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Founder's Story
This Business Model Turns Rentals Into 7-Figure Resorts | Ep. 223 with Jorge Martinez and Andre Vinay Co-Founders of Black Development Group
00:18:42
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- [00:00]
Sponsor Voice
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- [00:27]
Jerry
I can't sleep.
- [00:28]
Daniel
What is it now?
- [00:29]
Jerry
It's the company. It's chaos.
- [00:31]
Host
What's chaos now?
- [00:33]
Jerry
The numbers, the expenses, the books. What if we get audited?
- [00:37]
Sponsor Voice
No one's gonna audit you at 3am Go to sleep.
- [00:40]
Jerry
I can't sleep.
- [00:42]
Andre
You could if you used Ramp.
- [00:46]
Jerry
Who said that?
- [00:47]
Sponsor Voice
I don't care because they're right. Go to sleep and sign up for Ramp in the morning. Jerry.
- [00:51]
Jerry
Ramp is the corporate card that handles all your tedious financial operations, automatically integrates directly with your ERP and gives complete control over every transaction. Ramp gives you everything you need for bulletproof books and a better night's sleep. Wow. That is exactly what my company needs.
- [01:07]
Sponsor Voice
Yes, and exactly what I also need. Go to sleep, Jerry.
- [01:12]
Jerry
Upgrade to Ramp for free today and get $250@ramp.com that's ramp.com r a m p.com cards issued by Sutton bank members. FDIC terms and conditions apply.
- [01:25]
Andre
Hey everyone, welcome back to founder story.
- [01:27]
Host
Today we have Jorge Martinez and Andre Vinay, the co founders of Black Development Group. And Black Development Group is launching strategic tourist investments all around the world and you're doing a very, very interesting strategy around real estate. I was just talking to some friends about, so I wanted to make sure that we had some guests on that can really dive into this and I love this model around apartments turned into Airbnb or short term, short term living or it could be short term vacation. And it's just a unique model and people can have single owners. I love this whole model and I want to, I want to dive in more. But first, Jorge, can you start with what is the spark that made you say I want to be an entrepreneur?
- [02:15]
Jorge
Hello, Daniel. Well, we've always, I've always worked like in outside the corporate world since I was little. My dad was an entrepreneur himself. I always tried to follow his steps and during my pathway I stumped into Andres and we made a good partnership and we started with a company that did marketing and business strategy for different companies. So that's our background and we always try to, to get into the, into the real estate industry because we both have a background from our families in that in that industry. So we, we always had it in our DNA.
- [03:13]
Host
I, I can say before, Andre, before you answer the same question, what has been a key to continuing a positive partnership? And the reason I ask is we have guests on who've had amazing partnerships and guests on who've had the worst partnerships. So what has worked for the two of you? And I think you even have another partner.
- [03:33]
Daniel
Yes. Hi Danielle, how you doing? It's an honor to be here with you. Yeah, that's true. It's complicated. In the end, friendship comes first. So. And respect for each other. It's been 20 years since we started with other businesses. We decided to do this business eight years ago and start Black Development Group in order to get hotels. We were always wanted to have buildings and hotels all over the world. So we decided to start this company by doing that.
- [04:08]
Host
When you thought to yourselves, okay, you were, you had this other business before and now you're going to get into real estate. But it's not like selling homes, right? You're selling something much bigger, resorts, apartment complexes. You know how this seems like a big task, how did you get into this?
- [04:26]
Jorge
Well, first we, we wanted to sell like real high end apartments. And in the, in the meantime we, we looked that there was a growing demand on what really the investors needed that was to take care of their apartments because most of them don't know what it takes to, to take care of, good care of your apartment. So everything works as it, it has to. So when we started on the main principle in Tulum and Los Cabos, we wanted to have a model where you can buy your own apartment or house. And we as a model can make sure that everything goes and works as it should be and you don't have to take care of anything on your end. So that's, that's mainly what we, we wanted to, to, to create.
- [05:31]
Host
I know a lot of people that tell me I want to create a hotel or resort, but they don't realize how much work and effort and energy goes into not just building that, but you're building a brand, you're taking care of customers. There's so many intricacies that are involved with, with this. So when, when you look at where you're going as like the first step, how do you choose the areas that you're going into?
- [05:57]
Daniel
Basically what we did, we live, we looked for places with a lot of tourism. You know, Tulum was in, in a couple of years ago, starting to get like a big boom. So we decided to start there. We looked for a For a piece of land. Basically, what we could afford, okay, we got a couple of friends and let's say, let's go and buy the land. We're going to do this. We're going to do an apartment complex and we're going to sell it like a, Like a hotel and operate it like a hotel. Everybody came up like, what? Yeah, basically it's an Airbnb Reloaded. You get all these apartments. Everybody's doing it by themselves. Instead of doing that, let's hold. Do it with one person, one company with one focus and one price. And we can, we can get a better income out of it because of that. You know, you're not competing with it with your neighbor. Your neighbor is your partner in the end. So what we did was that, okay, let's go, let's. Let's sell apartments so we can get enough money to build it. Because a hotel needs. It's a lot of money to be built. So we decided to build. Build it through apartments. Then we came up with the idea of instead of getting our own brand to come up to get close to these big brands like Wyndham, Harriet, and let's say they can put us a brand new. They say, yeah, of course we can. We can franchise the brand. We can give you all the things you need to do the brand that's done, the brand's done the standards. And that could help us a lot. We really knew anything about hotels. Right. So that helped us a lot in order to get the hotel the way it should be, the back office and a lot of things that we didn't even know that existed. Right. So we did that. We got with Wyndham, a brand that's worldwide, pretty big. So we started with them. It's a brand. And from there on.
- [08:02]
Host
So when you look at profitability, because I'm sure a big expense at a hotel could be people having. A lot of people. Recently, I stayed at a boutique hotel that had one person and the rest were just cleaners because it was like this. Basically, it books on Airbnb. It's very simple. There's no front desk. I was very fascinated with the models of some hotels versus other hotels. How do you see, you know, the future of hotels, but at the same time maximizing, maximizing profitability while you also have separate owners for many of the rooms.
- [08:39]
Jorge
Yeah. As you say, the human resources are the. The key point in this, in this business. So the less, the less people you have working in your hotel on site is the most profitable for the company at the End this is the operating company for sure. In this case for the owners. No, because we have a lot of partners. Depending on the number of units that we sell is a number of partners that we have because we are not the ones that own the building. We are part of the building. If we have one or two units in that building as, as, as you might have one as well. So it depends on that. So what we look for in our model is to make more efficient the operation and the cost efficiency so the profit for everyone grows and, and everything works as it should.
- [09:44]
Daniel
Yeah, sure. In the end there's like two difference in the, in this industry the residence basically is what you, what you had to the place you went and the other one is the hotel operation. We have revenue, you have all this staff. So we're basically moving on into the residence style. So yes, you have front desk, yet you have some services. But let's say the restaurant, the restaurant, we give it away to another company like Starbucks maybe and that company is going to pay us a rent. It's going to give out the breakfast and lunch or whatever and that way we reduce all this. These people that are going to work with us, okay, Reducing the cost and making it more profitable.
- [10:35]
Host
Are you looking into how technology is transforming hospitality hotels operations, that kind of thing? Is there anything that you're looking into or anything that you're doing or that you see in the future for how maybe AI or advanced technologies can help with these things that we're talking about?
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Jorge
We think that the technology and in this artificial intelligence right now, it's going to revolutionize the industry for sure. Since you get to the complex all your, your day to day on, on the room, on the common areas. I mean there is a lot still to be made already. You can include make, check in and check out since from your phone. And this is going to start going to faster as we, as we move on. But for sure we have to be there because it's, it's something that's happening already and it will accelerate over the next few years.
- [11:42]
Daniel
In the operation you get the room, to operate the room from your phone, the tv you get to ask the menu, you get everything in your phone. Nowadays, no technology is reducing the amount of people you need to do things. You can get the blinds to open clothes, the air conditioner. In the end it's getting all these rooms completely technized.
- [12:11]
Host
I can't, I'm so excited for these automations because I feel like a lot of times bottlenecks sadly sometimes are people you know, because people could be happy one day, they could be sad one day and it can impact customer service. But a lot of these automations can also speed things up. While those people I think could be happier. Cause maybe they don't have to deal with issues that might make them, you know, sad in their day to day work. When, when you think of success through the both of you, when you hear the word success or you think about what success looks like, are you, have you already reached a certain level success and you're looking towards the next one or are you like I haven't even reached what I would even define as success yet. And what does that look like?
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Jorge
Wow, that's a good question. I think, I think that success comes through time depending on where you want to be and when you reach where you want to be. But the truth is that you're never gonna be there. I mean the true, I mean we, we're just getting started. I, I believe so. So if you can define success as you had a successful development or you sold every unit you had or yeah, maybe, maybe we can say we, we were successful that way. But we still have a lot to, to, to do. I think we're aiming for bigger things right now and for sure we're short from success. From what we, from where we stand right now.
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Host
When you, so what is your next milestone that you hope to achieve or what are you working towards as the next successful milestone?
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Daniel
We want to reach different countries. We want to move on into a worldwide company, not just regional. So that will be that, that next frontier, that next piece of success that you're looking for.
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Host
And where, what other countries are you seeing? Because I know you mentioned in the beginning about you're looking at, you know, hot tourist areas or busy tourist places. Where in the world are you seeing? Are you allowed to talk about that?
- [14:20]
Daniel
Yes, of course. We're reaching out to the Dominican Republic, Costa Rica. Those would be the next spots right now.
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Host
Yeah, I feel like Tulum. So I went to Costa Rica and then I went to Tulum. I almost felt like Tulum was like, it was like a Costa Rica meets like Bali. I was just blown away about how busy, how busy Tulum has gotten. They, they do a phenomenal job of marketing as like a, it's amazing how like these cities or counties or out of provinces do an incredible job at marketing and all of a sudden that one specific place just explodes. It's shocking. Where, I don't know. Are you looking at certain areas in Dominican Republic now?
- [15:04]
Daniel
Basically in that, in that area. And in Costa Rica, we don't. We don't know yet where we're gonna do it. We have like four different spots.
- [15:13]
Host
That's amazing. So if. When you're talking to owners or potential owners, do you. Do people normally go and visit? They want to feel the experience, see how it is, or are people just so excited because it's a unique opportunity?
- [15:28]
Daniel
They do that. It's an investment. In the end, many of them don't even know that the buildings we're building, they do. They just want to invest with us and they put the confidence with us. And basically what they're doing is that looking for a profit. In the end, eventually they're gonna go no to the hotel piece of hotel they own. But normally they don't even know the place.
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Andre
Where is a place that you like.
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Host
To travel to in the world.
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Andre
Personally.
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Jorge
Personally, I like Mexico a lot. The different cities here in Mexico, I like them a lot. And I will say maybe Europe for sure.
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Host
All right, well, I can't wait till you expand out to Europe too. I have to come in. I want to come and visit. We, My wife and I visit a lot of. We would rather not fly first class and stay at a nicer hotel. Like, that's our thing, you know, our thing are hotels. Like, we.
- [16:25]
Andre
We used to get a lot of.
- [16:26]
Host
Points just to stay at hotels and such. Because I feel like that's almost the highlight if you don't have a good experience at where you're staying. I almost feel like your whole trip, it's very hard to recover that trip. It really is something that you remember. You could have the best experience seeing the best sites, but if your stay was not a good experience, I almost would not even go back to that city or town or country. It. It's very hard. So I can see the importance in what you're doing at the same time opening this up to investors. Because it is like you said in the beginning, very, very hard to open a hotel yourself and to do everything. So at least they get, you know, they get a piece of it. If people want to get in touch with you, they want to find out more information. How can they do so?
- [17:11]
Daniel
Basically? Well, they can. They can go into our website, which is WW Black dg, and all the info is there. Our emails and everything is that is in the. In the web page. They can get in contact with that, with that. With Wyndham. We work a lot with Wyndham. They go with them. They can also reach us. And we're. We're here to hear any any questions they get.
- [17:38]
Host
Yeah, thank you for sharing that. So I think something you've done that is very special is this large partnership with Wyndham. And I feel like partnerships is a really great way for companies to grow, especially if you're trying to compete in a space, you know, with which with much more giants, it's better to collaborate and partner. So how is that process of how you even got into that partnership?
- [18:05]
Jorge
Well, when we started looking into the branded residence model or on the hotel model, we saw the perfect when you.
- [18:13]
Andre
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- [19:48]
Host
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- [19:50]
Andre
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- [20:47]
Jerry
This podcast is sponsored by Ramp.
- [20:50]
Sponsor Voice
I can't sleep.
- [20:51]
Host
What is it now?
- [20:52]
Jerry
It's the company. It's chaos.
- [20:55]
Jorge
What's chaos now?
- [20:56]
Jerry
The numbers, the expenses, the books. What if we get audited?
- [21:01]
Sponsor Voice
No one's gonna audit you at 3am Go to sleep.
- [21:03]
Jerry
I can't sleep.
- [21:05]
Andre
You could if you used Ramp.
- [21:09]
Jerry
Who said that?
- [21:10]
Sponsor Voice
I don't care because they're right. Go to sleep and sign up for Ramp in the morning. Jerry.
- [21:14]
Jerry
Ramp is the corporate card that handles all your tedious financial operations, automatically integrates directly with your ERP and gives you complete control over every transaction. Ramp gives you everything you need for bulletproof books and a better night's sleep. Wow. That is exactly what my company needs.
- [21:31]
Sponsor Voice
Yes. And exactly what I also need. Go to sleep, Jerry.
- [21:35]
Jerry
Upgrade to Ramp for free today and get $250@ramp.com that's ramp.com r a m p.com cards issued by Sutton bank members. FDIC terms and conditions apply.
- [21:47]
Jorge
Intersection between lifestyle and investment as we. As we just told you, and partnering with Wyndham was very strategic for us because we were looking for a brand with a global recognition and strong operational standards and flexible development approach. And Wyndham was the one that checked all the boxes at the end. So it was a long process for aligning our visions. But I think today we have a good partnership for both sides. I think they know us as how we work and now we know how they work. So I think it's a partnership that can go on with more projects.
- [22:34]
Daniel
It's been challenging for Wyndham because in the end, the model we're using wasn't an approach they were using. They used hotels. They weren't used to having a condo, and all these condos are operating like that. So it was a complete task for them in order to get us to work. So it was also difficult for them. Nowadays, the model is getting used all over the world. They're transporting him all over the world. They used us as models for that and, well, it's been interesting.
- [23:12]
Andre
Wow.
- [23:13]
Host
You're starting a whole new category. You know, you were there in the beginning, in the first. Sounds like your partnership's going to flourish more.
- [23:21]
Andre
Yeah.
- [23:21]
Host
Jorge and Andre, thank you so much for joining us today and sharing all the insights and everything that you've been working on and thank you for joining us on Founder Story.
- [23:31]
Daniel
Daniel, it's been an honor.
- [23:32]
Jorge
Thanks. Thank you very much. Daniel. Thank you for your time.
- [23:40]
Sponsor Voice
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- [24:10]
Jerry
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