Paul Kraaijvanger – Owner of Real Equity Group One LLC

Don’t worry too much about getting the “right” degree or going on to get additional degrees before you start working. Just get started. Understand that this is a process of discovery.”

A Netherlands native, Paul Kraaijvanger came to the United States in 1981 to fulfill a lifelong dream: making a name for himself in real estate. His passion for the industry was passed on to him by his family, as he came from a long line of Dutch architects. Therefore, it should come as no surprise that he possesses a sharp attention to detail and the passion for crafting unique interior designs.

Upon arriving in the United States, Paul threw himself into his studies at Tufts University, where he earned his Bachelor’s degree in Economics and International Relations. Shortly after graduation, he decided to focus his energy on gleaning more current insight on the business side of real estate, which he accomplished by attending Thunderbird Global School of Management. After a few short years, Paul earned his Master’s in Business Administration.

Paul Kraaijvanger got his start in San Francisco in 2008, just as the United States began facing one of the most crushing economic recessions of modern history. Ironically, this crisis — also known as the Great Recession — was caused by an overinflated market in the very industry Paul was breaking into: real estate.

However, he did not let these challenges deter him in the pursuit of his dreams. Instead, Paul Kraaijvanger moved forward and established his own company, Real Equity Group One LLC. Based in the San Francisco Bay Area, this real estate development business focuses primarily on the rehabilitation and repositioning of multi-unit properties and single-family homes.

In the years since the economic crisis, Paul Kraaijvanger has seen great professional success, especially as he has continually strived to put his best foot forward and allow his strong work ethic to shine. His passion for his career also continues to propel Real Equity Group One LLC forward, as the company has secured a slew of new projects for the upcoming year.

Where did the idea for Real Equity Group One LLC come from?

I come from a family of Dutch architects and have always had an interest in real estate. Prior to forming Real Equity Group, I was the co-founder of a high-tech startup that required me to sit behind a desk for long hours, working behind a screen for too many of those hours. From that experience, I was compelled to create a more balanced work day, where I would be out in the field – in the “real” world – working on real estate projects versus exclusively in the “online” world.

What does your typical day look like and how do you make it productive?

A typical day may include both dealing with immediate concerns and maintenance requests from tenants and working on projects that are in various stages of development and implementation. On any given day, I may be engaged in finding the real estate that I want to entitle and develop, in acquiring that real estate, and in going through the entitlement and permitting processes with architects and city planners. Once I have permits in place, I work to secure financing and to get the general contractors to execute the plans. Finally, once a project is finished, I work with real estate brokers/agents to sell the development.

How do you bring ideas to life?

Real estate development ideas are often constrained by the market, in terms of availability and what is allowed from a zoning and permitting point of view. This is particularly true in the San Francisco Bay Area. Even though such constraints are in place with the objective of better planning in San Francisco, they really limit what is possible. Other markets, like Texas, for example, may not have similar constraints. Once you understand the landscape and what is possible, you can start looking for specific projects that fit your skill set and budget.

Reconfiguring spaces for modern living in remodeling projects also involves dealing with the constraints of the building envelope. I try to envision how people live and design a space around those needs. Typically, this involves a much more open floor plan with larger kitchens and connected living spaces.

What’s one trend that really excites you?

I like following the home automation trend. From wireless home alarm systems to remote entry via your phone, this field is changing rapidly. I sometimes wonder, however, if these developments will ‘stick’ in terms of people actually utilizing the new technologies. Personally, I love the Amazon Alexa system and the way it can be integrated into home automation, such as controlling lights and other features.

What is one habit of yours that makes you more productive as an entrepreneur?

Leveraging expertise makes me more productive. I work with exceptional professionals who are experts in their fields, including bankers, lawyers, general contractors, insurance brokers, and real estate agents. I leverage their expertise to prevent me from making mistakes and with the purpose of keeping my company as lean as possible.

What advice would you give your younger self?

Don’t worry too much about getting the “right” degree or going on to get additional degrees before you start working. Just get started. Understand that this is a process of discovery, where you need to be ready to discard anything you don’t like and double down on the things that really interest you. I didn’t know exactly what I wanted to do after college and eventually found my current interest through a process of elimination. I think a lot of people feel they have to define themselves earlier than they need to. It’s okay not to know, just keep going in the direction that feels right.

Tell us something that’s true that almost nobody agrees with you on.

Not taking risks in your career is the greatest risk. A lot of people disagree and will find myriad reasons for not taking any risks in pursuit of their dreams. When I have encouraged friends to take a big jump in a new direction, many have come up with a thousand reasons as to why it’s not possible for them to take that leap. I think this risk aversion is sometimes rooted in fear of change or in the potential financial downside. And while such concerns may certainly be valid, from my perspective, the real downside is that you may end up doing something that has no real meaning to you for the rest of your life.

As an entrepreneur, what is the one thing you do over and over and recommend everyone else do?

Maintain a balance between your personal and professional lives. Starting a business and running one successfully takes an incredible amount of energy and commitment. If you have that passion and want to pursue it, make sure you pace yourself and also focus on activities outside of work. Exercise, time with friends, and family time are all very important in order to stay energized and tackle each day with enthusiasm.

What is one strategy that has helped you grow your business?

Building a network of brokers has been key in growing my business. Brokers are typically the first to hear of off-market deals and may be aware of other deals that are falling out of escrow. My first project was found this way, as were subsequent ones. My partner and I happened to talk to a broker that was listing a property next to the one we were considering and he happened to know of another listing that was a perfect fit for us.

What is one failure you had as an entrepreneur, and how did you overcome it?

I have had many, but I think the number one failure was pursuing a venture for the wrong reasons. If you are not 100% motivated, your chances of success will go down exponentially given the likelihood that your competition is probably incredibly motivated to succeed. You need to be all in or just take a pass until the next venture comes along that excites you.

What is one business idea that you’re willing to give away to our readers?

I see a growing disconnect between what is ‘spun’ in the media and what is ‘real’ – fact vs. fiction. What is a story and what is the truth? Who is real and who is not? I read an article recently on the topic of synthetic fraud, where fraudsters created fake identities online to commit credit card fraud. Technologies that allow you to authenticate people and their stories will become more and more important.

What is the best $100 you recently spent? What and why?

The best $100 I spent was on Alexa from Amazon. I didn’t think I would actually talk to this device, but I actually use Alexa every day to listen to NPR or to play music.

What is one piece of software or a web service that helps you be productive? How do you use it?

MS Excel. I use it on a daily basis to track rents, evaluate new projects, and track the financials on current projects. It really is like that swiss army knife that can do it all.

I am also a big fan of Sketchup for my particular field. It allows me to experiment with layouts in 3D quickly before committing to a final version of architectural plans.

What is the one book that you recommend our community should read and why?

Rich Dad / Poor Dad. I think this book holds a very important message for building wealth and individual freedom.

What is your favorite quote?

Do what you love and the money will follow.

Key Learnings:

  • Live below your means and focus on maximizing your income (Income statement)
  • Take your net income/savings and roll it into assets that produce passive income;
  • Use financial leverage to amplify #2. Many people just spend whatever comes in and don’t focus on building a balance sheet with assets that can produce income. Real estate is perfectly suited to this model, since you can leverage your investments and amplify your returns.