TGCI 186: Providing Turnkey properties & State of the Single family home investing

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Episode 186: Providing Turnkey properties & State of the Single family home investing

Copy of EP #18 - 2 Guests

Summary

In today’s show, Pancham interviews Marco Santarelli – investor, author, host of Passive Real Estate Investing, and founder of Norada Real Estate Investments.

Marco shows that he’s the epitome of hard work and commitment as he proves that it’s never too early to start your career. From starting his first investment at 18 years old to having the largest nationwide provider of turnkey cash-flow investment property, he is getting closer to his goal to help 1 million people gain financial freedom through real estate!

In this episode, get inspired as he shares his story of getting started with real estate, buying 84 units within 9 months, surviving through the 2008 financial crisis, and achieving financial independence! He’ll also share the lessons he learned that he has implemented in his business so don’t miss it!

PanchamHeadshotTGCI
Pancham Gupta
Screen Shot 2022-04-19 at 2.18.48 PM
Marco Santarelli

Tune in to this show and enjoy!

Copy of Quote #00 - 1 Guest

Timestamped Shownotes:

  • 0:36 – Pancham introduces Marco to the show
  • 1:57 – His journey on scaling his real estate business and helping others invest
  • 11:24 – Creating vs. adopting a system that works for you
  • 16:39 – On implementing his 10 rules for successful real estate investing
  • 22:32 – Why real estate is still the best investment regardless of time
  • 30:25 – On selectively diversifying his asset classes to scale his portfolio
  • 34:21 – Taking the Leap Round
  • 34:21 – His first rental property investment at 18 years old
  • 34:46 – Overcoming the mental hurdles when he first started
  • 35:31 – Why his out-of-state investment didn’t work out
  • 37:26 – Why you should learn and understand what you’re investing in
  • 39:24 – Where you can get your free guide to passive real estate investing

3 Key Points:

  1. Never sell your real estate properties. You can replace it with other properties to scale your portfolio, but don’t sell it unless absolutely needed as it has the potential to cash flow.
  2. Always educate yourself and learn new things as what you don’t know would cost you money, time, and wasted opportunities.
  3. It’s always a good time to invest in real estate. It’s only a question of where would you invest as there are a lot of deals and asset classes that you can start with.

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Read Full Transcript

 

Welcome to The Gold Collar Podcast with your host Pancham Gupta. This Podcast is dedicated to helping the high paid professionals to break out of the Wall Street investments and create multiple income streams. Here’s your host Pancham Gupta.



Hi, this is Tom Burns, author of why doctors don’t get rich. You’re listening to The Gold Collar Investor Podcast with Pancham Gupta.

 

Pancham Gupta  Welcome to The Gold Collar Investor Podcast. This is your host Pancham really appreciate you for tuning in today. I have Marco Santarelli today on the show. Marco is an investor author, Inc 1000 intrapreneur and the founder of Narada real estate investments, the largest nationwide provider of turnkey cash flow investment property, his mission is to help 1 million people create wealth and passive income and put them on the path to financial freedom. He’s also the host of the top-rated Podcast, passive real estate investing. Marco, welcome to the show.

 

Marco Santerelli  Pancham, it’s an honor to be on your show. Thank you for inviting me.

 

Pancham Gupta  No, it’s, you know, it’s great to have you on I remember last time we met, we were on a cruise ship in 2019. And since then, the world shut down. And we haven’t connected physically. But we are here virtually so happy to have you back and, you know, connect with you. And you know, are you ready to fire up my listener break out of Wall Street investments.

 

Marco Santerelli   Pancham, I was ready 11 years ago.

 

Pancham Gupta  I’m sure you know what’s happening today in the marketplace. It’s crazy, it’s scary. So, want to pick your mind on that as well as you know, what you do. So, let’s start with this. Tell our listeners about your background. And more importantly, the person behind that background?

 

Marco Santerelli  Well, I have a big, long story. So, I’m not going to go too far back or too deep. But I will say as part of the highlights is, is that you know, I didn’t grow up in a well to do or wealthy family. My parents both worked full time. In fact, my mother had to work two jobs to make ends meet and pay the bills. But one thing I didn’t notice growing up as at a very young age is that people who I met through social events that were well off financially independent or financially free, those people had one of two things. They either were business owners, and or they held real estate, they owned real estate, and they had passive income coming from that real estate. And I recognize that at about the age of nine. So as a teenager, I went down the road of being entrepreneurial. I didn’t you know; it was just more of an experiment than anything else. But I started coding at the age of 13. But what was interesting is around the age of 15-16, I was buying books and programs and courses to teach myself about business and investing specifically real estate investing. And that had a big impact on me. Because when I turned 18, when I could first qualify for mortgage financing, I actually bought my first property. So, I bought a townhome unit, fixed it up, put a sign out on the lawn, there was no Internet back then. So, it was newspaper and signage. And I leased it up and I managed it myself and I held that property for years. And it went very well. I mean, I had great equity gains, I made cash flow from it, it was a good investment. The biggest mistake I made. And this is kind of you know, a takeaway lesson for your audience is this. You never ever, ever sell your real estate. You can 1031 exchange it and replace it with other real estate to build and scale your existing portfolio. But just don’t sell real estate unless you absolutely have to, for example, if you have, you know, an emergency, you know, medical emergency or some sort of situation that you can’t get yourself out of. But you know, I bought that townhome for about $40,000. And it’s worth over $400,000 right now. And it would have been free and clear. And it would have been cash flowing at least 3000 a month, that one property. So, therefore you never sell your property. But that was you know, I started early at the age of 18. And I just went down that path slowly at first and then I accelerated it in time realizing that yeah, I really should be a full-time real estate investor and so that’s my quick story on the investing side. I’m you know, I’m a serial entrepreneur, I run multiple businesses and Investment Fund, I run an own, probably the largest provider of turnkey cashflow rental properties in the country. And that’s something I’ve been doing for over 18 years now. So that’s a little bit about a little bit of my background.

 

Pancham Gupta  That’s awesome. So, you said you started that 18 years ago, the company which provides the turnkey real estate



Yeah, it was an interesting experience back in 2003. You know, real estate was hot at that time. And I had just come out of a.com, a couple about a year and a half, two years before that a.com failure, you know, there was the.com explosion and the.com crash. And I was a co-founder was the third partner in this launch. And, you know, I thought I was going to be a multimillionaire, because we were going IPO, we were going in the direction of being publicly listed, and then the stock market crashed, and then all our venture capital funding dried up, and I’m sure this resonates well, with a lot of your listeners, you know, just being in tech. And so, you know, we had millions and millions of dollars of VC funding, and then when the NASDAQ crashed all that VC funding dried up. So, we had 105 employees, I was the third partner, third person, if you will, and we had to lay everybody off and wind that business down. So, the third in and that was the third last week, I took some time off, because I realized I don’t want to get back into corporate America, I don’t want a corporate job, I don’t want to be climbing the corporate ladder, I want complete financial independence and financial freedom. Now, I already had a good base at that time, but I wanted to pedal to the metal go full bore. And the catalyst for that to happen was an email that I got in that summer of 2003. You might notice this name, Robert Allen, Robert G. Allen key authored over 20 books, half of them, most of them on real estate. He coauthored books with Mark Victor Hansen, the author of Chicken Soup for the Soul. But you know, some of his Cornerstone books are nothing down and the road to wealth. And, you know, he is considered one of the grandfathers of nothing down investment, real estate. And I learned a lot from his books and courses. But I got this email from him. And I don’t know how he got my email address. But I got this email from him in the summer of 2003, saying, hey, we’re putting on this large, three, three-day events in the city of Orange, California, actually, right outside of Anaheim, where Disneyland is located. And I thought, well, you know, I’ve got time. And this is something I’m obviously interested in, because I’ve been interested in real estate for a long time, I’m gonna go. So I went to this event, and it was massive, there was over 2000 people in this ballroom, a three-day event free. And they had one main speaker, a guy by the name of Glenn, very engaging, a very good teacher, great information. Everybody was riveted to their seats. But you know, because it’s a free event, they obviously selling something in the back of the room. So, what they were selling over the course of those three days were these boot camps, which were peppered all over the country. And they started with $15,000 for the five or six boot camps. And it went up to $35,000. So, it was 2003. Yeah. Oh, wow. So, I had interest and time on my hands. So, I decided, well, you know what, let’s whip out that credit card, go to the back of the room, just like everybody else and sign up. And I’m glad I did. Because it did two things, it pushed the gas pedal a little harder for me to continue buying investment, real estate. And what I ended up doing is I ended up buying 84 doors 84 units. And I’m not talking like apartment buildings here. I’m talking mostly single family and duplexes at four doors in a nine-month period. Wow. Second thing that happened is because I was doing that, people were coming to me, a lot of people because I was meeting hundreds of people, people were coming to me at these events saying, hey, it’s amazing what you’re doing. I’m watching you, you know, blaze a trail? Can you coach me? Or can you mentor me? Or can you help me? And my response to that it was, you know, I’m flattered, and appreciate you asking, but I honestly don’t have the time, and I didn’t. But what I do have is deal flow. I look at a lot of deals all the time, because that’s what I was doing. I was on the hunt for finding good deals. And I was always in acquisition mode. I said I can, you know, pass on deals that I’m not buying to you. So that’s when the light bulb moment went off. And I realized that people were always educating themselves. But they never pulled the trigger. They were hung up on finding the deal or putting a deal under contract because they just didn’t know how to find the deal or do the due diligence on the deal. But I was already doing all that. So that light bulb moment was really the birth of my existing company, you know, 18 plus years later have no Rata real estate investments. And now, you know, we’re helping 1000s of investors every year, acquired turnkey rental properties in about 25 different markets. So that events for the Robert Allen event were like a turning point, a pivot point where I went like all in on real estate investing. And I started one of many companies at that time, which is Narada real estate investments.

 

Pancham Gupta  That’s an awesome story. So let me ask you this app bunch of questions. Say and you know, it’s a great story. So, this is personal to me to like, you know, I got into multifamily because I was doing what part of it what you were doing? I had a full-time job; I don’t know how many properties you had while you were buying. You know, I know you had quit when you started Narada. But before that when you were doing that.com thing, did you have a lot of properties? Then?

 

Marco Santerelli  I had a small portfolio. Yeah, I mean, I was doing I was doing well, I have, you know, a fair amount of equity. I wish I knew what I know now and what we freely teach people today, back then, because if I knew what I knew today, back then I would have known how to tap into that equity to accelerate and grow my portfolio much larger, much faster. I missed out on so many opportunities, because I just didn’t know what I know today. And you know, when I do presentations, one of the things I say often, you know, to audiences is, you know, finish the following sentence, ignorance is blank, you know, and everybody says, well, ignorance is bliss. And I say, well, that might be true, but you wrong because ignorance is expensive. So, when you don’t know is costing you money is costing you opportunity. It’s costing you time, and so many other things. So, it’s important to continually educate yourself and learn and put that knowledge to work for you.

 

Pancham Gupta  Yeah, no. So, going back to my question, right? Did you feel overwhelmed by the fact that you bought 84 single family properties versus an apartment complex? People who are listening, you know, they’re maybe getting overwhelmed by the thought of buying at four single family. They have one. They don’t have any, maybe they have two? What’s your suggestion, or what you kind of tell people who have good full-time jobs, right? They like what they’re doing. But they want to build this on their side. But they get this overwhelm where, you know, too many properties and it’s gonna be time sink for them. And I’m actually part of that story as well, when I was working full time job, and I had portfolio and five states, these properties, and they were managed by property managers, you know, had properties in Ohio, Georgia, and all these Pennsylvania, it was too much for me, because when you have a bigger portfolio, you have something breaking somewhere, something happening somewhere. And you know, you must manage the property managers, you must manage, you know, all the things that are going on. So, what advice would you have for people who are listening right now and thinking, Oh, wow, 84 doors, that’s awesome, but very overwhelming.

 

Marco Santerelli  Well, was I overwhelmed? Probably. I mean, I remember times where I was a little frustrated and flustered. But I was running so hard, so fast, that I never had time to stop and think whether I was feeling overwhelmed or not, I’m sure I was. But I was just running so hard and trying to get cover as much ground and accomplished so much in such a short period of time that I probably just never stopped to think about it. I just kept going, going in, I didn’t look back. But yeah, I’m sure it was overwhelming. And it wouldn’t be for anybody. But I made a lot of mistakes, fell on my face many times and picked myself up. And I learned a lot of lessons because you must understand that I was living in Southern California in Orange County, California, which is where I am now. And I was investing over 3000 miles away. And some of those properties were purchased sight unseen, or at least seen with my own eyes. And so, I had to assemble my team, which I didn’t have in the beginning, I had to, you know, find my team, vet those people and build a team around me to help me accomplish that. So, what I was doing is laying the groundwork down for what became Narada real estate investments because the systems I put in place, and the methodology became what we teach and use today to help investors and so they don’t make the same mistakes. They don’t incur the same expenses and fall on their face and get tripped up. When you have a formula and a system that works. And you can it’s duplicatable, then you just rinse and repeat, you keep doing it over and over again. But you know, back then I didn’t have system I had to create the system I had to find the people to work with. And it may involve flying out many, many, many times to Florida to Georgia to Michigan. So yeah, I mean, sure I was I’m sure I was overwhelmed, but I was just plowing through and running 60 miles an hour to try and make this happen. I made it happen, you know, and made a lot of money and I lost a lot of money. So, lessons learned.

 

Pancham Gupta  So someone who’s listening like would you say to them that you know just follow a system and you know, learn from someone’s mistakes like for example, you and you I’m sure you have a lot of You have your own Podcast and you have, you know, a lot of stuff that you offer your clients, to you kind of had them through this as well, like, you know, this process this journey.



Yeah, I mean, you have two main roads to go down. One is to do it on your own, which leads to building a team. So that means you have to do what I did back in 2003, and 2004, and that is figure it out, create a system or find a system that works and use it and then you know, build your team and make it happen, make it work, the other road you can go down is to use someone else’s system. And I’m going to just, you know, say it again, you know, we already have the system, it’s there, it works. And there’s no cost in using it. It’s, it’s a free service. But you use a system that works, or you create a system that works. And those are your two basic options. So, I don’t advise anybody starting out today to try and do it by themselves or do it on their own. That would be silly, because if you want a fast path to success, riding other people’s coattails, like you would do with a syndication, or you follow the methods and systems that other people have used, regardless of what it is whether it’s, you know, building a business, or investing in stock or day trading or investing in real estate, you know, just follow a system that has worked for many other people, and not reinvent the wheel. And that’s what I suggest for most people, especially if you want to be a passive, not an active real estate investor, use a system that works, invest in markets that are healthy and have the fundamentals. So yeah, I mean, I can go on and on. But this is the right gift. 

 

Pancham Gupta  got it? So, I’ve two questions. I want to switch gears and talk about the market environment. And first question, is, you have the benefit of hindsight. So, you started in 2003, right with this company, and you had 80 photos, and then 2008 happens by so did you get very heavily impacted by that, given that you were so heavily invested at the time

 

Marco Santerelli  that have an impact? Yes, I’ve seen it impact and destroy many people, you know, that the housing crash that started in 2006, and became, you know, in the Great Recession in 2008. The problem was back then there were a lot of speculators, you know, most people were not truly investing. They were speculating, they were not investing for cash flow. They were they were investing. And I say that in air quotes, they’re investing for appreciation. You know, they were hoping for appreciation, they were buying to flip properties that, you know, they can make small capital gains on short term capital gains on that was fueled by the fact that credit was widely available and easily accessible. That’s not the case today, of course, but you know, in hindsight, yes, I mean, it’s hurt, hurt a lot of people, there were a lot of lessons learned, hopefully, a lot of people learn from, you know, what had happened. It impacted my business for a couple years, there were I mean, credit wasn’t available. So, it was hard for a lot of people to invest in real estate. So, I had to scale my business back. But most of the other people out in the space, you know, so called competitors of mine, most of them closed their doors, they went out of business. So, I survived that, whether through 2008, nine and 10. And then things started coming back, because I was half prepared for it. I mean, I saw it coming. I was able to cut back on staff and expenses to weather through. And, you know, we survived. So, I mean, we’ve been running for over 18 years, almost 18 and a half years now, which is a long time. We’re the longest running company out there in the turnkey investment space. But yeah, there’s lots to learn from that. You know,

 

Pancham Gupta  yeah, I was going to get any lessons from that, that you took to your heart and implemented in your business since then.

 

Marco Santerelli  Yeah, well, I created, you know, essentially 10 rules for successful real estate investing. And some of those rules apply directly to what we’re talking about in terms of lessons learned. But you know, one of the big ones is, don’t speculate, there’ll be a speculator, the problem with speculation is that appreciation is not guaranteed. And so, if you’re going to invest, invest for cash flow, so you know, that’s actually my fourth rule, my 10 Rules invest for cash flow, you know, because what I call cash flow is glue. It’s the glue that holds your deal together. So, you can weather through recessions, you can weather through market cycles up and down. Because if you’ve got the cash flow, you can pay for your expenses and you can pay your debt service and you have hopefully some money left over, which is the profit or the income from the property. But if you don’t have cashflow, if you have negative cash flow, you can only survive for so long. I mean that’s not sustainable. So, you must invest for cash flow, but you invest in markets have strong fundamentals that gives you the stronger appreciation potential. There’s no guarantee for appreciation growth, but in the markets that we choose. We have both cash flow and appreciation potential. Some markets are stronger for cash flow, and you’ll get stronger, higher cash on cash returns. While other markets have stronger fundamentals, like the Florida markets, for example that we were talking about before, you know, we started the interview, they have stronger fundamentals and appreciation potential. So those are what I call growth markets. You can choose one, you can choose the other, you can choose markets that are what I call hybrid markets, which are really markets and transition from one to the other. So, my third rule, never speculate my fourth rule invest for cash flow. My fifth rule is market agnostic, never marry yourself to a particular market, and especially your own market and your backyard. Because often, the best deals that you’re going to find, as an investor, when you’re investing your hard-earned capital, is to look at the 500 Plus markets around the country. And really, if you want to break it down into submarkets, you’re into the 1000s of markets. Right? So be market agnostic, because we live in a very large country made up of hundreds of local real estate markets, the emphasis there is the word local, all real estate is local. In fact, it’s hyper local. And they all move up and down independently of one another. And they all have their own local factors. And, you know, market cycles, politics, supply, and demand and whatever else. And so, there’s always a time to invest in a particular market, sometimes it’s a good time to be investing in that particular market. And sometimes it’s not a good time to be investing in particular markets. So, it’s important to be market agnostic. And you know, you know, to throw a fourth one in the mix there, you know, you should take a top-down approach. This is my sixth rule of my 10 rules of successful real estate investing. These are all listed on my website, it’s the first post in the blog, it’s always at the top never slides down. But you take a market top-down approach, which means that as an investor, you shouldn’t be looking at properties before you actually start looking at markets, then submarkets, and then neighborhoods and then the property. So, you take a top-down approach, you always start with the mark, and you work your way down into more hyperlocal and granular locations and properties. And then you build your team around you, and you build your team around that property. Because if you have the right team, then they’re going to help to assure your success. So, take the top-down approach.

 

Pancham Gupta  Got it? That’s great. You know, anyone listening? If you want 10 rules, definitely check out Marcos’s website, which is Norada real estate. Right? And Noradarealestate.com? Yeah. So, Marco. Now my follow up question on that is so what you saw in 2006? Do you see today? And with the rates going up? And you know, one number one question I get today is the still the right time to invest with the curve going up? 30 year is 5% 30-year mortgage, you know, close to five today, and I don’t remember last time when it was five, I think it was pre-2008. So, what are your thoughts?

 

Marco Santerelli  Well, no, it’s not the same word in different environment right now, back in 2000. In the 2000s, we had a lot of people who are speculating because credit was very cheap and widely available, and it was very easy to qualify for it. Whereas financing today, the average credit score of people who are acquiring mortgages are 720 and above, so the borrowers are far more qualified. Their debt-to-income ratios are in check. Lenders are much more conservative and cautious as to who they’re lending to. And so, credit is being lent with proper underwriting, you know, it’s not lost money. Second, we have very strong fundamentals right now, back then there was a very large supply of inventory, especially as we got into 2005 and 2006. We reached the point in 2006 2007, where supply far outpaced demand. It’s not the case today, today, we actually have very strongly the opposite. The supply is falling far short compared to the amount of demand for housing out there, both rentals and new homes, either new construction or homes available for people to move into, you know, whether it’s Gen X, Gen Y, Gen Z, people who are moving out of the house, or looking to get away from their roommates, and they’re marrying and they’re moving into their own and forming their own households. Right now, we have nationwide only 0.8 months of inventory in terms of housing supply, extremely low, that would be considered a very, very strong seller’s market. You know, in the past four to six months’ worth of inventory in a particular market was considered a balanced market, you know, that was neither seller nor buyers’ market. I think as time has gone on, we’ve come to see that maybe two three, maybe four months is more of the new normal, but even then, we’re not there. Are there are very few markets that have more than two months of available inventory. But you know, if you average out a lot of the major metropolitan areas in terms of inventory, and you know, we track hundreds of them, but there’s 69 specific markets that we look at, and then 130. Above that, but we’re seeing less than one month’s worth of inventory in those markets, which makes it a very, very strong seller’s market. So, the dynamics is what I’m saying the fundamentals today, much different than what it was back in ’04, ’05, ’06

 

Pancham Gupta Got it. So really, what you’re saying is that you have credit number one, and supply shortage, I’m just summarizing what you just said, which is very different from 2006. Credit was widely available, not the case today. And supply was way more than the demand. And today, the demand is way more than the supply with very low in inventory, and probably less than one month of supply. Right? So, it’s crazy. So, these are the two main factors. And you think even though the rates going up, I believe the yes, they will be the buyer pool may get shrunk a bit. But overall, if there are 10 people looking for one house, now there might be five, you know, but still one person will get it.

 

Marco Santerelli  Yeah, we’re still in a deficit in terms of new household formation, like how much new inventory is coming onto the market, it’s still falling short of demand, and probably will until 2024 2025. That’s probably the point where we’re going to see equilibrium between supply and demand. The only caution there is that builders are acquiring so much land and building so much right now and have so much in the pipeline in terms of permits that have been pulled, and new housing stock that they plan to build that will come out that we might see an oversupply between 2025 and 2030, which would kind of start to flip markets the other way where we have too much inventory and not enough demand. But you know, we’re not there yet, into the comment about in the interest rates is that even though rates have gone up this year, they haven’t gone up all that much. I mean, they’ve gone up a measurable amount, but in the grand scheme of things, they’re still historically low. And you know, they’re still well above the historic average for interest rates, which is somewhere around 7%. So, we still have cheap credit available, its still cheap money, especially if you can lock in, you know, to a 30-year fixed rate mortgage. And, you know, four point something five, even 5%. You know, that’s still cheap money. And you also must keep in mind that we’re in a pretty strong inflationary environment. So, when you get when you borrow capital and lock it in for 30 years at a rate and interest rate that’s below the real rate of inflation, and let inflation erode away at that debt. That’s incredibly powerful. And that’s what makes real estate, still the best investment that you can make out there. It’s the most historically proven asset class, it has tax benefits, it has income, it has wealth creation through equity growth, and it’s leverageable. You know, it’s very, very powerful. Then, you know, one more comment, I’ll make just kind of on the whole state of the economy, state of housing and the fundamentals that we’re seeing, if you look at a comment that John Gray, made back in late January, he’s the president of Blackstone, you know, Blackstone, you know, massive company, you know, they manage trillions of dollars of assets under management, they’re massive, you never want to bet against, you know, John Gray, right? You want to be on the same side of the table. But he said in The Wall Street Journal in late January, that never in his 30-year career, has he seen real estate fundamentals as strong as they are today. That speaks volumes for, you know, what they see Blackstone, and what is going on? It confirms everything that I’ve been looking at, and everything I’ve been seeing and saying, but you know, he started invitation homes back in 2012. They’re a monster, they, they have billions of dollars’ worth of real estate, you know, under management and they continue to buy. So, they wouldn’t be buying so much real estate and continue buying if they didn’t feel that the fundamentals are strong. So, you know, the question of, was it a good time? I think you asked me this. Is it a good time to invest? It’s always a good time to invest. I’m always bullish on real estate. Always. It’s not a question of when I always say it’s a question of where because there are always deals out there. So, don’t ask yourself, should I be investing in real estate? The answer is yes. You absolutely should be investing in real estate because it’s a phenomenal and inflation hedge and it’s a great wealth creator. The real question is where and you know, that’s something I spend a lot of money and a lot of time figuring out. And then you know, our investment counselors when they talk to our clients and people who want to invest in real estate, those are the conversations we have. These are the places You should be looking at or some not all, but some of the places you should be looking at as a real estate investor to build your portfolio.

 

Pancham Gupta Awesome. Well, that really is a well-rounded answer. And I’m in your boat to buy, buy, buy, where is the question? And that’s when, you know you spend your research and time on. So let me ask you market this and you know, we’ll wrap up the first round, and we’ll move on to the second part of the show. My question for you is, and given this environment, I know you made the case for real estate, and I’m sure you’re investing there other than real estate, like where are you investing your own personal capital in? Are you still very heavily going forward with real estate or are you diversifying into different sectors?

 

Marco Santerelli  Well, I’m very selectively diversifying. So, if you’re asking me personally, that’s one answer. I also manage a fund called Norada Capital Management, which is a debt fund. So, investors are investing and buying promissory notes that are paying 12 to 15% per year, as much as 18% per year paid monthly. That capital in the fund is used to arbitrage into other opportunities. So, where we’re investing there is also where I’m investing personally. And that breaks down very loosely into other businesses that are very scalable and have high profit margins. And those would be more specifically some very lucrative e commerce businesses that we’ve built as well as acquired and scaled over the last three to five years. Some crypto, very specific choices there. We have two crypto projects, we’ve released our own two tokens, and one is the decentralized exchange. This is gonna sound a little eclectic, but part of the fun includes six new Broadway musicals that are all launching, well, the first ones launching in June, but three of them this year, three of them next year. We have a land development company where we acquire and subdivide lands. So, we can provide nationwide homebuilders like Dr. Horton buildable lots. So that’s in the funds. That’s the majority of it. No, yes.

 

Pancham Gupta  Very, very divided nation. Very loosely correlated asset classes there. So that’s awesome. So, thanks, Marco. For this, we’ll be back after this message. Do you ever feel overwhelmed by the thought that you have no time after work, and family time to learn about investing? Do you feel left behind that you are not putting your money to work for you? Do you want to create passive income, but you do not know where to start? If so, I have good news for you. I have created an investor club which I call The Gold Collar Investor club for accredited investors, I will be putting together investing opportunities exclusively for this group. These are the opportunities where I have done my part of the due diligence for you and will be investing my own money alongside you. If you are interested, please sign up on The Gold Collar Investor.com forward slash club, I repeat The Gold Collar Investor.com forward slash club, I will reach out to schedule a 30-minute phone conversation to discuss your investing goals. Once you sign up, this can be a good opportunity to diversify and take some chips off the hands of Wall Street to produce some cash flow. And in case you are wondering, what is an accredited investor, credited investor is someone who has earned more than 200,000 as filing single or more than 300,000 Filing Jointly for the last two years. Another way to qualify as an accredited investor is if your total net worth is more than $1 million, excluding your personal home. It includes your stocks, 401Ks, IRAs, cars, etc. Just not the equity in your personal home. If this, is you, I would highly encourage you to sign up? So, Marco, let’s move on to the second part of the show which I call taking the leap round. I asked these four questions to every guest on my show. My first question for you is when was the first time you invested outside of Wall Street? Was it that home that you bought in when you were 18?

 

Marco Santerelli  I would have to say it is I don’t remember if I actually invested in anything before that. If I did, it was a loser. But I would say my first real investment was that rental property when I was 18.

 

Pancham Gupta  Got it. So, did you have to overcome any fears when you invested in that?

 

Marco Santerelli  That was so long ago I don’t remember if I did or didn’t, I probably had some reservations and reluctance. I don’t know if it was what I would Call fear. But regardless of what you want to call it, I had to overcome it. Now you must remember, when you talk about fear, it’s a mental game, right? Fear only exists in your head. And you need to do what you need to do, whether it’s through education, or a mentor, or somebody who can coach you along, or maybe a partner, to get you over that fear. Because once you get over that fear, then you have no mental hurdles. It’s just a matter of execution and getting the capital on the team and making things happen.

 

Pancham Gupta  Right, exactly. Cool. So, my third question for you, can you share with us one investment that did not go as expected?

 

Marco Santerelli  Yes. So, when I was investing out of state 3000 miles away, I was buying some properties in Detroit, specifically within the city of Detroit. And I was expecting a turnaround in the city, because there’s a lot of good things happening, a lot of capital is flowing into downtown by the hundreds of millions of dollars. And so, there was a revitalization going on. So, I bought into that story that Detroit was on the turnaround, and I was coming in and on the ground floor. But I was buying properties, unfortunately, in the city, but in areas that were very sketchy, and I didn’t know this, you know, you don’t know what you don’t know. And therefore, you know, what I’ve learned back then it’s everything we incorporate into our business today and help real estate investors with. But I was making the mistake of being in a market that didn’t have strong fundamentals to begin with. But in neighborhoods that were sketchy and low income and had high turnover and high vacancy and a very small to no retail market. And all those factors played into the fact that these properties were easy to buy very hard to get out of and sell, and I would have a tenant pool that were very problematic, they would cause problems, complain a lot, create damage, were transient, never stayed skipped payments. And I’m not talking one property, I’m talking like, multiple properties. So those were the deals that have gone bad. And I learned a lot of lessons from that, that I don’t do today. And we don’t let our clients do today. So yeah, I mean, I didn’t have one bad deal. I had many bad deals,

 

Pancham Gupta  I’m sure. And those are real world seminars, right, real world college. So cool. Yeah. My last question for you is, what is one piece of advice would you give to people who are thinking of investing in Main Street that is outside of Wall Street?

 

Marco Santerelli  The piece of advice I would give to invest in Main Street remains for Main Street and Wall Street.

 

Pancham Gupta  People not thinking about doing it and never done it.

 

Marco Santerelli  Not investing in equities. You’re not talking about equities, correct? Yeah. Yeah, it’s kind of a two-part answer. But really, it’s one in the same, understand what you’re investing in. And really the bigger message, there is my first rule of those 10 rules of successful real estate investing that I was talking to you about before, you know, it really comes down to this, you need to educate yourself, you need to be a lifelong students, you need to constantly feed your mind with knowledge of all kinds, you know, finance, about money, economics, personal development, people skills, etc., etc. Because knowledge is what’s going to help take you from being a non-investor, to a good investor, and a good investor to a great investor. And the knowledge is what’s going to help, you know, help you build that passive income stream that you need to create that financial independence and that financial freedom. But if you don’t educate yourself, if you don’t build that knowledge, and have that currency of knowledge, then you’re essentially doomed, you’re doomed to follow other people’s advice. Those are the people that hand their money over to, you know, a financial advisor, money manager and say, here, I’ve got money, I don’t know what to do with it, or how to manage it, or where to invest it, you do it for me. And you don’t know if you’re getting good or bad advice from that person, you know, you’re, you’re just gonna go with whatever they advise, but you don’t know whether it’s good or bad. You don’t have the intelligence or the knowledge to ask intelligent questions. So, it’s very, very important to educate yourself. It’s so important that you build that knowledge base all the time continuously.

 

Pancham Gupta  Very well said, well, thank you, Marco, for sharing your knowledge here. I know you’ve put together a guide for investors, you know, looking to passively invest. And it’s called Ultimate Guide to passive real estate investing, tell our listeners about how they can get it. There’s a special handle there. And what is it in the guide that they will find?

 

Marco Santerelli  Yeah, so it’s a 37-page PDF, that’s a free download on both of our websites. And it’s called, like he said, The Ultimate Guide to passive real estate investing. It’s a lot of fundamentals and principles, things that don’t change necessarily, or ever as the markets change or the economy changes. So, it’s a great primer, but it talks a little bit about market location, quick rules of thumb on how to quickly assess an investment property, how to quickly analyze the pro forma or the cash flow, to know if you have a good deal, what to look for, you know, landmines to avoid stepping on. Like I said, it’s just very broad. It’s a bit of primer on a lot of things. But it opens your mind and opens the door for you to learn more about these different things that you’re not strong in. So, it’s really kind of a mini book, if you will, it is actually becoming the full book called passive real estate investing, which actually is almost ready to be published. It’s in manuscript right now. So, people, yeah, so when people download, download that free guide, The Ultimate Guide, will have access to the book for free as a download. They can still purchase the paperback for seven bucks, but they’ll get access to the full book when it’s released.

 

Pancham Gupta  That’s awesome. So, people who are listening, if you want that book, that free investing, I send an email to passive at The Gold Collar Investor.com And they will get you will get a copy right in your inbox. So again, it’s passive P-A-S-S-I-V-E at the gold color. investor.com Thank you, Marco for your time here,

 

Marco Santerelli  It’s been an honor and thank you for your time. This has been great. Thanks.

 

Pancham Gupta  Thank you for listening. I really appreciate you if you have questions, email them to me at p@thegoldcollarinvestor.com. That’s P as in Paul at The Gold Collar Investor.com This is Pancham signing off. Until next time, take care.



Thank you for listening to The Gold Collar Investor Podcast. If you love what you’ve heard and you want more of Pancham Gupta, visit us at www.thegoldcollarinvestor.com And follow us on Facebook at The Gold Collar Investor. The information on this Podcast are opinions. As always, please consult your own financial team before investing

Copy of EP #18 - 2 Guests

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