This Business Model Turns Rentals Into 7-Figure Resorts | Ep. 223 with Jorge Martinez and Andre Vinay Co-Founders of Black Development Group

0:00Hey, everyone. Welcome back to Founder Story. 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 it. 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 be Airbnb or short-term living, or it could be short-term vacation. And it's just a unique model and people can have single owners.

0:42I love this whole model and 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? Hello, Daniel. Well, I've always worked 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 stumbled 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 get into the real estate industry because we both have a background from our families in that industry.

1:45So we always had it in our DNA, 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. Yes. Hi, Daniel. 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.

2:34In 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. When you thought to yourselves, okay, 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 well uh first we we wanted to to sell um like real high-end apartments and in the meantime, we looked that there was a growing demand on what really the investors needed.

3:21That was to take care of their apartments because most of them don't know what it takes to take care of, good care of your apartment, so everything works as it has to. So when we started on the mean 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. And so that's mainly what we wanted to create. 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.

4:21There's so many intricacies that are involved with this. So when you look at where you're going as like the first step, how do you choose the areas that you're going into? Basically what we did, we looked for places with a lot of tourism. You know, Tulum was in a couple of years ago starting to get like a big boom. So we decided to start there. We looked 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 lab. We're going to do this. We're going to do an apartment complex. And we're going to sell it like a hotel. An operated hotel.

5:06Everybody 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 all do it with one person. One company. With one focus and one price. and we can get a better income out of it because of that. You're not competing with your neighbor. Your neighbor is your partner in the end. So what we did was that, okay, let's go. Let's sell apartments so we can get enough money to build it because a hotel needs a lot of money to be built. So we decided to 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 and Harriet.

5:55And let's say they can put us a brand new. And 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 has done, the standards. And that could help us a lot. We didn't know anything about hotels, right? So that helped us a lot in order to get the hotel 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... So when you look at profitability, because I'm sure a big expense at a hotel could be people, having a lot of people.

6:46Recently, 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 the future of hotels, but at the same time, maximizing profitability while you also have separate owners for many of the rooms? Yeah, as you say, the human resources are the key point in this business. So 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.

7:34In this case, for the owners. No, because we have a lot of partners, depending on the number of units that we sell. is the 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 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 everything works as it should. Yeah, sure. In the end, there's two differences in this industry. The residence basically is what you had to the place you went and the other one is the hotel operation.

8:34We have revenue, we have all this staff. So we're basically moving on into the residence style. So yes, you have Trondesk, yes, 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 us the breakfast and lunch or whatever. And that way we reduce all these people that are going to work with us, reducing the cost and making it more profitable. 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?

9:29We think that technology and this artificial intelligence right now is going to revolutionize the industry for sure. Since you get to the complex, all your day-to-day on the room, on the common areas, I mean, there is a lot still to be made. Already, you can make check-in and check-out from your phone. And this is going to start going faster as we move on. But for sure, we have to be there because it's something that's happening already and it will accelerate over the next years. 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.

10:29Technology is reducing the amount of people you need to do things. You can get the blinds to open, close the air conditioner. In the end, it's getting all these rooms completely technolized. I can't. I'm so excited for these automations because I feel like a lot of times auto necks, 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. Well, those people I think could be happier because maybe they don't have to deal with issues that might make them sad in their day-to-day work.

11:11When you think of success through the both of you, when you hear the word success or you think about what success looks like, have you already reached a certain level of 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? Wow, that's a good question. 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 going to be there. I mean, we're just getting started, I believe. So if you can define success as you had a successful development or useful every unit you had.

12:03Or yeah, maybe we can say we were successful that way, but we still have a lot to do. I think we're aiming for bigger things right now. And for sure, we're short from success from where we stand right now. So what is your next milestone that you hope to achieve or what are you working towards as the next successful milestone? We want to reach different countries. We want to move on into a worldwide company, not just regional. So that will be that next frontier, that next piece of success that you're looking for. And 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.

12:52where in the world are you seeing are you allowed to talk about that yes of course we're reaching into the dominican republic and costa rica those would be the the next spots right now yeah coast i feel like tulum so i went to costa rica and then i went to tulum i almost feel 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 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 shocked where i don't know are you looking at certain areas in dominican republic now and basically in that in that area and in costa rica we don't we don't know yet where we're going to do it.

13:47We have like four different spots. That's amazing. So when you're talking to owners or potential owners, 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? They do that. It's an investment. In the end, many of them don't even know that and the buildings we're building. They just want to invest with us, and they put their confidence with us. And basically what they're doing is that, looking for a profit. In the end, eventually they're going to go to the hotel, a piece of hotel they own. But normally they don't even know the place.

14:27Where is a place that you like to travel to in the world personally?

14:35Personally, I like Mexico a lot. the different cities here in mexico i like them a lot and i will say maybe europe for sure 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 hope we would rather not fly first class and stay at a nicer hotel like that's our thing you know our thing our hotels like we we used to get a lot of 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's very hard so I can see the importance in what you're doing at the same time opening this up to investors?

15:34Because 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 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? Basically, well, they can go into our website, which is www.blackdg.com. And all the info is there. Our emails and everything is in the webpage. They can get in contact with that. With Wyndham, we work a lot with Wyndham. They go with them. They can also reach us. And we're here to hear any questions they get. Yeah, thank you for sharing that. So I think something you've done that is very special is this large partnership with Wyndham.

16:21And I feel like partnerships is a really great way for companies to grow, So especially if you're trying to compete in a space with much more giants, it's better to collaborate and partner. So how is that process of how you even got into that partnership? Well, when we started looking into the branded residence model or condo hotel model, we saw the perfect. When you realize you need to hire, it's usually already too late. I've been there wasting weeks waiting for decent candidates. If I had used Indeed, I could have hired way faster. So when it comes to hiring, Indeed is all you need. Stop struggling to get your job post seen on other job sites.

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17:40There's no need to wait any longer. Speed up your hiring right now with Indeed. And listeners of this show will get a$75 sponsored job credit to get your jobs more visibility at Indeed.com slash founders story. Just go to indeed.com slash founders story right now and support our show by saying you heard about Indeed on this podcast. Indeed.com slash founders story. Terms and conditions apply. Hiring Indeed is all you need. Intersection between lifestyle and investment, 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.

18:30And 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 well 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. 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, you know, and all these condos and operating like that. So it was a complete task for them in order to get us to work.

19:21So it was also difficult for them. Nowadays, the model is getting used all over the world. They're transporting all over the world. they used us as models for that and well it's been interesting wow you're starting a whole new category you know you were there in the beginning in the first uh sounds like your partnership's gonna flourish more yeah jorge and andre thank you so much uh 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 daniel it's been an honor thanks thank you very much daniel thank you for your time.