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WS441: Why Mindset Matters with Agostino Pintus

Starting any venture is difficult, but worthwhile. It requires defining a ‘macro-goal’ as well as mapping out each step needed to reach the final destination. This is why many people settle for a W2 job, where the goal is clearly defined and daily, large-scale decisions are not necessary. This regimented life, devoid of creativity, was not the path Agostino Pintus wanted to be on. In this episode, we learn why despite pursuing a hugely successful corporate career, Agostino found himself in many uncertain situations.

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He had been led to believe that a stable career was supposed to be secure but in reality, this was not the case. We discover how, through changing his mindset, Agostino has been able to follow his long-suppressed entrepreneurial spirit. We also learn more about why he thinks that so many of us have been conditioned into fear rather than being excited to take risks. Agostino’s beliefs dismantle a conventional understanding of success to show us that if you put your mind to something, it is certainly possible. The hardest but most crucial step is simply deciding to succeed. To learn more, tune in today!

Key Points From This Episode:

  • Learn about Agostino’s background in IT and the work incident that changed his life.
  • Why Agostino believes people live in fear even when they have a ‘secure’ job.
  • We have been conditioned to not take risks but that’s what being an entrepreneur requires.
  • Being an entrepreneur is about making a decision to change your life.
  • Find out how Agostino shifted his mindset from W2 comfort to entrepreneurial risk-taker.
  • How having a 12-month plan helps you better work towards your goals.
  • The details of how Agostino landed his first syndication.
  • Learn more about the exact moment that catalyzed Agostino’s mindset shift.
  • The hardest part of syndication: making the decision to be successful.
  • Agostino’s top tips to prepare for a downturn.

[bctt tweet=”When you leave your future in the hands of someone else, that could take it away from you, then you’re vulnerable. — @agostino_pintus” username=”whitney_sewell”]

Links Mentioned in Today’s Episode:

Agostino Pintus on LinkedIn

Agostino Pintus on Twitter

Realty Dynamics Equity Partners

Bulletproof Cashflow

The Bulletproof Cashflow Podcast

The Men Who Built America

Robert Kiyosaki

Sam Zell

LoopNet

Free eBook number: 202-410-4202

About Agostino Pintus

Agostino is a multifamily investor, syndicator, and entrepreneur with more than 15 years of experience in real estate. He currently oversees strategic partnerships, capital development, and platform development for Realty Dynamics Equity Partners, an investment firm specializing in multifamily acquisition and asset management services. He is also the subject of The Bulletproof Multifamily Mindset Show, a series highlighting topics every multifamily investor should know to build their success, as well the host of The Bulletproof Cashflow Podcast, a show focused on interviewing the top experts in the real estate and the mindset required to build success, all of which can be found on iTunes, YouTube and Facebook. He helps people build financial freedom through multifamily real estate and leverage their unique core competencies to achieve success. Investors at the top of their game work with Agostino to maintain their position, and in moments when business gets difficult, they strategize their return to greatness. If you are feeling stuck with your real estate portfolio or unsure of how to start, Agostino will lead you to clarity, focus and action.

Full Transcript

[INTRODUCTION]

[00:00:00] ANNOUNCER: Welcome to The Real Estate Syndication Show. Whether you are a seasoned investor or building a new real estate business, this is the show for you. Whitney Sewell talks to top experts in the business. Our goal is to help you master real estate syndication.

And now your host, Whitney Sewell.

[INTERVIEW]

[0:00:24.1] WS: This is your daily Real Estate Syndication show. I’m your host Whitney Sewell. Today, our guest is Agostino Pintus.

Thanks for being on the show, Agostino.

[0:00:32.9] AP: Man, I’m pumped up to be here.  Super excited.

[0:00:35.2] WS: Yeah, I’m excited too. I’m excited too and it was a pleasure to meet you in New Jersey recently where we were both speaking at a conference and I enjoyed that dinner and learned a lot more about you and I’m looking forward to this conversation.

A little about Agostino: he’s a multi-family investor, syndicator and entrepreneur with more than 15 years of experience in real estate. Currently oversees strategic partnerships, capital development, and platform development for Realty Dynamics Equity Partners, an investment firm specializing in multifamily acquisition and asset management services.

He is also the subject of The Bulletproof Multifamily Mindset Show, a series highlighting topics every multifamily investor should know to build their success, and is also the host of The Bulletproof Cashflow Podcast, a show focused on interviewing the top experts in the real estate and the mindset required to build success, which is crucial – the mindset.

Give the listeners a little more about you know, what you’re up to right now Agostino and let’s dive in because you got an amazing story and you are very focused on mindset. And I can’t agree with that more, especially initially, I mean, mindset is just everything.

[0:01:43.0] AP: People totally underestimate that. I mean, when I was a kid, I was born to poor immigrants, out of Canada, my parents moved from Italy and we didn’t have a lot of money, you know? All these things that I wanted in my life at the time was all I ever wanted to do is computer code. I want to code on computers. That was my thing, right?

Of course, my parents didn’t have any money so I went to the school and used the library computer to learn how to code and from there, bought my own computer and I was determined that I was going to build my own software company. I was going to do – I was going to be my own thing. Be my own man and build my own company.

By the time I was like 13, I already built my own little software company, right? I was determined. I’m going to be an entrepreneur. I’m going to build my own company. Even as I grew up, I was growing up, I abandoned those dreams and I went the corporate route because that is what we’re told all our lives, you know?

You go to school. You get a job, you get married, you have kids you grow old and die, that’s the plan. The plan has been prescribed by society, by our parents, by our family. That’s the plan. I ignored largely, to a large extent, this entrepreneurial bug that was there the entire time. That actually cost me. That cost me dearly in terms of not living to my potential, right?

What ended up happening was, I ended up going the route of IT, in a corporate world right and I took on first director of all IT and then becoming a CIO for these big companies and Inc. 500 companies. Very, very wildly successful. I was already a CIO for a large publically traded debt buyer, the biggest in the world actually, at this point. By the time I was 32, 33 years old, I was already a C level executive, you know?

I always had to drive and ambition, what made me successful with that role though was I basically was able to do whatever I wanted. I was autonomous, right? That ability to be an entrepreneur was instilled even then, right? But you know, fast forward a few years and like anything else, when you leave your future in the hands of someone else, that could take it away from you, then you’re vulnerable. And everyone who is working at a job right now is in that exact spot everyone. Everyone.

I was too. When that boss came in, after building this multimillion-dollar company, huge company, they’re approaching a billion dollars in assets in their management at the time. I built all the tech, I built the team, I built everything.

They said they’re going to go into a different direction. Call me into the office. They hand me the box, “Get out. You’re done.” Stole my stock and left and ended up having to leave.

[0:04:31.9] WS: But I thought it was secure, right? I mean, I thought you know, you had this position, I thought it was secure, right?

[0:04:36.9] AP: You would think, right? You have the employment agreements and all that stuff – listen, the employment agreements are there to benefit the business and not to benefit you, you know? People seem to think that it’s a false sense of security, you know? You have more security taking control of your own life and knowing exactly what you’re going to do.

But there’s a reason why, Whitney, there’s a reason why people – they go to that job, that 40- hour week job and not do it themselves, right? There is. I’ll get into that a second. But leaving that job and see that all while the success to be told, now, “You’re a failure. You’re nothing. You suck.” That led me down a dark path for 10 years.

I was going from job to job to job. Whitney, I sent a 500 resume a week, minimum. Just to get anybody to hire me, right? Because I put it into my own head that I wasn’t good enough. That mindset that I put into my head said, “You suck, you’re not good enough, you’re poor, you have no money.”

And you have to really watch what you say to yourself because people tell you, “I’m fat, I’m gross, I don’t dress well.” You’re programming your head, you’re programming your mind and when your mind is accepting these things, that’s what you become.

[0:05:55.4] WS: Pretty soon you’ll believe it, right?

[0:05:57.1] AP: Exactly, that’s what happened with me. I started to believe that all that stuff was true about me, right? It certainly wasn’t but I didn’t know, right? It wasn’t until I made a decision, you know what? While I was working at this company, I was – I did have enough sense to start buying like single family and small multi-family.

I knew like, “ Huh, it throws of a little bit of money.” My whole thought process at the beginning of this whole real estate thing was, “If I can get enough passive cash flow out of this thing, then I won’t have to worry about getting and staying in a job or losing a job.” Here I was in my 30s at a big company, wildly successful and even then, I was still worried about losing a job, I had no reason to. I had two cars. I had a Corvette, I had a Hummer, I had all these giant house and I was still worried I was going to lose my job, you know?

It’s insane. People living in fear their entire life even though they have a secure job, right?

[0:07:01.8] WS: You talked about being taught that you know, we’re taught to go the W2 route instead of this entrepreneurial route, right? Because of that, quote security that we’re all taught to believe. Maybe you could elaborate on that a little bit.

[0:07:15.2] AP: You know, it’s funny. I don’t watch a lot of TV but I was watching The Men Who Built America, it’s a great miniseries.

[0:07:22.8] WS: Great series by the way.

[0:07:23.8] AP: Yeah, if anybody out there wants to get an understanding as to how this country was built, it’s a very short, it’s four and a half hours, great content that shows how the Rockefellers, the Vanderbilts, the JP Morgan’s, all these guys who built this can built in this country, right?

And the thing is that they applied their ingenuity outside the box to build something spectacular, right? Meanwhile, what’s the difference between them and the massive other people that just sat there and did nothing or sat there and just didn’t do anything? Because it’s easy to do nothing, right? It’s easier.

That’s what we’re taught. Our family, whether they blatantly say, “You need to work a 40-hour week.” Even in my adult life, my dad still says, “You don’t get a paycheck?” I said, “No, I don’t get a paycheck. I make a kill. I take down a deal. I get paid and that’s it.” That’s how it works in this business. He used to say, “My god, it’s totally foreign.” He doesn’t understand it, right? He’s not an entrepreneur. That’s okay.

Not everyone’s cut out to be an entrepreneur, right? But it involves believing in yourself enough to know that you’re going to win and making that decision. That’s ultimately what it is. It’s making a decision to see a change in your live, right? That’s the deal I’m working on right now. I wish I can share but I can’t share it yet. Maybe the next time I see you, I can share this deal. Whitney, it’s going to scare the hell out of me. It’s scary, it’s a big hairy scary deal but you know what? On the other side of that hair scary deal is going to be a huge, huge monumental win.

That’s the risk that many people don’t want to take either because we’re trained not to stay safe, chill out, sit down on the couch, Netflix and chill, do that. It’s simple it’s easy. Let’s go drinking on a Friday night, that’s easy to do that. you know what’s hard is trying to figure out how to make a deal work, try to raise a 10 million dollars on a deal, right? That’s hard work.

[0:09:41.0] WS: You and I – when you and I were speaking at that conference in New Jersey. I was going to talk about marketing and you were talking about mindset and a lot of stuff we’re talking about today and after your presentation, “Wow, it’s so close.” It was similar to what I was talking about and because you know, even the marketing side, if you don’t have the mindset, if you’re not committed, it just doesn’t make sense, I didn’t know that’s what you were going to talk about.

But it doesn’t make sense to pursue all that if you don’t have that level of commitment and the mindset right before then. You know, maybe elaborate on how you changed your mindset, you know, from that W2 employee and got comfortable or just that you are going to make it, that you’re going to make this happen and you’re going to do what it takes to make it happen, from that so called security level over here at this W2 position.

[0:10:24.4] AP: It wasn’t until my last W2 job, right? I was making really good money, only five years ago or something like that. I’m making great money with a big company, was making great money with a big company and I was doing okay. The CEO hired me, liked me, he brought me on to help transform the business and I was doing just that. Until one day, he leaves.

He quits the company and rolls. And then the equity firm hires a new guy, a new CEO. This new CEO, I don’t know, for anybody out there that understands corporate America, they want to bring in their own guys, they want to bring their own team and I was not on that team. He again cans me. “You’re out, you’re done.”

I’m like, “You know what? This is freaking ridiculous, this is the point, right here, I made a decision, I will never be put into this position ever again.” I’m in my 40s at this point. How many more times can you afford to get cut, laid off, whatever? How many times and how irresponsible is it for you to really be put in that position when your family depends on you to bring home the bacon and support the family, support your kids, put them through school, whatever the family needs?

To me, that was a big problem, right? It took that preverbal kick in the … to really say, “Okay, you need to make a change.” And sometimes you know what? A good kick in the teeth is what you need to make that decision and that’s what it did. When I decided that I was going to make a change, I knew real estate was going to be something but I didn’t know what, I still didn’t know what exactly. But it wasn’t until I spoke to a friend of mine, a real estate attorney and he explained what syndication was and I’m like, “I can do that, I could find deals.”

I’m at a different point. I have a different advantage because in my whole career, I’ve always been in a position to either raise money or talk to CEO’s or whatever so I had some experience with that. I kind of knew how to put together a presentation and knew how to do what needs to be done when it comes to putting together a syndication but I didn’t have a team.

I didn’t have lenders, I didn’t have inspectors, I didn’t have any of that. I started from nothing, form zero. And because I was wiped out from previous businesses, I had very little money, I started with nothing, you know? Other than my own sheer will. But that’s ultimately what it is, it’s that decision.

And you know what’s funny because when I have friends on Facebook, Facebook friends that they want to do something, “I want to get into this business.” But then they post on a Friday night or again in a Thursday night, “I’m binge watching Game of Thrones.” Well that’s great. How does that fulfill – there’s no congruence with what you just said in your post on your group for instance that you want your goal is to have a million dollars in I don’t know, in assets, right, like a million in assets? Well, it’s not congruent, it doesn’t make sense.

You need to clear and make a decision. It sounds simple but that’s all it is, you need to make that decision. “I will do it. I will purchase X number of units and this amount of cash flow and this amount of assets under management.” The way that it’s done is to establish a 12-month plan like right now, we’re in December right now and you want to plan out the next 12 months, it doesn’t matter what month it is really, who cares, right?

These are all these months to define by people, right? It doesn’t matter. 12 months from now, where do you want to be? Ad start breaking it down, nine months, six months, three months, seven day, one day. What’s today’s goal, how is that going to match up all the way to the end? If Game of Thrones is not somewhere in here at the end of the 12-month period, chances are, you don’t need to be doing it.

Those people I might say, “Well, you got to have fun in your life.” Yeah, I understand that, of course you do, right? But at the same time, if you want great big things to happen in your life, it requires a commitment and a decision to actually do it. That’s the thing. It’s not just going to automatically happen, it’s easier to work at a job because someone else is defining those exact things that I just told you. Someone’s telling you what the goal is, you just go work for that goal, let me know when you – I’ll give you a little piece of the pie, I’ll take the rest, thank you.

[0:15:10.4] WS: It’s a sacrifice that most aren’t willing to take.

[0:15:12.4] AP: Yeah, that’s the thing. I mean, when I first started in this business, started buying the small deals. It was very difficult, I learned on my own, I didn’t have any mentors or anything else like that. That start from the virtual mentors. That’s how I learned, I learned from Robert Kiyosaki, Sam Zell, those are my two guys I focused on at first. Read all their materials.

Found two new mentors. Read all their materials and just kept doing that. I got too learn the lingo, I got to learn the language. But most importantly, when it came time to start talking to other syndicators and partnering with them, I had something to give them, right? As a syndicator, you’re syndicating deals. That person has to bring you something that they don’t have. What do you have that I need, right? Unfortunately, “What’s in it for me?” That’s the human, that’s how we operate, we want to know what’s in it for us.

[0:16:11.3] WS: What was that for you that you brought to the table or you know, maybe you can talk about getting to that first syndication?

[0:16:16.0] AP: Yeah, I was living in Virginia at the time when I made that decision. I actually took on a coach and in talking to the coach and talking to him and of course meeting this attorney. I realized that multi-family real estate is where it is. That is what I’m going to do. I am not going to do industrial. I am not going to do commercial. I’m not going to do retail. I’m not going to do any of that stuff.

Nothing wrong with it, not mad at it. I will just focus on one thing. One thing. Which is another problem in itself and people just started doing a million things at once. Stay away from shiny object syndrome, one thing, right? Multi-family, that’s it. And then, what I did was, I decided, I’m going to pick an area. And I saw that Cleveland was the place to do it.

I saw that Ohio was the place, right? They’re still in the pre-recession lows as far as the cost per unit, the average rent for a C class asset back then, they’re sitting at like 520, 550, that range, you know? For a nice C class property. I’m like, “I’m going to Ohio.:

[0:17:24.1] WS: You picked up and moved, you said, “Okay, that’s where I’m going to.”

[0:17:27.7] AP: I went to where – again, one of those sacrifices. “I’m afraid.” No, I packed up my Hummer, it’s the last car I had left, sold everything, right? Sold everything to do this multi-family thing.

[0:17:41.4] WS: You didn’t have a W2 either at this time?

[0:17:44.1] AP: No, I had nothing. The reason I was at Virginia was because I had a duplex up there, right? One that I bought when I was working at that company. And I was selling everything. I have one property left in Virginia, one single family home out there, that’s it. I sold all my single-family homes, I sold everything, that duplex have just sold it, I’m going to Ohio, and I started learning that space, started learning and I understood and saw the opportunity.

When I spoke to my first, now is a really good friend of mine, who is a big syndicator, he’s got over 4,000 units and I’m telling him about Ohio and he’s buying in Texas. He’s buying in like Columbus and Louisiana and Oklahoma City, those big markets that I’m sure many of your listeners are very much aware of. “Who buys in Cleveland? Cleveland, what the hell?”

What’s Cleveland all about? When I showed him, not only why it’s a great market but that I have the ability to find and bring deals to the table, already underwritten, already showing where it’s going to go. Complete. Here’s a package, it’s already handed to you on a silver platter, fund it, I already got to financing, I got everything.  All I need is for you to raise a capital. If you have the capital let’s roll, right?

That is what I brought to the table. When I first started, I put the whole deal together and the only thing it was is it didn’t have the – for guys got 4,000, 5,000, 10,000 units chances are they have a good network of investors, right? I didn’t have that network of investors.

[0:19:21.0] WS: I like how you did your homework and you didn’t just ask somebody or ask this person who have more experience than you, what can I do for you or is there anything I can do for you? You did a lot of leg work. You had increased your knowledge. You had educated yourself and you actually found a deal. I mean you showed commitment too but moving to this market, right? If I was that experienced operator and let’s say you are a lot newer.

And you come to me and you say, “Well I believe in this market and I just moved there because I am jumping into this, you know no matter what I am that committed.” Like that is going to impress me like, “Okay, wait a minute, this guy is committed,” I am going to give you a little more of my time.

[0:19:56.8] AP: Right, exactly and that is the thing but speaking of commitment, my very first deal that I did, one of my very first bigger deals, it was a $1.6 million purchase price. $1.675 purchase price asking. And I happen to call – it was on LoopNet, which you know for all of your listeners out there LoopNet is where deals go to die. I remember like be very careful if you buy something on LoopNet. But I just happen to have LoopNet up and I had a small deal with a property manager.

And the property manager is selling this deal and he had a post on LoopNet. So, I said to him and I go, “Hey, this deal is on LoopNet. Tell me about this deal.” It just happens to be up there. I have him on the phone with him, he tells me about this deal and I am like, “What is the bottom-line number? 1.47. I will take it. Send over the PSA.” I signed the PSA, executed on the PSA without even looking at the property. I don’t recommend people doing that right?

I don’t recommend it but the thing is so I committed and then right after I did that, I immediately hit the phone started talking and calling people. “Hey, I got a great deal here. Here is the cost pre-unit, here is the expected cash flow.” I knew the area, I knew the market and I already had been living in Ohio, I knew the market, I knew what I was dealing with and it is a great deal. But I committed. I signed a PSA and sent the earnest money before I even knew what I was doing.

I took the commitment because I believed in the deal and I believed in the market. People are afraid to put up a $30,000 in an earnest money, right? I did it with all the money I had, I did it, right? And it was like most people are complaining. They are worried about the $30,000 student loan. That is the wrong attitude, guys. So that is my earnest money on the deal, $30,000 you know? It is nothing. When you start making $30,000, a lot of money in your head you are going to lose.  $30,000 is not a lot of money. It just isn’t.

I mean it sounds awful to say it I’m sure some of your listeners will be like, “Oh who is this guy, why would you say something like that?” No, I am telling you when you start living to your potential you start realizing that when you train and you study and you really get to understand what this business is, what the potential is and commit and decide you are going to win, you are going to realize that is all small potatoes. We have been trained to think in small potatoes. We’re trained to think in small numbers.

[0:22:31.4] WS: So, let us circle back to the mindset piece just for a second before we go to some other questions before we run out of time. But you had the W2 position. You lost that job, you lost the vehicles, the home, whatever you sold all that stuff so that you can commit to that –– but you said your father wasn’t an entrepreneur but where was the mindset shift for you and what triggered that?

For me, I can relate back to some military experience, law enforcement, different ways that are like okay, you know the mindset had to be right because it depends on other people’s lives were counting for me performing. You know in the military, law enforcement, whatever it was and that was some great training for me and like for you, where do that mindset shift change?

[0:23:15.6] AP: It happened over several jobs. And what I mean by jobs is when you are working for a company and then you get canned. And not because I am not a bad employee or whatever. It is partially my fault for going to work for a crappy company. I did plenty of that. There is plenty of crappy companies out there and then remember I was telling you sending off 500 resumes a week, right? So, if anybody got an email, they are getting my resume, all right?

And I will go work for you for some amount of time and then I will end up leaving. Non-committal, lost, just floating around, doing whatever it took to get whatever paycheck that I can possibly get. Stupid, right? But when you go from company to company and then you get kicked and get canned enough times and it is you realize like, “What the hell is wrong with me? Is something wrong with me? Am I? Is there something wrong with me, what’s going on? What is going on with me?”

This is a great deal of frustration. But when you get canned enough times and you realize that you need to take control of your life, like in the last gig that I was working when they said, “You know what? You are done.” I just said, “I am not doing this anymore. I refuse to allow my life to be dictated by anyone else but me.” That is the decision that I made. I will be in control of my life

And when I made that decision – here is the thing, when you’re able to make that decision especially as a man, you are able to be the rock for your family, you are the rock for your spouse, your kids they look up to you. And for me, that is what I wanted to be. That is the person I wanted to be in my head. I decided that is where I am going to be.

And I am not saying that you have to be an entrepreneur to do that but more on ones of if you experience enough failure like I did, I mean I must have cycled through, Whitney, I don’t know, 20 jobs, 20 executive level jobs in that 10 year timeframe at least.

I mean you’re talking six weeks or six months like every I am cycling going to different place. I am moving from city to city, right?

[0:25:25.8] WS: It sounds like that what may have been thought of as a curse at the time, you know that person letting you go was a big blessing because now you can spend six weeks in another country if you want.

[0:25:36.2] AP: Man listen, I mean I am not going to say this just to be, again, not to show off but if you do this right, if you do this business and I swear if you commit to this business – someone like me like I can make more net worth in one deal than I can make in an entire year as a C level executive, right?

When you put it in that perspective it is mind blowing and it is crazy. Now it is not like I am living high off the hog. I’m not driving my Tesla just yet but it already feels like that, right? It is coming.

But this is it right now, I am in the building phase and that is another key aspect that many listeners need to understand. As a guy that has been through the 2008 crash, which is a completely disaster. I actually started a company during the crash. It was terrible experiencing it but leading up to that crash mirrors what is going on today. Money is very inexpensive. If you train and you apply this, the rules of this game, this business and you start building this business, when the next crash comes, if you built it properly you are going to be just fine.

Because the cycle – I don’t know if there is going to be another one like this, the buildup that is happening right now and I don’t want to get political but you know, “Hey listen the current administration is working.” Whatever they’re doing I don’t know. I am not going to get political whatever it is it is working. There may not be a second chance for you.

If someone is in their 40s right now do you really want to be 60 years old trying to do this thing? The time is now. You have to do it now. There is no other chance and there is no – you don’t get a second chance around this ride. You get one ride that is all you get. Got to hurry up.

[0:27:24.3] WS: Get started, all right. Agostino before we run out of time, we got a few more questions for you. What has been the hardest part of the syndication journey for you?

[0:27:33.2] AP: You know I will tell you. It was really making the decision and that is what is was. I was on the fence but I didn’t know what was on the other side. That was the thing, I didn’t even know that all of these stuff was an option. So, meaning that I started up software companies, I started up mobile app companies, I have started up debt collection companies. I started up asset management companies, I have done all kinds of stuff.

And we have to go to a lender. And then basically beg and plead, “Please. Please, can I get $200,000 to fund this business blah blah blah?” Versus this business where it was the lenders are calling me asking me, “Hey do you have any deals because we want to send you a few million dollars to get this deal done for you.” Right? The hardest part though I didn’t know any of that stuff existed. So now for the people who are listening to your show right now they know that they can do this.

So now the hardest part: make the decision. Make the decision that you will be successful. That’s it. I mean that was the hard part. I didn’t understand that that was even an option and now once I understood that was the option and then letting go, letting go of all the fears because I think for many people that job, that 40 hour week job that is given to someone else that is given by a company that outlines their goals. They are defined by that job, right?

So, and I was the same way. When I get canned every time what did I tell myself? “I am nothing I am a loser, I suck, right?” For many people, I am not the only one. There is millions of people out there the same way that job defines them. If they lose their job, they fall apart. That is why losing your job is harder than going through a divorce. I guess I read something similar some magazine somewhere. It is harder to go through than a divorce or it is harder than breaking up, losing a job. That’s ridiculous, right? But once you overcome that fear, the sky is the limit.

[0:29:28.8] WS: Yeah, no doubt. I can’t agree more. Sky is the limit once you – and like you said, when you were laid off it seemed like a curse at the time but ultimately it opened a big door for you to change your mindset and move forward in a lot bigger direction. But how are you preparing for this next potential downturn that everybody is talking about?

[0:29:46.7] AP: The way that I underwrite my deals. So, as we were talking about the syndication side phase one. But I specialize specifically in the Ohio market. I still do even to this very day. At some point in the future, I will be switching to a different market. But for the time being, I am still buying that market. I am still buying Cleveland sub markets, this primary and secondary markets that set a stand and especially markets.

But whenever I underwrite my deals, I underwrite very conservatively. I don’t go crazy. I don’t buy on broker’s pro formas or anything else like that. I buy off the current numbers – and which is very different than how most people do it. They will say they will look at the deal, they will say, “Well I will increase the rents by X and I will reduce expenses by Y and then da-da-da-da and then. Oh well, I will do these things casually.” It is crazy. No, you underwrite it as if you cannot do anything. As if the previous guy is the best operator in the world. That’s the deal, right? Because you don’t know, you don’t know how well an operator they are.

So, I underwrite conservatively, we always over raise more money than we need. Most times we actually over subscribe our deals, which is great. So, we do that and then we create efficiencies around our operations. So, when the downturn hits we are not forced to sell anything. We are not forced to do anything we don’t want to do, right?

So, the operating efficiently is absolutely critical because I think that for many people out there right now especially those that listen to our show and other podcast as well, there is always this big emphasis, “Hurry up get into a deal, hurry, hurry.” Yes. You know what is even harder than getting into a deal is operating it for 10 years straight profitably. That is hard, that is hard work. That is very, very tough.

So, operating it and then building those efficiencies are absolutely critical today. While it is still possible to do so when that downturn does come and it will come, I don’t know when but I’d say maybe six years at this point. When that downturn does happen, you want to be prepared, you want to be ready. That is how you prepare. So, underwrite conservatively, raise more money than you need and make sure to operate your deals efficiently so you are not forced to do anything you don’t want to do.

[0:32:10.2] WS: What is a way that you have recently improved your business on the syndication front that we could also apply to ours?

[0:32:16.0] AP: I would say that – one thing that we do that not many operators do is we do the weekly KPI meeting right? So, every week, every property has a KPI sheet and we go through potential dollars raise, how much it has brought in this month, occupancy levels, how many sales we have all of these different things right? We talk to our managers every week, at least once a week. I talk to them every day. But we go through and we basically outline every single thing that is going on with each individual asset one by one, right?

And we take several hours to get through it all. But that is the only way you can keep a close eye on everything. And then we decide from the KPI list there is another sheet and then that is a task list of all the things that we said we are going to do last week, where are we this week and what is going to happen next week that kind of thing. Instituting those sorts of controls you have to keep an eye on things and then one thing that we are looking at doing now is implementing some cost controls on our expenses around sub metering. That’s the latest thing we are looking at doing.

And some of these assets, some of these C class assets, water is expensive because of things that the city did and I am not going to get into it right now. It is just too much. But if people tend to waste stuff and they are not paying for it. So, we are going to be installing sub metering to push those costs back onto the tenant and we are going to watch our water bills just go down. It is going to be crazy I am looking forward to it.

[0:33:51.6] WS: Yeah. Before we have to go tell us how you like to give back.

[0:33:54.3] AP: You know one thing that I do, we actually do coaching. So, we are now doing live coaching. We are revamping our entire website for 2020 so we are going to have a lot of online coaching as well. It is going to cover everything from mindset and goal setting to how to buy deals even operations. So, we are going to cover the whole nine yards, right?

But even the aside from that I will get people that reach out to me on Facebook and ask me questions about a deal. Or how do you find financing or whatever, I don’t mind talking to people. I don’t mind engaging with them and helping someone out. Because I remember when I first started, I have no one. I didn’t know what I was doing and I had to start reading books to learn. I didn’t have anybody to ask questions but I just didn’t know and that’s why I will spend some time. I will talk to someone about, “Hey, here is what you need to do.” And we actually got even a couple of ebooks as well.

So, one of the biggest things is how to talk to a broker and if you call a broker up and you don’t know what to say to them, they are going to hang up on you as simple as that. So, if your listeners want to text freedom to 202-410-4202, again that is 202-410-4202, text the word freedom to that phone number and I will send you a free ebook on how to talk to brokers. It will cover everything from how to dress, how to act, what to say, how to say it, everything.

So that is one thing we do to give back. We also have another book on how to raise capital as well. So that might be in the same email as well so if they send it, the same phone number, 202-410-4202, we can get those ebooks. And I would love to share that with everyone. But that is one thing that we are doing right now.

[0:35:31.1] WS: That is a lot of great information. I mean as far as that conversation when you are starting with brokers you know people are nervous about like the conversation with investors like you probably cover in the other one, raising capital. So, tell them also any other way they can get in touch with you.

[0:35:43.2] AP: Go to bulletproofcashflow.com, we are all over Facebook, on YouTube, Instagram, everywhere if you just Google it, you will find me.

[END OF INTERVIEW]

[0:35:52.8] WS: Don’t go yet, thank you for listening to today’s episode. I would love it if you would go to iTunes right now and leave a rating and written review. I want to hear your feedback. It makes a big difference in getting the podcast out there. You can also go to the Real Estate Syndication Show on Facebook so you can connect with me and we can also receive feedback and your questions there that you want me to answer on the show.

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[OUTRO]

[0:36:33.0] ANNOUNCER: Thank you for listening to The Real Estate Syndication Show, brought to you by Life Bridge Capital. Life Bridge Capital works with investors nationwide to invest in real estate while also donating 50% of its profits to assist parents who are committing to adoption. Life Bridge Capital, making a difference one investor and one child at a time. Connect online at www.LifeBridgeCapital.com for free material and videos to further your success.

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