Short Term Rentals vs. Long Term Rentals with Aaron Fragnito

Aaron, thank you for joining us today. 

Taylor. Thanks for having me glad to be here. 

Hey, it’s been great talking with you so far and we’re going to have a great valuable conversation for our listeners here for those out there who don’t know about you and what you do. Can you give us an intro to your background and your business?

And then we’ll dive right in to what we’re going to talk about. 

Yeah, absolutely. So I’m Aaron Frank Neato with people’s capital group and we’re located in Berkeley Heights, New Jersey. So we focused on buying apartment buildings in north Jersey, and we also focus on doing short-term rentals in Southern Vermont and STS, really our two specialties.

Awesome. And that is right into what the conversation I wanted to have with you today is learning about the short-term rental business that you’re engaged in and also comparing and contrasting. The long-term rentals of apartments with your short-term rental experience, because short-term rentals are very popular these days, but I feel like we only hear about the say advantages and not maybe there are some of the competitive disadvantages.

So I want to have a conversation where we learn about the whole realm and compare and contrast the two. 

Let’s break it apart. Let’s dig in there man. Face first. 

Love it. Love it. First off, let’s break into it. Tell us about those relative experiences of buying long-term rentals, apartments in north Jersey, and then what you’ve been doing more recently.

Sure. Sure. So yes, we folk we’ve been buying apartment buildings and income properties in Northern Jersey, Jersey City, Newark Patterson, Morristown playing field. If you’re familiar with any of those markets. And generally about an hour from New York Eliza to commute to New York within an hour.

And for example, where we just put out an offering yesterday it’s 28 units in Rahway, New Jersey. This is. A mismanaged apartment building rents are about 30% below market value. It’s two blocks to a train station, seeing the Manhattan and 45 minutes. Yeah. And we’d put kitchenettes in the studios about 15 studios.

We’re going to put kitchenettes in there, make them into more enjoyable apartments with actual kitchens, renovate the other units cosmetically, but it’s really a nice building, just a bit mismanaged, great location, huge parking lot. So we’ll buy that. We’ll. Put some money into it, spruce it up increase the rent, roll, lower our expenses and reposition the building and refinance out over time.

And, I don’t want to give away my position on which one I like more too soon, but boy is that tried and true. My friend, it doesn’t matter if no one on the railway is going to be like, you can’t lease property anymore. So the laws can’t just change and take it away, but we’ll dig into that later, so really a tried and true investment.

We’ve been doing this for about 10 years. Man. I just refinanced a property myself. I bought Newark in 2013 for pennies on the dollar. And boy, it’s just such a great strategy by refinancing. We love it. 

Yeah, absolutely. As you said, tried and true now if you would, let’s learn a little bit about your more recent short-term rental experience so we can flush that out.

Sure. In about 2018, I bought a small property in Southern Vermont. So I’d always be going up to Southern Vermont to ski. I’m about four hours south of that in Jersey there. I’d look at the real estate magazines and the diner in the morning, and they’d be like, four acres, three bedroom homes, 60,000.

I’m loose to north Jersey. You put another zero on it, things falling apart. So you know, I would be, and I’d be paying an arm and a leg to stay there, cause to go skiing. It’s an, a sport. You pay a lot to stay that you pay a lot to go. And I realized holy mackerel is a real estate investor.

This is a great opportunity. So I put down my own money where my mouth was. I bought a little property for $60,000. Put about 30,000 into it. And I figured my wife and I would go up there and enjoy skiing. And the other half the time she’d rented out Airbnb and we’d make a few bucks and. I started making a lot more than a few bucks.

I was like, okay, I own $10 million of apartment buildings and I don’t really make this type of cash flow. And that’s all. In fact, the amount of cash flow is making on a hundred thousand dollars investment essentially was equal to like a million-dollar investment in New Jersey. Equity-wise, of course, you’re nowhere close, but just cashflow wise was phenomenal.

I ended up buying another one up there and that’s kinda where I was going to stop. I figured I’ve added a couple up there and I’d focus on Jersey and that’d be that. And then of course the pandemic hit. Like everyone, our lives changed and Diana, my wife, and I moved up here and just for a few weeks while the pandemic passed in March and we figured we’d be back down to Jersey by April.

And so here we are a year and a half later. Autumn a million and a half more property up here. We brought our resources from New Jersey, our investor group. We have about 50 good investors that reinvest with us over time. And we’re always growing that. And boy, we put out a few offerings up here and they were funded in days and some in hours, it was incredible.

Short Term Rentals vs. Long Term Rentals with Aaron Fragnito

Wow. So that is awesome. And personally, I bet I would like living in Vermont more than I would like living in Northern New Jersey. So I don’t blame me for staying, but I do love it to get to the point of the amount of cash. You mentioned, the cash flow you’re making. And that is really the first thing that you hear come up when people talk about short-term rentals is they say, man, I bought this place.

I’m renting it out short term, it’s a vacation rental, or what have you Airbnb and making all this money and cashflow. Yeah, I don’t have that much actual. Who cares? I’m making so much cash flow. It almost doesn’t matter. I’m just going to do a bunch more of these, but is it as tried and true as apartment buildings where you could do value add, and you have a lot more equity?

Let’s dive into that. How did you feel about really scaling up on that? 

Here’s the test, my partner, and I always do we say, okay if we always look at these stupid little cryptocurrencies, we say, what if we put a thousand dollars in that crypto and we make $10 million. Okay. And you had $10 million.

First of all, what we did. The first thing I wanna do is get it out of the crypto market, right? 

Exactly of the tax bill. 

So pull every single dollar out of crypto. The first thing I would do, the second thing I would do is probably invest in apartment buildings. Professionally managed high demand locations. It doesn’t have to be north Jersey, but that’s where our infrastructure is.

And that’s where I, what I would do. I do like short-term rentals. I think they’re great for cash flow. They’re incredible opportunities. To make opportunities work where sometimes you have to be really a lot more picky with apartment buildings that are harder to find. Sometimes the short term rentals, you have a little more options to buy, so you can move the deals forward a little easier.

But also you have to look at those local rules and being in a town that is short-term rental friendly. For example, I would never invest in the Jersey shore personally with short-term rentals because I see those towns every month a new town is making a new law for the Jersey shore about short-term rentals.

And quite frankly, they’re all trying to get rid of them. I don’t know why. It’s a short term, right? Empire, but that’s, that’s what the Jersey shore is trying to do. So in Ludlow, they get it. They’re like we’re a sleepy little town in Southern Vermont. Our tourism is literally like 75% of the economy here is like tourism.

So if they took away the short-term rentals, they’d be shooting themselves in the foot and they know that. Now the state of Vermont is trying to crack down on it. All they’re making us do now is register every year, which is free. We just have to type our information to assist them so they can know where we are, what short-term rentals they have.

And then I think there was. Some possible fee they’re talking about, it was like a nominal, like $80 fee or something. So I was like, all right, fine. Bring it on. That, that’s it. I think Vermont is short-term rental friendly. Vermont itself is not really business-friendly.

My neighbors sure don’t like it,

It is what it is and we run a good business up here. We have good assets. We maintain them very nicely. And my neighbors should like it because their property values have increased because I’ve been buying up the town and that’s good for them, 

Okay, nice. So up until a year and a half ago, or just pre COVID, you would have said, or you could reasonably say no.

Yeah, let me back up a little bit. You could easily say all these towns, cities, whatever, not just Vermont, but everywhere. We have it here in Virginia and everywhere else. They’re legislating so hard against short-term rentals. They want to shut it down. Nobody’s legislating against long-term rentals, but lo and behold, we had a national eviction moratorium for nearly a year and a half.

And that hammered some people and others. It was tough. We floated through it and were able to work with a lot of our tenants, but still. That is a new piece of legislation or not even legislation regulation that came through. But do you think overall the regulatory risk of long-term rentals is lower even in New Jersey where I have to imagine in normal times doing evictions is probably pretty different.

It’s at least we know the devil we’re dealing with long-term deal rentals. So we know we have rent control. We know we have five-year Greencard inspections. I’m investing in Patterson right now. It’s ridiculous. Literally, if someone moves out and I want to rent the apartment again, I need to get three different inspections completed by three different bureaucratic departments of local government.

And you better bet during a pandemic, they’re like three months out, it’s just ridiculous how much red tape there is in New Jersey. So what that does is that keeps out competitors, right? So I’ll sit here and complain about it all I want. But then again, a lot of people don’t do what we do in Jersey because of all the red tape, because of the high taxes, because of rent control.

 

They don’t know how to navigate around these things the right way, the legal way as we do. And. It’s just incredible. After a while, you really can write a book about investing in blue states and how much red tape there is. And maybe that’s my next novel 

Should be, that’s a good title. You got a good title right there.

investing in blue stapes and dealing rents it.

Yeah. Yeah. That’s good. I like so yeah, so basically, we know we’re dealing with here. It does keep out a lot of competition and that’s why everyone goes to Texas in the Carolinas and that’s why their property values are booming. 

That’s true. As a broader conversation around regulations, housing is a supply and demand.

Good. Anything else? Prices are flying upward. The only thing we can do, there’s so much demand. I don’t think we can do is develop more, but so many of these states municipalities make it so difficult to build new real estate that it just makes the existing real estate that much more expensive and keeps out competitors.

Yeah, like sunshine like San Francisco, right? Like California, right? Those areas, those markets, I don’t know how they do it there, but, and then what do you really get, homeless people knock on your door, you know what I hear over there? So it’s tough, in the interest in those cities, but in Jersey now we’ve got a good niche here.

We have a good network. We’ve been working in these cities for years, so we know that a lot of the people here and the people we’re dealing with and you just gotta know what you’re doing, you know what you’re doing with. Know that it’s not too hard, but the short-term rentals, they could just flick that switch and boom you’re out of business.

Yeah. We were talking before we started recording. I live in Richmond in Virginia and they did that pre pandemic or the city did that. It went from, there was no regulation, which is not a stable equilibrium. I don’t love regulations. That’s going to happen. And then the regulation that came through made it so that you have to live in the property more than 50% of the year.

So that just completely shuts down these rental arbitrage models or pretty much any other short-term rental model. 

Yeah, exactly. And again, that’s why to invest in Ludlow. Per particular area of Southern Vermont, where they really need short-term rentals. And there’s no talk of the local politicians of removing it.

So as long as the state doesn’t have a statewide crack down on it, which would be the first and I’m sure that we’d be able to fight that with suit probably. So that, that would be an interesting lawsuit, right? Kind of state says no short-term rentals. Can a state do that? I don’t even know.

I’d have to talk to an attorney, that’s I take that to the Supreme court baby. 

Here we go. I wouldn’t put it past some of those blue states legislators out there, but that’s another conversation for another time. Yeah. So we’ve covered cash flow versus equity. We’ve covered some of the tried and true NIS of long-term versus short-term rentals.

So I want to talk about getting involved or getting invested, particularly for passive investors. There are apartments indicators out there. It sounds like that’s what you do, where there are a lot of options for investors to get in passively. That’s what I do too. But how about short term rentals? You said you have a network of 50 investors that invest with you.

Are they involved in the short-term rentals? How are you handling it? Bringing in passive investors, if at all, I don’t know. Tell us about that. 

Sure. So that’s exactly why we started doing these short-term rentals and offering them to our investors. Because at this point we had about $15 million of holdings in New Jersey and New Jersey holdings.

You pay a lot, right? You’re buying high end areas, the red rules high. So it’s all in context, but you really don’t make a lot of cash flow on them. You do very well in New Jersey over a period of time, and you do a cash-out refinance every four years or so, and laugh all the way to the bank.

But the cash is two to 3%. It’s tough in high and high-end markets. So to counter that, we said to our investor group, alright, here’s a cash. Play right. And this is all about cash flow. This is going to get you ideally, we’re going for 10, 11% cashflow per year. So if you invest a hundred thousand dollars, you’d expect $10,000 in cash flow per year.

And, hopefully the value of the real estate goes up over time and all those other great things. But we’re just talking about the cash flow of real estate. That was very attractive. That’s like a stock paying a 10% dividend or something. Very attractive. That is our goal with the short-term rentals.

And there’s a lot of tricks of the trade of really you’re running a hotel. You need to have really good management. The management of it is really different than long-term rentals. Both, you have to have good staff. Patients and infrastructure are good people that really are operating it behind the scenes.

That’s the focus. I don’t do all the management. It’s just too much. And so that, that’s it, but we’re running a hotel up here. It’s like running a bunch of small hotels. So everything has to be. You don’t have to mention their reviews go right on Airbnb. So it’s if you have a disgruntled tenant in an apartment building, they can complain, they can drive you to go to court, whatever that’s all it gets settled on Airbnb.

Like they’ll come and go for a two-night stay and maybe they’re upset about something completely different. In fact, it’s always like my husband didn’t come and he left me with all the kids for the weekend, zero stars, zero stars are like, oh my God, come on. And then no one wants to rent from you.

So you gotta be careful there. You really have to make everyone happy at all hours of the night, people were texting you at midnight being like how do you what’s the code again or something, it’s just, yeah, so it’s a lot, but that’s why we do the whole passive investment to our investors.

Of course, they don’t have to deal with any of these shenanigans. And the idea is they’re making to make a lot stronger cash flow than the Jersey investments.

It's a constant battle to find the right people to work with you.

How are those deals structured? 

Same thing we do with our Jersey acquisitions a little bit different in the sense that we do a preferred rate of return.

Okay. So we offer a preferred rate of return to our investors, generally around five to 6%. That means the first net profits after paying our expenses and our debt services are paid out to the investors. So until they earn a five to 6% annualized return on their investment, and then we’ll go ahead and sell the equity split.

The deal is where the investor is going to own equity in the opportunity and get their portion of the cash flow as well on top of the preferred rate of return. And that’s how we get them up to that 10% cash flow we’re going for. 

Gotcha. Gotcha. Okay. So like also to learn about deal sourcing and what you look for in a short-term rental, because you mentioned a little bit earlier.

If I’m recalling correctly, it’s a little harder to assess the market for a short-term rental than it is. Say an apartment complex. Nice part of Northern New Jersey where it’s right next to train station and you can get right to Manhattan. That makes a lot of sense. There’s going to be demand for that, but my short-term rental in a small town in Vermont.

How are you really figuring out what the demand is going to be? 

First thing we do is usually use something called air DNA. DNA is a website we have access to that we pay for, and that gives you data on all the local short-term. Rental websites in the area. So you can determine what your unit might rent for based on strong data.

The next thing we do is we own a lot of properties in the area. So we just know from our experience and the quality of the unit and everything like that, what we would expect units to rent for it is tough because there’s a lot of. Know, like a three-bed, two baths, might not be the same as this three bed, two baths.

And there’s so many different variables of real estate, so size parking amenities, finishings. And so we try to calculate all those in the problem with these like data websites is they don’t really. They don’t, you put a three-bed, two baths that like, oh, $1,200. You’re like yeah, but it does not park.

And it’s in this part of town, so you gotta breathe recognize the reality of the situation or vice versa. They’ll give you a low number. You’re like, no, we’re going to have this type of product. You don’t get it. People pay more for that. It’s a science, but it’s also an art in that sense.

And that’s how we determined what the rent was for. 

That makes a lot of sense. If you spend enough time as a real estate investor, or just paying attention to the deals that are happening around you, eventually you’ll come across something where somebody screwed up. I’m just an idiot. Comes to mind for me recently is a house across the street from me was flipped.

Recently. I live on the south side of Richmond. It’s fine. It’s a decent area, but it’s not the best area of town. And this particular property was way overdone for the part of the little bitty part of the neighborhood that it’s in. Three or four blocks away in the other direction, then it would be worth twice what they had asked for it.

And wouldn’t, it sat on the market and sat on the market and they’re going to get probably a hundred grand less than they had thought because you’d, maybe they went to one of those sites that didn’t really incorporate that. Hey, it’s on the wrong side of this main street that the gentrification has included.

Yeah. Yeah. Oh yeah. That’s absolutely it, and you gotta be careful with real estate and that’s what we don’t really flip houses anymore. Seth Martinez my business partner and we’ve flipped. Vic’s like over 50 houses and that was our bread and butter for a number of years.

But I think that’s the hardest buck to make in real estate, buying an old property, you got to fix up and it’s silly. Cause all these shows glamorize it. You’re right. It’s the hardest dollar you will ever make in real estate. And he’s buying a fixer-upper. Fixing it up, dealing with contractors, permits, and then trying to sell it.

This is the hardest dollar ever made. There’s no doubt about it. It’s so funny how gurus are like get started by buying a fixed way, Jose, it’s crazy. 

You gotta breathe recognize the reality of the situation or vice versa. They'll give you a low number. You're like, no, we're going to have this type of product. You don't get it. People pay more for that. It's a science, but it's also an art in that sense.

And at the end of the day, when you sell the property, your tax bill is enormous because it’s taxed as ordinary income. And I think a lot of people.

When they first flip, I don’t know how big of a tax bill is going to be, at least from what I’ve seen. 

I remember when I started real estate by year three, I was a realtor with a team and I was starting to flip houses too. And I made a bunch of money, all of a sudden, and I got nailed on taxes and didn’t have the money to pay it.

I was like, I need it. What do you mean? Like I’m not, I don’t have that type of cash laying around. I have a lifestyle. I live in Hoboken, New Jersey, bro. It was interesting. And then that kind of set me on the path to say, wait a minute, if I’m going to work this hard and make, $200,000 and 75, it goes to the government, what the heck, man, that makes me angry, and where does that money even go really? And then you start. Yeah, I read rich dad, poor dad, and, but I made the mistake of not executing what rich dad, poor dad taught, which is to own assets and pay yourself. Finance of those assets so that the money you’re taking off the table is tax-free money it’s debt.

That will be paid down by your tenants for years to come. It’s safe. Debt. It’s good debt. I’m not taking it out on a million-dollar home. I’m living here with my wife and a pool and a mortgage. I can’t pay. I’m taking it out on buildings. Like when you see behind me apartment buildings. So the bottom line is I wasn’t practicing really what I was preaching or what I wanted to be doing at the time.

And this was years ago and I realized, wait a minute, I need to pivot and really. Practice this owning real estate and refinancing. And now if I pay myself that amount today, I take home that amount. It’s in my bank account. I don’t have to give it to the government. And I liked that a lot more.

I like that too.

So before we move on to the final little part of the show, Really sum it up and ask you, we’ve gone through all these pros and cons of long-term versus short-term rentals. And, let’s get a conclusion here as to, I’m not going to say a recommendation as to what people should go for, but if they’re thinking about it, what are your thoughts about maybe what they should go for consider before going down the path of longterm versus short term rentals?

Yeah, there’s a lot to consider. I would say at the end of the day if your goals are to just have a good investment that, you’re just making a solid return on your investments protected. I would go wish with the long-term rental properties, the apartment buildings tend to be very tried and true.

But diversify. So the bottom line is also like it’s a lot easier to manage a short-term rental long-term rental property. If you’re going to do short-term, bet. And you think you’re going to manage it? No, it’s not going to be fun. It’s going to be a job. You could buy like a three family and deal with three tenants and like you really, if you have good tenants, it’s not going to be that hard.

You could probably deal with that for up to about 10 tenants. You could probably like, deal with yourself as long as it’s not class D real estate. Then, that’s a good way to go, but I think at the end of the day, a syndicate really is a good option. That’s why they exist.

I understand I own and operate a real estate syndicate. So of course, I’m going to say that, but that’s why we exist. You don’t cut your own hair, I just hurt my MCL. I went to a doctor now I go into a physical therapist, there’s we go to the professionals, I’m not going to go to.

Bang my knee with a hammer until it feels better, I’m going to go to a professional and get the right diagnosis. And that same thing with investing, same thing with the financial advisor and the stock market real estate is like having a financial advisor, but with real estate and we’re in it with you though, we’re in the deal with you.

We’re in the business with you were operating the business day in and day out, and that’s a nice synergy there. 

Nice win-win scenario. Yeah. Yeah. It seems like the short-term rental model is maybe a little bit more. I always use baseball metaphors. I don’t like baseball at all, but it’s a little bit more swinging for the fences.

You’re taking a bit of a risk, particularly when it comes to the legislation risk aspect and we’ve seen. Hit people before, but it can produce enormous cash flows. It’s also a lot of work if you do it on your own.

I don’t overpay for the property. I see a lot of these people like saying oh, you can pay whatever you want because you’re going to make this cash flow on my goal.

And I see that stuff on YouTube guy or the guys that signed really high leases and then just expect like Lisa the little bit more. Oh my God. That’s a terrible idea. It’s a terrible idea. We buy real estate for a good price. So listen, if they changed the laws in Ludlow, which would destroy the entire economy here, and the veil would never allow that they’d fight that tooth and nail basically what we would do is we would sell the properties.

 

We don’t, we’re not in for too much, we’re in them for the right amount. We’d harvest some equity and we’d move on to plan B. So just don’t overpay for the real estate rule. Number one. 

I love that. We’re going to leave it right there right now. We’re going to take a quick break for our sponsor.

All right, Aaron, I’ve got three questions. I ask every guest on the show. Are you ready? Go ahead. Great. First one. What is the best investment you ever made other than in your education? 

Boy I guess I’m going to go ahead and say a five-unit I bought in Newark in 2013 and I just I bought it for 135 grand.

I put 30,000 into it and it was just appraised for six 50.

Woo. It’s like a casino, no. What the heck, you buy in the right areas, you maintain I didn’t even, I put 30 grand of the thing. 

Here in the passive wealth strategy show, we say wall street is a casino. You, my friend, bought it at a great time. Newyork in that time has probably.

Grown significantly. If I had to take a gas people trying to get out of New York city and you weren’t in that deal, like a lot of money it’s not nothing, but it’s not a huge buy. 

It’s also an off-market deal. Like a foreclosure deal. Like I stole it. Like it was one of those deals that, you make a podcast about.

Nice. So we had the best investment. Now we go to the worst investment. What is the worst investment you ever made? 

Probably a high-end property on jockey hollow road in Morristown. It was a devastating property for us. We unfortunately hire the wrong contractors and they gutted the property and they said we can renovate this whole property for a great price, but first we have to gut it.

We’re like it’s in pretty good shape, but then they got it. And they said actually the price is two or three times and we quoted you. So then we were left with a gutted property and had to hire new contractors. Now our investors did not lose money. We wrote them a check at the closing table.

They made a 12% return on their investment, annualized interest on their investment. So they did pretty well and actually reinvest over time. And we learned that high end flips are not the place that we do our best work. 

Nice. Interestingly, that is your worst. I’m curious your investors still made money.

Did you make money on that deal though? Oh, no, 

I was a huge write-off yeah. 

Yeah. Fair enough. Had to ask how to ask. 

You can roll the losses. You could roll those losses over the year. Oh yeah. Yeah. 

That’s true. It’s still a loss though. I’d rather make money than lose money. Yes, exactly. 

But Hey, if you pay yourself, a different way than I can roll over those losses and it’s crazy how much you can avoid paying tax.

If you have losses, 

If you do it right. If you do it right, there are legal ways written into the tax code to benefit investors and business owners so that we go out and we create activity. So that’s what it’s all about. My favorite question here at the end of the show is what is the most important lesson you’ve learned in business?

I would have to say, just be fast to fire and slow to hire, I’m right now I’m hiring three or four VA’s, and boy, it’s just constant, and that you really have to be fast to fire. I hired someone on a Monday. I fired them on a Tuesday. That’s it, I’ve been in this business too long and I can, you’ve asked to fire my friend.

Okay. Absolutely. I’ve you know, VA’s, I’ve, I want to say I’ve struggled with. Yeah, I totally agree. Fast to fire, especially sometimes, it’s tough to coach. I have a great virtual assistant shout-out to Rem. Who’s working for me right now. She’s doing a great job, but man, it took some work and to find her.

Yeah. And you know what? I do find that a lot of times I spend more time correcting their work. It would have been almost faster. I did it myself. And there’s also just a huge gap in communication. Sometimes, my feedback will be what ends up on the presentation. You’re completely misunderstanding.

So yeah, it’s so it’s a constant battle to find the right people to work with you. 

That is the difficult part, particularly when it comes to providing feedback and maybe they understand maybe they don’t, but it’s not taken as a lesson to carry forward in our situation. So hopefully. Yeah, I, deal with the situation.

They’re learning. And improving for the future. That’s any employee though, right? Yeah. 

Yeah. It’s funny. Everyone’s suddenly this is unprofessional. This will attract teenagers. So she thought that’s what I wanted on the ad. So she copied pasted. This is unprofessional. This will attract me. I’m like, oh my gosh.

 

Okay. That’s where we’re at. Yep. 

Wow. Aaron, and thank you for joining us today. Very illuminating conversation. If folks want to learn more, they want to reach out. They want to learn about your business or anything else that you’re doing out there. Where can they find you? 

Our website is people’s capital group.com and that’s where you can check out our podcast, the passive cashflow podcast, and get qualified and review different offerings.

We have. We try to produce an offering every month or so to our group. So check it out. Peoples capital, group.com. 

Awesome. Thank you once again for joining us today, I’ve really been wanting to have this conversation with you. Lives in both worlds of the long-term and short-term rentals. So I’m very glad we got to have that conversation today to everybody out there.

Thank you for tuning in. If you’re enjoying the show, please leave us a rating or review on the apple podcast. That’s very much appreciated that helps other people learn about the show. And I’m always honest with you guys that helps me feel good because I get to see that you guys are engaging with the content you’re learning and you’re escaping the wall street casino.

Along with us. If you know anyone who could use a little bit more passive wealth in their lives, please share the show with them and bring them into the tribe. Thank you for sharing. Thank you for tuning in once again. I hope you have a great rest of your day and we’ll talk to you on the next one. Bye bye.

Seth and Aaron in People's Capital Group

About our Guest

Aaron Fragnito

Thru real estate syndication, Aaron helps others passively invest the way wealthy people make and keep their money. Aaron has been involved in RE his whole career. Aaron has over a decade of Real Estate investment experience and is co Owner of Peoples Capital Group (PCG). Aaron focuses on building relationships with individuals seeking passive returns though NJ real estate ad owns over 100 units.

Aaron Fragnito has been a guest on over 30 real estate and investment podcasts such as Cash Flow Ninja ep. 488, Joe Fairless’s Podcast Best Ever Real Estate Investing Advise ep 2085, Money Tree Investing March 6th 2020, The Real Estate Syndication Show Ep. 409 and many more.

Aaron Fragnito is a Co-Founder of Peoples Capital Group (PCG) which holds a $16M portfolio, host of the New Jersey Real Estate Network, host of the Passive Cash Flow Podcast, a licensed NJ Realtor and a full time real estate investor. Aaron has completed over 250 real estate transactions, totaling more than $40,000,000 in Real Estate in his career.

Episode Show Notes

Through real estate syndication, Aaron helps others passively invest the way wealthy people make and keep their money. Aaron has been involved in RE his whole career. Aaron has over a decade of Real Estate investment experience and is co-Owner of Peoples Capital Group (PCG). Aaron focuses on building relationships with individuals seeking passive returns through NJ real estate and owns over 100 units.

Aaron Fragnito has been a guest on over 30 real estate and investment podcasts such as Cash Flow Ninja ep. 488, Joe Fairless’s Podcast Best Ever Real Estate Investing Advise ep 2085, Money Tree Investing March 6th, 2020, The Real Estate Syndication Show Ep. 409, and many more.

Aaron Fragnito is a Co-Founder of Peoples Capital Group (PCG) which holds a $16M portfolio, host of the New Jersey Real Estate Network, host of the Passive Cash Flow Podcast, a licensed NJ Realtor, and a full-time real estate investor. Aaron has completed over 250 real estate transactions, totaling more than $40,000,000 in Real Estate in his career.

Peoples Capital Group (PCG) works with qualified investors to create passive returns through local commercial real estate and short-term rentals. The owners of PCG are experienced in locating discounted apartment buildings for sale in Northern NJ, Southern VT, and implementing a value add strategy to create max returns for their silent investors.

[00:01 – 04:30] Opening Segment

  • Get to know Aaron Fragnito

  • Aaron shares about himself and Peoples Capital Group


[04:31 – 13:54] Short Term Rentals vs. Long Term Rentals

  • Real Estate in Northern Jersey

  • Aaron’s short term rentals in 2018

  • Cashflow and equity: Stupid little cryptocurrencies and scaling up

  • Some things  you should do when investing in short term rentals

  • “At least we know what we’re dealing with… [with] long term rentals.”


[13:55 – 27:56]  Making your Dream Go to Your Pockets

  • Aaron talks about state regulations on short term rentals

  • Passive investors and their role in short term rentals

  • Making people happy 24/7

  • Structuring their deals 

  • DnD: Determining the Demand

  • The hardest dollar you’ll ever make in real estate

  • Aaron’s advice for you!

 

[27:57 – 36:42] Closing Segment

  • Quick break for our sponsors

  • What is the best investment you’ve ever made other than your education?

    • A 2013  investment in New York

  • Aaron’s worst investment

    • A high-end property with the wrong contractors

  • What is the most important lesson that you’ve learned in business and investing?

    • “Be fast to fire and slow to hire.”

  • Connect with my guest. See the links below.


Resources Mentioned:


Tweetable Quotes:

“You just got to  know what you’re doing.” – Aaron Fragnito

“If your goals are just to have a good investment, I would go with long term rental properties but diversify, diversify, diversify.” – Aaron Fragnito

“Don’t overpay for the property.” – Aaron Fragnito

————

Connect with Aaron Fragnito through Facebook and LinkedIn.  Visit their website https://www.peoplescapitalgroup.com/


Invest passively in multiple commercial real estate assets such as apartments, self storage, medical facilities, hotels and more through https://www.passivewealthstrategy.com/crowdstreet/

Participate directly in real estate investment loans on a fractional basis. Go to www.passivewealthstrategy.com/groundfloor/ and get ready to invest on your own terms. 

LEAVE A REVIEW + help someone who wants to explode their business growth by sharing this episode or click here to listen to our previous episodes                   


This episode is brought to you by Roofstock, the world’s largest residential real estate investing marketplace. Open an account for free and start browsing turnkey investment properties today.

We are also supported by You Need a Budget. YNAB is a different kind of personal financial tracking company. They’ll help you track and plan your money with your priorities in mind. Open your trial account today and give it a shot!

About the Host

Taylor on stage

Hi, I’m Taylor. To date I’ve acquired or partnered on over $250 Million in Commercial Real Estate Investments. I help busy professionals invest in multifamily and self storage real estate through my company NT Capital

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Real Listener Reviews

Extremely useful podcast
Extremely useful podcast
@thehappyrexan
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Short, impactful with excellent guests. If you have a full time W-2 job or business and are looking for ways to get involved in real estate on the side, this is for you.
Simple & effective information!
Simple & effective information!
@jjff0987
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This podcast is worth listening to for investors at all levels. The information is simplified for the high level investors but detailed enough to educate seasoned investors about nuances of the business. I recommend!
Awesome Podcast!!!
Awesome Podcast!!!
@Clarisse Gomez
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The host of Passive Wealth Strategies for Busy Professionals podcast highlights all aspects of real estate investing and more in this can’t miss podcast! The host and expert guests offer insightful advice and information that is helpful to anyone that listens!
Great podcast!
Great podcast!
@Owchy
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Love all the information and insights from Taylor and his guest. Fun and entertaining. Highly recommend.
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