When it comes to real estate, Leo Pareja has all the right moves
Story By: Joe Dyton
Pareja is the president of the National Association of Hispanic Real Estate Professionals (NAHREP), an organization dedicated to helping Hispanic families achieve their dream of homeownership, owns a private debt fund as well as a real estate technology company and he also happens to be one of the top performing real estate agents in the country.
So what does he mean when he says he’s never had a job?
“By default” is a good way to describe how Pareja found his way into the real estate industry. Initially interested in a career in graphic design, his pursuit was halted during his freshman year of college when web design companies were collapsing because of the tech bubble burst.
However, it was at that same time Pareja had read, “Rich Dad Poor Dad” by Robert Kiyosaki. Pareja was fascinated by the book’s philosophy about leveraging into three buckets; people, time and money. The book also focused primarily on real estate, which helped lead Pareja to his next career venture—real estate investing.
“That’s not something we grew up talking about at home whether it’s Latino culture or just traditional middle-class culture,” he says. “That put me on this incredible path of trying to gain as much knowledge as I can.”
To get his foot in the door, Pareja approached a local investor and asked him if he could work for him for free. The investor told him no, but referred Pareja to his mentor who lived in a different state. He called the mentor and told him he wanted to learn everything he could about the real estate investing. Pareja was told to give him $10,000 and he’d teach him everything that he wanted to know.
Without telling anyone, Pareja sold his car and wired someone he didn’t know all of his money. A one-year mentorship began and Pareja learned all there was about how to sell; understanding the psychology of the sales process and the wants and need that are involved. After Pareja got his real estate license, he went back to the man who initially turned him down. He offered him a job and a choice—take an hourly rate and be treated like an assistant or “learn how to hunt and eat what he killed.”
He chose the latter, and the decision paid off dearly. While he was still in college, he had an argument with his landlord about noise levels and his boss told him he needed to buy his own property. As a 20-year-old college student, Pareja thought there was no chance he could do that, but his good credit rating and a co-signature from his dad allowed him to qualify for first-time homeowner’s loan. Since he was a licensed realtor, he was able to put his commission towards paying back the debt.
“I bought my first property before turning 21 with four bedrooms,” he says. “I rented out each one for $500 each and lived effectively rent-free and that was an ‘aha’ moment in my life.”
A Businessman is Born
After the successful purchase of his own property, Pareja saw an opportunity. He asked his classmates to let him talk to their parents. He called them and gave a sales pitch about how they could pay for their children’s college education through housing. That summer, Pareja sold 11 houses and made about $60,000---at 21 years of age.
His success got him recruited by a conglomerate company to build a real estate company. He opened six offices in six months and recruited 100 agents. He thought he couldn’t be stopped—then the real estate market collapsed.
“I realized I was a creature of the market and I was not that talented,” he says. “I was just in the right place at the right time.”
After his multi-million dollar net worth vanished in a year, Pareja needed to figure out his next step. After consulting with more experienced people in the industry, he learned how market cycles worked and that they were driven by collateralized debt obligations. He started calling banks in 2007 and asked if he could help them with their distressed outlets from then until 2010. The move helped him become one of the biggest real estate agents in the U.S. By 2010, Keller-Williams ranked him the top agent in the world.
When the market stabilized in 2012, Pareja started his private debt fund. As one of the biggest lenders in the Mid-Atlantic region, the fund is financed by fix and flip investors and a number of clients are Latino contractors who can’t navigate the current banking environment.
Paying it Forward
In 2010, Pareja was approached by NAHREP. The organization wanted a Washington, DC presence, which is crucial when launching a market to get influencers involved. Since NAHREP’s mission is to help create sustainable Hispanic homeownership, a value that’s important to Pareja, he was more than happy to help. After all, once he finished selling homes to his friends in college, his next focus on was on first-time Latino family homebuyers, so he understands the need for organizations like NAHREP.
“Latinos are very hard-working, family-oriented people and real estate investment is the foundation of this country’s American dream,” Pareja says. “If the family bought a house 20 years ago and spent the same amount of money they would have on rent, they now have a free and clear home in southern California or northern Virginia and have a lot of wealth. Whether they sell it or refinance to get a line of credit, that’s how the next generation gets to go to college, how an employee can make the jump and say, ‘You know what? I’m going to do this on my own and I need the seed money to start my own business.’ That business becomes a bigger business that employs others and that’s economic stimulus.”
After he ran the Washington, DC chapter, Pareja moved on to the national board and almost by default ended up in an unofficial policy liaison position because he lived so close to the nation’s capital. He got to attend several big meetings including discussions on Dodd-Frank and the legislation that came with housing and NAHREP.
“I get a front row seat to see how we shape policy in this country, and it’s been an honor,” he says.
As the Latino population continues to grow in the United States, Pareja wants to see it take control of its merits. As an ethnic group, he believes Latinos are at a tipping point when it comes to workforce participation, household formation, and homeownership rates. The Latino demographic is also the fastest growing and is the leading economic growth. For Pareja, this all adds up to wanting to make sure the Latino community continues to fight to make its voice heard.
“Going from where we had our start as our roots in NAHREP as advocacy versus empowerment is very real to me and I think that’s the dialogue we need to be having in this country,” he says. “We don’t need a handout, we just need to understand that we are the market and own it. I’ve always said, ‘I love being the number one at whatever I am doing; that happens to be Latino.”