Jacob and Arleen Garza: How REEP Equity Creates Value and Opportunities for Multifamily Investors

Jacob & Arleen Garza

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  • REEP Equity was established by founders Jacob and Arleen Garza. The Garzas, as a husband-and-wife team, balance company, and client needs with a “people first” approach.
  • Since 2012, REEP Equity has bought, sold, and managed $720M of multifamily assets, managing more than 5,500 units across San Antonio, Houston, and Austin. The current portfolio comprises twenty-three properties with a total of 4,171 units, valued at over $600 million.
  • The Garzas believe that while the real estate industry may face headwinds in the months ahead, the multifamily sector is here to stay and will remain resilient.

Real estate investing remains a reliable method for building an individual’s cash flow and wealth.

One popular way to invest in real estate is by owning a collection of rental properties. Properties with only one residential rental unit are commonly called single-family properties, while apartment complexes with more than four rental units are known as multi-family properties.

Investors often favor multifamily properties for the monthly cash flow they generate. Rents are predictable, and typically, units can be easily turned over and re-leased to ensure a steady cash flow year in and year out.

Mirror Review recently interviewed Jacob and Arleen Garza who highlighted a common misconception among new investors: thinking that multifamily investing is only for the ultra-wealthy. However, this is not true. According to Garza, “Real estate investing is not like the stock market. Many people are still choosing to invest in certificates of deposits and retail investments, for instance, but are frustrated with lackluster returns on their investments.”

(The following Q&A has been edited for length and clarity.)

Mirror Review: Can you discuss the diversity within your group of multifamily investors and how your services cater to varying levels of experience, from seasoned investors to those just starting?

The Garza’s: Multifamily investing appeals to a diverse group of investors. Our clients come from around the world and have varying levels of experience – from seasoned investors to those just starting. We work with a multitude of investors, including teachers, engineers, doctors, and individuals from various walks of life. What unites them is a desire to build long-term wealth and meet financial goals through passive income.

Sixty-five percent of our clients invest with us repeatedly, evidence that we consistently meet their objectives. By providing access to multifamily investments, we assist investors in hedging inflation, providing tax reduction benefits, protecting capital, and diversifying their portfolios, paving the way towards retirement, college savings, second homes, world travel, and more. We take pride in helping our investors create generational wealth and realize their dreams.

Mirror Review: In your statement, you mentioned a vertically integrated structure. How does this structure provide REEP with an advantage in investment opportunities?

The Garza’s: Our vertically integrated structure with our in-house management team gives REEP an advantage in recognizing and creating value, providing incomparable service and opportunities to our investors. We focus on acquiring underperforming, income-producing investment opportunities. We invest and have a stake in the game. Unlike others, we invest our own capital and operate properties directly. This shared interest as both an investor and manager enables the agile execution of business plans that drive returns.

As we expand our community of investors, our commitment remains the same: to satisfy each person through personalized service, transparency in communications, and strategic investments. The road ahead promises new opportunities to help our clients achieve financial freedom. Alongside our in-house Property Management team, REEP Residential, we can fulfill this commitment.

Mirror Review: Can you share your educational and professional journeys and discuss how your family dynamic has influenced the culture and values of REEP Equity, especially as you involve your young adult children in expanding your legacy business?

Jacob Garza: Before REEP Equity, I founded Property Automation Software, which became the #1 selling property management software for small to mid-sized property management companies. The company had 21,000 customers in 9 countries, managing over 3.9 million units. As the sole shareholder, I successfully sold the company in 2007.

Arleen holds a Bachelor’s in Business Administration in Finance. Before venturing into real estate, she held various key roles in the financial services industry, attaining the position of Senior Vice President. Her roles included National Hispanic Marketing Manager, Retail Banking Center Manager, International Private Banking Manager, and Credit Officer. Throughout this period, Arleen shared her expertise on national and local media programs, educating consumers in both Spanish and English on personal financial management.

After successful capital events in the early and mid-2000s, we ventured into property management by acquiring a small apartment complex. This hands-on experience allowed us to understand the intricacies of income and expense drivers influencing property value. We established REEP Equity in 2012 with a commitment to a “people first” approach, balancing the needs of the company and clients. In our roles, Arleen manages the company’s growth through acquisitions and capital events, while I oversee equity, operations, and the overall vision of the company. Our legacy business is flourishing, now with the active involvement of our young adult children. Today, our business has grown to manage over $710MM in assets.

Mirror Review: You mentioned that the Texas Triangle megaregion is a significant part of your investment strategy. Could you elaborate on the primary drivers of growth and demand in this region, and how you leverage them in your investment strategy?

The Garza’s: Our investment strategy focuses on regions that attract major corporate relocations, and jobs. ‘Texas’ is booming with new business opportunities and residents. With no state income tax and a pro-business environment, Texas attracts new ventures, particularly within the Texas Triangle megaregion.

This area, linking Dallas, Houston, and San Antonio, constitutes the 15th-largest economy in the United States. Four of the nation’s ten most populous cities are located within this region. Fueled by both expansion and migration, the Triangle leads in U.S. growth.

Currently, REEP’s portfolio has 23 properties in this region, totaling 4,171 units valued at over $600 million. As business influx continues unbalancing supply, Texas presents prime investment prospects. Our holdings in the thriving Triangle position us to capitalize on this flourishing market.

Mirror Review: The exceptional workplace culture at REEP comes from its people. How does the company actively involve and engage employees in keeping this positive culture?

The Garza’s: For REEP, it’s more than just investing in properties; it’s about building relationships. We do this through our commitment to collaboration, positive community impact, and fostering a culture of continuous learning for our team.

We strive for excellence in everything we do, setting high standards and continuously seeking opportunities to grow, innovate, and improve. We inspire our teams by sharing the vision and giving them the freedom and tools to reach their goals.

Our positive and inclusive workplace directly comes from our team’s commitment to working together and embracing diversity. We didn’t have to teach these behaviors—our employees naturally understand that embracing different perspectives leads to greater success for everyone. There is a reason we have been fortunate to be 2023 award winners of the National Apartment Association Top Employer of the Year, Top Work Places by the San Antonio Express-News, and the FastTrack Award for the fifth year in a row by the San Antonio Business Journal.

Mirror Review: Considering the potential headwinds in the real estate industry, you expressed confidence in the resilience of the multifamily sector. Can you elaborate on the factors that contribute to this resilience?

The Garza’s: Multifamily stands out for its stability, and we specialize in finding opportunities to add value to properties and the communities we serve.

The real estate industry might face challenges in the months ahead, but the multifamily sector is here to stay and will remain resilient. While economic changes may affect other asset classes, demand for apartments will remain constant. People always need a place to live. That’s why we’re confident REEP will reach $2 billion in assets under management within four years. Our growth trajectory is robust despite broader industry challenges.



Also Read: The 10 Most Influential Real Estate Leaders of 2024.

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