W2 to Financial Freedom, A Teacher's Journey with Frank Patalano

Frank Patalano has a fantastic success story of building financial independence by investing in real estate with a long term vision! Frank's background is in teaching, and years ago he realized that he needed to build extra streams of income. Today he shares his story of escaping the rat race, lessons he's learned, and you'll learn what sets apart a successful investor from a busy professional who never gets started. Good work Frank! Job well done.

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Cashflow Kings Podcast

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Guest Bio:

Frank is a successful real estate investor who had a successful career as a teacher, but realized he wanted to earn more and do more. After doing numerous deals throughout the last market cycle, Frank left the rat race in 2019 and became a full time real estate investor. He hosts the Cash Flow Kings podcast and is passionate about helping others build passive streams of income.

Full Transcript


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Taylor , Frank Patalano


Taylor   00:01

Welcome to passive wealth strategies for busy professionals. I'm your host Tabor load Today our guest is Frank Adelanto. We're going to talk about Frank's experience going from being a busy professional teacher to now a financially free independent who left his job, real estate investor. For those of you who do not know I'm your host Taylor load I'm a real estate syndication real estate investor, love talking about real estate investing and just like you, I am a busy professional. I am excited for this topic today. I've known Frank a little while now and have been watching him. You know, he just closed his first syndication as a general partner. Some quick facts about Frank before we get into it. He's invested in about 1000 doors. Like I said before he was able to leave his full time job by investing in real estate. And now that he no longer has his full time job. He's able to walk his kids to school every morning and go out networking whenever he wants, or Go on podcast interviews like he has with me right now at 8:41pm on a Wednesday. So, Frank, thanks for joining us today.


Frank Patalano  01:08

Thanks for having me, sir.


Taylor   01:10

happy to talk with you again. Can you tell us about you know, your story and what it was like getting started as an investor and a teacher, because you have a lot of time commitments that are tough to do. What was that? Like, you know, getting over that first hurdle?


Frank Patalano  01:24

Sure. So, I was a full time school teacher for 17 years. And when I was a kid, my dad owned a couple houses. I always joke that he wasn't always the best at real estate and is a little too easy on people sometimes. And I never really saw him grow but it wasn't really that big of a deal because he didn't want me to do any real estate anyway. He basically wanted me to get one of those, you know, safe secure jobs that there was talking about Rich Dad Poor Dad. So at one point, I thought about doing some accounting, but uh, I decided to be a history teacher. My girlfriend at the time she was going into education. And I thought it was a pretty cool idea. This was back in the 90s, you know, when teachers were thought of pretty highly with the Clinton era and everything else, and I said, cool, and we went for it. And yeah, so great experience teaching, but over time, you know, you start to get tired of things. And I enjoyed stocks, but I lost money on them a few times. And basically, I said, Let's diversify a little bit. So, obviously, I might be dating myself a little bit, but oh, I bought my own personal house at the top of the cycle. Oh, and yeah, so where I joke because April Fool's Day 2005. And we still live in the same house today. We don't plan on moving so I consider it like the Warren Buffett style. You know, it doesn't matter what you paid for it if you feel like where you are. If you're not gonna you know We've refined twice, but we've only refined to lower the payment and over the rate. We haven't taken any cash out necessarily. But basically, as the cycle went down, I decided to buy a Scrye Plex. We call them three families around here in Rhode Island in 2009, so it was a good time to buy. Everybody was so fearful, though, everybody thought I was crazy. And I thought I was crazy a little bit too, but I figured I'd diversify a little bit if you know what I mean. And at the time, I bought it for like, just to show you the numbers and I know numbers of different parts of the country, but I paid 129,000 for it. And the rents were about 656 25 and 600. You know, so it sounds good on the 1% rule. Yeah, deal. Yeah, but it's funny, we didn't make any money the first few years because there was a foreclosure and we're always fixing stuff up. You know? roof one year a new heating system the next year new water heaters the next year. I joked in the first couple of years we really didn't make any money. You know, but it's a great property. I mean, we still own it. I have. I have recently refined it in order to do some stuff, but besides that, we had no mortgage on it for a couple years, which is pretty cool too. You know, and then I gradually, every year I buy another one or two properties, mostly smaller multis, sometimes, depending on where the cycle and the price I bought a few single families for a while, stuff like that. I actually thought about syndications maybe about seven years ago, but was steered away because a few of my friends lost money on them.


Taylor   04:43

Interesting. Seven years ago, I had a good time in the market to be investing in seven years ago. We were pretty much on the upswing in most markets. Yeah, so that's interesting.


Frank Patalano  04:54

They just had an indicator that was a newbie that wasn't doing that. Well. I think was in Texas, Texarkana, I think, or that Arkansas line, and I won't get into too much, but a few, a few of my buddies lost money. So it kind of steered me away for a few years. And it's good and bad. I mean, I was able to continue to grow locally, I started to buy some, like six units and you know, a nine unit stuff like that. And over time, but about, you know, about five years ago, I said, you know, what, I'm not gonna be teaching forever. You know, I had a few, you know, rough days once in a while, because students are always right and tough, and everything else. So we decided to, you know, I started to say, you know, what, if I keep doing this real estate thing, I could probably leave my job. You know, so, uh, we just kept buying smaller stuff. And then last year, I actually left teaching in June. That's really cool. I started to invest in some syndications last year as well. Mostly on the passive side you know small small money obviously not small for the average person but I'm saying it wasn't hundreds of thousands of dollars you know it was it was 25 or $50,000 on each deal but what I do is I'd sell one of my houses or refi one of my houses and start to move some money into other markets because the biggest problem for me as a Rhode Island's considered notice that the best place to invest some people call it tax hell CNBC call it the worst place to start a business. Really? Yeah, just because of the regulatory structure and taxation everything else but um, I had 98% of all my money in Rhode Island real estate, so I had to diversify a little bit. So now we're, I mean, in the last year we've invested in five other markets.


Taylor   06:51

Nice nice are you finding that the business you know environment is better and as other markets like you expected?


Frank Patalano  07:00

Well, since I've invested all over the past year, I mean, I haven't started to see some distributions, but I just feel better about it. Like I have a friend of mine that does syndications or he did syndications. He's more of a bear. I won't mention his name, but he's basically so he sold his entire portfolio right now, this is worried about where we are in the market. And I say to myself, I said, you know, what, if I kept my money here in Rhode Island, I'd have the same problem. The difference is I feel that the other places might turn around quicker.


Taylor   07:33

You know, so if we hit you mean if we hit a recession or a downturn that Rhode Island's gonna have a harder time coming back


Frank Patalano  07:43

I joked that their first in recession last out so


Taylor   07:48

interesting that well, that's good to know a good bellwether for the next the next coming recession. I suppose. You know, it's gonna happen eventually. I'm curious how many units you have that you are able to leave your job, like what did it work out to in terms of that?


Frank Patalano  08:05

So, because of partnerships and stuff like that I had about 15 or 20 units myself. And then I had another 30 units with one or two partners, you know, and then besides that I started doing the syndications and obviously, doors don't necessarily mean a lot with syndications per se, it's the proper percentage of your money and stuff like that. But yeah, 5050 doors between myself or one partner or two partners on a deal, which is pretty nice. And a few of them we had paid off. And even though I left teaching, I mean my wife still technically she's still teaching. I think it's borderline whether or not she needs to but she's very big on safety. And you know, how much of a problem the entire healthcare system is today? Exactly. Yeah. So, I mean, we do pay into the medical through her teaching, so that helps too, that'll be another jump though. I told her that if she wants to be out, I would suggest five years but It all depends on what she wants to do. And she loves what she does. And are the straining days for her as well. Absolutely. But she's able to do what she wants and love it. So that's fine by me.


Taylor   09:11

That's great. Now a lot of teachers still have to work throughout the summer to bring in the money, enough money to pay the bills. And you might be in a position where you know, your wife at least gets the summers off. You know? I don't know.


Frank Patalano  09:25

Absolutely. We have three kids. So summers are mostly filled with, you know, at least one week of vacation, couple of scout camps and stuff like that


Taylor   09:35

summer is quote unquote, off but working the family the whole time. Absolutely. So I said I wanted to talk with you about it today. It is like the mindset that enabled you to kind of take that leap and make it happen. And we talked about this offline but something that really strikes me something I hear a lot. I remember this one experience I had. Some Facebook group somewhere. And they were talking about real estate investing. And there was one particular comment where this gal said, I can't invest in real estate because I'm a teacher. And I already knew you were already friends. So I knew about you. And I was like, Nah, man, Frank did it. That's not a valid excuse. And I didn't chime in on that discussion. But it's something I wanted to talk with you about with you today. Keep saying that backwards? Because I don't know. Do you see that mentality a lot in the teaching world? And what do you think kind of set you apart that enabled you to, you know, get past that and make this happen?


Frank Patalano  10:34

So I agree that I do see a lot. I don't think it's just teachers. I think it's a lot of people that work in safer industries that we don't see the potential of things being swallowed up or a number of layoffs anytime soon. I mean, doctors and I know we have this whole nationalized healthcare debate, but I see the same thing probably with doctors sometimes, too. I mean, doctors aren't going in Where they might get, they might get tired of that job, and that's why they're moving. But, you know, stuff like that. Teachers, firefighters, stuff like that. Some of those jobs are much more stressful than teaching, but they know the jobs are going to be there. And they know there's some kind of usually some kind of pension related to it. So they're not necessarily worried about their future in their retirement too much as well. You know, but you're right. It's very much about excuses. I see it all the time. You see it on social media, especially too old, too young. To this to that too fat to skinny, whatever this is gonna be. Well think about it. You know, there's tons of excuses. We probably have mutual friends, I'll mention his name. He's awesome. Dave tupid. He's like 24 years old. He's counted down the Texas market. He's worth a few million bucks and people say, you know, 24 Oh, my God. And he's hustling. He works harder than I do. But he's amazing. Is this. There's no excuses. Here. US agent excuse and I know plenty of 18 1920 year olds that are out there doing a Kevin like this as well. at the same point there are people that are older to that, you know, they finally something some light bulb changes or something in their own mind, and now they're out there doing it. And they can. That's awesome.


Taylor   12:18

Yeah, they realized that maybe at the end, once they're older, they realize that you know, the end is coming and I better take the risk because I don't know it's going to happen and age is indeed a convenient excuse. I guess that's something I hadn't thought about and is that the folks who gravitate to the safer industries or maybe quote unquote safer industries might tend to also be more averse to taking a risk risk to get into real estate investing. So that's an interesting point. Interesting,


Frank Patalano  12:50

So expected , so one thing I will say that a lot of teachers don't think about is this online technology, you know, yet the virtual assistants and everything else, online technology where people from India and people from the Philippines will be able to teach kids. You know, robots, everything on the internet. I mean, we don't even use the last four years as a history teacher, I don't even use the book. Everything was on the way on the cloud or on the Chromebook or something else. You know, so it's coming. That's,


Taylor   13:19

you know, that's interesting as well. And something I did not mention at the beginning of the show, is that you also have a virtual assistant company, and that's something that I don't really know what you're doing with that company. Do you? Would you mind including us in what you do? And sure, so


Frank Patalano  13:36

um, I have a buddy, his name is Pedro, he ends up owning his own translation company. And he's been using virtual assistants for like eight or nine years and he said, Frank, you're so connected in the real estate industry. Why don't you go out there and help others by using virtual assistants and we don't make a killing on the business. Little bit of side hustle. It's one of those small businesses that I just enjoy doing. actually haven't pulled any money out of it. And it's more just to help others. And what's really cool is we built a lot of connections with it. There are people in the industry, I won't mention any names, they, you know, they use some of our assistance. And that's one of the ways I was able to get closer with them and network with them is by basically helping them it's just like when you set up your, your own real estate networking group, you know, you've created a group, you've helped others, you're not necessarily making a killing on it, but it's really made a lot for you, right had built a lot of connections.


Taylor   14:32

Absolutely, yeah, my group I didn't even start charging for my group until the beginning of this year, and even now, I'm charging five bucks a person but prior to that, I was paying all the costs and eventually, at the end of the year, I was like, this thing cost me $1,000 it would be you know, this year, which is not a lot of money, but you know, if I charge $5, then I'll at least break even for the year.


Frank Patalano  14:57

So the same thing, I mean, we don't. We're not actually. I mean, it's not set up as a nonprofit, but we're not actually using it to make a killing. Are we using it to help others and to build relationships?


Taylor   15:10

That's interesting. And the, as you said, the use of virtual assistance goes across the least in the syndication space. I mean, everybody that's big and syndication that I'm aware of, is using some virtual assistants in their business to varying degrees. Some are using a lot of virtual assistant hours to run most of their business.


Frank Patalano  15:34

Well, we talked about all the time that people use other people's money, we all do it in real estate, and this is basically using other people's time. You know, you're leveraging things that you don't want to necessarily do, but you know, need to get done. And that's one way to do it.


Taylor   15:51

That's really smart. I mean, delegating those tasks. I think that's probably one of the biggest things that a lot of people struggle with at the beginning. I know you know, especially still struggling with it is finding the right person, especially a virtual assistant to handle those tasks. And it sounds like what you're doing with your business is you help find these virtual assistants and vet them and place them, you know, with, you know, whoever's hiring them, is that what you do? Or you know what that whole process looks like for you to get into that business a little bit?


Frank Patalano  16:23

Sure. So we interview about, you know, almost 100 people in order to get like one or two, and we call them real agent helpers. And once somebody needs a religion help, or they contact us, they become one of our clients. And we make a little bit of the spread in between, in between, but it's not as crazy as people think because we always have extra virtual assistants on staff. Sometimes we'll have somebody that's just starting out as an indicator. We've hired somebody and then they don't need the person anymore. And we usually keep them on staff until we find a replacement client for them, stuff like that. Yeah. Where we're providing a service, there are people that need help in the Philippines and in other places that we use. And basically, we help support them. You know, just like any other business, small business, basically the same thing, you know, you have little pizza places and everything else that they hire a couple extra staff to make it easier, and they don't always make a lot of money on it, but it's the right thing to do.


Taylor   17:21

Nice. I like that. And we've talked about it before, a lot of folks. We don't know how much skill we can really expect to get from virtual assistants, what is this skill range, like, for your business? And you know, how much does it cost to get somebody that has, you know, an appreciable amount of, of skills like good English skills, and, you know, some business acumen, things like that?


Frank Patalano  17:47

Yeah, so, most of our most of our real agent helpers come from the Philippines. And as a society, they are very much into this whole online technology. The government specifically wants foreign companies and corporations to use them. They have whole big skyscrapers that are filled overnight, by the way, because they're about 11 or 12 hour difference from us. So most of the time when you're up when you get up, when you make a phone call between nine and five, that's between 9pm and 5am. for them. They have they have, I don't know what percentage of population but a large percent of the population works overnight, which is just quite interesting for me. You know, and basically for skill sets, I mean, most of our virtual assistants, they're either doing social media support, or we have some that are all phone support. We have some that do market research. We have some just do email management and our CRM stuff, and most are pretty good. Like I said, we do go through quite a few to narrow down people, but we doubled. I'm not worried about They're English skills at all. And because in the Philippines the accent is not as harsh as some other countries. So for example, if you go with virtual sets from India, many people have a harder time understanding the accent.


Taylor   19:17

Yes. I think one of the issues, if you will, that I've run into personally in hiring virtual assistants to do like copywriting is that it's just some of the things that they write that are kind of read as though they're not written by somebody whose native language is English. It's written by somebody who's got a really good grasp, but there's nuances that now you wouldn't say it that way. If you really, you know, grew up speaking English is that's a hurdle that you've been able to get past.


Frank Patalano  19:48

So we hire for different things. That would be the cost isn't much different, but we consider that more of them term, the exact wording because we were just looking for what we consider the more technical writers You know, versus our normal support staff. So most of our most of our support staff is, you know, 90% of our people are like, CRM, phone call answering stuff like that. But it's a little different for someone that, but you can still get people that have a master's degree in English. And even after paying us a little fee, you're still paying them less than $12 an hour or something. You know, and we test them. I mean, we have them write essays for us. And we, that at that level, the technical writers, and then we even send the essays to the client say, Hey, listen, here's three people that we're thinking about which one do you like best? Or which two do you like best? And I'll let you guys interview them.


Taylor   20:44

Nice. Nice. So I went to a conference in the fall of last year, not ultimately partnering with a different one in Philadelphia. I don't think you were there but maybe next year, this year you can get to it but you don't. The number was called the Mid Atlantic. summit they've heard of. It was really good. One of the speakers, runs a Airbnb business with properties in places like San Francisco. But he is location independent. He just bounces around Asia and stuff. But he runs it using virtual assistants in the Philippines. And one of the things that he talked about that one of the issues that people run into when, especially when they're new, is the, what he called the disappearing Filipino. When you hire a virtual assistant, and things are going well, and then poof, they're gone for whatever reason, they just go away and quit by leaving. Have you run into that? Or how do you control that or account for that in your business? And what do you recommend for those of us that are hiring to keep that from happening, because there's obviously behaviors that we can exhibit to reduce that.


Frank Patalano  21:53

Yeah, definitely. I would say that we've only probably lost to a Two real agent helpers in the last two or three months, which isn't bad as a percentage. But we also pay better than the average. You know, the average person that works in the Philippines, just like the average person works here that I mean, usually a little, a little different. But you know, some of the works at Walmart, some of the works at McDonald's, they still need cash,


Taylor   22:24

you know, and Filipino pesos, they still need it. So if you pay them well, and you go through a little bit of training, but besides that, I haven't really worried about it, I've seen a problem. So we've only lost one or two in the past three months. Interesting. And it sounds like I mean, you have folks that come with Master's master's degrees and everything and from conversations we've had, it sounds like you're not hiring or folks on hiring through your platform for two, three hours a week, it's a bit more so people really can use that that income and and need it and they're less likely to To kind of lead it.


Frank Patalano  23:01

So you're going to laugh, it's actually tougher to keep people that are better qualified. So if they have a master's degree or something else, they often don't want to work the overnight shift. And you know, stuff like that. So they're more likely to go AWOL, if you know what I mean there. And if they're, if they're really highly qualified, which does happen, they're more likely to get, you know, touched by somebody else. You know, but to give you an example, we had, one of the things that drives me nuts is how much virtual assistant companies are not that are out there. But how there's so much going after people, you know, like, I'm sure you see on LinkedIn, I get it. I accept people all the time on LinkedIn. And then the first message I get from them is how they're gonna offer me a virtual assistant, everything else. And the funniest thing is they said, Oh, yeah, well, you can get virtual assistants from us at $4 an hour. I said, Guys, stop right there. I own a virtual assistant company. We pay our instance more than $4 an hour. So I don't know how you're able to charge me $4 an hour, you know what I mean? If for some reason they can make a profit and only charge $4 now there's something wrong there. I don't know how the heck they're doing it. I've been wondering myself, but I mean, for full time we charge, we charge about $8 an hour which is what we charge the client, we make a couple bucks in between, not a couple bucks an hour, a couple bucks total. We just make a small spread on it. But it's like, we pay them more than four or $5 an hour. So don't I can't use that excuse. I don't know if they're scamming me or what you know,


Taylor   24:33

probably, I mean, well, I don't know you can't, again don't want to levy accusations of a scam, but they're, you know, just getting people to fill the seats. And I mean, to be honest with you, I've been ripped off by a VA platform, not Upwork but one of the ones where they like you by a block of time and then hey, you know, we've got the people for it. You just tell us what you need done. Give us a training task and then they'll go and You know, if you have a problem with the person you get then we'll give you another one no problem. And it was just it was pulling teeth to get them to do anything. I mean, I think I bought like 20 hours worth of time, not much just to see just to try. Yeah, I could only like I could only get them to use like 15 hours worth of the time I can't bag I know the one gal disappeared and I contacted like the president of the company and I kept trying like give me somebody new and they wouldn't do it so it's these less to be honest with their concern.


Frank Patalano  25:33

Yeah, itself overall, I mean, may total there for me I don't I spend less than a half an hour a day on that. I mean, virtual assistants just work on my little side fun things and it's the build networks and everything else. Most of the time I am looking at properties online or you know, just doing some of the real estate stuff, just starting my taxes or something. So you'll get a kick out of this. Yesterday it was poor and here in Rhode Island, and Mike twins are in third grade. So I said Hey guys, you want to walk to school? And they look at me because they know I'm crazy daddy kind of thing. It's like Okay, get the umbrella and we walk in the rain with umbrellas. The school is really awesome.


Taylor   26:15

Well, if you know if that's what you enjoy, I guess you had you spent time with your kids. So you like it, but


Frank Patalano  26:19

Oh, yeah, it's just memorable stuff. I mean, soccer was a blizzard out there and it wasn't snowing. So


Taylor   26:26

I was wanting to go out there. That's true. That's true. memorable is a good way to, to put that like I mentioned before you recently closed on your first syndication as a general partner. What do things look like for you? moving forward? That's syndication? What was a 506? c? For those out there who don't know. That means that Frank could publicly advertise the syndication before they close on it. Will you do it five of 60 in the future, will you keep syndicating? What's your plan


Frank Patalano  26:58

so it number one It was a heck of a lot harder than I thought it was gonna be. Every well it's definitely a learning experience and it's definitely a learning curve, but every step of the way, it was just like wow, wow. You know, we didn't think it was harder than the race than we thought it was in a market that my two partners are in so I can tell I can tell about it. It's in Pocatello, Idaho. I like to market a lot. Idaho's actually one of the top places that people are moving to in 2019 and 2020 it's two hours out of Salt Lake City. So what was amazing about it was Salt Lake City was such a hot market that they're both from Salt Lake City. It couldn't raise any money. It's always a city people guy and I'm not gonna be perfect. I'm gonna keep investing here, you know, in Salt Lake City. So I had to bring out more of my network together and because of the final success, you can only use accredited investors and My network was not there's not many teachers that are credit investors, you know what I mean? But now my network was mostly just regular real estate people you know, somebody's doing it part time. They might have five or six properties but they're not. They don't have enough money, they don't have enough assets to be accredited. And even a couple that do some of my friends they're like, I'd love to invest but I got too many other deals going on. You know, $50,000 is a big chunk of change for anybody to spend. Unless you're a you know, a millionaire one way or another.


Taylor   28:33

Yeah, it is, especially if you're not accredited 50 K, I mean, is an enormous chunk of your net worth. I mean, just a million not accredited your net worth is less than a million. So 50 k is a huge percentage of your worth. How did you meet your partners if they live in Salt Lake City live in Rhode Island,


Frank Patalano  28:52

all about networking. So you keep going to conferences. I keep going to conferences. You meet people. You build relationships. They needed somebody that could sign the note. So I became a key partner on the deal.


Taylor   29:08

Okay, okay, interest so


Frank Patalano  29:10

uh, yeah, they were going to JV it for a while, but they decided to syndicate it and it was already set up as a football success before I got involved. And what I do is see I see again, probably, maybe not the next one, the thing I would seize is that I really honestly think that's the wave of the future, especially with social media. That's the way I see it going. Because you can like what you said, you can broadcast it anywhere. Be we may try one at some point. I know that the average syndicator loves them better. So I have a friend that did a study recently. There's a lot of BS and they said Frank, it was a bad decision. Well, even for me, I mean, so for example, because we did it as a See, I had two people that were going to invest about 75,000 each of the Deal, and they couldn't invest because they weren't accredited. You know, and they're I mean, I wouldn't say they were super close friends, but I did have a pre existing substantive relationship. I've known them for years, I've been a member of my own local real estate group for over a decade. Wow. You know, we have over 350 paying members. So it's been around for a long time and help run it so


Taylor   30:22

nice. That's really solid. I've heard of others. You know, that they have had issues with their raises on five or six seeds, because a lot of their investor base potential investor base is not accredited. And by going five succeed, they count them out and then boom, it's a lot harder to raise the amount of money that they need to. So it could be one reason for the popularity of a five or six be


Frank Patalano  30:49

no, I agree with the other percent that's the same situation that I've heard, besides maybe somebody like me, Obama, who is very well connected. I don't know anybody. Maybe even Rod Cleef. I don't know any Else it's really doing sees in an acceptable way and always doing season loving it you know it's very much so be is for some people say be is for buddy it's very much a relationship type of business.



Yeah, absolutely it


Frank Patalano  31:16

has to be anyway but you know what I'm saying?


Taylor   31:18

Yeah no no I do because if you're a seed if I if I'm mister mister accredited investor and I see an advertisement one way or another for Frank steel and Idaho well i mean i don't know Frank Why should I send Frank 100 Grand i got a lot of uses for that hundred grand but if I knew Frank and even if I was six Be and he offered it to me I might be more interested because I like Frank and I know he does good deals so it makes a lot of sense, you know, white when


Frank Patalano  31:44

I got it. So it's funny you say that because every one of the people that we had as an investor, all this other passive side. I've met through social media but two of them I met before the deal started so and I didn't In person before they invested, but just the fact that we have a pretty good Instagram following. I mean, we have a podcast ourselves. And most of the mostly accredited investors that we found were people that met us on social media just because I like I said, I didn't really have a big network of accredited investors in my own local space.


Taylor   32:21

Yeah, so your Instagram. I'm glad you brought that up. That's something I wanted to bring up. You know, I checked a little bit earlier. You're creeping up on 10,000 followers, I believe, which is no small feat for you know, that's, that's impressive.


Frank Patalano  32:35

Yeah, we've worked very hard. It's the main thing is all about consistency. I have a few friends of the syndicator that only have two or 300 followers, stuff like that. But we just keep trying to understand the algorithm without paying for fake followers and gradually, using hashtags and making some nice pictures and posting every single day, no matter What?


Taylor   33:01

That posting every single day no matter what is a, that's tough to do quality content on a daily basis that's fresh and not constantly rehashing the same thing.


Frank Patalano  33:11

Absolutely. Absolutely.


Taylor   33:16

Nice. Nice. Well, right now we're going to take a quick break for our sponsor. All right, Frank, I got three questions. I asked every guest on the show. Are you ready? Yes. All right. First one, what is the best investment that you ever made other than in your education?


Frank Patalano  33:32

So the best investment I ever made, some people don't believe this could be done. But uh, we had a single family that had a little bit of a title issue that one of my friends just wanted out. And we bought it for $50,000. And it already had people living there. It was originally a foreclosure. And the people that were living there ended up paying us a discount, but they paid us for all that. Heard I was a month late. As we're cleaning up the title, it probably took about two years to clamp the title. Wow, we met them. We had to do a full report of clothes and everything else but it was probably late 36 payments out of 39 but when you buy a $200,000 house that I bought for $50,000 no money down. Wow. Wow. So I yeah, I still own it, but I'm actually planning on selling it in this spring market. Just where we are in the cycle. I think it's a good time to get rid of some of these single families because right now the 1% rule is not working at all in my market. And single families you're not going to see anything with a rent Sarah. You know, if you don't know the 1% rule basically, if I can rent the house for $2,000 a month. 1% means I could buy it for 200,000 but right now, in a different house that I have the record 2000 a month we're selling it for about 320 Wow. So that's why we're probably going to unload a few of the single families just to move some money around to play Monopoly, you know. And I bought a hotel today even though I didn't get a hotel in the Virginia market at one point just to invest as a crowd fund. Not all my money, you know, stuff like that. That's probably the best investment though that I did.


Taylor   35:23

Nice. Nice. Well, I like the sound of that, despite all of the delayed payments, but interesting, we still


Frank Patalano  35:30

got the money, but but it was just always like,


Taylor   35:33

still get the money's fine that I guess.


Frank Patalano  35:35

Yeah, I mean, she burned us in the end. But I mean, that's why we evicted it.


Taylor   35:41

It all comes around. So on the other side of that best investment coin, we have the worst investment. What is the worst investment?


Frank Patalano  35:47

You have? Oh, no, I have a bunch of those. Let's see, probably the worst investment that I did. deciding which one you know what I'll just pick the one this one is us once or twice before when people have asked. It was my first investment. I didn't. I didn't tell you about it earlier in the story. After we bought our single family house, I decided that I was going to go down to a land auction in New York City. And it was called band auction calm. I don't know if they're still in existence. But they would buy up vacant lots cheaply around the country. And they would sell them at a big auction. And you know how people get excited with auctions and they overpay and everything else. Oh, yeah. I wouldn't say to sell they overpaid. I just didn't understand enough about what it takes to build a house. So I was able to pick up a vacant lot in western Massachusetts for about $20,000 which sounds like a great deal. They bought it for like six or five. The problem was that it was virtually unbuildable. It was a it was you would need septic and you would need a well of a lot. And basically it was all shale underneath the ground. Man, there was a side of a hill. And I had driven out to the site and everything else but I didn't realize how, how hard it is to build I end up losing about $20,000 on that deal. That was actually my first deal that was actually before I bought the multi family you know, so I could have been done right then and say, go back to teaching and work till the time I'm 85 or whatever it takes in today's day and age to actually retire.



I think that's actually I think





Taylor   37:33

I'm glad I brought that question up because you know, you very much could have said I crap I lost 20 grand nobody ever makes any money in real estate. I'm never going to do it again. But you didn't do that and you've well made up the 20 K so good on you.


Frank Patalano  37:49

Absolutely. Well, yeah, I've walked out and my philosophy is this whole thing about riding a bike and you know, if you are thinking Like an infant, when infants, you know, nine months old, 10 months old, they fall down a lot. And they get right back up, they fall down again, they might just like with real estate, I might lose money here or there. But you gotta keep going forward and keep trying to learn from it. You know, same thing riding a bike, you know, you're gonna fall off once in a while, but eventually gonna stay up there. You should do pretty good.


Taylor   38:23

Interesting. I think that is a very good analogy to learning what it takes to be a real estate investor falling down a lot. I haven't lost 20 grand yet, but I have fallen down. Interesting. My favorite question at the end of the show is what is the most important lesson that you've learned in investing?


Frank Patalano  38:46

The most important lesson besides getting back up again, that's a good one. Yeah. I guess part of it is the fact that no matter how much you think, you know, if you keep challenging yourself, you need to learn and grow more. Okay, so it's just like. So like with the syndication that we did right now. And we're doing other things, too. I mean, right now, we're looking to build a 18 unit apartment complex here and within five miles of my house, and we basically have a one acre lot. And across the street from it's an 18. About 1.4 acres. And there's an 18 unit condo development across the street from about and we're working on figuring out how much money is going to cost and what it's going to take to build that. And it's like, wow, there's so much involved here. Cool. And, yeah, it's pretty cool. I mean, I actually tried about three or four years ago, I bought a sink, I built a single family house, and I didn't make any money but I didn't lose any money. But I gradually kept going and I guess I didn't lose any money, which was good. We broke about even


Taylor   39:54

you know, I've talked to other folks that Yeah, about that topic. Buying lots and building single families and small properties. And most people seem to about breakeven, if not make a little bit of money, maybe lose a little bit of money, but it's, it doesn't seem to produce the same kind of return that buying existing properties on it at a discount will produce that that seems to be a much more productive strategy.


Frank Patalano  40:22

No, I agree. 100% on that. There's just so many, there's so much sunk in cost, at one point or another. When we're selling the house, it's like, I got hundreds of thousands of dollars in this dirt. I gotta move this, you know, taxes on each row is like little alligators, these, these, these vacant lots sometimes when you pick them up, but if you pick them up for a great enough price, I'll still do it. I mean, sometimes that's why builders get upset all the time when builders buy properties or offer such a low price for the lot. It's like yeah, that's because they really understand what it takes to actually build if you're gonna make a profit.


Taylor   41:00

Yeah, they can't pay top dollar for the lot if they want to make money on building a property on top of that, it's just it's hard to do. Yeah. Well Frank, thanks for joining us today I really was looking forward to sitting down and talking with you and learning more about you and your business and everything. If folks want to learn more about you and get in touch, where can they reach you? Give us the name of the podcast, Instagram , all of it?


Frank Patalano  41:23

Sure. So we have a podcast and Instagram with the same name. It is the cash flow kings my shirt says cash flow kings we actually have to put the word thought in front of it I we just love the way the shirt looks so we kept it looks good and you know I'm always out there you'll see me on Facebook and every other type of social media we've downloaded Tick Tock even though we haven't done much with it yet and always trying Well, you know, there's there's new people coming into real estate all the time. We deal with any age group, but the younger crowd is what's going to be buying and investing. In the future, so we're just getting ready for them. And send me a shout out anytime. I'm always wanting to help. That's probably part of that teacher in me. Some people say give away too much for free, but we're always helping giving advice, etc.


Taylor   42:15

Nice. Well, you know, I definitely appreciate that I think there is a lot of value in giving knowledge away for free. So, good on you for that. So, thanks for joining us today. Once again, everybody out there. Thank you for tuning in. If you're enjoying the show, please leave us a rating and review on Apple podcasts and finally call an Apple podcast not iTunes but that has it's not going to stick. If you know anyone out there that could use a little bit more passive wealth in their lives. Please share the show with them, bring them into our tribe. I'd have a great day and a great rest of your week and we'll talk to you on the next episode. Bye


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About the Host

Taylor on stage

Taylor invests in multifamily & self storage real estate. He has partnered, invested, or otherwise participated in over $150 Million in real estate, primarily through real estate syndication deals as both a General Partner & Limited Partner. 

Taylor’s company NT Capital focuses on high-quality value add commercial real estate investments, acquired through syndication.

Don’t forget to subscribe on your favorite Podcast App like Apple Podcasts and follow on Instagram @passive_wealth_strategies

6 Ways To Passively Invest in Real Estate

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