As the newly anointed star of CNBC’s “The Deed,” one of the network’s latest primetime business reality shows, Torres returns to his hometown of New Orleans to connect with his first love, real estate. He’s helping newbie developers who are in way over their heads and are desperate for funding to complete their projects. In each one-hour episode, Torres offers his own money and his expertise in exchange for a piece of the property and a percentage of the profits. Since he has developed over 250 million dollars of real estate projects in the U.S. and abroad, novices are wise to follow his lead.
The first episode of “The Deed” aired March 1 and featured rookie developer, Nicole Webre, a city zoning consultant. She bought 2.5-acres of land located in New Orleans Irish Channel, an eclectic neighborhood in the midst of a revitalization. The development project is a family affair as Webre’s husband and in-laws have invested, and her parents cosigned for her on a $1.7 million loan. But when Torres arrives on the scene, he learns that the property is close to foreclosure. Viewers watch the drama unfold knowing that these aren’t actors and the possible consequences for her investors are real.
“The Deed gives you the real true story of how house flipping works,” said Torres reflecting on the challenges Webre encountered and the emotional toll it takes on her and her investors.
To be successful in any endeavor, educating oneself tops Torres’ list of must-do's, and he advises novice developers to align themselves with the top real estate broker in the market that they want to invest in.
“It's a very inexpensive way to get information and good data that allows you to make financial decisions. It’s a free way to learn which areas are hot and which ones are not,” said Torres, adding that he had a mentor when he began selling real estate over 20 years ago.
A common mistake he sees developers make occurs while they are negotiating the purchase price of a property, and it’s not until construction is completed and they are ready to sell that they realize the consequences.
“You make your money on the buy, not the sale. The sale is where you collect your money. It goes back to doing your homework and educating yourself on data when you're doing the buy. People think that they can pay a little bit more because they can renovate it cheaper, that's the wrong thinking. You've got to go in thinking that you've got to find a great area and negotiate a good deal because you want to have enough cushion during renovation. If you can renovate for less money, that's great, but you want to be able to get in there and have a head start by buying it right,” said Torres.
Torres flipped his first house at 20-years-old with the help of his grandmother who co-signed on the loan, but not before insisting that he go out and do his own homework. She wanted to be sure that her grandson was committed to the effort. Torres said that because of that process, he purchased the property at a great price.
Perhaps his grandmother’s approach to business influenced him in other ways too, like noticing how gender differences playout in the business world.
“I think women are way better flippers than men. Men seem to have more of an ego, they don't respond and perform the same way as women,” Torres said.
In fact, his core management team, including his CEO, CFO, accountant, and assistant are all female, and so are the operators of his 25 companies in sanitation, video poker, retail, and commercial properties. Torres points to commitment, drive, gratitude, and attention to detail as their salient qualities.
Often referred to as a serial entrepreneur, Torres lived up to the name in 2015 when he launched IV Capital, a private investment firm that invests in small and mid-sized businesses in the Gulf Coast Region who need capital as well as strategic or managerial support.
“I've become more of a managing entity than an operating entity because I've sold three of my large companies and have started a fund, IV Capital, which is a big reason why CNBC asked me to do 'The Deed.' I have about $85 million in the local market that I lend out to people who can't get bank financing. I also partner with banks to help people get bank financing after I get them to a stable place,” Torres explained.
One of the companies Torres had sold was SDT Waste & Debris. After Hurricane Katrina pummeled New Orleans in 2005, the city was in dire need of waste management services, so Torres rented a garbage truck and started picking up trash. Though his motivation was to do what he could to help his hometown recover from a catastrophic event, he realized that it was also a business opportunity and went on to build SDT Waste & Debris which became the largest waste hauler in the state of Louisiana. After seven years, he sold the company. From there, he took off to the Bahamas for, as he says, “something different.” While building a house there, he saw a chance to create jobs by developing a resort on the Island. The result was The Cove, a $100 million world-class resort which also he eventually sold.
“I'm a person who operates off my gut finding things that are in need, like creating the French Quarter Task Force app for the city of New Orleans. There was a crime issue and nobody could figure it out. Everyone said we don't have enough employees and we don't have enough cops, and we don't have enough money. And I said, no you don't have enough technology to make this thing efficient, transparent, and where people are held accountable – the system you have is broken. So, I'm going to design a hybrid that's going to work on its own. We did and we dropped crime by 45 percent in three months,” said Torres, adding that since the French Quarter Task Force app was covered by the New York Times, Chicago has commissioned SDT Productions to create versions for the city's problem areas. “The crime app has now become a business.”
“I love things that are completely screwed up that nobody wants to touch, and I like to find the best side and create value out of it. Then I want to brand and market it, and build it with quality at a good price. That’s why “The Deed” is a fit for me, and I think the show's going to be successful because I look at these troubled real estate developers as a challenge. I look at it as going back to how I started. People are going to love it because it shows a side that no one shows in the real estate world,” said Torres.
“I've always been a guy who gets very bored doing the same thing every day. I've never had a desk,” said Torres, explaining that he works from his mobile phone or sometimes from his accountant’s office often finding a spot on the floor. “I'm a guy who likes to be on the run in the field, on the ground dealing with stuff. I'm much more productive in that way.”
“The Deed” airs on Wednesday evenings on CNBC at 10:00 p.m. EST. And, “The Deed: Chicago” featuring multi-millionaire real estate mogul, Sean Conlon premiers March 29. http://www.cnbc.com/the-deed/
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