For as long as he could remember, Daniel Borrero always wanted to be wealthy, and how he was going to get there was his main objective. When he graduated from college, he went back to his old neighborhood in Brooklyn where he felt comfortable and opened up a video store. The year was 1985, and the store was situated right across the street from where he grew up – in his father’s bodega in Fort Greene, Brooklyn. As many people may know, Fort Greene today is not the same Fort Greene in 1985 – by any stretch of the imagination. His family members thought he was nuts, but within four years he had saved enough money to purchase his first property, a pre-war two-family home in Brooklyn for $72,000 dollars. Today it’s worth about $2.6 million dollars because of its location. For this reason, Daniel constantly tells people the real money in the real estate business is on the long-term hold. Fix-and-flips are great for short term capital, but the real money is in the long term hold.
After his first property, he bought his second property in Park Slope, a mixed use, a two-family with two stores. He went on to buy a double lot across the street from his father’s bodega, in which people were always dumping garbage. Dan cleaned it up and fenced it. He wasn’t sure what he was going to do with it at the time; he just wanted it cleaned up. Shortly thereafter, people started paying money to park their cars there. He started buying up more lots in Ft. Greene and selling them to developers. With that money, he started buying buildings all over Ft. Greene.
The Importance of Delayed Gratification
Daniel admits he didn’t even know what a 1031 exchange was when he did his first land deal. His lawyer had to explain it to him. The rest is real estate history. Daniel says he wasn’t brilliant, but he was smart with his profits. He didn’t use them to enrich his life with fancy cars, homes, vacations, or furniture; he used profits to purchase more properties. James Prendamano notes that delayed gratification is an idea that is sadly lost on so many folks these days. James goes on to say that people don’t realize how critically important it is to delay gratification, especially when you’re starting in the real estate business. It’s important to resist that urge to go out and reward yourself by buying a new luxury car when you first get going. James Prendamano says if you’re going to be in the real estate business and you want to stay in this business, those first few deals you make provide an unbelievable springboard. Prendamano says that if you want to get in the game, delayed gratification can’t be part of your principles it has to be the principle. You have to take the money, take the profit, and roll it over.
The Entrepreneurial Spirt
James Prendamano asks the question – is the entrepreneurial spirit something you can learn or is it something you’re just born with? Borrero says we can teach it as much as possible, but most people don’t adhere to it. Borrero says ‘you either have it or you don’t,’ admitting that he sometimes discourages people from entrepreneurship. It’s not meant for everyone, and it’s not an easy life. In fact, he jokingly says, it’s an “insanity lifestyle.” He and James both note how business never stops.
For example, Dan talks about how you could be in bed trying to sleep and an idea comes to you – you then have to get up and write it down. There’s always a dilemma we have to resolve. That’s what we do as real estate investors – we’re constantly solving dilemmas, Daniel adds. As a result we get paid handsomely for it, but we are problem solvers. Daniel imparts these words of wisdom – if you’re not a problem solver and you’re a bit of a drama queen, do not become an entrepreneur. James adds that the secret of being a good dealmaker is having empathy. If you know how people are feeling, you know what they want to hear, when they want to hear it, and how they want to hear it. Your job then is to bridge that gap. That comes with a heavy toll, James says. It’s not something you can shut off; it’s not something that just goes away. Borrero adds that entrepreneurship gives you financial freedom, but it doesn’t come with the social freedom that people think it does.
Listen or watch this episode of the Casandra Properties real estate podcast and find out how your competitors, as well as the younger generation, are always your greatest teachers.
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