Business

A New American Dream

Conti CEO Carlos Vaz is reimagining the American Dream with a lessened focus on home ownership.

Carlos Vaz came to the United States 16 years ago from his home country of Brazil with just $300 in his pocket. Today, he owns a thriving commercial real estate firm whose portfolio is valued at more than $300 million.

Addison-based Conti buys and operates apartment communities in North Texas. So far this year, distribution to investors—mostly family offices and high-net-worth individuals—has hovered around 9 percent. Conti takes a stake in every acquisition. “That is our guarantee to investors,” Vaz says. “We’re never going to be ahead of you, we’re never going to be behind you, we’re always going to be with you.”

Since Vaz got into the multifamily game in late 2007, the market has benefited from strong population growth and a shortage of single-family homes. The investor looks for properties with at least 150 units (to make it worth his while) and no more than 500 units (when management can be a headache). He also avoids the risk of ground-up development, focusing strictly on acquisitions. “We’re extremely cash-flow driven,” Vaz says. “It’s all about the money from day one.”

The second-youngest of nine children, and one of six boys, he began working at the age of 7 at the family farm and his father’s butcher shop. When he was old enough, he entered law school in Brazil. Tuition was free at the federal university, but the professors would routinely strike. Frustrated with the stops and starts, the big-thinking Vaz decided to try to secure an apprenticeship in the states. Through an internet search, he stumbled across a Massachusetts law firm, Donahue & Grolman. After various tests and interviews, the firm offered him an internship. Vaz used his life savings to pay for his plane ticket to Boston.

Carlos Vaz began investing in North Texas multifamily properties in 2007.
Carlos Vaz began investing in North Texas multifamily properties in 2007.

Upon arrival, he met up with others from his home country. One agreed to rent him space in an attic for $350 a month. After the travel expenses, he had only $300 to his name. The law firm internship was unpaid, so Vaz had to take other jobs to survive. He loaded newspapers onto trucks in the wee hours of the morning, spent the day at the law firm, and worked at TGI Fridays on the weekends. At night, he took business classes through Harvard University’s extension program. “To me, knowledge comes first,” Vaz says. “There’s that saying, ‘If you think education is expensive, try ignorance.’ Anyone could take classes through the extension school, and it was great because many of the professors were the same [as those who taught at Harvard University].”
When his internship came to an end, Vaz’s friends from Brazil encouraged him to join them in the construction business. He had no experience and no tools, but found a company that was willing to give him a shot. He threw himself into his work, soaking up knowledge about the industry and how the business was run. He spent any extra money on tools—“getting my first Sawzall was a very big deal,” Vaz says—and continued to take classes at night. Before long, he began lining up his own construction jobs on the side, and his small business flourished.

Around this time, a friend suggested that Vaz join him in the mortgage business. He agreed, but only if he could work with the firm’s top producer. “I said I’d do it for an 80/20 split, with me getting the 20 percent,” Vaz says. “I wanted to learn from the best. As I tell my nephews, you work for the knowledge or you work for the money. Money will come and go, but if you have knowledge, you can always make more money.”

Vaz kept his construction business going while also working at the mortgage company, telling clients he could help them get financing and also handle any needed repair work. In 2005, he began buying and flipping houses for himself. Within two years, he had acquired more than 30 homes in the Boston area. By early 2007, though, he began getting concerned about a housing bubble as lenders started to pull back. Realizing his entire livelihood relied on an ability to get home loans, he knew it was time to switch gears. He joined CCIM and took classes through the organization to learn about the commercial side of real estate, with plans to segue from the single-family to the multifamily sector. He sold all of his homes in Boston and began evaluating other U.S. cities, wanting to start over in a high-growth market. He found what he was looking for in Dallas. Almost immediately, he says, it felt like home.

It has become more socially acceptable to rent, even at the highest income levels.

An expert networker, Vaz quickly built up a base of connections. By December 2007, he acquired his first apartment complex, a property in Fort Worth. He took everything he learned at Harvard and in his previous careers into his new company, named in honor of his mother, Neusa Conti. In 2008, he took on a partner, Stewart Hsu, who serves as COO. Since its inception, Conti has closed deals involving more than 5,000 units and $400 million in value.
Everything at Conti is about “process-execution, process-execution,” says Vaz, who is militant about establishing and following systems. The company keeps everything in-house, from due diligence to management to dispositions. Its three mantras are focus, relationships, and performance.

Key demographic trends have worked in Conti’s favor, with millennials delaying home ownership and baby boomers trading in their large houses and the upkeep they require for the convenience of renting. It’s become more acceptable to rent, even at the highest income levels, Vaz says. And, given the string of foreclosures the country saw a few years back, home ownership has lost its luster. Says Vaz: “To me, the American Dream shouldn’t be to own a home, it should be achieving financial independence.”

To keep up with demand, North Texas is seeing robust development activity. The new projects are driving up rents, with some of the higher-end properties getting $2.50 per square foot or more. (That’s $2,500 for a 1,000-square-foot unit.) Vaz says the industry is headed for an affordability crisis. “Dallas is more affordable than other cities, which has worked to our advantage,” he says. “But there’s going to be pushback at some point.”

The entrepreneur, who now holds U.S. citizenship, says he feels a great deal of gratitude for the opportunities he has been afforded. America has given him the chance, he says, to provide people with a place to call home, to help employees support their families, and to provide for his family—here and in Brazil—in a way he never thought possible.

“I have an eternal debt to the U.S.,” he says. “To me, it is the best country in the world.”

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