A-Rod’s Wins and Strikeouts in Real Estate

SAN DIEGO—Alex Rodriguez, founder and CEO of A-Rod Corp., made his first real estate move 20 years ago. It was a duplex purchase where be “put in some value add” in the form of blue awnings and cream colored paint. Best known for his accomplishments on the baseball field, the founder and CEO of A-Rod Corp., stands as one of the greatest athletes in the world and shared his insights from business to his baseball career at MBA’s CREF Convention.

“Success starts starts with people and relationships,” said Rodriguez, when talking about building his business empire, a move, he said started out of fear. “If you look at macro trends, the numbers were frightening.”

He explained that less than 5% of baseball players had a college degree, most athletes make 80% of their money between age 20 and 30. “Many have financial trouble after playing and I wanted to plan for something after my baseball career.” That investment turned into some strategic pivoting, where now roughly 50-60% of his time is spent running his private equity firm, while the rest of his time is in entertainment.

What’s important to success, according to Rodriquez, is who you surround yourself with. “You are only as good as the five people you surround yourself with. Hiring great people is one of the ways I have been able to be successful.”

Real estate has been a mainstay of his business, which has invested about $400 million of equity in buying multifamily units in secondary markets through Fannie Mae. “They are nothing fancy, but our returns to our LPs have been north of 30%.” But they haven’t been all wins.

One “strike out” he mentioned includes a 500-unit portfolio out of Tampa at $60,000 a door that overnight was worth about $42,000 per door. “We ended up cutting a deal with the bank, but I had people at the table with me with experience and a great track record.”