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Jacques Massachi

From Mechanic to Hollywood Real Estate Mogul

Jacques Massachi

Location: MCAP Partners HQ
Date: 4/14/2020
Title: From Mechanic to Hollywood Real Estate Mogul
Profession: Managing Partner, MCAP Partners

Q & A

Tell us about yourself. Who are you and what do you do for a living?

My name is Jacques Massachi and I am 60 years old.  I am a real estate developer and entrepreneur focused primarily in entertainment businesses. My projects are very unique in nature and inspired by passion. 

What's your backstory and what led you to Real Estate?

I think everything started when I was 6 years old.  I became ill with rheumatic fever, which is a tonsil complication that can lead to problems with your heart. I was put on bed rest for 6 months and I was told not to move. I felt helpless.That experience gave me the desire to never become helpless again. Being helpless doesn’t sit well with me.  Every time I face a challenge, rather than becoming overwhelmed, my mind automatically goes to a solution and I really think it’s because of that traumatic experience at a young age.

I was 15 years old when I came to the United States.  It was before the Iranian revolution in 1978. I was very young and all of a sudden I had to take care of everything myself because my family wasn’t there. All of a sudden I had to grow up and be responsible.  

The revolution happened right as I was graduating from college at The University of Colorado. I was 20 years old.  My goal was to go to law school, but I had to leave that behind and start business with my family in Los Angeles. I hated it at first because it was completely different from what I had been planning to do.  Even though my father was a very wealthy man in Iran, all of his assets were frozen. He immigrated to the United States with very little money. It was unpleasant for all of us.

I came to LA and we bought an automotive repair business on the corner of Highland and Fountain from this Israeli man.  He was burned out and tired of the business. We gave him all of the money we had to buy the property and the business, and he carried a loan for us as well.  That was the first Ori’s Service Center. In the 80’s, cars would break down a lot. Back then there were no leasing programs available, so everyone bought cars and there was a lot of wear and tear.  These factors allowed our business to grow.

When we started, I knew nothing about how to run an auto shop. I knew nothing about the business at all. I was lost.  I realized quickly that I needed to learn a lot to be successful. I started going to trade schools and became a highly technical automotive person. I was able to diagnose cars and deal with customers. We grew the business and got to a point where I had 18 mechanics and 3 managers working for me. 

Describe the process of launching your Real Estate business. What was it like?

My dad has always been my rock.  He came from a real estate background in Iran.  He’s always had a big appetite and stamina for taking risks. He always motivated us to be risk takers.  He would say, “It’s better to be sorry about buying than sorry about not buying.” I don’t take that for granted.  Most people have very conservative parents that limit their growth. My father always invited me to push the envelope further.

The automotive business was booming and I started getting involved with the local neighborhood and businesses. I started to get to know all of the property owners and the movers and shakers.  We took the cash flow from our automotive business and started buying properties and businesses around the neighborhood. Even if the properties were negative, we could fill it up with the cash flow from the businesses. 

Back then, the banks would not give me much credit because I had no track record. No matter what they gave me, I always wanted more.  If they had given me more at the time I would have been able to do a lot more. We leveraged a lot up until I was about 40 years old. For example, if we needed $100,000 we were leveraging $95,000. 

When I was 40, there was an event that changed the trajectory of my life.  We got into a lawsuit as the plaintiff against a bank. They sold us a contaminated property, which they knew was contaminated, but intentionally did not disclose. They wanted to cheat us by dumping this contaminated property on us. For two years, my new profession was litigation. They fought very hard. They hired Gibson Dunn for their defense, which is one of the top law firms in the nation. I wasn’t a lawyer, but in a way I became one. I had to go to countless depositions.  On the eve of going into trial we came to a settlement in our favor. We didn’t receive as much as I had hoped, but by stepping out of the automotive business for those 2 years I realized that I wanted to focus more on real estate. Rather than being so involved in the day to day of an automotive business, I became much more real estate investment oriented. 

I started buying a lot of properties in and around our neighborhood. I started developing and building gas stations, shopping centers and apartments. I learned on the job, made mistakes, lost money but stuck with it.  When I start a project, I become the project. I approach every challenge head on, and it all goes back to that feeling of not wanting to become helpless.  

One of the developments I bought was this mansion in Hollywood called Lombardi house.  I had originally bought it to tear it down and build apartments. It was a really high density zoning by right. When I went to get the demo permit, the city called for a 24 hour delay before they issued the demo.  They called all of the conservancy groups and historical watchdogs of the city who stopped me from what I was planning to do. When that happened I didn’t know what to do with it. It was this old deteriorated building on this massive parcel that was no good. For about a period of 8 years, I built that mansion back to what it was little by little. I had all these different ideas of what to do and finally landed on subdividing the house into 4 suites. I grew in love with it in such a way that made me not even want to lease it when it was done.  I thought it was so beautiful that if I leased it the tenant would never leave. 

Since I was so in love with the property and didn’t want to rent it, I was willing to listen to other ideas. Through this process I was introduced to a very unique girl who I was told could help me. I had been planning to tear down the barn in the back of the property, but she convinced me not to.  I spent four months looking at every possible barn I could on Pinterest and building it with my own crew. We turned it into an event venue and the rest is history. Before Coronavirus we we’re booked every weekend in 2020 for that space. The space is extremely flexible. We’ve had fundraisers, weddings, non-profit events and more. From there we started branching out into the venue business. 

What drives you?

Passion and doing the right thing.  When you love what you do, you do it in such a way that generates a lot of energy in the project and the people around you. If you have passion and can build an organization and bring it all together, the money will follow. 

One other thing I have to mention is that I love to travel.  When I travel and I see the world, I realize how small what I do is.  When I go to another country or city and see these unique and massive buildings and structures, I think about how small my work challenges back home are. By comparison, it gives me a lot of motivation to move forward. 

What would you say makes you different from other real estate investors?

I’m not a follower. I don’t follow other people’s footsteps. For example, when I build apartments I try to make them unique and different. I don’t follow the herd. Sometimes I try to go the opposite direction of the herd.  

I’d also say when I start a project, money is not my primary focus.  Money is not the driving factor for me. Of course I calculate the income, expenses and cap rates, but when I do a construction project or build a business I’m always first considering if I love it and have a passion for it. From there, I believe if we do things the right way, take care of the details and make it unique enough, the money comes.  

What's the biggest challenge you've had to overcome in business and how did you go about it?

Right now my biggest passion project, and the most difficult I’ve ever done in my life, is a live music venue called The Vermont.  No matter how much money I put towards the project it doesn’t get finished. I’m trying to create a 21st century venue without compromising on the technology, design, space and equipment.  My goal is to have not only the best experience for the audience, but also the top performers. The performers will have their own green room, hangout room and dressing room before and after the shows. I’m hoping it will be ready sometime in 2020. Just yesterday I met with the planning department regarding one of my permits and they tried to push my project another 3 to 4 months.  I went to the heads of the planning department and they’re pushing me on what is called a SNAP ordinance.

This thing has been challenging since the beginning. We had to get a liquor license, we had to change the use to allow live entertainment, and I didn’t know anything about the industry. The challenges still haven't stopped. The more challenging it gets, the more driven I become. I’ve been working on this project since 2014 and 90% of my time has been devoted to it. I didn’t set a budget at the beginning so it’s a gamble and it’s risky.  But does that stop me? No. 

I overcome this challenge by often envisioning myself in the venue.  It’s pitch dark. It’s full of people all around me. I hear the hums of the amp before the start of the show and I get excited.  I’m manifesting it’s creation and that’s what drives me. I want to see it and I want to feel it. 

 
 
 
 
 
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The updated marquee & tower for our @vermonthollywood concert hall project is still in the works - be sure to follow the new account!

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How are you doing today and what does the future look like? What's your ultimate goal?

Physically, I’m doing really well.  I’m on a diet and I lost a lot of weight already.  I love exercise and I go to the gym often. I get up at 4:30 am every day and I’m one of the first people in the gym at 5.  I usually take a group class at 6 am and by the time I shower it’s 7:30 am and I’m running at a peak state of mind. Everybody is asleep and I’m fully energized, ready to go.

I love my career and I never want to retire. On Sunday, I look forward to Monday. I can’t wait until Sunday is over so that I can go back to what I usually do on Monday. My job is an extension of me. I love my crew. They’re all dedicated to me, they all work hard and they’re all honest. We’re really like a family. 

My ultimate goal is to become a world traveler. I may take on less projects just to be able to travel more. I want to travel because I think it opens your horizons. I love seeing mega projects and unique cultures around the world.  What really captures my attention is architecture, buildings, and details. 

Software & Tools:

What software do you use for your business?

We have a website that was completely custom built and perfectly tailored to the needs of our businesses.  It truly focuses on the three branches of our business: Property Management, Hospitality, and Gasoline Retail. 

We use Instagram for marketing.  Since we’re in the events business we get a lot of traction through Instagram posts.  We get a lot of submissions to our live venues directly through Instagram.

I use LinkedIn for networking. When I’m learning about new industries I am able to connect with the top leaders in those fields and befriend some really great people.  If you’re looking to diverge into a business I highly recommend using it.  

We use CoStar, which gives us first hand news on the real estate market.  If you want to be in this industry you have to have a membership. CoStar is the owner of LoopNet, and the stuff that goes on LoopNet goes to CoStar first. 

We use QuickBooks for accounting, which is very user friendly and extremely practical.

For our property management we use Yardi.  They have a platform called Rent Café, which allows our tenants to pay us directly from their banks (ACH).  That software saves us a lot of time not having to chase tenants for checks. It’s very hard to set it up at the beginning, but once it’s set it is a very good software.

We also run our maintenance through Yardi.  The platform allows tenants to submit emails to us when repairs are needed. 

I use Pinterest all the time. For example, let’s say you want to build a backyard, or a gazebo, or a bathroom, or even a gate.  Pinterest provides you with so much information and ideas to help you.

What software would you recommend to someone starting out in your field? Why?

Any one who wants to be in this business has to be familiar with LoopNet. This is where you can get all of the market information.  You have to understand the platform and learn how to analyze data and understand financials.

What software would you advise people to be wary of, or not to use at all? Why?

I’d say the learning curve for Yardi was difficult, but now we are all in and it’s very good.  That’s one of those softwares that’s worth the learning curve.

Resources:

What have been the most influential books, podcasts, or other resources you’ve learned from along your journey? Why?

Podcasts: I enjoy the Tony Robbins podcast.  It shows you the power of positive thinking, the power of overcoming fear, the power of energy and more.  He also has a fantastic program that teaches you how to be organized, how to deal with people, how to be a better person, how to be a better business person and more. Tony does not teach you religion or fundamental ideologies. He teaches you the facts of life. I highly recommend it for anyone. 

I get all of my news from NPR.  

If I want to learn something I always use YouTube.  If you want to know how to build something, or solve something YouTube is a great resource for that. 

What courses have you taken that have been beneficial to you?

I was an Econ major and I’ve found that using the laws of supply and demand have helped me with my business.  When I was very young I advertised in all of the Yellow Pages.  Now of course marketing has changed with websites, google and facebook.  If anyone wants to grow they need to learn and understand the power of advertisements.

In general, I highly recommend all education in general.  Knowledge is power.

Where would you steer someone looking to learn more about business and more specifically, real estate?

I would recommend that anyone looking to get into real estate start by targeting one geographic area rather than being all over the place. Learn every street, every corner, and every property owner in one area.  Find your niche and work it. Eventually, you’ll find out what that neighborhood needs, what it has to much of, what the traffic counts are and more. Get to know the movers and shakers, the Chamber of Commerce, and neighborhood council. 

What are you doing to continue learning and growing in your business as well as personally?

Since I’m focused on the live venue business with The Vermont, I’m going to a lot of trade shows in that industry. I like to meet people in the industry and learn from them. I was planning to go to Coachella this year just to learn more about that business. 

Personally, I take a lot of mindfulness classes.  I strongly believe that mediation and mindfulness is the solution to internal challenges and can make one a better person.  I take courses at UCLA with Mitra Manesh and other independent classes for mindfulness.  I highly recommend everyone learn more about mindfulness. 

Final Question:

What advice do you have for entrepreneurs looking for the right tools to succeed in business and in life?

Build your foundation the right way, and the tree will grow up straight.  If you don’t do things the right way you will ultimately fail.  You might excel at the beginning, but you will not sustain it.  Never take any short cuts in life.

Focus on family.  A supporting and loving family that supports all of your crazy ideas and unique business ventures doesn't hurt.

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