Greetings and salutations , Real Estate Undergrounders . It is Ed Mathews , again with the Real Estate Underground . Thank you so much for making us a part of your day . I know how busy you all are and I'm grateful for the listen . Today is a really interesting show . I am joined by Daniel Angel Mejia and he is with Apex Development Group . So , Daniel , welcome to the show . I'm really excited to have this conversation because you happen to run a business very similar to mine and I want to ask you how you do it so I can get down to best practices .
Daniel Angel MejiaAwesome . Thank you so much , Ed , for having me . Pleasure to be here , pleasure to meet you , my pleasure .
Ed MathewsSo , the folks who haven't discovered you on LinkedIn or elsewhere , why don't you tell us a little bit about you and your company ?
Daniel Angel MejiaYeah , of course , a
little bit about Colombia .
Daniel Angel MejiaOriginally from Colombia , south America , born and raised there , then I had the opportunity to go to school here .
Daniel Angel MejiaThen I went back to Colombia to go corporate life , initially in the finance world , and that's how it took me to the real estate world , initially there , and then about 10 years ago I got the opportunity to get back to the States and while I was working corporate job in a cement and ready mix company , I decided to take some steps on the side in the real estate world , specifically in the residential world , and that's how everything started , initially doing some flipping , some experience with side , trying to capture all the experience I had from some funds I used to work for back home , slowly but surely started getting into something bigger until I decided and found that was the path I really wanted to take leap of faith , decided to close the chapter of the corporate life and started Apex , fortunately enough to found who's my business partner , now also from Columbia , who used to live in Miami and decided to move to atlanta . And that's where we joined forces and started this amazing path that we're still driving and trying to bring okay , congratulations on your success .
Ed MathewsSo let's talk about the business a little bit what niche do you tend to focus on ? I know you do a lot of different things , but I'm curious where you've done most of your days ?
no , totally . We've stayed within the residential space and that initially covered more buying , existing distressed properties , renovating and selling or renting . That has evolved into the multifamily space also . So nowadays we cover single family and multifamily . In the single family space we did evolve into more roundup construction , both for sale and for rent , and in the multifamily space we only acquire to execute value-add programs . So we basically revolve around that residential world and those three were roundup for sale , for rent and then acquisitions in the multi-space or value-add or plus approach .
Ed MathewsThat's a lot . Talk to me about your team . What does that look like In ?
Daniel Angel Mejia2021 , we saw the need of starting to build a team around us . Initially it was just the two of us and then another partner we used to have for the construction part of the business . Right after COVID we understood the idea of virtual approach and combined that with our roots and started building a team back home . Today our team is split into those two locations back in Colombia about 15 , 17 people , with us covering different areas . We try to be as vertically integrated as possible . So we try to bring everything in-house , except for property management at this point , anything that has to do with acquisitions , underwriting , structuring , capital markets and stuff like that , even managing some of the projects from there parts of the process of project management from Columbia . So that's why we built that team there . And then the other part of the team is whoever needs to be on the ground , on the field , seeing and living the properties will be here , so it's about a seven people team in Atlanta at this point .
Ed MathewsWe do a similar model here , except our people sit the Philippines , but similar concepts .
Daniel Angel MejiaNow are those folks in Columbia ? Are they employees or are they virtual assistants or a combination thereof our employees and our team members ? There's two advantages that we found there . One they're timezoner , so they work at the same time as we are . We're just sometimes of the year we're an hour off , but it works pretty well . They are our team , we know the culture , we are bilingual , we speak Spanish and English , which helps on the construction and renovation side tremendously . So basically , it ended up being a great advantage to our company and pretty much one of our differentiators at this point .
Ed MathewsYeah , it's a competitive advantage , for sure , because , yeah , not everybody speaks . I speak enough Spanish to get to understand if somebody's having trouble , or to convey what I'm trying to get across , but I am by no means bilingual , so having the ability to speak natively is a huge advantage . Or to convey what I'm trying to get across , but I am by no means bilingual , so having the ability to speak natively is a huge advantage . So , with regard to the changing markets , right , you're based in
Atlanta . Where are your properties ?
Daniel Angel MejiaThey are in Atlanta also , and that's another important decision we've made . With time , we've learned to make some of those decisions , which are important , sometimes Out of state , and looking at other states and other markets is interesting and can be kind of like shiny and attractive . For us , it's like focus . Being close to the acid boots on the ground is really important , something that we have decided to stay on , at least for now . That doesn't mean we won't go to other states eventually , but I think the knowledge of the market and I think to your point of like with changing markets and after the great run that the real estate world had from 2012 or 2011 to probably a couple of years ago , really didn't matter , so to speak , didn't really matter where you were , it was just a great run . At this point , in our opinion , it's really important for you to know what you're doing , know where you are and understand the specifics of the submarkets . In Atlanta specifically , it's a pocket-by-pocket market . In general , it's a great market and great fundamentals . You got to be calm .
Ed MathewsI was looking outside of Connecticut , down in the Carolinas and out in the Midwest a little bit and came to the conclusion that the physical proximity is an advantage . Right , being able to be on site within an hour or two is a huge advantage is a huge advantage and mainly from a customer service and project management perspective . If somebody picks up the phone and calls you and says , hey , I need you on site first thing tomorrow morning , we got something important to talk about . To be able to not have to get on a plane and go do that is really helpful for sure . The other part of it is just being able to go out and touch the property every once in a while and be present there is also valuable because , especially in the multifamily world , the folks that live in your buildings want to be heard , right , they want to be seen , and when the boss is there , they know stuff's going to get done . That's always a good thing from a retention perspective , right .
Daniel Angel MejiaThat's exactly right . Yeah , To your point . Our mantra for now is two hours at the most from site . That's been key to us , and obviously there's folks that are in smaller markets and it's a little bit challenging to find opportunities there For us . Fortunately , we're surrounded by 13 counties . It's a pretty extent metro area , so it's good enough for that , and then we have other potential expansion routes in close states where you can't go at some point . Still keeping the two-hour radius , but yeah , for now Metro .
Ed MathewsYeah , and the other thing you mentioned is really important is understanding the markets and the dynamics . Here in Connecticut there are , I would say , at a macro level , there's probably three major markets . Right , there's Fairfield County , which is an entirely different world , very much a growth market from a appreciation perspective . You got Central Connecticut , which is very much a cash flow play , and then you've got I'd say the same in Southeastern Connecticut . But Northeastern Connecticut is , again , is an appreciation because it tends to trend after Worcester and , indirectly , boston . But I live literally in the middle of the state and it's two hours , it's 120 miles to New York City and 125 miles to Boston . So there are investors who focus on Fairfield County and there are investors who focus on Central Connecticut and there's not a lot of overlap and because the market dynamic is so different , I think there's something interesting that you mentioned there regarding the different strategies dependent on the market or the sub market , when you think there's a lot that you guys are doing .
Daniel Angel Mejiaone of the strategies is precisely that staying in multifamily , and it has been one avenue that we felt to keep transactions going regardless of the dynamic of the market . At some point we were trying to focus more on multifamily , but then 2022 and 2023 happened , where transactions just didn't make sense . We say it's a bit drastic here , but nobody kicked us out of single family . Why not go back ? You can keep it going , keep churning .
Why not go back ? You can keep it going , keep churning . There's some sub market that will be suitable for sale product and then some that will be more cash flow place for rent , and that's when the whole fund came to be . Or we can co-manage all these strategies , take advantage of the fact that we have different particularities of the different sub markets within the market that we are , and then we can approach everything in a way at the same time and find opportunities suitable for each one of the strategies .
Ed MathewsSo I ascribe to the exact same strategy . Take what the market's giving you right , and there's no reason to shoehorn a strategy into a market that isn't going to respond to that strategy . It's better to understand okay , the inventory is low in this particular market , so as we build rehab houses , it makes sense to sell those , and so on and so on . So I'm curious about the fund . What made you go down the path of building a debt fund versus private equity fund , or just working with private investors on an individual basis ?
Daniel Angel MejiaOf course , that's a very interesting question . It has been a work where we compiled a lot of experiences , feedback and what we believe ended up being a good balance for passive investors right . So initially the way we raised equity and the way we went about our projects was typical 506B or LPGP structure , where we would raise equity from friends and family or an individual check writer and then go about each project . That meant at that time one multifamily project with one specific approach or a portfolio of single families with one thesis , whether it was for sale , for rent or a combination or whatnot . What we found with time and with the variations of the market is that sometimes singles , sometimes doubles , sometimes you foul and sometimes brand slam , but when you go one at a time , then your investors could be a single , a double once you put all that in a bag . Basically we found what we think most investors are looking for when they go the passive route is they want certainty , flexibility and know what they're getting . The IRR double digits , 20s , 30s , whatever that sounds great . Once they start realizing it's a target , not a certainty , then things can get a little bit iffy . Our approach with that was this is our business , this is our passion . This is what we're going to be doing for the rest of our lives , but for investors , it could be something for a minute or some years , could be potentially for the rest of their lives .
Daniel Angel MejiaSo we came up with this idea of a fixed return debt fund and the reason why it's debt . It's not that we're originating debt for investors , they're creditors to the fund . It's not that we're originating debt for investors their creditors to the fund but they have a fixed return . We have various , I guess , like thresholds or trenches , depending on the amount they invest , but they know what they're getting . They can have a compounding effect which can get them to the double digits that usually investors are trying to reach . But they also have flexibility . So if something comes up in our case it's a lock-up period of 18 months if something comes up , for whatever reason , they can go out without having to liquidate a property or sell or wait for whatever time right .
Daniel Angel MejiaSo when you start talking to and this applies for individuals , in our experience at least individuals , family offices , whoever is , you can have a long-term vision . Life happens , what happens if I don't know ? I have a need , something , a kid graduated , someone is for school , or every kind of different particularity that can happen with a GP LP structure . The answer , nine times out of 10 , is oh sorry , we need to wait until we can full cycle the deal . We can't cycle the deal , we can't sell the deal , or it's a lot more trouble to get somebody out just because you're sitting on the equity position . With this structure , we found what we believe is a great balance of good return , certainty , flexibility , cash distributions if they need it , or all compounding , cash distributions , if they need it , or full compounding . So it's a combination of various factors that we have compiled with time , based on our experiences and feedback from investors , and it's working pretty well , we find the same thing the whole concept of allowing somebody to be able to stay in the fund and compound their returns .
Ed MathewsAt some point that turns into some pretty good money , and it's yeah , and I like I so personally that one of the things that I had done with our own debt fund is in the exact same thing . There's an 18 month lock up and but then there are periodic opportunities to pull your money out If you need it .
Daniel Angel MejiaSomebody's getting married , somebody's going to college , medical bill whatever , some investors at some point want to get a little bit more active and want to buy their own stock , and that's perfectly fine . We just feel that the flexibility adds a lot of value for investors and our point really is just trying to build a diversified portfolio that people can rely on and then for the time that they want to be , hopefully as long as they can , but sometimes there is needs in life we understand . So it's just serving investors at the end .
Ed MathewsTo each their own , all right , daniel . Hey , I talked about what I mentioned before we started recording . I can talk about this stuff for days and you've built a tremendous business Congratulations . But I would like to get into the final five , our lightning round , if you'll indulge , all right . First one is always . First question is always about purpose , right ? I'm curious what gets you out of bed on Monday morning ? I know you've done very well and the mortgage is paid , the car payments are probably paid off and kids , colleges , are taken care of , and yet you still get up and go to work in the morning . So what drives you ? What's your purpose ?
Daniel Angel MejiaI would split that in two . There's the personal side , which really happened after I left corporate and started my own thing enjoying the ride that's how I call it and it's just making sure , regardless of what's happening good or bad or ugly just enjoying every minute . So to me it's like sometimes I don't even know if it's Monday or Sunday . We're on a timer at the end of the day and we're probably the end of that timer , so it's just make sure you enjoy every second . From a company perspective or let's call it Apex perspective is being able to build a professional and strong team . Something I feel
very proud of is the people that we work with and the fact that we've been able to get back to our roots . We left our country . We can build something at home without having to be at home , working with great professional people and being able to build something around . That is something that I very close to my heart .
Ed MathewsI couldn't agree more . I think that there's a contribution that gets me out of bed in the morning is that you're helping people get where they want to go . Right , yeah , all right . So I'm always curious about your mentors and coaches along the way . Talk to me about the best advice you ever got , and I'm curious who gave it to you ?
Daniel Angel MejiaYeah , it's one of my mentors . It's someone I would have liked to work with while I was at corporate , but I didn't have the chance . I worked alongside in some ways but never liked him to be one of my mentors or bosses , and that never got to be that . But then liked him to be one of my measures or bosses , and that never got to be that . But then converted him in one of my mentors still there , great guy . The best advice that I got from him was when I was planning on going back or getting back to the states and I was kind of like hesitant at the time because I've been doing a great career there . But he said just try , but make sure you burn your ships . It's the meaning at the end of the day is just don't look back , and it was something I at the time . It generated some fear , but it was a great advice for anyone that's taking a leap in any moment of their lives that I think that's a great advice Always . Yeah .
Ed MathewsMy reference to Cortez for those folks who are not history geeks like me is when Cortez reached the new world , he had his men burn their boats and he strangely found that they were highly motivated to make it work Right . I'm also interested , fundamentally believe that we learn way more from the mistakes we make than the successes that we have , and I'm curious about a decision or a mistake , something that you'd love to have back . And what was it and how'd you recover ?
Daniel Angel MejiaOne has to do a lot more with Apex . The other one's a little bit more like personal . The Apex one is not bringing construction in-house tuner and honestly find it amazing when I find groups that are able to work with outside construction . We were never able to make it work . There was always something until we brought it in . That's something that I would have done sooner and faster . Probably I would have applied a little bit more dedication to that earlier . Excellent . And the personal I should have left corporate sooner .
Ed MathewsShould have started sooner . Basically , I get that a lot , myself included . Never late , but
Could have been faster . Yeah , I agree . All right , how do you take in information , like as a leader ? I'm sure you're always reading and listening to podcasts and audio books and all that . So I'm curious what is the method that you sharpen the saw with ? And also , importantly , who are you paying attention to these days ?
Daniel Angel MejiaObviously , podcasts and books are a good source that I rely on . I also follow a lot of LinkedIn . There's a lot of information on LinkedIn . Some doesn't , but I'm a LinkedIn believer A few folks there , jay Marcy , for example that offers great information , great feedback with real substance . For us that's important , just kind of like to follow trends , understand what's going on . There's a lot of variables and like too many sometimes to really get aligned , understand . But I think finding those kind of people that are offering interesting fundamental information in my opinion is always good . And then keeping a couple books around , I think is always good too . Yeah , what are you reading these days , right now ? Fraction ? Oh , my opinion is always good .
Ed MathewsAnd then keeping a couple books around . I think is always good too . What are you reading these days , right now ? Fraction oh Gina .
Daniel Angel MejiaWickman Okay , yeah , it's an annual read for me , is it ? Wow , I'm doing it for the first time and we're definitely gearing towards that EOS approach . I've found it's interesting because it's just so simple , but it just makes sense . A couple of things that we've implemented are starting to look pretty interesting .
Ed MathewsYeah , it's this way to make a very complex system fairly manageable , and we've had a lot of leaders on this show who are also EOS entrepreneurs and to a person they say it's really hard to implement in total right hard to implement in total right . So I find that a lot of people do what you and I do , which is read a chapter , understand a concept and then apply the concept of the business without having to go through the whole eis consulting not the exact .
Daniel Angel MejiaThat's the approach we're taking , at least for now , like understanding section by section , trying to implement and apply and eventually , probably at some point , we reach out . In our opinion , it was like let's understand first before we get bombarded with too much information .
Ed MathewsYeah , so talk to me about success , like , how do you define success in your life , in your professional life and even in your personal life , if you want to talk about that ?
Daniel Angel MejiaYeah , of course , for us , Apex evolving portfolio and our capabilities , a fully development capable tier where we get to a point where which community is multifamily and stuff like that'll take a few years probably until we have enough reps under our belt . Once that's going successfully , we'll follow . That's more like from a company perspective right At a personal level . To me , is combined with the purpose I mentioned earlier is just understanding that every situation in life , whether it's good or bad , it's temporary . So just making sure that you're enjoying what you're doing . To me , this is my passion , not only real estate , but just the fact being able to things together , building teams , working with people , working as a team and just making sure we can be or add value to everyone , even at a personal level . To me , that's success . Awesome , love that .
Ed MathewsAll right , sir , when you're not talking about real estate with geeks like me , what do you like to do for fun ?
Daniel Angel MejiaI like to ride my bike . I used to run until my knee decided not to Biking . I always enjoy a nice restaurant , also spending some time with my wife and friends , and I love traveling too .
Ed MathewsFantastic , Daniel . I've really enjoyed this conversation . If folks want to learn more about you or Apex , what's the best ?
Daniel Angel Mejiaway to get in touch . I think our website is a pretty good route . apexinvestments . us Email is always a great route to us . Dangel@ apexinvestments . us and in LinkedIn . I'm pretty active there, Daniel Angel Mejia , which I think would be the best three ways to reach out , and happy to have many conversations this morning as possible . I really really love it .
Ed MathewsDaniel , thank you again for joining us and it's a pleasure to see you . And continued good success . Thank you so much .
Daniel Angel MejiaPleasure to meet you , pleasure to be here .