I went from $1,500 cash to $150,000 cash in less than four months. The rest is history, and I was able to assign the deal in escrow and became a millionaire at that time through my second deal. I set up a real estate fund, and that was the best thing I did because if I would have known about real estate funds and I set it up like in 99, I would have grown like crazy, like it would have been in the billions.

Hey guys, this is Sharad, the host of the recently podcast, bringing you another very special guest on this podcast. Cherif Medawar, Cherif, welcome to the recently podcast. How are you doing today?

I’m fine, thank you, Sharad. Appreciate it.

Thank you so much for being a guest on the podcast. Cherif, tell us a little bit about yourself, your real estate journey, you know, how did you get started and how are you involved in real estate now?

Thank you. Well, many family members are in real estate, and when I came to the United States, I was 19, I had a hotel degree, and I was working at a hotel called Century Plaza Hotel in Los Angeles. I loved the hotel business. I just wanted to become a general manager, so I was working around the clock, and a wealthy investor, a billionaire in the name of Edmond Bessari, stopped me in the lobby one day and he said, “Cherif, I see you working from 6 o’clock in the morning to like 11 at night. What’s going on?” And I told him, “Well, sir, I don’t know if you notice, I have a golden name tag, you know, they identified me as a potential general manager, and if I work hard for 10 years, I may move up.” He looked at me and said, “Are you crazy? You know, they tell you what to do, what to wear, when to take off. You need to come and work for me. I have real estate around the world, and I need somebody with your enthusiasm and energy to do the work on my behalf.” I got scared. I was excited, but I got scared. I said, “Sir, I don’t know anything about real estate.”

And he grabbed me by my shoulder and he said, “Cherif, you’re at the right place at the right time. Just say yes.” So I said yes, and I went to work for Edmond Bessari for eight years, all the way until literally it was 1989, generally when I left him. And the reason I left him is I realized I had learned so much, had done so much for him that I could do it on my own with very little money, just credit lines and credit cards and stuff. And I told him, I said, “Mr. Bessari, I’m ready to move on. Are you okay with that?” And his answer to me was, “Cherif, you’ve labeled yourself as a hotel manager and you are going to stay in the hotel business forever. Then you labeled yourself as working for me as my right hand man and you’re going to be stuck with me forever. You’re a free man. Go out there, do your thing, and help at least 10 other people.” That was the best message he gave me because I left and I continued in the hotel business but I started doing real estate on the side and started getting my first days in San Diego as a matter of fact. First deal was in Solana Beach on Loma Santa Fe Drive, and I took actually two plaques and got a cash advance on my credit card because they had what’s called a Nina loan, no income, no asset verification. They just didn’t care where the down payment came from, and they had a special program, those living in Del Mar and Solana Beach, that area could put 5% down on a home. So I put 5% down, got a duplex to live on one side, rent the other side. But then I didn’t want to live there. I split the two units, separated the water meter, gas meter, electric meter, created condo units, and sold them both. I remember bought the duplex at $300,000. It was $295. I’m running the numbers. When I split them, I sold each one at 200,000. I netted $150,000 in cash sitting in my bank account. I went from $1,500 cash to $150,000 cash in less than four months. The rest is history. I just said, “Oh my God, this is unbelievable.” In the hotel business, I cannot make that much money in so little time. So I kept doing more and more and more and kept growing in the hotel business while I’m doing stuff on the side.

And then when was it? 1998, I decided to start teaching people. Because people started asking me in the hotel business, “How are you driving this convertible Mercedes? Or in the hotel business, you moved up, but you don’t make that much money. I’m like, no, I make my money in real estate. I do this.” And so they started getting me into groups, started teaching people. And when I started teaching, I realized I had to learn so much more. They asked me questions I didn’t know. So I got better at the game.

Then fast forward, another 10 years, in 2009, I grew with my education company so big that people started asking me if they could invest with me. So I set up a real estate fund from the education company. People wanted to invest. So I set up a real estate fund. And that was the best thing I did. Because if I would have known about real estate funds and I set it up like in 99, I would have grown like crazy. Like it would have been in the billions. But it’s okay. Everything happens at the right time.
And when I set up the real estate fund in 2009, people started investing with me. And they invested alongside what I do. And that has been my journey. So today I am doing my real estate funds in Puerto Rico, in San Francisco, in Florida. I enjoy teaching. I still teach. And I have a huge portfolio. I’m the largest owner of historic properties in Old San Juan, Puerto Rico. I took residence in Puerto Rico, moved from California. Because in Puerto Rico, you can drop your taxes from 50% to like 15, 16% if not less.

Yeah, I live in California. It’s crazy with the way taxes are.

Cherif, congratulations on all the success. But it’s incredible, like for you to be in the right place at the right time. Like if you had not come across the mentor that you got, you probably would not be where you are right now. Because sometimes, like, we’re so much in our world that we don’t realize the opportunities that are outside available. And this mentor of yours, he almost insisted you join him. He saw the potential in you that you probably didn’t even see the potential in yourself. So that’s incredible. To come across someone like that. And that person also being so open after eight years of working with him to say, “Yes, you’re a free man. Go do and help 10 other people.” I think that’s incredible. One of the best stories I’ve heard. So thank you so much for sharing that.

Thank you.

So the first property that you bought and sold in Solana Beach, not too far from where I live, incredible area. What were you doing afterwards? Were you just basically repeating the same process? Because at this point, you still had that full-time job working at the hotel. So are you just doing the same thing, basically like a burn method?
So I was a general manager at the Del Mar Hilton because I had opened the Hilton because when I left Edmond Bessari, what he did is he said, “Look, let me give a call to Hilton hotels because he had hotels and stuff.” So he picked up the phone and he called them Beverly Hills. He said, “Look, I’m going to give you a gift because he knew the top people.” Sharif Medawar worked for me. He managed my resort in Wisconsin. We had a resort there called Olympia Resort and Spa. And I was doing these for him, even trading the stock market as I learned and I found things. And he said, “Look, I’m going to give you a gift. This guy can run hotels, but he can also talk to the owners because he understands the real estate part, not just the management of hotels.” So they took me over right away after a quick interview and they sent me over to open the Del Mar Hilton. And I was with a great team, but then a great area also. So I did the Solana Beach deal, which was a mile away from the Del Mar to Solana Beach. And then when I finished that first deal, I said, “Oh my God, if I can separate units and sell them separately and make so much money, what am I doing dealing with duplexes? Let me look for a bigger deal.” And I found the bigger deal, believe it or not, at the penny saver, you know, the penny saver. There was no internet at the time.

Yeah.

Saver was where I found my first deal. And the penny saver I found, a deal in Mira Mesa, California was a large apartment building, 172 units. And I think somebody had posted on penny saver?
Yes.

Wow. Yeah. And I called the guy, he’s a very nice gentleman, and he said, “Come and meet with me.” And we sat down, he said, “I only have five minutes. What is the proof of funds? You don’t have enough down payment.” I said, “I have $156,000, but I’m going to get the deal done. But if you can just help me, because I have some people.” And he thought that my family was rich or something, so he kind of worked with me a little bit. And he said, “Look, I’ll give you an option to buy it, but you got 25 days.”
So what I did is I asked him, “Let’s put things in writing.” And then I went to the city planning and zoning department and I asked them if they would allow me to separate the units and make condos. And the guy in charge, kind of literally just brushed me off, like, “No, no, no, we’re not going to approve that. We don’t need condos. This is an apartment building. Good luck to you.” So I left, and then I went back to the seller, and I told him, “Listen, can you allow me to talk to some sellers? I just want to see if I can talk to them directly, because I want to condominiumize the thing.” He said, “Okay, but you need to tell me what you’re going to tell them.” And I told him, “I’m going to tell them if they would like to approve that we make it condos so later they can become owners of their own units that they’re renting.” And he said, “Okay, do it.”

So I went and I remember the first person I talked to, I asked, he had a baby in the background with his wife, and I told him this, and I, I’m having the deal under contract. If it’s okay with you, would you like to? He was paying $1,095 for rent at the time.
So you’re talking to the tenants off the building?
Yeah, one of the units. Yeah.

And I told him, “Would you like to own the building, the actual unit you’re in, the condo, and your payment will be $1,300?” And he said, “Why will I pay more? I’m renting here, and why will I obligate myself to this with the tax and insurance?”
And I said, “Because you can get deductions and you will actually be paying less.” And I showed him, like literally educated the guy at the door. He wouldn’t let me inside. And he said, “Okay.” I said, “If you agree, sign this petition here, because I’m going to go to the city planning office to make it condos.” And he signed, and he said, “Talk to my brother-in-law. He’s living over there.”

Anyway, so I got the board, kind of a clipboard, and it only had like maybe 17 signatures out of the whole apartment building. And the rest, either nobody answered the door, or they weren’t there, never called me back. It was very frustrating.
So but I went back to the city planning office about four days later, and I saw the same guy. And I remember he had me waiting, and I was there very early in the morning, and he was talking about waking up at six and watching the movie Gone with the Wind. I mean, the guy was just an absolute loser.

But anyway, finally he called me over. He said, “What’s going on?” I said, “Look, I got a petition right here signed by the condo renters. They want to become condo owners. If you don’t approve this, I’m going to go get Channel Four, and they’re going to make a big expose about this thing that the city is not helping people become owners. And I’m going to raise a holy hell against the city.”
Because he said, “Wait, wait, wait. Let me talk to my supervisor.”
They take me into the office, and they say, “Okay, we’re going to work with you. As a matter of fact, it’s a good idea. These are going to be affordable housing. You’ve got to dedicate so many units for whatever, whatever.” All that they told me, I said, “Fine, fine, fine.” Got a piece of paper saying that this is okay.

And I went back and I advertised 172 units in Mira Mesa, California, approved for condos. Value will increase by so much and this and this. And I was able to assign the deal in escrow and became a millionaire at that time with my second deal. So it was creativity and guts and experience. And, you know, you win wars by having great timing, very, very powerful force, relentless force, intelligence. I knew that the city would need condos and great allies, because the guy, the seller wanted to sell. So he gave me an extension of time, because it just took a little longer for me to sign it.
And I told him, “Look, I’ve got some people interested. Let me go back in, I need to inspect this and that.” So he worked with me because, you know, an older guy who wanted to sell, he told me he had the kids from two different wives and he wanted to separate the money, and he had his reasons. So I was working with him and he was working with me. I mean, he could have told me, “No, I don’t want to give you an extension.”

So it’s knowledge, really, skills, and a degree of luck in life.