,
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  any time for the property to appreciate. And they know that just with the market,
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  the property's going to appreciate, but they're assuming that you can have outsized appreciation
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  because of the work you're going to put into. Plus also the fact that you're going to draw revenue
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  from it. That's going to actually help. They're hoping I default. They are hoping you default.
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  Yeah. That's the game on the on the landlord side. On the landlord side, if you came to me and
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  I'm the landlord and you made this offer, I would make sure that the deck is kind of stacked in
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  your favor. Stacked in my favor to make sure that you're putting a lot down. You're renovating my
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  asset. And if you miss the payment on the third day, I'm taking your assets, which I have a great
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  story about this actually, but. Dull, I mean, what? What? This wasn't on a rent. Oh, this is on my
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  house that I bought on Flamingo. This is a crazy, this is a crazy story. I bought this house. It was
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  10.2 million dollars. And it was a normal contract like put down the money to buy it and had it.
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  My idea was that I was going to sell this house. I bought it off market. So I thought that I could
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  get it. I could flip it for 14 million in like 90 days. Didn't work. Didn't didn't pan out.
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  So I had a the loan that I used on it. This is crazy. The loan that I had on it. I had
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  only a 12 month term loan on it. Because I again, I had only anticipated being in the deal for 12
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  months. So I go to the closing table to purchase it. And my lender is like, Hey, if they knew I had
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  other assets, he's like, Hey, we're going to need an extra, I forget what the dollar amount was. We
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  need an extra $800,000 down in order for you to close. I'm like, how are you doing this today?
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  Like that's crazy. He's like, well, we have an option. You can we see you have this other property
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  over here. We'll go ahead and pay off your loan on that other house. You have a million five
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  inequity on that house. We'll pay off that house and we'll now hold the note here. And that's just
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  basically what's called cross collateral. So we're going to cross collateralize your two properties.
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  And I'm like, well, that doesn't sound great. But I don't why would they do that to you? Because they
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  can. Because I have no option. I'm they know I'll do it. I have I'm at the closing table. And I've
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  already put down 500 K to purchase the property in that I'm way past my due diligence. So that's
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  now in the seller's pocket. I there's no like collecting that back. If I say, you know, I don't want
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  this property anymore. Let me leave it gone. It's gone. And they know that the bank knows that and
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  the bank knows I have another asset with equity, other other assets with equity. So the easiest
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  thing is for them to just reach into my pocket and say, Hey, I want to take the loan on that property
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  and have all the equity on that property. We need 30. We need 30% down rather than 20% down.
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  So now I have to be, you know, three and change down on this property. Anyway, it is what it is.
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  I cross collateralize two properties. Go to the closing table 12 months later. I sold the house to
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  Lindsay Vaughn. She's a Olympian gold medalist. I don't know if you know Lindsay is, but she bought
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  the house and she the offer comes in from from Lindsay and they they're set for like a 45 day close.
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  They put their money. They're past their due diligence. I've already been down the road where she's
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  in, right? Yeah. So I'm now in the seller's position and they're at their 45 worst. My loan is
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  only a 12 months loan. Okay. So my loan is a 12 months loan. And my lender is saying, Hey, I want
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  you to renew for another two years. And like, Well, of course you do. You know, and he's like, he's
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  like, Yeah, I don't want you to, you know, he didn't say I don't want you to sell, but he in less words,
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  you know, he's like negotiating with me with you can I'll renew your loan two points higher than
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  you currently are, but you need to pay another $200,000 down to renew the loan. And I'm like,
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  that's great. That's robbery. And he knows that you don't have a choice. If I can't sell in my 12
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  month period, I have to renew. So this is like, let's just, I don't know the exact dates or whatever,
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  but it was the Thursday. I remember that it was a Thursday in my bank. So the bank or he's
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  like, it's a Thursday and he calls me. He's like, Johnny, he's like, have you decided if you're
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  going to extend the loan with me? I said, no, I have a closing. As you know, it's supposed to close
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  on Monday. And he says, you, I said, they're supposed to close on on Monday. And he goes, I want
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  I want to be very clear with you. Let me just be very clear. And he gets closer on the phone with
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  me. And he's like, I, he's like, if you do not close on Monday, I will take both of your homes. They
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  will be mine. I want to be very clear with you. And I have a $2.75 million property over here and
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  a $10.5 million property over here. And he's going to take them both, right? Because I can't
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  clear one day. And I was like, you won't just give me an extra two days. And he said, let me repeat
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  myself. And he goes through over it again. Okay. So I hang up. I call. I'm like, just don't know
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  that you've done business with me. No, I never did business with this guy before or again. No,
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  I would never do business with him again. But I learned a great lesson from it. So I, so I,
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  so then Lindsay's attorney calls me. This is Friday. This is Friday morning.
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  No, this is okay. So the closing on the bank was Monday. My loan was over on Monday. The
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  closing with the house was Friday, right? So the before the Monday. So it's the next morning,
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  Friday morning. The lawyer calls me. Hey, Johnny, with my attorney and my and Larry's on the phone.
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  Of course, you know, Larry's always right there. And he's like, he's like, hey, listen,
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  we're going to need another 30 day extension. And I said, let me be very clear with you.
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  If you do not close today, I will keep Lindsay's $500,000. There will be no extension. This house
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  will not be for sale. He will, that she will never purchase this house. I will hold this home.
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  I want to be very clear. We are closing today. There is no extensions.
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  And they hung up. I hung up. Everyone hung up. I like turned around. I look at Halley. I'm like,
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  oh, my God. Like both homes are in the balance right now. And you didn't, you didn't think that
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  if you told them what was going on, I would have helped your case. No. Then they would have waited
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  for me to default and bought them from him at a discount. Oh, shit. For sure. You can't let your
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  cards be shown. They would have been, oh, yeah, he's in a weak spot. We'll see you Tuesday.
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  That's how that played out. That's how I would have played it out if I was on their end.
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  So yeah, I learned once that generally I'm forgiving very, like give everybody lots of
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  opportunity, sure, extend, extend, extend. And then in this case, I was like, he was here and
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  the fire was there. It was like, no, I had to push back in the same tone. What happened?
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  The wire cleared Friday. And I sent it to my lender and paid him off and got all of my,
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  everything was done by Monday, cashed out both properties, both properties sold.
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  I figured that was the second detail was there was two closings. I had another buyer for the
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  other property. And we had teed him up to both clothes on that same Friday. Because with cross
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  collateral, you can't sell one without the other. So we had multiple times. We had a buyer for
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  this one, but not that one and a buyer for that one, but not this one. And I kept trying to
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  deleverage the properties from each other. So there's some wisdom. Don't cross collateralize assets.
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  That's why was this. I was going to, you know, he obviously would never say this that that lender.
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  But it sounds like he knew that if you cross collateralize, it's going to be harder. Very hard.
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  He knows that there's a real good chance that he can milk you for anything and take both.
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  Yeah, take both or force you to renegotiate and renew at two points plus another $200,000. And
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  you can't say shit because you can't sell the properties simultaneously. So they did it.
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  Well, I knew it. He was like two degree fucking you over. He had planned it from the beginning.
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  Yeah, I can see that. When someone gets into this game, someone's going to listen to the story of
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  the big shit. Okay, well, that's scary as hell. How do you avoid that? I didn't belong
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  buying a $10 million property to begin with. I shouldn't have gotten into that type of property where
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  that I should have if, you know, two, three, four, five million dollar properties is my comfort zone.
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  And this one was, oh, a $10 million property. I can flip it in 90 days because it's worth 14. There
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  was another property that just sold for 14 on the same block, same square footage, same lot size.
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  I was like, okay, I can, I can get probably 14. So that was the plan was to, you know,
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  get in and get out. So just don't bite off more than you can chew. That's where you,
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  that's where you, you lose. You're saying that, but now I know you deal with like ultra luxury
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  and hotels and all that. So what was your thought process after that? Because I was obviously like
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  a little bit of trauma, a little bit of stress that worked out. But then you think about how you
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  progress since then now you do ultra luxury and you do high end and you do, I think like what,
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  30 to 40 million dollar plus property. So what was the point when you decided to get into that?
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  Into hotels. Yeah. And right now you still just do two to three million dollar homes, but you
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  also do hotels. No, I, no, no, that's not true. I know. So I'm asking, so what was the start
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  and you move? I mean, I'm going to buy good deals. So whether, if it's two or three million
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  or it's four or five or six, maybe the one I'm going to close on next month is should appraise over
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  five million. We should get our appraise back this week. It just, I, I, how can it cash flow
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  and what's the future value of the property? You know, you don't want to necessarily be by,
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  I think I see a lot of people say real estate didn't work for them because they got it and got out
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  and they got burned or they didn't really make a profit. And it's because, you know, real estate is
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  not a game to get in, get in and get out of. It's a get in and, and let the property appreciate
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  and get all of that depreciation every year and, and let your tenants pay it, pay it down. So
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  two million or five million or, or 20 million, it's, it's the property price isn't the, the main
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  focus. It's for me, I'm in the hospitality game. I'm in the hospitality business. So for me,
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  what's important is that I can earn money in the villa or the hotel and it's in a, in a prime
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  location, prime, you know, the waterfront for, for homes. Most of the homes are waterfront
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  for hotels. They're all, for mine, they're, currently, they're all on South Beach. Yeah. And
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  then that's, so that's when you moved into hotels. So last, I got into hotels actually just
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  a one year ago, but my, when I was a kid, my grandmother used to take me traveling all the time and
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  she'd always get me whatever the presidential suite is in the hotel. And I felt like Kevin McAllister
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  with a big cheese pizza. And I would have a, I would stay in the presidential suites. My grandma
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  would get her own suite and, and I would shoot always let me buy the robes and like just, I,
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  I did this every summer, like from middle school all the way. So I graduated high school. I always
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  traveled with my grandma for a week every summer. And, and I'd said, and I used to say I want to
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  manage a hotel. I want to make my grandma would say somebody you'll own your own hotel, done
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  where you'll own your own, your own, your own hotel. And that's why I wanted to go into hotel
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  management when my dad said, no, you can't go into hotel management. And, and so last year I was
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  just, just had an agent who works with, works, now he's with our company, but at that time he,
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  he's just an agent I know here in Miami, David, and, and he's, he's great. I really like David.
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  He's, he's very genuine person. And, um, he's like, Johnny, I got these hotels and he's just
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  hitting me with, you know, I, I get deals all day long from people texting me deals all day long,
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  or you should buy this building. You should do this. You should do that. And so I, I was like a hotel.
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  Hmm, I kind of like hotels. This is a cheap one. This was a, uh, uh, seven million, uh,
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  like seven point five million dollar property on Collins. He's like, I have this property.
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  This owner is in a bad situation. I was like, oh, I speak more. I like these deals. That's where
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  you find good deals. Yeah. I know I have a distressed seller. He needs to get out of this property. He'll
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  do a, he'll do a, a contract on it. You should, you know, look, like come and look at it. And I was
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  like, all right, let's go look at it. So, um, I go and I look at the property and I'm like, man,
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  this is, it's only a 17 room space with a retail space in the hotel. Yeah. A little boutique hotel
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  on Collins. And so I went to the property. And I was like, I like this. Yeah, I think I can do this.
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  And I'm looking at how they were. And I asked how, how much revenue is like, oh, it does like,
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  it does like, I hate when someone says that because now you know, they're biasing, you know, it does
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  like seven, seven thousand a month. And I'm like, okay. And I'm like running the numbers in my head.
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  Like, okay, I think the account for the bullshit factor. So, and, and it was in, uh, January and
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  February. So I was that, you know, that was in February last year. And, um, so I was like, yeah,
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  I would try it. Let's, let's do it. I'll just make an offer. I'll pay you first, you know,
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  the rental amount was 35,000 per month. I was like, I'll just give you first, first last, first,
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  first and second months deposit. But I want two months free because I'm going to pump money into
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  the property. And they agreed. So for 70,000, I took keys of a $7.5 million property.
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