Real Talk With Gary - Real Estate Investing
219: Adrian Pannozzo - From A Police Officer To A Successful Real Estate Investor
Thu Jul 20 2023Real Estate InvestingJoint Venture PartnershipsMarket ChangesIn-House ConstructionProperty ManagementApartment Building RenovationsNegotiating DealsManaging Multiple PropertiesMarket UncertaintyTaking Action
Description
Adrian Pinozo, a retired police officer, shares his journey of transitioning into full-time real estate investing. He discusses the importance of taking action, leveraging joint venture partnerships, and navigating market changes. Gary, another former police officer, also shares his experience in real estate investing. The speakers emphasize the value of leveraging time, scaling portfolios, and building in-house construction and property management teams. They provide insights on renovating apartment buildings, negotiating deals, and managing multiple properties. The episode concludes with key insights on market uncertainty and the importance of taking action.
Insights
Taking action is crucial for success
Adrian and Gary emphasize the importance of taking action in real estate investing. It is essential to overcome fear and make decisions to move forward.
Leveraging joint venture partnerships accelerates portfolio growth
Adrian and his partner scaled their real estate portfolio by leveraging joint venture partnerships. This allowed them to acquire a large number of properties and doors.
Building trust with investors is essential
Adrian highlights the importance of building trust with investors. Trust is crucial for attracting joint venture partners and raising capital for real estate investments.
Sharing your story on podcasts can lead to opportunities
Adrian and Gary found that sharing their real estate journey on podcasts attracted joint venture partners and helped build their reputation in the industry.
Practice and experience improve podcast interviews
Adrian advises that practice and experience improve podcast interviews. It is important to refine storytelling skills and effectively communicate insights.
People resonate with personal stories
Adrian and Gary found that people resonate with personal stories in real estate investing. Sharing personal experiences can inspire and connect with others.
Recognition and feedback from listeners are valuable
Adrian values recognition and feedback from listeners. Positive feedback provides validation and encouragement to continue sharing insights on podcasts.
Starting a YouTube channel is important, regardless of timing
Adrian suggests starting a YouTube channel as a way to share knowledge and insights. Timing should not be a barrier, as consistent content creation is key.
Contact Adrian for joint ventures or more information
Adrian can be contacted for joint venture opportunities or more information at investwithepc.com or on various social media platforms.
Chapters
- Adrian Pinozo: From Police Officer to Real Estate Investor
- Gary: Transitioning from Frugality to Real Estate Investing
- Gary's Journey from Police Officer to Real Estate Investor
- Building a Real Estate Portfolio and Transitioning from the Police Department
- Transitioning from Police Officer to Full-Time Real Estate Investor
- Scaling the Real Estate Portfolio through Joint Ventures
- Streamlining Operations with In-House Construction and Property Management
- Renovating Apartment Buildings and Dealing with Legacy Tenants
- Negotiating Deals and Managing Multiple Properties
- Key Insights from Adrian Pinozo's Real Estate Journey
- Navigating Market Uncertainty and Planning for the Future
- Insights and Contact Information
Summary
Transcript
Adrian Pinozo: From Police Officer to Real Estate Investor
00:00 - 06:52
- Adrian Pinozo, a retired police officer, is now a full-time real estate investor and entrepreneur.
- He has acquired over 80 investment properties in less than a decade.
- Adrian is the founder of Executive Properties Capital, Inc., which raises capital through joint venture partnerships.
- He also owns Investors Edge Construction Management and manages a property management company in the Hamilton area.
- In this episode, Adrian discusses leaving your full-time job to pursue real estate investing and how he scaled his portfolio.
- He shares insights on joint venture partnerships and navigating interest rate hikes.
- Adrian advises taking action and making adjustments in response to market changes rather than complaining or blaming the government.
- He emphasizes the importance of long-term strategies in real estate investing.
Gary: Transitioning from Frugality to Real Estate Investing
06:31 - 13:30
- Gary is investing in real estate properties in Hamilton, St. Catharines, and Welland.
- He has a busy schedule and requires an admin to manage his calls and emails.
- Gary grew up frugal and had to learn the importance of leverage.
- As a police officer, Gary dealt with the lowest of the low in society.
- People's perception of him changed when he became a cop.
- Gary realized the value of leveraging time by hiring an admin.
- It allowed him to focus on his strengths and grow his portfolio.
- Gary's childhood dream was to become a police officer, which he achieved at 23 years old.
- He worked in various divisions during his 21-year career, dealing with serious criminals.
Gary's Journey from Police Officer to Real Estate Investor
13:13 - 20:36
- Worked in various police squads including detective, auto theft, and homicide
- Investigated crimes in plain clothes and undercover
- Drug component involved in many crimes
- Investigated high-level drug traffickers
- Passion for being a police officer changed after 21 years
- Transitioned to real estate due to mortgage renewal
- Learned about equity and home equity line of credit (HELOC)
- Initial hesitation about rental properties but decided to explore it
- Started with a HELOC of around $200k on their home
- Considered cash flow as a way to supplement retirement income
- Took action based on courage gained from police background
Building a Real Estate Portfolio and Transitioning from the Police Department
20:08 - 27:02
- Started investing in real estate to create a retirement income gap
- Began with a duplex close to home for easy management
- Paid $305,000 for the duplex, now worth over $800,000
- Minimal issues with tenants and low maintenance costs
- Expanded portfolio using home equity line of credit
- Reached a point of leverage and had to make a decision
- Decided to join venture with investors and build reputation through podcasts
- Business exploded in 2017 due to market conditions
- Retired from police department after 21 years due to success in real estate
Transitioning from Police Officer to Full-Time Real Estate Investor
26:47 - 34:16
- Retired from the police department after 21 years to focus on real estate investing
- Was producing around $80,000 a year in positive cash flow from real estate
- Decided to leave the police department and become a full-time real estate investor for more freedom
- Had to deal with time constraints and lack of freedom as a police officer
- Enjoyed working with people in real estate compared to dealing with criminals as a cop
- Realized it was time to leave when his passion shifted towards real estate instead of policing
- Left the police department on a high note after being promoted to Sergeant
- Emphasizes the importance of utilizing income from a full-time job before leaving to invest in properties
- Had four rental properties and one principal residence before starting joint ventures
- Transitioning into scaling his real estate investments
Scaling the Real Estate Portfolio through Joint Ventures
33:57 - 41:18
- Adrian and his partner started with four rental properties before venturing into joint ventures.
- Through joint venture partnerships, they scaled their portfolio aggressively.
- They now own 83 multifamily properties with a total of 415 doors.
- Adrian never imagined owning this many units, but he believes in the power of dreaming big.
- He was inspired by guest speakers at a seminar who owned 100 doors, and now he owns 450.
- To achieve this level of success, Adrian focused on getting results and building a track record.
- Podcasts played a significant role in attracting joint venture partners.
- When starting out, leveraging family and friends can help bridge the gap for new investors.
- Initially, Adrian agreed to put in 10% of the capital required for projects to show commitment.
- As their reputation grew, they stopped putting in capital and relied on investors for funding.
- Adrian started an in-house construction company to handle renovations on distressed properties.
- He had negative experiences with contractors before starting his own company.
- Outsourcing construction became inefficient due to volume and unreliable contractors.
Streamlining Operations with In-House Construction and Property Management
40:52 - 48:07
- The speaker decided to form an in-house construction company with their own employees on payroll after experiencing issues with outsourcing.
- This decision eliminated drama and provided peace of mind as the speaker had direct control over their team's performance.
- The speaker also brought property management in-house, focusing solely on their own properties and joint venture partners.
- They have a small boutique company that provides exceptional service to their properties and does not outsource to external clients.
- The in-house property management company has full-time maintenance staff and leasing agents who handle service calls, tenant screening, and lease preparation.
- The speaker's goal was to build a comprehensive real estate investment business model similar to Costco, where all necessary services are provided in-house.
- While they still do smaller residential projects like duplexes and triplexes, they are transitioning towards larger acquisitions such as apartment buildings ranging from 10 to 47 units.
- Legacy tenants are the only challenge when it comes to apartment buildings, as these properties are typically fully tenanted at the time of purchase.
Renovating Apartment Buildings and Dealing with Legacy Tenants
47:38 - 54:41
- Apartment buildings are easier to work with compared to residential properties because they come fully tenanted.
- The only lag of time with apartment buildings is dealing with legacy tenants and negotiating cash for keys.
- Once a tenant vacates an apartment building unit, renovations can be completed in 30 days.
- There is a system in place for apartment building renovations, including paint colors, countertops, lighting, and flooring.
- Residential properties require more hands-on work due to their age and the need for structural changes.
- Obtaining permits for residential renovations can take four to six months in some areas.
- Cash for keys negotiations are not as simple as giving money to tenants; it depends on factors like how long they've been there and potential rent increases after renovation.
- In the commercial platform, the value of renovating a unit is calculated based on the lift in net operating income (N.O.I.).
- The most paid to tenants to leave an apartment building unit was $25,000, but it was still profitable considering the increased value of the building.
- Vendor take-back mortgages (VTBs) are often used in apartment building deals when owners want to cash out and buyers want financing options.
- Commercial appraisers can be a good source of leads for off-market commercial properties.
Negotiating Deals and Managing Multiple Properties
54:16 - 1:01:18
- Negotiated a deal to buy a building for $500,000 less than its appraised value
- Renovations on the building were easier and more streamlined compared to other projects
- Owning a larger apartment building with little money left in the deal is a lucrative investment
- Creating new corporations for each building acquisition is easy and costs around $1,000-$1,200
- Having preferred commercial agents for insurance helps streamline operations
- Running a tight-knit operation with processes in place makes managing multiple properties manageable
- Overseeing all moving pieces requires proper systems and regular meetings
- Success in real estate investing is possible without prior business education or experience
- Pushing out of your comfort zone and learning from failures is key to growth
Key Insights from Adrian Pinozo's Real Estate Journey
1:01:00 - 1:07:39
- Pushing out of your comfort zone leads to learning and growth.
- Reacting quickly to changes in the market is crucial for business success.
- Interest rate hikes negatively impacted cash flow on the residential side.
- Some properties were in the red, causing concern among JV partners.
- Encouraging JV partners to hold on to properties despite current market conditions.
- Emotions play a significant role in investment decisions.
- Overleveraging can lead to serious financial difficulties.
- This experience serves as a valuable lesson for future investments.
- Riding the wave and waiting for the market to turn can lead to long-term success.
Insights and Contact Information
1:13:59 - 1:19:47
- Taking action is crucial for success
- Raising capital accelerates portfolio growth
- Building trust with investors is essential
- Don't be afraid to share your story on podcasts
- Practice and experience improve podcast interviews
- People resonate with personal stories
- Recognition and feedback from listeners are valuable
- Starting a YouTube channel is important, regardless of timing
- Contact Adrian for joint ventures or more information at investwithepc.com or on social media platforms