Johny Fernandez: Brooklyn native Ralph DiBugnara works across the
Hudson River in Edgewater, New Jersey. He's a real estate
investor that started small and made it big. Here's how it
happened.
Ralph DiBugnara: I started investing in real estate in
2003. So I rode the wave up, and then I rode the wave down, and
then I started over again. So I've seen all sides of it, but
even the properties I bought before the crash that I was able
to have staying power with and hold on to I eventually pay
dividends. So I think real estate, as a long term
investment option is still the best option.
Johny Fernandez: DiBugnara started working in the mortgage
world in 2001. That was his introduction to the real estate
world.
Ralph DiBugnara: It was easy to access money to buy real estate.
So you know my first purchase was I was like, I don't want to
rent I'm going to buy. So at 23, I went to a property with my
brother, and we bought something. And I owned that
until I wanted to move into Manhattan. And then I sold it
really, really quickly. And again, I didn't know anything
about real estate, there was a lot of mistakes I could have
made but that's when the market was really trending upward. So
when I sold the property, I was able to make a profit pretty
quickly. And then I took that money and I flipped it into more
properties.
Johny Fernandez: At the time, Ralph shared with me, he started
to expand his portfolio and invest out of state. While it
was smooth sailing at first, the 2008 housing crash followed.
Ralph DiBugnara: I went from making a significant amount of
money. I was a vice president at Deutsche Bank at the time,
because they had acquired us as a company, I was running a
pretty large division. And literally overnight, I lived on
Maiden Lane, which is a block over from Wall Street, my
company was on Main Lane, which is in the Federal Reserve in New
York City. And I'll never forget, I was walking up the
block and I got an email that said they're eliminating these
products and mortgages. And it was like 90% of my business that
were in those products. And I said this can't be right, this
is wrong, somebody made a mistake. And sure enough, by the
time I got to the office, it was right, I spent the rest of the
day back in my apartment watching them market market it
as interest was a freefall. So I went from, you know, making a
significant amount into six figures to making nothing, it
wasn't like a slow, like, like crawl out, it was like nothing.
So you know, at that point, as a real estate investor, it gets
very, very hard. So I went to the process where I didn't want
to just give everything up. So I went through the modification
processes and all that stuff to try to keep the properties and I
was able to keep most of what I had. And, you know, start over.
Johny Fernandez: Ralph says this experience is what shaped him
into the investor that he is today. He told deBanked that
it's important to be prepared and have a diverse plan of
action.
Ralph DiBugnara: My philosophy kind of changed a little bit
when this year started, where I was I was really all long term
investments and I was multifamilies are properties I
can rent long term, whether it was a large scale multi, multi
or single family too, I really had to start exploring the short
term rental market, which is Airbnb and VRBO, and things like
that, that kind of exploded this year. So it was something that I
really say, okay, what is this? How do I pivot towards this? And
that's what I started pivoting. And I think if you're looking to
do it, it's a really, really good option, because it's a much
higher return on your money, in my opinion, but it's a lot more
work.
Johny Fernandez: His advice for real estate freshmen is to ask
for help, whether it's alternative finance or real
estate, what advice would you give them someone that's just
starting literally walking in and doesn't know what to do?
Ralph DiBugnara: Yeah, I mean, listen, I think that it's a
better business to be in than it ever was before, just because
COVID sped everything up. And now there's so much information
out there right now, it can be overwhelming. But that's why you
start slow. And like I said, if you're from New York or New
Jersey, buy, go buy a multifamily, you know, go buy a
multifamily that you can live in and earn on, that's a good way
to enter the market where you can make a lot of mistakes, and
not completely lose your investment. You know what I
mean, you can rent to the wrong, whatever, and it leaves you a
lot of room for error, there's more access than there ever was
before. And I think that that's really, really important that
there wasn't, there wasn't that kind of access before and there
is now. So I think that because things have gotten virtual, it
is made it easier to get into the business.
Johny Fernandez: He says to follow experts online that have
already made mistakes and learn from them.
Ralph DiBugnara: I would say to look for somebody in this
business that can mentor them that made all the mistakes. When
I went through the market crash in 2007, 2008. I didn't know
anybody else outside of my company, there was no such thing
as podcasts and audiobooks. And all this information out there
or social media, so I could network myself, I had no
network. Now you're in an in an area in an arena where this it's
so easy to access people who have the information, right. So
even me, I've been through a million mistakes like, find
somebody that can give you the information to help you avoid
the years and years it would take you to get up and running.
Johny Fernandez: Ralph shared with me his predictions for the
investment market.
Ralph DiBugnara: You're gonna see values that continue to rise
in one way shape or form because of bidding wars, because you
know anything, there's a lack of supply, and you're gonna pay we
pay a premium for. So I think if you're going to buy you have to
look at it as a long term investment and have to look at
something in five or six years. Is this where I want it? Is this
still where I want to be? I don't think you can look at it
as a year two or three market because even if you could buy a
property and make a profit on it really really quickly if you're
buying in a primary residence then where are you going? Unless
you're moving to a different state, then you're going to pay
a premium. So even selling for a premium, you still have to pay a
premium. So unless you're looking to sell in one high
value state and move to another state where it's a lower cost.
You're kinda in the same position everybody else is. So I
think you have to more than ever look into something over the
long term. Because I think the trend for prices is still gonna
rise. I think interest rates will stay low, at least till the
end of the year, because I don't think they could take a raise
right now. I think we're dealing with a very volatile market in
general. And when you're dealing with a volatile market, again,
we want to have staying power so I want to invest enough, the
amount of money that I can have something that can stay in power
because you have to have enough foresight to run in when
everybody's running out just like anything else, as the
market is a roller coaster, try to be diversified. Don't be in
one thing or the other and don't run away when the market starts
to dip because you're gonna have reactive markets where you're
gonna have waves.
Johny Fernandez: In Edgewater, New Jersey, I'm Johny Fernandez
with deBanked News.