From Sales to Massive Real Estate Deals with Jason Pero
Today our guest is Jason Pero. Jason is a successful real estate investor, who achieved financial freedom and left his medical device sales job by investing in real estate!
Today you'll learn how to build a big portfolio, how to scale and build financial freedom, what real estate can do for busy professionals needing to make a return, and how to get started! Jason is based in Erie, PA and is an expert in tertiary market investing, which we discuss as well. Many investors forget about tertiary markets, but if you know what you're doing (and Jason does!!) you, too, can build a portfolio and become financially free by investing in real estate on the side.
In this episode, you will learn:
- A brief history of how he started as a real estate investor
- Opportunities in investing in tertiary markets
- Working with passive investors and real estate syndication
- Biggest lessons of new high-net investors to diversify their investments
- The stumbling blocks of investors in real estate investing.
- The priorities in terms of downside protection, cash flow, return, maximizing the assets, and all of the advantages of real estate investing
- Understanding the investor's mechanics in getting the right deals
- "Hard work and doing things the right way does pay off."
- "The best investment in self-development is me, on the personal and professional level. Investing in a Mastermind, being surrounded by like-minded people, is a great investment."
- "To be resilient during the downturn. Time can cure all of that. Might get a hiccup, but be patient. Time will cure all of that. Do not panic. Learn the value of staying calm."
About Jason Pero:
Jason Pero is a successful Real Estate Investor, and Founder of Pero Real Estate. In 2001, he and his wife bought their first rental property. They started the old fashion way, built from one salary, and saved to a down payment, and got to more significant real estate deals. Then, he got to 300 units. In 2012, he left his day job as a Medical Device sales rep. He got the ball rolling, got creative, and found some private investors and hard money lenders. Still did the business the old fashion way, used different financing strategies, and now owns 650 units that his company manages in Erie, Pennsylvania.
Jason Pero 0:00
Lot of high net worth individuals are looking to diversify, but don't really know how are aware. And so I know we sort of go down to talk track of like, Well, what does that look like? Do you want to own a carwash? Do you want to own your restaurant? Do you want to own an accounting business? What you know what is and what is passive income really look like to you.
Thank you for joining us on passive wealth strategies for busy professionals. Today, our guest is Jason Pharaoh Jason is a successful real estate investor he used to be no longer is used to be a medical device sales rep in the corporate world, working hard down those medical devices. And on the side, he was investing in real estate, he bought his first unit in 2001 way, just first had to nickel two nickels to rub together he and his wife.
Now he's built up to a portfolio of hundreds of units as we speak, he's just closed a 205 unit deal in his market in Erie, Pennsylvania. And that's the only place he invests a tertiary market in Pennsylvania, we don't talk to a lot of folks who focus on just one tertiary market. So it's definitely gonna be interesting. To get that angle as well. We're going to talk about how to start investing in real estate how to start passively investing in real estate, or high income individuals, because Jason works with a lot of high income individuals, lawyers and doctors and folks like that, who don't have the time to mess around with tenants toilets and termites.
I’m sure don't have that time. And I don't think you do either. I don't want to mess around with that. So let's get into it. Jason, thanks for joining us today.
Jason Pero 1:32
Thanks, Taylor. Thanks for having me. I'm looking forward to it.
Great. So can you run out some of those numbers for us and your story and you know, fill in the gaps that I left some pretty sure gaps in there.
Jason Pero 1:42
Yep. So 2001. year before my wife and I were married, we actually bought our first rental property. We started out the old fashioned way. So we lived on a one person salary saved, basically what the other person made and just pummel that into buying real estate build fast, we saving up for our down payments, all that kind of stuff, you know, did several larger deals along the way, got us to 300 units in 2012 was when I left my day job as a medical device salesperson.
So again, still doing it all the old fashioned way. When I left my day job, linked up with some hard money lenders, private investors, that type of thing, and really got the ball rolling from to doing a little bit more creative, creative financing, creative strategies, and got up to about 600 units that my wife and I own just ourselves. In the last year, we've you know, as you mentioned, we just closed that 205 unit deal.
So we've we've kind of backed into syndication is that's a just another feather in the cap another way of another strategy of investing, we still do a little bit of everything, but you're primarily had been focused in your EPA in our backyard, because there's still been a ton of opportunity in in our market and market Lake Erie. And having done this, where, you know, my first property, we actually closed the week before 911.
And, you know, we are through that down cycle, went through the 2008 cycle, and all the stuff in between and since then, and what I really liked about tertiary markets is, you know, when the market corrects, I don't, I don't necessarily, it doesn't necessarily affect us, we're still going to have a community that have people looking to rent apartments, and as long as there's that tenant base, in a market like Uri, and other tertiary, even secondary markets are a little bit more immune to the major economic downturns and, you know, who knows, none of us can time that that part of the market, but I like the safety that that brings me, you know, and we are looking to invest outside of you.
But it has to be the right, you know, in the right role and the right type of deal and everything else, but I really had been screaming as loud as I can, from the mountaintop that places like Yuri, are the place to be because you know, you're not gonna be you just doing this isn't Nashville, Tennessee, or Denver, or Atlanta. But on the flip side, you're not going to have that market crashed.
So, you know, 1015 years from now, when you're looking to cash out of a deal, your equity is grown at a nice rate, you've had a great return all the way along, and your money investment has been Safe, safe the whole way around. And just add to that, you know, with our most recent deal, we had quite a few.
We've got 15 investors from out of state that believed in that, you know, the idea of looking for that tertiary market that is just stable, you know, it's that steady upward growth, but nothing, you know, nothing huge on the upside, and, you know, no real, you know, real downside to speak of other than, you're not gonna have any massive appreciation,
my area, Virginia, we've got a few tertiary markets that were fantastic in the 70s and 80s. Back when we were building furniture in America, and this area, Martinsville, it's 20% of the population it used to be, but we will get into that now. So you work with passive investors, you were successful in real estate, before you started working with passive investors just with your own money. So what has that been like? And how, you know, what have your investors kind of seen? What have you presented to them? And, you know, from your end, how's that transition been starting to work with those investors?
Jason Pero 5:20
Yeah, it's, um, I think the biggest thing for me, you know, I knew about syndication for 15, out of the 18 years, I've been in real estate, you know, I always had a big mental block, and I was afraid of, you know, maybe thinking to, you know, I wasn't thinking maybe not thinking big enough, maybe not confident enough in my own abilities.
But during that time, you know, develop a really, really reasonable track record, you know, nurtured a lot of friendships and relationships. So, when I made that decision to jump into syndicating and bringing in passive investors, it was a really easy transition, because I just looked at my network looked at my network of people, and I, you know, I don't like the high pressure sales approach, I don't want people to, you know, fear seeing you coming or calling.
And so I reached out to a handful of guys and gals that I know and trusted, you know, either who are friends or people I knew in the business world that I said, hey, look, you know, that I have these types of deals that I'm looking at, here's the type of return I can give, you'll get, you know, you'll your money will be secured by the real estate, you'll get paid quarterly dividends in, you know, say eight to 12% range.
What do you what do you think, and so I started with a real softball approach to gauge their interest and found that that approach really works. So even when I have a deal in mind, I still sort of take that, that frontline approach with with folks to see if they really are interested in may be a good fit for, for making a passive investment. And, you know, seeing you know, a lot of high net worth individuals are looking to diversify, but don't really know how are aware.
And so I know, we sort of go down the talk track of like, Well, what does that look like? Do you want to own a car wash? Do you want to own your restaurant? Do you want to own? You know, an accounting business? What, you know, what is that? And what is passive income really look like to you? And if, if most of them don't, you know, most people don't want to do the extra work, they want to return on their money. So, you know, the answer is easy. And they you know, they answer that in the sense that, well, I like the idea of a check. And most investors can live with a quarterly dividend check.
And that's typically how we, we set up our investments to pay out quarterly. So that's been very, it's been a very easy, easy path, I think you know, the, what I found is that sometimes people get it in one conversation. And sometimes it's a new concept, you know, they're used to the 401k is, they're used to a real estate investment trust, so they're used to, you know, a bond fund or a mutual fund. So, I would say, you know, gosh, it's a pretty successful hit rate, but you you know, if you look at it from that way, but it's really just the conversation, you have to try to align what we do with, with the goals of our investor, and if there's a fit, you know, it's got to be a fit for personality, you know, you want to go to get along with somebody and become friendly enough with them that you know, that you've got, you know, a relationship and, and we really try to make sure that we, you know, we surround ourselves with good people, and that we all get along, as friends.
And so we try to break bread with people, you try to make sure that you've, you've got a chance to really get to know somebody and really know them at a deeper level. You know, but before, you know, before moving forward with with a passive investment, not absolutely. As a syndicate or in passive investor.
Totally, I believe that on both ends, you have to, like who you're like the people you're dealing with first before? No, I don't, I don't want to say I don't much care how great the deal is, I do care. But my first step, you know, do I like the people? Do I like the business? I feel they're, you know, competent, their business, all that stuff?
Do I get along with them comfortable with all that good stuff. So what have you found? And you made a comment about some of your folks might want to they might want on restaurants, folks that are listening, go check out our interview with Greg Dickerson, he's an investor here in Virginia has been investing for decades, his worst investment he ever made was a restaurant, go check it out. Don't buy a restaurant.
So what have you found that these higher income higher net worth folks who have no real estate investing experience? What are some of the biggest lessons that they need to learn or they have questions about or they're just not familiar with, because they've spent that time they spend more time researching liquid investments, more liquid invest, like stocks and reads and all those things that you mentioned?
Jason Pero 9:52
I think, in some sense, for a lot, not all, but a lot of investors, you have to dumb it down to the basics. I mean, you know, they're interested in real estate the same way that I was interested in real estate 18 or 19 years ago, and, you know, I don't know how long you've been in business, but same thing.
And so we didn't, you know, we didn't always understand depreciation, we didn't always understand cost segregation, or self directed IRAs, and, and all these creative strategies of investing in real estate. So I think the idea is that, you know, really being able to get to the basics, you know, some some of our investors really didn't understand how they generate a profit and in real estate investments.
So it's simple thing it as much to, this is a profit and loss statement. And, you know, here's your gross revenue, which is the rents and revenue that comes in, and here's expenses, and here's what's left over that is split up on a prorated basis to to our investors. And, and I think, you know, not everybody has to understand that part of the business, but a lot of a lot of people are just employees, they might be very well paid employees, now you're an executive or position or somebody making several hundred thousand millions of dollars a year, their specialty might not be in business.
So I think some of those basics, it's important that they understand how you generate a profit in the real estate business, but, but also how they can invest again. You know, we, we've had several friends and investors say, hey, look, I love this, if I can only invest in my IRA, I would totally do this.
And then, you know, of course, that's a such a softball, like, for self directed IRAs. And, and I think that, really, from the syndicators standpoint, being able to provide value to the folks that invest with you, and not just up front, but ongoing in terms of relationship management, you know, we really try to make sure that our investors are feeling that they have sort of a custom solution for their needs to diversify. So we keep providing them value, teaching them about even depreciation, and how, you know, leading them down that path that here's a loss.
And what you do with that loss is a discussion for you CPA, but giving them enough information to understand what real estate how real estate losses can benefit them, and other tax strategies. So by No, by no means can we provide tax or legal advice, but we can give them information and then have them ask their CPA, what they can do with that type of information.
Some of the things that I've observed coming from your professional background is, you know, when you have, like an IRA or 401k, that you've talked money into through your employer over the years, you don't know about self directed IRAs, because the custodians that you invest with through your employer, don't do self direction.
Or if you ask them about self direction, they might say, Oh, yeah, you can buy whatever stock you want, but they're not really answering the question all the time, you know, you can't buy real estate in your retirement account, which is just false. Right? So yeah, digging a little bit deeper for that information and being a source of information is fantastic. And what are some of the kind of stumbling blocks you've come across?
When you when you're talking to these higher paid professional, the professionals that are looking at investing in your your softball, pitching on them on your investment, or some of those tougher roadblocks, that they have a harder time with it? Is it? Is it the illiquidity of a syndication investment? Is it something else, what do you run into?
Jason Pero 13:25
I think, you know, there's a couple things that I think for a lot of these individuals, they have a very linear career path, you know, if you go to college, and you go to med school, to your residency come out of your high pain physician, so to think about risk is different for them. And making a decision is different for somebody like that. So, but that being said, there's several, we have several physicians that were the various students very on top of their personal finance, and decision was easy.
So I think, I think some folks is just helping them make a decision without being pushy. And, and I think for us, you know, we've tried to take a really low pressure sales approach, and make it more of, I hate to say, can, you know, consultation, but you know, if you're friends with these folks and become friendly, look, it's no pressure you make this decision on your own. You know, I've tried to do a lot of if somebody is on the fence, and they're really, you know, thinking about, like, gosh, I'm locked into this thing for 10 years, I don't understand this, I've lost sometimes give them books, I don't know whether they read them or not.
But I'm like, hey, read this book, read this chapter, you know, cost me all 10 or 20 bucks, you know, each encounter, but again, that's, you know, hey, this, this talks about how real estate investment works, I don't have to write my own book, I can just, you know, like, you know, we all know, like, there's tons and tons of books out there that have great content, you know, I can just steal borrow from that and pay your mark, you know, read this chapter right now, to better understand this, or Hey, click on this link.
And I picked up really tried to understand what their, what their hurdles are, what's holding them back. And I had a person who's a friend of ours that was looking to invest in our first indication, and this individuals son was going to college this coming year. And he you know, he's very high paid physician, he was worried about his liquidity, because, again, the cost of college is not not easy. And you know, his son was really going to be getting any financial aid.
So, what we did between the first syndication and the second syndication was, just occasionally, go ahead into my calendar to send him an article, you know, once a month or so just, hey, here's a link, check out this article on passive real estate investing, educating me about that self directed IRA. mechanism. So when the time came for the next deal, he said, hey, look, this is great, I'll do this, I'll, you know, rollover, X amount of dollars out from IRA, and that it was such a softball. So I think that sometimes the hurdles you encounter may delay that person from investing in the deal currently.
But you know, if they are really interested in, you know, you want to help them from a genuine spot, you know, I've said, Look, you don't have to invest with me. But if you're looking to invest in diversify your holdings, you really need to do something that good that helps you build equity that's safe and predictable, like real estate is, and, and I just, I guess, just try to try to go come from a place where I'm really helping them understand finance from a different from a different level. And what have you found as you work with these folks, maybe the more sophisticated one, people I don't know, what have you found their priorities are in terms of day,
downside protection, maximizing cash flow, maximizing internal rate of return, all of those, those those spectrums of advantages of real estate investing? The will to rank those in terms of their, you know, highest priority, these high paid, you know, professional, you are experienced investors in this field? Where would you rank that, from your observation?
Jason Pero 17:06
It's different for the different types of investors because we have some folks that are strictly seeking cash flow, and they care more about that quarterly that annual return, am I getting paid 12% on my money, or my getting paid 10% of my money, or whatever that number is, that's the bottom line for them. And I think having a deal that solid all the way around, that provides that great quarterly return, but also, you know, has like long, good long term appreciation.
So I guess I try to make sure that I understand all the fundamentals of my my deal. So that whatever is important to the investor, were able to hone in on so some investors are like, yeah, I want to know what I'm going to make over a 10 year period, I don't care about the quarterly returns, I care about, hey, did this thing shoot off the 20% IRR over a 10 year period. And so I think if they're more sophisticated, then you know, you have to make sure you give your investor the whole picture.
You know, and really focused on on on that at the end of it. But I think that a lot of guys, they they see, I try to explain to them and dumbing it down as much as possible that they with your quarterly return, or I mean, your annual return plus the plus the debt paid, I'm trying to simplify that IRR to simplicity form to get them to understand what the over the life of this, it's going to look like. So it's not just those dividends, but it's appreciation, it's the debt pay down. It's all these things that end up making, that making this a huge win in your favor. And then and talking about the risk of the most of them.
They ask about the risk, but it's not as important, I think, really, it comes down to this deal. Makes sense? Do I trust this indicator? You know, do I believe that this is going to perform in a predictable manner over over a reasonable amount of time. And so I think that if you were able to build that trust, and come You know, and, and be someone that operates with integrity, that's probably number one would be that they like you and that you're presenting to them a deal that that makes sense.
And so, you know, you could have a deal that has a 5% annual return, you know, a very modest, modest returns, but it could be, you know, it could be because they believe in you, they're willing to they're willing to put their money in the deal. And, you know, you may have a deal that shoots off 12%, you know, dividend checks every year. But, you know, they may not like, you know, they may they don't like you or they don't they don't trust the deal, you know, then they're not going to be interested. It's kind of this like weird magic pot of all, you know, all those factors. And then I know that didn't give a clear answer, but I think it really depends on it just all depends on the investor,
I certainly understand that I think that helps put my personal values in my investments more into focus. For example, the most recent deal I invested in was a 10 year horizon, there's a potential refinance event in there, so I'll get dollar, most of my capital back out, still retain my shares. But my priority is not living off of the cash flow, my priority is maximizing the dollar value of my assets, you know, down the road, what I need to, you know, when I'm getting ready to retire, I don't mind a 10 year window, that's why you give me a dividend check back, then I have to go find something to do with that, whatever, a couple thousand dollars, so kind of a pain on my part. But
Jason Pero 20:26
that's one question that, you know, you can struggle to answer sometimes is that for the person that doesn't need that dividend check? What do I do with that? Right? And so, you know, they, now they either, you know, you have to figure out a way for them to roll that into, you know, there's got to be creative, you know, can they roll it into a next deal?
Can they let that accumulate and put into a trade account, but as you know, as they've achieved certain levels of dividends, they want to make that make money on the money that, you know, that they're making off the investments. So that's probably one of the bigger tracks is, you know, having a home for that. For them, for them to realize that. They have to, you know, how did they redeploy those dividends?
Yeah, absolutely. I mean, that's doesn't get too much in the weeds. But that's the advantage of this particular deal of the Rifai that we get most or all of our capital back out. So then we can redeploy that much larger check than a much smaller one.
But we don't go into that. So as far as the mechanics of folks investing passively in these deals, you know, when, obviously, you're coming from the other side of it, you're you're making the offering, but when you're talking with folks, you know, the process of them meeting you then meeting up their syndicators all the way to being invested in the deal. What does that typically look like for most of your investors? Sounds like you have a pretty long term relationship with most of them.
Jason Pero 21:57
Yes, so a lot of folks, you know, we've I've known
Jason Pero 22:01
four years, just being, you know, being a business just life, and there's a personal relationship. And so,
Jason Pero 22:09
but what's happened is that
Jason Pero 22:12
the introductions get made, hey, I need you to meet my friend, that would be interested in the types of deals we're doing. And so there's that that realm, which, you know, ends up being a coffee or lunch meeting, or going out for half an hour or something like that, and really getting to know them as a person, giving a very high level view of how a real estate investment work. And then, usually, by the second or third time we get together, there's a deal in the works, that they can, you know, that they can look at, I try to still employ that three touch Well, I just in terms of really getting to know somebody, and I know, it's time consuming. But that's the best method for me for my personal stable of investors and the people that I would bring into to a deal. You know, if I'm, if I just had a lead of somebody that I was, somebody says, Hey, you should reach out to someone.
So, you know, I usually will call or shoot a text message and say, Hey, you know, we have a mutual friend that is suggested that we meet, and really just try to get to know them. I mean, by no means do I pitch a deal I'm working on the first time around, and we know, we obviously make sure you're compliant with anything that's out there, but I'm not you know, not one of those guys, that just has to sell the deal. I really want to get to know people and understand what makes them tick. And, and, and see if there's a good fit, just whether it's a deal we're doing now, or just something long term. So. So again, it ends up being a little bit time consuming for me, but I enjoy that. That's what I like to do. So I have a lot of fun getting to know people and you know, trying to provide value to their lives.
Absolutely. you're investing your time in building starting and building relationships with investors, and some are going to work out and many well, and that's the name of the game. Yeah. Have you like asked this syndicators as well? Have you ever been audited or examined by a third party? Due Diligence person by acting on behalf of an investor?
Jason Pero 24:14
Are you meaning like a, like a CPA or like a financial, you know, maybe their financial advisor or somebody like that, like, doing their own due diligence? Is that?
Yeah, yeah, absolutely. I've, I've seen investors do that with your CPA or financial advisor, or somebody they just trust. I can't speak to any qualifications in that regard. But you know, as far as your experience having, you know, been reviewed, what's that? Like? what information they asked for all that stuff?
Jason Pero 24:43
Yeah, um, no, I didn't I'm, I guess, haven't been in business, that line, very comfortable with my resume my background. And so I guess hard work and doing things the right way does pay off. Because I've been fortunate for in the regard that people have, I've had people that I didn't even know, know, you know, knew each other, to Hey, I, you know, like a friend would call me and say, Hey, I talked to so and so they were calling me asking, you know, asking about you and your business.
But I've had folks asked for, you're happy to give them examples of how past deals have performed. I'm happy to give them a brief financial resume, I'm like, really doesn't need to provide, you know, all the in depth, mechanics of network, but happy to share those numbers with people if they want to know what we're worth our how we got to that point. And happy to have them have a conversation with with my CPA or my attorney. I mean, I'm an open book. So. So generally, that goes pretty easy, easy. And, and I think some for some of the folks that are experienced in real estate investment.
Those are the ones that oftentimes ask the most questions early on. But I think it's good to get them comfortable. So you have to be comfortable and kind of opening yourself up to a little bit of scrutiny and in a positive way, you know, I mean, they're going to, they're going to look at your company online, they're going to look at you personally, and I mean, it's like an FBI background check shirt for something like that. But if, but if somebody wants to know, you know, know, they, you know, I just sort of say call my CPA call my call my attorney, you know, call, call any any friend or reference any random person that knows me.
And I'm generally generally pretty open and willing, willing and able to answer any questions somebody would have. I think you just have to be willing to, to give somebody a peek into your life. If if that if you're comfortable with that.
Nice. And I you said something, I want to make a comment about it. You said hard work and doing things, hard work and doing things the right way does pay off editor and blog posts folks grab that will make a nice image out of that, because I really like that. What is the best investment you've ever made? Well, just because
Jason Pero 26:49
it's recent, you know, the recency effect and say the one I just did, but I mean, really, I think the best. I mean, because I'm just I'm still high off of closing that deal. But realistically, I think the best thing investment was in myself. And once I kind of brought into the idea of personal development, and journaling and reading books and setting goals. I mean, I know it sounds trite, but that that really is the truest thing to be able to develop yourself as a person personally and professionally, is going to pay off.
And that's going to allow you to think bigger, operate at a higher level, and take that larger and larger deals and be successful in the long run. So that's, that's really the best investment from a, like, all around perspective.
Okay, so is there something in particular in that, you know, that personal development journey that sticks out of your mind? Oh, that was a great one, you know, any, any? If we dig into that a little bit deeper? Yeah. Something that comes to mind, that was a particularly good investment in the self development world for Yeah,
Jason Pero 27:48
I think, you know, joining, joining a mastermind, you know, putting up hard money and real money to surround yourself with people that are high performing individuals that maybe have achieved was levels of success that you want to achieve.
So I think being able to be around people that have done it, and can show you the path, but also, at the same level, there's people there that are aspiring to be which, which you are, so you know, you're kind of people are helping pull you up, and you're helping pull others up the same way. And I think, you know, I'm not a course junkie, I don't go out and do a ton of courses and a ton of masterminds, but I think a well placed mastermind, or a well placed, you know, performance or accountability group, is a really good investment for for anybody in any walk of life, whether it's real estate, or if you're a physician, get around a peer group of people that are, you know, maybe, you know, helping you grow your practice or things like that. I mean, I think just anything you can do to kind of grow as a professionals is a good thing.
I like that answer. I actually, listeners will know this, you might not know this, Jason, I get that answer nine and a half times out of 10, from highly, highly successful investors, people with high incomes, high net worth, you know, all that good stuff, primarily in real estate, because that's who we talked to, but I get that answer a lot. And I think it there's a reason I get that answer, because it's, it's a good answer, you know? Yeah. Alright, so the other side of that coin, what is the worst investment you've made?
Jason Pero 29:16
I, the worst investment was a car wash laundromat. And not that it didn't make money, but I bought myself another job. And, and so I thought that, hey, this will be just as easy as collecting the coins from, you know, the water machines in my building. But what I didn't realize is, that was like, such a time suck that, that it just, it just became like having to run down there and deal with this daily.
And it was, it wasn't a it just wasn't well thought out of my my part. I mean, I could have gone in and, you know, renovated, the carwash renovated the water that made everything more automated. That would have been in retrospect, that would have been a great a great plan. But I bought myself a job and I bought myself something that was a time suck, taking away from the things I should be doing in real estate. So. So it was a bad investment from that standpoint, but I could have done it differently. You know, I ended up selling it, and I'm holding the mortgage on it. So it's a better investment now very minimal, but I try to turn you know, turn lemons into lemonade type of thing.
Absolutely. I think when I may we go down this rabbit hole a little bit. You're so most investors, even that have been investing since 2001. And prior, most investors don't reach that 300 unit number with their own money, and owning all the unit's themselves.
But you did, though, you there must be a significant level of business systems competency you have you built or something like that, I'm sure you have excellent systems in your business, because nobody has enough hours in the day to fully manage 300 300 unit portfolio. So how did you make Exactly So in a nutshell, it's a huge conversation. But yeah, building up those business systems to manage that huge portfolio, man, what was that? Like? What did you do? Let's get to that a little bit.
Jason Pero 31:10
So one of the things I did and it was probably harder than doing deals themselves was hiring employees. And I realized that, hey, I can know I can have people I can delegate these tasks to so I can grow. And I think, you know, I became very, very adept at buying properties, we could rehab and renovate and rent them out and getting the financing and doing all that stuff. And really, me saw the value in employees, but didn't understand how to build a system and operate a business.
And now one point made peace with a, this is a growing experience, no one to know, you could have 10 MBAs from the best schools, but no one will teach you actually how to build a team, and manage that team and hire people to manage the team and things of that nature. So so that was a little bit of a learning process, I feel like we've finally gotten really good at that, to be able to attract talent, retain talent, and manage that talent. And, you know, but I think the, I think for me, you know, being able to, like, hey, let's try this system out. And if it works, great, and we'll run with that, if not, let's try something else out and really try to seek that knowledge from other other operators, other people that can give you some best best practices. So learn quickly to be able to automate and take away those, those tasks that are generating revenue in the business. I mean, I wish I would have learned 10 years ago, only focused on revenue generating activities.
And I would, I would have focused, I was acquiring properties, getting the financing and bringing investors and that's, that's what I do now. But as we're growing, I was also dealing with tenants, tenants have the ability to reach us and all those things that end up sucking up a lot of time. You know, so that's the, you know, I think a little bit of trial and error, but you know, joining joining areas and meetups and being around other landlords, again, that people that are where you want to go and people that, you know, that are kind of aspiring to be what you're like, you know, and I think that, you know, being around that you can get the best ideas out of out of everybody. So
what is the most important lesson you've learned in investing?
Jason Pero 33:20
Well, learn lessons every day, but I think one of the most important lessons is to, to be resilient, that time can cure most mistakes in, in real estate investing, you might, you know, you might have a hiccup with, you know, with occupancy rates, or might be a down cycle in the economy, some hidden expense that you didn't budget for something you missed in your due diligence, but time will cure all of that. So, rents will go up, you know, high expense ratios are not, shouldn't be the norm forever. And, you know, Ty will cure that. So be patient, you know, don't, you know, don't panic.
And so I've learned the value of meditation, you know, trying to try to try to be calm, trying to have like, operate from a state of peace, and always taking that big picture approach. rather than letting the little things panic you and if that, if that makes sense. So you know, the other thing. You know, a lot of people say, Don't ever buy DD class properties. I didn't start out ND I started out in BBNZ, and had a mentor that sold me a bunch of D class properties, through owner financing. But I loved it, I you know, it made me You know, it was my first million dollar deal I bought all sorts of properties may generate a really good cash flow to my business. But the exit strategy was really hard.
And sometimes you can't sell those properties for what you want, because they're, they may be a great property, but it's a rougher area and an area where, you know, like, the guys with money, are looking to deploy that in a war zone. So So then, you know, I sort of had to reframe how to how do I exit out of this stuff now that I build enough equity and kind of how to do with those mentors did to me and find folks that are willing to that you're willing to mentor and take it, take a you know, a calculated risk on and be the financer for them, and lots of totally other rabbit hole and probably something for a total, you know, totally different, different episode. But, but that was that that kind of lends itself to just the patience and creativity. So, you know, if something's beating you up, and you just don't see a way out, you know, again, try to think from a place of calm, like, seek out answers from mentors, talk through it with different people, and you'll have a creative answer that may be needed.
Just just didn't think of before that, that gets you out of that that temporary financial jam or just emotional jam. I mean, for me, it was, you know, I had properties that were sucking up way too much of my time.
Jason Pero 35:59
And so getting getting away from those things that were time suckers. Hmm.
Interesting. So it's been a great conversation, where can folks get in touch with you if they want to learn more if they want to talk about things you have going on future investments you have? You're working on stuff like that? Where can people reach you?
Jason Pero 36:17
Right now anybody can they can reach me on Facebook, Jason Pharaoh, they can hit me up on my profile. They can also message me on LinkedIn. And then I can give out a personal number that that's fine, too. You know, and if you want to put that you want to give an hour I can even put up the show
Go for it. It's your it's your call, you're getting the calls not me.
Jason Pero 36:39
All right. Area Code 814-397-8030. In get on my calendar, I just I don't have a calendar or appointment yet. So but feel free. And we'll hop on the call and we can deep dive into something. Whatever no man talk about
a point late is a great investment highly recommended. So definitely a big, big recommendation there. Well, awesome. I definitely appreciate it everything and you know all the links and everything we mentioned your phone number, all that's going to be in the show notes for everybody listening. Flip it over there to your show notes.
If you didn't catch anything, or hit record or hit rewind, and you can listen to it again. But thank you for joining us today. It's definitely interesting. Hopefully, we can get you on another time to talk about specifically about tertiary market investing. That's definitely an interesting strategy. And I can see that it can be successful, but also, we have to be smart about it and invest in the right markets and all that good stuff.
So Alright, great. Well, thanks for your time, everybody. Thank you for tuning in. This has been passive wealth strategies for busy professionals. If you're enjoying the show, please leave us a rating and review on iTunes or whatever Apple's new podcast platform is by the time this episode airs certainly appreciate it. And if you know anybody that would benefit from any of these lessons we're bringing to the table, please share with them and like it subscribe wherever you wherever you subscribe to podcast. So thank you for joining us again. Thank you, Jason. And we'll talk to you all again soon.