Would you invest your own money in a complete stranger’s home flip? Serial entrepreneur and real estate guru Sidney Torres has made a career — and TV show — out of it.
In the second season of CNBC’s “The Deed,” Torres invested more than $4 million of his own funds to help aspiring property investors in New Orleans complete the flip of their dreams.
His approach is raw, didactic and involved, empowering investees to learn important skills and become self-reliant entrepreneurs — often by learning the hard way.
“Our show allows people to trip and fall down a little bit to learn how to deal with the process,” Torres, 42, said. “We stay and work with them through the good times and the bad.”
Torres has developed more than $300 million worth of property in the last 20 years and is releasing an app soon to help first-time buyers. “The Deed” just completed its second season.
What initially inspired you to invest your time and money into helping others with their income properties?
I know how it feels when you're passionate but don't have the know-how of where to ask for help or get guidance on funding to even start. After Hurricane Katrina I opened a fund that helped individuals who couldn't get bank financing or needed a short-term bridge loan to buy the property before they could restore it.
How does a typical investment play out on “The Deed”?
Other entrepreneurs like me do the footwork and sweat equity work — driving around, researching how to find the best properties and negotiate the best deals to build equity. Once I get them stabilized, I partner them with an institutional bank that gives them a line of credit to continue developing property.
What have been some of the biggest challenges for you as the sole investor?
At first it was very difficult for me to let go of control as someone who is so hands-on, so I have to hold back sometimes. CNBC wanted the investees to go through the process and deal with it on their own so you can show them and the viewer which mistakes not to make and how to actually deal with it on camera. That's why I'm not allowed to speak to them except in-scene because if there was a problem they wanted it to be done on camera, not as a reenactment.
Your grandmother taught you a very important lesson during your first purchase.
When you're looking for your first home and especially your first flip, do what my grandmother did for me when she co-signed my first $40,000 line of credit. I had to come back to her in 90 days and if I still had the same passion to be in the flipping business then she would co-sign. Take 30 to 60 days researching, getting other people's opinions who know the market and the area before you actually pull the trigger and realize the dream is a nightmare.
Tell me about your new IV Real Estate app for first-time home buyers and flippers.