Growing Up in a Real Estate Family

Real estate is in our blood and we have been around the industry for all of our lives. This has had a significant impact on how we view the world and business. It was instilled in us at a young age that real estate was the best path for long-term wealth. And, we have been able to use these lessons in life to forge the path in our real estate business.

When we were Young: Setting our Sights on a Real Estate Career

Growing up, we would go with our mother to help her with open houses. We helped set up, put out signs, etc. We also DE trashed, demoed, and helped paint homes that they were working on. This gave us a huge appreciation for what real hard labor is. It instilled in us huge respect for those guys hammering away in the hot sun. As a result, we treat these guys well, and they love working for us as a result. As long as everyone gets the job done on schedule and within budget.

Another job we would do during high school was to send letters to properties we had an interest in buying. In fact, our family eventually bought an office space that we would call home for years – all from those letters. On top of that, many other good deals came from the letters. Always at the dinner table, we often talked about the business and how it was going. Let’s be honest – we were kids and our parents wanted us to be kids too. But there is no doubt that at a very young age, we were taught the power of real estate.??

Working in the Family Business of Real Estate: The Flip Business

Both of us started working full-time in the family flip business shortly after the Great Financial Crisis of 2007-2008. Our family business did take a hit from the recession. So, we came to help rebuild the business, leveraging our young creative exuberance to launch the business into the well-oiled machine it would later become.

With the support of a few investors, we started buying foreclosures at the courthouse steps. Jonathan was in charge of the whole bidding process and acquisitions as a whole. Jeff was the broker to make sure all those homes were later being sold effectively. During that period from 2009 – 2019, 400 homes were bought, rehabbed, and resold. We were able to achieve $22,000,000 in profits with an average return of 38% for us and our investors. And that’s after all overhead was paid; salaries, office, etc.

We learned a ton during that process. One of the big things we learned was how to negotiate good deals. We learned to effectively manage many tough projects simultaneously. We learned the importance of systems, organization, and checklists. We learned to always ask what else and how we could continually improve our process and do better. We became underwriting machines too because many times we would look at 50 homes before we bought one. We always learned most, though, from the tough moments. All in all, it was quite the ride and we grew so much personally and professionally.

Time for a Change

During the timeframe of 2010 - 2013, Jeff and Jonathan bought a handful of long-term duplex holds in gentrifying areas of Los Angeles. This was done with the extra money we had from our salary and bonus money we received from the flip business. We always knew cash shouldn’t sit in the bank but should be working for us in some way. This allowed us to live more affordably by living in one unit and renting the other out.

The flip business wasn’t always so great, though. As things began to get tighter on deals after overhead and paying taxes, there wasn’t a whole lot left. Ten years into things, we looked at what we had to show for it, and we were dismayed to find it wasn’t much.

We had those duplexes that were cash flowing nicely and appreciated four times over. And a light bulb set off in us and we realized that we can do more of this and grow an actual business out of it. It just so happened that at the same time, we were growing apart from the family business. The time had come for us to chart our own course.

New Beginnings

In 2019, Jonathan bought a 14-unit deal in Kansas City and more than tripled the cash flow from one duplex he owned. So, in early 2020 we decided to launch JB2 Investments and create a boutique real estate firm. Then COVID hit, but that brought us a couple of opportunities that we feel we wouldn’t have stumbled upon otherwise.

Since then, we have bought another 141 units and have begun to see the power of cash flow coming. And that cash flow will come in for years to come which is unlike the flip business where you get one big hit and it’s gone. The business we have created now will be more consistent as we grow the portfolio.