How to Win at Self Management in Real Estate with Jason Pero

Full Transcript

Taylor 0:02
What's going on guys? This is the passive wealth strategies podcast. Thank you for tuning in. today. Our guest is Jason pero. Jason has been on the show before. He is a very successful real estate investor who had a career in medical device sales and his wife was in medical sales as well. They started investing in real estate two decades ago, and have gradually built up an enormous portfolio that he's going to tell us about on the show.

Today we're talking about the two aspects of self management in real estate investing. If you think about it, you might be able to guess one, you might not guess the other one. the two aspects of self management Think about that for a second, and you're going to learn the two aspects of self self management in real estate investing on this episode.

For those of you who are new to the show, I'm your host Taylor vote. I'm a real estate investor and real estate syndicator. I buy Real Estate with passive investors and split the return love talking about real estate investing and strategies that we can use as busy professionals to grow our cash flow passively. Thank you for tuning in. Without any further delay, here we go with Jason pero. Jason, thank you for coming back on the show.

Jason Pero 1:21
Thanks for having me, Taylor. I really love what you're doing. I appreciate BMB for you asking me to come back.

Taylor 1:27
It's my great pleasure to be talking with you this evening. Great time. Now I want to spend my time for those out there who have not caught your previous appearance on the show. It is a great one just go check it out. Check the show notes. But for those who have not yet, can you tell us about your business?

Unknown Speaker 1:44
Yep, so I'm born and raised in Erie, Pennsylvania.

Jason Pero 1:49
Once you know once a college, got a degree just did the normal thing and started investing in real estate in 2001. It was a few years out of college Bob bought our first duplex my wife and I a week before 911 we both worked in medical sales so she was a pharmaceutical sales rep, I was a medical device sales rep. Fast forward to 2012 we kept buying property, we were both able to leave our day jobs so she left in 2010 myself I left in 2012 and since then we've grown the portfolio to roughly 600 units that we own together just my wife and I and then another 300 units that we've syndicated with another about 130 under contract right now that we're set to close mid May.

Taylor 2:34
That's awesome. That is a lot of units to own on your own you know there are a lot of syndicators out there who say you know I own 600 units for example but really in reality they're they own a portion of that their investor base or their company maybe they manage on Zappa your bonafide on them yourself. that's fantastic. today we wanted to talk about the two meanings of self management and real estate super interesting. You self manage your properties. That's the first meeting. Let's talk about that.

Unknown Speaker 3:10
Yeah, so

Jason Pero 3:12
we self managing, I guess, by default, when we started buying properties, I didn't know any, any other way. We were buying duplexes, triplexes , and occasionally we got a 20 or 30 unit property in the mix. we would so I just modeled the way that I saw others doing it. We were initially cutting our own grass, leasing our own apartments and we had no employees. By 2005 we had grown a portfolio and had a deal that brought over an employee. I quickly realized that you can go further with others, and so we started our own property management business just to manage our own property, so kind of a growth that organically over the last close to 20 years. Our infrastructure now is a lot different than it was 15 years ago. We have site managers, we have portions of the portfolio managers, and I have a property manager that I groomed into being an asset manager. we sort of do everything vertically.

We have in house accounting, office management, property management, asset management, which helps manage the assets and the various site managers and things like that. But whole maintenance crew, so really try to do as much as we can in house not only to maintain control, but controller costs as well and really keep the finger on the pulse of what's happening in the business because I, one of the things I was an opinion in mind early on, it's not always true, because I know some people that go to third party management that love it, and they have great success with it.

But one of my mentors in the business early on just imprinted in my brain that no one will ever manage the property as well as the owner and Game the truth and that is that maybe nobody will ever care about him as much as the owner. for my wife and I. We like to have that control. you know fast forward to now we're in the middle of this COVID-19 pandemic I've told my bankers they've said hey, you know what happens if things go sideways I said, Well then then we'll run our own apartments and we'll I'll go out and mow the lawn myself not that I want to do that.

But I will go mow the lawn myself and all of my properties before I ask my bank for for parents so so that's that's the difference of self management and in managing your own properties and and i think in a time like this, it's very reassuring to myself that early on as all the lockdown started occurring and all everything was getting shut down across the country and locally here bit on the horn every day with my with my property managers and just making sure that we have the most control over Our portfolio and then we know what's going on with every tenant.

if we don't know what's going on with that tenant, then you know that that's another conversation. But you know that that just helps me sleep better at night. Having that control?

Taylor 6:13
Yeah, so the thing that really strikes me about this is that it's a big task to manage that many units and also have your acquisitions and syndication and all that other business going on as well. Yeah. how do you look at that as a sales guy to being a pretty substantial business owner, and making that shift and properly managing your business and everything like that? let's talk about that. some of the tough lessons that you've learned to become a business owner.

Jason Pero 6:52
Yeah. When we were starting to grow the business I am one of the benefits of having a job. I worked for various startup companies in the medical device world, you know that I got turned on to the world of personal development. I worked for a company called Intuitive Surgical, they manufacture the da Vinci robot.

That's a surgical robot that surgeons use and helps him deal with many minimally invasive, complex procedures and 15 years ago I was lucky enough to get a job there and I had the manager that they talked about personal development I'm like, What the hell is this like, I knew I read books I read Rich Dad, Poor Dad and I, I was reading and all these other personal finance books, but I kind of was like a kind of like a deer in headlights with a couple conversations with with a guy that I worked for.

But he started the culture there at the time. It was very much like everybody's reading this book, everybody's kind of spitting out certain monitors at certain times, and I asked this guy some work, where do I start? And he said, you really need to start journaling, and you need to listen to Jim Rohn. Again, I knew nobody I may have heard of Tony Robbins, but at the time and everybody in the company, they're walking around with their fancy journals, and it seemed like a cool thing to do.

But really, really that changed my life learning about goal setting, and I went out and buy the, all these Jim Rohn CDs and, and I'm because I'm on the road, half the time driving throughout throughout my territory sales, so, I just started realizing that there's just certain things that resonated with me, and some of it was goal setting and having a clear path that you want to achieve. one of the things that I stick with me over all the years is one of the things that Jim Rohn would always say was work harder than you're on yourself and do your job. so I started working on myself and just trying to enhance my skills and improve my mindset.

work on my mindset just just everything and trying to work on myself, but it took, I mean, it sounds great, but it took a long time. I mean, I would say just up until maybe a good couple years ago, that I still like, I mean, one of the things you hear all the time in business is that find somebody who's better than you at a certain task and hire it out, delegate it out. I still wanted to maintain like so much control in certain areas of my business and there's still certain things that I'm very have a lot of pride about that i think i do very well but at 1000 units, I mean can I go out and like source all my leads for lead at least all my apartments, it just doesn't, it doesn't make sense.

Finally, it took some time to really build that confidence and be able to take on the role as a leader for a business and that's and it just, it just happened through trial and tribulation now making mistakes and saying, Well, did it this way, it doesn't work. let's try it this way or what i one mentor said to me 15 years ago, he probably was right. just try to take those lessons and apply those to the business. where that I'm spending most of my time working on myself be it mentally or physically working on my goals for my business and then being able to have the people that are in place in my business execute on those goals and having their goals and their vision for where they want to go their career aligned with what we're doing as a company and so, so it I don't really have a good exact science on that I've tried hard to, to operate at a higher continue operating at a higher level to attract good people.

then trying to build a nice culture that we can retain that talent as well. Or if their goals are to go off and become an entrepreneur to foster that. We had a guy that wanted to do that and we helped him get to where he wanted to go and but i think constantly like even now during during is like this crisis if you have a team of people working for you you don't want to panic and create panic amongst your, your client base or your

or your employees. Now it's okay to be afraid. I mean, I listened to Governor Cuomo I mean, I by the time this comes out on your podcasts will be a little dated but yesterday he was interviewed on the Howard Stern Show and everybody right now in the country is looking at Cuomo if he's steady and he's a good leader.

They really think he's got this under control and and he said look, I'm afraid you know I'm afraid okay. I'm afraid he's said he's afraid for his mother for his brother because his brother Chris got diagnosed with COVID-19. I think you have to lead with a steady hand and by no means am I saying I'm a great leader or you try to if you're paying signing people's paychecks and they're looking to you as their leader. you have tenants that could be worried.

their own thrown livelihoods so you have to just lead with compassion and caring and it's okay to admit we're all in this together might be afraid, we don't know, this does it end tomorrow? Does it under a year from now then what's this route? How does this all affect us, but just taking everything a day at a time and really just controlling what you can control. I'm using the quarantine time to, work on myself, kind of a reflection plan, really take some extra time with our people, be it tenants that may need me to talk to them. I mean, a lot of times anymore, I don't get involved in that day to day with the tenants, but there's still a lot of tenants, I have relationships with that.

That we want to make sure they're okay and, and they got to know that we care beyond collecting their rent, and that they know their rents. Do we don't have to beat them over the head with it. I think if we lead with compassion, and caring that will, I think oftentimes have yield a better result than to just rule one with an iron fist. so I'm grateful that I've been able to, like I think five years ago, if this crisis happened, I probably would have been in a different state of panic. But I'm not really losing sleep over the business being disrupted or anything like that.

It's more all this other ancillary stuff that goes on there that you worry about, so I'm asked a very long answer to what you asked, and I apologize for kind of rant rant and ramble a little bit.

Taylor 13:27
I love it. I mean, it really gets into that second aspect of self management, the second meaning of self management that I wanted to get to here as he became a business owner by managing yourself and improving yourself. Listen to Jim Rohn. now you, you probably, maybe Kyle Wilson, who like ran that whole Jim Rohn organization for years and years and years, but I find it very instructive that an intern thing that a lot of the successful real estate investors and entrepreneurs that I've gotten to know become friends with probably nine out of 10, if not more of them have some kind of Tony Robbins, Jim Rohn something like that type of work on yourself practice and I just find that fascinating and also instructive.

Jason Pero 14:25
It really is and I find it sometimes I'm at a loss when I, if I if we're talking with we have some friends that'll just they'll they'll come out and criticize gurus or personal development industry and, and and they want to say this in a nice enough way. But oftentimes that criticism comes from those who aren't as successful in their lives or careers that that other people are and I can think of a few people I know, then they're friends of mine locally and then they'll we might be having a few beers, and we're out with the wives for dinner. I mentioned that, I saw that Tony Robbins, I'm not your guru. This might have been a year or two ago and, and they saw it's just a bunch of BS and this and this. no, and I don't want to, I totally disagree with their opinion because it's not BS. I mean, they may think it is.

I think there's a certain personality maybe it's data driven, maybe it's the engineering type that maybe but they're not all like that, but they maybe get stuck in a box and say, Well, I'm just gonna make decisions based on numbers and I'm going to make or I'm going to follow a very linear path a lot of friends that went to school went and went to med school and become a doctor and then to the residency and became a surgeon or whatever it is, and they just follow this this path but entrepreneurship doesn't necessarily follow that path. It's more of a rollercoaster continually for us and I to your point probably nine out of 10 People that I would deem successful that, that not just have the financial part figured out, but that work life balance that they can take amazing vacations and they can be there for their family and they can be amazing friends and they can have like really fulfilling lives.

I think that, again, the vast majority subscribe to some sort of personal development prescription and it's hard to follow. I mean, there were times where we would journal every day, and then you put it down for three months or longer. then there's times where you get sucked into either watching the great Tony Robbins or Jim Rohn videos or whoever, whoever your guru of choice will be because it's all the same fundamentals like they the fundamentals don't change, but it's how they frame that, that the story or frame that, that lesson that that resonates with, with you as a as a as a listener or a student. so I struggled with that for a while. I thought I had to be doing it. Every day at 6am I gotta listen to videos every day. But sometimes you just want to sleep in and that's okay too.

That's, it's okay to like to acknowledge that you don't have to be perfect. Just progress is better than changing, he trying to achieve perfection because you get burnt you can get burned out really quickly, like with certain certain programs and certain certain things You'll never catch me getting up at 430 in the morning again, I did it for years for work, it's not gonna happen in my world.

Taylor 17:26
That's a big one right now getting up at 430 due to a a lot of folks out,

Jason Pero 17:32
in that you can do it with more power to you. I know, I know, it works for a lot of people for sure. I'd be cranky the rest of the day,

Taylor 17:39
you know, I feel like I'm the same way I feel like that would ruin my life more than it would benefit my business? If I like to sleep.

Jason Pero 17:48
Bless the power of like with personal development. I mean, I think there's so many different programs and teachers and gurus out there that you know that works for certain people. they need that and they need that structure. That's what will help propel them further and other people need something different, you know. I think it's about exploring to find who really resonates, who you really resonate with and who your mindset resonates with.

Taylor 18:17
Yeah, yeah. Like you said, there, there are a number out there and I'm personally I'm less partial to Tony Robbins and more to Jim Rohn and a few of the others and probably like Brian Tracy, and just I don't need to, really, I don't feel any I need to explain why I don't even know if I know why. But I found my work. deal. Yeah. Okay.

it's that having a not necessarily a daily practice, but getting as close as you can to that constant improvement and always doing better and you don't have to be the guy getting up at 4:30am to be successful. Right.

Jason Pero 18:58
Well I because I interweave one of the one of the guys. I really, really love Tim Ferriss and yeah, he's great. Sometimes it's like I mean, a lot of personal developments cafeteria style.

You just pick what works for you. It's like a buffet. But one of the things that Tim Ferriss did with the four hour workweek tribe of mentors, tools of Titans easily boiled down those key, like, three or four things that somebody would do to be successful in whatever endeavor it was that they were choosing. In my mind, I'm like, Well, what are you? What are those key things that I need to do to work on my business or to achieve my goals? It's not all this other stuff. For me, personally, it may not be getting that extra hour of sleep. I'm recharged. I have that full.

I have that eight or nine hours of sleep, I mean, nines kind of pushing it but seven or eight hours of sleep a night, working out for a couple hours every day and doing those things is just to me is just as important as taking action in other areas. But that's not but that's okay. That's me. It doesn't mean it's right for everybody. Right?

Taylor 20:05
Yeah, I mean, for me personally, if I can get my own account related to that recently as we kind of got into the Coronavirus pandemic and things started shutting down, the gyms shut down. I wasn't going to the gym anymore. I'm a big jiu jitsu guy, and then that shut down. that practice for me. For me, it was a big stress relief, and just helping a lot went away. I didn't deliberately replace that initially and that really gave me care and I had a hard time with that. the consciously replace that and, and I think in the entrepreneurship world, there's actually not enough focus on things like that, like, Look, science says, You need to sleep a certain amount and it's not four hours a night, it's not six hours a night, it's about a exercise and all those things. It's important Yeah.

Jason Pero 21:00
So, area Huffington had a great book she a couple years ago called thrive. that was, the premise of the book was about getting enough sleep and getting that rest. Everybody knows her as a successful entrepreneur and she talked about how she was just hard charging because you're trading your time for money. that concept of, if I can just work more, I'm going to outwork them and I'm going to achieve more financial success. But a lot of times when you do that you end up having a health scare or something that breaks you down.

It did not happen to me, and that's a story for another day, but I have a heart issue that got uncovered or diagnosed a few years back. I'm again, I always worked out. I thought I was living a relatively healthy life. I'm like, I'm not a pillar of health and yet I still am having pizza and chicken wings for dinner. Might have a beer. Can we watch TV tonight, but it was at that idea that you need to, you can't just be going 100 miles an hour at all times.

you have to Have a well balanced life and I think that for every bit of the stuff that you want to follow from a teacher or a guru you need to find that in those areas that will help you lead a well balanced life because you can make 100 million dollars but die of a heart attack at age 50 Well, that was a good visit, you know? And, and the thing is, or do that and just never have a never have a satisfying relationship or, or could be estranged from your kids or whatever, whatever the case is.

I think being well balanced is just as important, or if not, probably more, it's probably the most important part of being an entrepreneur because you need to be coming from a place of inner peace not to get to Frou Frou. But meditation, and it could be any style of meditation. I mean, some people, like you said, you're you practice Jiu Jitsu, well, maybe that's your meditation. Maybe the gym is meditation for some people, but Sometimes just being able to sit and clear your thoughts for 15 minutes a day and there's no right or wrong way to meditate.

But there's so much science behind that, and the health benefits of it. I think in times like this, when it's, everything's going crazy, and there's that uncertainty in the world, now you can bring that inner peace back into yourself, and realize that you can control what you can control.

you can let a lot of the other variables kind of wash wash away. Like, that's probably the most important thing that for entrepreneurs like myself, it's not for everybody, although I think it should be, but I think Yeah, I really would say that there's not a downside to it, it doesn't, doesn't cost anything. the, the mental, physical financial benefits of having a centered and well balanced approach to life is it's paramount to everything.

Taylor 23:55
Yeah, it's important. if I can do a hard gear shift here, and I Get some historical lessons from you. you're somebody you saw the great recession in 2008 happen. we're sitting here in April of 2020. Depending on who you ask, there's a lot of uncertainty. There's always uncertainty, but a lot of uncertainty now. We might be looking at the biggest recession since the Great Depression. Yeah. What are your thoughts about that from what you see, especially in light of kind of seeing rumblings happening before the Great Recession happened? if you did, I don't know.

Jason Pero 24:37
Well, what do you think? Well, I mean, there's, there's so many avenues we can talk about with this, but I think that what, on one hand depressions and recessions create more millionaires, right. That's one less than one clue. That happens every time there's economic disruption. of course, there's blood panic in the streets.

that creates opportunity, which opportunity should always be addressed ethically and honorable you never want to take advantage of, of a negative situation. But I think that knowing that, that there's going to be opportunity, how do I, as an entrepreneur, position myself to take advantage of opportunity that may come my way because of that disruption. what we did a few years ago, we refinance all of our properties, didn't pull any cash out, although I would have liked to.

I mean, I always have a way to spend the money. But in my mind, I thought the discipline that I was taught was that it's in real estate, nothing beats cash flow. In the portfolio we had at the time, I was able to reduce my monthly payments by close to $20,000 a month. Wow.

if I didn't do that, I mean, I might already be out leasing my own apartments and my own lines, but what that did, I mean, we already had a bit That cash flow, but what that did is that allowed me to take more money into my own pocket, maybe create some cash reserves, hire better talent do all these things that we want to do in our business, but it prepares you for a lien time. it's a lesson you don't want to over leverage and always bet the farm. Because sometimes you might run out of equity. I think if somebody is in that case, it's okay to make mistakes.

I mean, it's like, how do you pivot and learn those lessons? So, I think if you get over leverage, well, can you make it through the next three months? Well, if you don't know the answer, you can make it through the next month, can make it to the next week and, and control what you can control. for someone that self manages is your landscaping contract super expensive? you might have to go out mow your lawns do you Yeah, I don't know. I mean, there's not no one size fits all approach to this, but you have to be willing to take control and own Whatever be humble in the success, but don't whatever problems come your way.

Friend of mine put up a quote today on Facebook, he said, Okay, can I curse on this or not sure it's clean. Okay? He said, Now there's two types of people in the world if they're standing in a pile of shit, somebody's going to be complaining. There's the person that's going to complain. then there's the person that's going to be looking for the horse. Right? So you want to be the first that's looking for the horse. We're all standing in a pile of crap right now. you're gonna complain, or you're gonna look for that opportunity. Right? And so, I think that, again, it's all about keeping a positive mindset.

Again, there could be a lot of disruption. But again, I think I've, maybe I'm just saying look, I'm not I'm I'm not a scientist. I'm not, I'm not a statistician. I'm not an economist. I mean, I just go on, read everything that comes out. I pay attention to economics, but I still, I asked people I said, Well, tell me how Finance my properties, right? And we created a great situation for our tenants. How, how is this a risky investment? So even in the middle of a pandemic? I mean, we're not fortunate, we don't have much disruption.

But even if we did what's our breakeven threshold if we were 60% occupied, or 70%, occupied, and we can still break even great. Now, the fact that we've raised four or 568 months of reserves for emergencies, well, guess what we're in an emergency right now, you may not even have to use those reserves. But I think that you have to take if you're going to spend all that time and underwriting deals and spend all that time raising money, spend all of that kind of mental fatigue dealing with dealing with the lenders and putting all the reports together.

make sure you're positioned to weather as best as best you can encounter. there's a lot of cool programs out there right now with the characters In the payroll Protection Program that have forgivable money. I mean, obviously, it's free money, but there's a lot of things, there's a lot of societal guardrails that people can utilize to come out of this even stronger.

Taylor 29:15
I think it's very instructive. What you said, when I first asked the question about more millionaires being made in these tough times, then that was your first response to the question is where's the, where's the horse to go back to the analogy that you gave? So I think that's a good insight in that you're not initially looking for the negative you'll get to the negative part and then how do we update that but the first thing is, what's the positive focusing on that? So I think that is an That in itself.

Jason Pero 29:51
Yeah. another positive in all of this. I mean again, like for whether you're single or married kids, whatever. cases you have time to be in solitude and, and for me I we're social so we've jumped jumped on our zoom calls several nights a week with friends and having having these happy hour so it's great to stay connected, probably more so with with friends that like I call it friends that we'd see each other once a year now we've been on zoom calls every Friday night for the last round. It's fantastic and you saw one hand that brought you know should bring you back into appreciate what maybe it's taken for granted in the past.

But even with our kids at home, I mean, we've been able to play board games and so our favorite courses monopoly but you can sit and play board games a couple nights a week and watch movies and eat dinner as a family together when we're not running around like crazy. my fear is that we come out of this and maybe forget that we had a really some really cool opportunity while we're all shut down. Yeah, there's all this uncertainty and there's a lot of people suffering and it's, there are some really bad negative things going on. People are dying physically And, and from a business standpoint, but at the same time there's a bright side to everything. I think that for us, I mean, being able to be home with our kids we working out at home a lot of virtual workouts and running around the neighborhood or whatever it is, but being able to do things differently and just try to try and do appreciate that.

when we come out of this, maybe have a a little bit more empathy for for our fellow man and maybe just try to have a greater connection with other people, because sometimes you just and that always last post post crisis that that happened after the Great Recession happened after 911 there was this unity and people were, were friendly, but I think that as a world, you kind of we need that you need need to be able to reconnect and have that ability to like, smile at your neighbor and not just like hide your head when you're walking by I mean, so, so try to use us every bit of this downtime is a lesson and then time to recharge and appreciate the things that maybe took for granted before this.

Taylor 32:05
Wow, I love that and it's been great getting some insight into the two aspects of self management in real estate investing. I love that as a topic. Jason if folks want to learn more about you and your investments and syndication business and all of that, where can they get in touch with you? They can get a thing go on my website, it's pero real estate calm if anybody wants to schedule a strategy call always have to take 15 or 20 minutes and link up with anybody whether they're brand new investor or

Jason Pero 32:37
you know somebody somebody that's been in business long term I don't don't have anything to sell just it's always good to hop on and just kind of get to network and meet people so I can go on calendly com forward slash Jason peril and connect with me there and hit me up on Facebook and LinkedIn and all the all the usual places.

Taylor 32:53
Awesome. I talked to so many real estate new real estate investors who are not technically real estate investors yet but they want to get in and they Say what do I need to do? Who do I need to talk to? And there's a great one. a lot of people, shockingly, will not accept that offer of a quick conversation. that can put you so far ahead, talking to somebody who's experienced I wish

Jason Pero 33:18
I would have had that opportunity early on. I mean, we sound like it wasn't that long ago 20 years ago, but I mean, the internet was still, we still have flip phones, it's funny and, and payphones nobody knows what that is anymore. But it's now with social networking. you can hop on the phone with somebody from halfway across the country and network that way. It's just a beautiful thing. yeah, I mean, anybody feel free to hit me up, I'm more than happy to take time with new or experienced investors.

Taylor 33:52
Great. I love it. Well, thanks for joining us once again, for everybody out there. Thank you for tuning in. If you're enjoying the show, please leave us a rating and review on Apple podcasts is a very big help. If you know anyone else 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 tuning in. Once again, I hope you have a great rest of your day and a great week and we will talk to you on the next episode. Bye bye

Taylor   0:02  

What's going on guys? This is the passive wealth strategies podcast. Thank you for tuning in. today. Our guest is Jason pero. Jason has been on the show before. He is a very successful real estate investor who had a career in medical device sales and his wife was in medical sales as well. They started investing in real estate two decades ago, and have gradually built up an enormous portfolio that he's going to tell us about on the show. Today we're talking about the two aspects of self management in real estate investing.

If you think about it, you might be able to guess one, you might not guess the other one. the two aspects of self management Think about that for a second, and you're going to learn the two aspects of self self management in real estate investing on this episode. For those of you who are new to the show, I'm your host Taylor vote. I'm a real estate investor and real estate syndicator. I buy Real Estate with passive investors and split the return love talking about real estate investing and strategies that we can use as busy professionals to grow our cash flow passively. Thank you for tuning in. Without any further delay, here we go with Jason pero. Jason, thank you for coming back on the show.

Jason Pero  1:21  

Thanks for having me, Taylor. I really love what you're doing. I appreciate BMB for you asking me to come back.

Taylor   1:27  

It's my great pleasure to be talking with you this evening. Great time. Now I want to spend my time for those out there who have not caught your previous appearance on the show. It is a great one just go check it out. Check the show notes. But for those who have not yet, can you tell us about your business?

Unknown Speaker  1:44  

Yep, so I'm born and raised in Erie, Pennsylvania.

Jason Pero  1:49  

Once you know once a college, got a degree just did the normal thing and started investing in real estate in 2001. It was a few years out of college Bob bought our first duplex my wife and I a week before 911 we both worked in medical sales so she was a pharmaceutical sales rep, I was a medical device sales rep. Fast forward to 2012  we kept buying property, we were both able to leave our day jobs so she left in 2010 myself I left in 2012 and since then we've grown the portfolio to roughly 600 units that we own together just my wife and I and then another 300 units that we've syndicated with another about 130 under contract right now that we're set to close mid May.

Taylor   2:34  

That's awesome. That is a lot of units to own on your own you know there are a lot of syndicators out there who say you know I own 600 units for example but really in reality they're they own a portion of that their investor base or their company maybe they manage on Zappa your bonafide on them yourself. that's fantastic. today we wanted to talk about the two meanings of self management and real estate super interesting. You self manage your properties. That's the first meeting. Let's talk about that.

Unknown Speaker  3:10  

Yeah, so

Jason Pero  3:12  

we self managing, I guess, by default, when we started buying properties, I didn't know any, any other way. We were buying duplexes, triplexes ,  and occasionally we got a 20 or 30 unit property in the mix. we would so I just modeled the way that I saw others doing it. We were initially  cutting our own grass, leasing our own apartments and we had no employees.

By 2005 we had grown a portfolio and had a deal that brought over an employee. I quickly realized that  you can go further with others, and so we started our own property management business just to manage our own property, so kind of a growth that organically over the last close to 20 years. Our infrastructure now is a lot different than it was 15 years ago. We have site managers, we have portions of the portfolio managers, and I have a property manager that I groomed into being an asset manager. we sort of do everything vertically.

We have in house accounting, office management, property management, asset management, which helps manage the assets and the various site managers and things like that. But whole maintenance crew, so really try to do as much as we can in house not only to maintain control, but controller costs as well and really keep the finger on the pulse of what's happening in the business because I, one of the things I was an opinion in mind early on, it's not always true, because I know some people that go to third party management that love it, and they have great success with it.

But one of my mentors in the business early on just imprinted in my brain that no one will ever manage the property as well as the owner and Game the truth and that is that maybe nobody will ever care about him as much as the owner. for my wife and I. We like to have that control. you know fast forward to now we're in the middle of this COVID-19 pandemic  I've told my bankers  they've said hey, you know what happens if things go sideways I said, Well then then we'll run our own apartments and we'll I'll go out and mow the lawn myself not that I want to do that.

But  I will go mow the lawn myself and all of my properties before I ask my bank for for parents so so that's that's the difference of self management and  in managing your own properties and and i think in a time like this, it's very reassuring to myself that  early on as all the lockdown started occurring and all everything was getting shut down across the country and  locally here bit on the horn every day with my with my property managers and just making sure that we have the most control over Our portfolio and then we know what's going on with every tenant. if we don't know what's going on with that tenant, then you know that that's another conversation. But you know that that just helps me sleep better at night. Having that control?

Taylor   6:13  

Yeah, so the thing that really strikes me about this is that it's a big task to manage that many units and also have your acquisitions and syndication and all that other business going on as well. Yeah. how do you look at that as a sales guy to being a pretty substantial business owner, and making that shift and properly managing your business and everything like that?  let's talk about that. some of the tough lessons that you've learned to become a business owner.

Jason Pero  6:52  

Yeah. When we were starting to grow the business I am one of the benefits of having a job. I worked for various startup companies in the medical device world, you know that I got turned on to the world of personal development. I worked for a company called Intuitive Surgical, they manufacture the da Vinci robot.

That's a surgical robot that surgeons use and helps him deal with many minimally invasive, complex procedures and 15 years ago I was lucky enough to get a job there and I had  the manager that they talked about personal development I'm like, What the hell is this like, I knew I read books I read Rich Dad, Poor Dad and I, I was reading and all these other personal finance books, but  I kind of was like a kind of like a deer in headlights with a couple conversations with with a guy that I worked for. But he started  the culture there at the time. It was very much like everybody's reading this book, everybody's kind of spitting out certain monitors at  certain times, and I asked this guy some work, where do I start? And he said, you really need to start journaling, and you need to listen to Jim Rohn.

Again, I knew nobody I may have heard of Tony Robbins, but at the time and everybody in the company, they're walking around with their fancy journals, and it seemed like a cool thing to do. But really, really that changed my life learning about goal setting, and I went out and buy the, all these Jim Rohn CDs and, and I'm because I'm on the road, half the time driving throughout throughout my territory sales, so, I just started realizing that there's just certain things that resonated with me, and some of it was goal setting and having a clear path that you want to achieve.

one of the things that I stick with me over all the years is one of the things that Jim Rohn would always say was work harder than you're on yourself and do your job. so I started working on myself and just trying to enhance my skills and improve my mindset. work on my mindset just just everything and trying to work on myself, but it took, I mean, it sounds great, but it took a long time. I mean, I would say just up until maybe a good couple years ago, that I still like, I mean, one of the things you hear all the time in business is that find somebody who's better than you at a certain task and hire it out, delegate it out.

I still wanted to maintain like so much control in certain areas of my business and there's still certain things that I'm very have a lot of pride about that i think i do very well but at 1000 units, I mean can I go out and like source all my leads for lead at least all my apartments, it just doesn't, it doesn't make sense. Finally, it took some time to really build that confidence and be able to take on the role as a leader for a business and that's and it just, it just happened through trial and tribulation now making mistakes and saying, Well, did it this way, it doesn't work.

let's try it this way or what i one mentor said to me 15 years ago, he probably was right. just try to take those lessons and apply those to the business. where that I'm spending most of my time working on myself be it mentally or physically working on my goals for my business and then being able to have the people that are in place in my business execute on those goals and having their goals and their vision for where they want to go their career aligned with what we're doing as a company and so, so it I don't really have a good exact science on that I've tried hard to, to operate at a higher continue operating at a higher level to attract good people. then trying to build a nice culture that we can retain that talent as well.

Or if their goals are to go off and become an entrepreneur to foster that. We had a guy that wanted to do that and we helped him get to where he wanted to go and but i think  constantly like even now  during during is like this crisis if you have a team of people working for you you don't want to panic and create panic amongst your, your client base or your

or your employees. Now it's okay to be afraid. I mean, I listened to Governor Cuomo I mean, I by the time this comes out on your podcasts will be a little dated but yesterday he was interviewed on the Howard Stern Show and everybody right now in the country is looking at Cuomo if  he's steady and he's a good leader.

They really think he's got this under control and and he said look, I'm afraid you know I'm afraid okay. I'm afraid he's said he's afraid for his mother for his brother because his brother Chris got diagnosed with COVID-19. I think you have to lead with a steady hand and by no means am I saying I'm a great leader or  you try to if you're paying signing people's paychecks and they're looking to you as their leader.

you have tenants that could be worried. their own thrown livelihoods so you have to just lead with compassion and caring and it's okay to admit we're all in this together might be afraid, we don't know, this does it end tomorrow? Does it under a year from now then what's this route? How does this all affect us, but just taking everything a day at a time and really just controlling what you can control. I'm using the quarantine time to,  work on myself, kind of a reflection plan, really take some extra time with our people, be it tenants that may need me to talk to them. I mean, a lot of times anymore, I don't get involved in that day to day with the tenants, but there's still a lot of tenants, I have relationships with that. That we want to make sure they're okay and, and they got to know that we care beyond collecting their rent, and that they know their rents.

Do  we don't have to beat them over the head with it. I think if we lead with compassion, and caring that will, I think oftentimes have yield a better result than to just  rule one with an iron fist. so I'm grateful that I've been able to, like I think five years ago, if this crisis happened, I probably would have been in a different state of panic. But I'm not really losing sleep over the business being disrupted or anything like that. It's more all this other ancillary stuff that goes on there that you worry about, so I'm asked a very long answer to what you asked, and I apologize for kind of rant rant and ramble a little bit. 

Taylor   13:27  

I love it. I mean, it really gets into that second aspect of self management, the second meaning of self management that I wanted to get to here as he became a business owner by managing yourself and improving yourself. Listen to Jim Rohn. now you, you probably, maybe Kyle Wilson, who like ran that whole Jim Rohn organization for years and years and years, but I find it very instructive that an intern thing that a lot of the successful real estate investors and entrepreneurs that I've gotten to know become friends with probably nine out of 10, if not more of them have some kind of Tony Robbins, Jim Rohn something like that type of work on yourself practice and I just find that fascinating and also instructive.

Jason Pero  14:25  

It really is and I find it sometimes I'm at a loss when I, if I if we're talking with we have some friends that'll just they'll they'll come out and criticize gurus or personal development industry and, and and they want to say this in a nice enough way. But  oftentimes that criticism comes from those who aren't as successful in their lives or careers that that other people are and I can think of a few people I know, then they're friends of mine locally and then they'll  we might be having a few beers, and we're out with the wives for dinner. I mentioned that, I saw that Tony Robbins, I'm not your guru. This might have been a year or two ago and, and they saw it's just a bunch of BS and this and this. no, and I don't want to, I totally disagree with their opinion because it's not BS.

I mean, they may think it is. I think there's a certain personality  maybe it's data driven, maybe it's the engineering type that maybe but they're not all like that, but they maybe get stuck in a box and say, Well, I'm just gonna make decisions based on numbers and I'm going to make  or I'm going to follow a very linear path a lot of friends that went to school went and went to med school and become a doctor and then to the residency and became a surgeon or whatever it is, and they just follow this this path but  entrepreneurship doesn't necessarily follow that path.

It's more of a rollercoaster  continually for us and I to your point probably nine out of 10 People that I would deem successful that, that not just have the financial part figured out, but that work life balance that they can take amazing vacations and they can be there for their family and they can be amazing friends and they can have like really fulfilling lives. I think that, again, the vast majority subscribe to some sort of personal development prescription and it's hard to follow. I mean, there were times where we would journal every day, and then you put it down for three months or longer. then there's times where you get sucked into either watching the great Tony Robbins or Jim Rohn videos or whoever, whoever your guru of choice will be because it's all the same fundamentals like they the fundamentals don't change, but it's how they frame that, that the story or frame that, that lesson that that resonates with, with you as a as a as a listener or a student.

so I struggled with that for a while. I thought I had to be doing it. Every day at 6am I gotta listen to videos every day. But sometimes you just want to sleep in and that's okay too. That's, it's okay to like to acknowledge that you don't have to be perfect. Just progress is better than changing, he trying to achieve perfection because you get burnt you can get burned out really quickly, like with certain certain programs and certain certain things You'll never catch me getting up at 430 in the morning again, I did it for years for work, it's not gonna happen in my world.

Taylor   17:26  

That's a big one right now getting up at 430 due to a  a lot of folks out, 

Jason Pero  17:32  

in that you can do it with more power to you. I know, I know, it works for a lot of people for sure. I'd be cranky the rest of the day,

Taylor   17:39  

you know, I feel like I'm the same way I feel like that would  ruin my life more than it would benefit my business? If  I like to sleep.

Jason Pero  17:48  

Bless the power of  like with personal development. I mean, I think there's so many different programs and teachers and gurus out there that you know that works for certain people. they need that and they need that structure. That's what will help propel them further and other people need something different, you know. I think it's about exploring to find who really resonates, who you really resonate with and who your mindset resonates with.

Taylor   18:17  

Yeah, yeah. Like you said, there, there are a number out there and  I'm personally I'm less partial to Tony Robbins and more to Jim Rohn and a few of the others and probably like Brian Tracy, and just I don't need to, really, I don't feel any I need to explain why I don't even know if I know why. But I found my work. deal. Yeah. Okay. it's that having a not necessarily a daily practice, but getting as close as you can to that constant improvement and always doing better and you don't have to be the guy getting up at 4:30am to be successful. Right.

Jason Pero  18:58  

Well I because I interweave  one of the one of the guys. I really, really love Tim Ferriss and yeah, he's great. Sometimes it's like I mean, a lot of personal developments cafeteria style. You just pick what works for you.

It's like a buffet. But one of the things that Tim Ferriss did with the four hour workweek tribe of mentors, tools of Titans easily boiled down those key, like, three or four things that somebody would do to be successful in whatever endeavor it was that they were choosing. In my mind, I'm like, Well, what are you? What are those key things that I need to do to work on my business or to achieve my goals? It's not all this other stuff. For me, personally, it may not be getting that extra hour of sleep.

I'm recharged. I have that full. I have that eight or nine hours of sleep, I mean, nines kind of pushing it but seven or eight hours of sleep a night, working out for a couple hours every day and doing those things is just to me is just as important as taking action in other areas. But that's not  but that's okay. That's me. It doesn't mean it's right for everybody. Right?

Taylor   20:05  

Yeah, I mean, for me personally, if I can get my own account related to that recently as we kind of got into the Coronavirus pandemic and things started shutting down, the gyms shut down. I wasn't going to the gym anymore. I'm a big jiu jitsu guy, and then that shut down. that practice for me. For me, it was a big stress relief, and just helping a lot went away. I didn't deliberately replace that initially and that really gave me care and  I had a hard time with that. the consciously replace that and, and I think in the entrepreneurship world, there's actually not enough focus on things like that, like, Look, science says, You need to sleep a certain amount and it's not four hours a night, it's not six hours a night, it's about a exercise and all those things. It's important Yeah.

Jason Pero  21:00  

So, area Huffington had a great book she a couple years ago called thrive. that was, the premise of the book was about getting enough sleep and getting that rest. Everybody knows her as a successful entrepreneur and she talked about how she was just hard charging because you're trading your time for money. that concept of, if I can just work more, I'm going to outwork them and I'm going to achieve more financial success. But  a lot of times when you do that you end up having a health scare or something that breaks you down. It did not happen to me, and that's a story for another day, but  I have a heart issue that got uncovered or diagnosed a few years back. I'm again, I always worked out. I thought I was living a relatively healthy life. I'm like, I'm not a pillar of health and yet I still am having pizza and chicken wings for dinner. Might have a beer. Can we watch TV tonight, but it was at that idea that  you need to, you can't just be going 100 miles an hour at all times.

you have to Have a well balanced life and I think that for every bit of the stuff that you want to follow from a teacher or a guru you need to find that in those areas that will help you lead a well balanced life because you can make 100 million dollars but die of a heart attack at age 50 Well, that was a good visit, you know? And, and the thing is, or do that and just never have a never have a satisfying relationship or, or could be estranged from your kids or whatever, whatever the case is. I think being well balanced is just as important, or if not, probably more, it's probably the most important part of being an entrepreneur because you need to be coming from a place of inner peace not to get to Frou Frou.

But  meditation, and it could be any style of meditation. I mean, some people, like you said, you're you practice Jiu Jitsu, well, maybe that's your meditation. Maybe the gym is meditation for some people, but Sometimes just being able to sit and clear your thoughts for 15 minutes a day and there's no right or wrong way to meditate. But there's so much science behind that, and the health benefits of it. I think in times like this, when it's, everything's going crazy, and there's that uncertainty in the world, now you can bring that inner peace back into yourself, and realize that you can control what you can control.

you can let a lot of the other variables kind of wash wash away. Like, that's probably the most important thing that for entrepreneurs like myself, it's not for everybody, although I think it should be, but I think Yeah, I really would say that there's not a downside to it, it doesn't, doesn't cost anything. the, the mental, physical financial benefits of having a centered and well balanced approach to life is it's paramount to everything.

Taylor   23:55  

Yeah, it's important. if I can do a hard gear shift here, and I Get some historical lessons from you. you're somebody you saw the great recession in 2008 happen. we're sitting here in April of 2020. Depending on who you ask, there's a lot of uncertainty. There's always uncertainty, but a lot of uncertainty now. We might be looking at the biggest recession since the Great Depression. Yeah. What are your thoughts about that from what you see, especially in light of kind of seeing rumblings happening before the Great Recession happened?  if you did, I don't know.

Jason Pero  24:37  

Well, what do you think? Well, I mean, there's, there's so many avenues we can talk about with this, but I think that  what, on one hand depressions and recessions create more millionaires, right. That's one less than one clue. That happens every time there's economic disruption. of course, there's blood panic in the streets. that creates opportunity, which opportunity should always be addressed ethically and honorable you never want to take advantage of, of a negative situation. But I think that knowing that, that there's going to be opportunity, how do I, as an entrepreneur, position myself to take advantage of opportunity that may come my way because of that disruption. what we did a few years ago, we refinance all of our properties, didn't pull any cash out, although I would have liked to.

I mean, I always have a way to spend the money. But in my mind, I thought the discipline that I was taught was that it's in real estate, nothing beats cash flow. In the portfolio we had at the time, I was able to reduce my monthly payments by close to $20,000 a month. Wow. if I didn't do that, I mean, I might already be out leasing my own apartments and my own lines, but what that did, I mean, we already had a bit That cash flow, but what that did is that allowed me to take more money into my own pocket, maybe create some cash reserves, hire better talent do all these things that we want to do in our business, but it prepares you for a lien time. it's a lesson you don't want to over leverage and always bet the farm.

Because sometimes you might run out of equity. I think if somebody is in that case, it's okay to make mistakes. I mean, it's like, how do you pivot and learn those lessons? So, I think if you get over leverage, well, can you make it through the next three months? Well, if you don't know the answer, you can make it through the next month, can make it to the next week and, and control what you can control. for someone that self manages  is your landscaping contract super expensive?  you might have to go out mow your lawns do you Yeah, I don't know.

I mean, there's not no one size fits all approach to this, but you have to be willing to take control and own Whatever be humble in the success, but don't whatever problems come your way. Friend of mine put up a quote today on Facebook, he said, Okay, can I curse on this or not sure it's clean. Okay? He said, Now there's two types of people in the world if they're standing in a pile of shit, somebody's going to be complaining. There's the person that's going to complain. then there's the person that's going to be looking for the horse. Right? So you want to be the first that's looking for the horse. We're all standing in a pile of crap right now.

you're gonna complain, or you're gonna look for that opportunity. Right? And so, I think that, again, it's all about keeping a positive mindset. Again, there could be a lot of disruption. But again, I think I've, maybe I'm just saying look, I'm not I'm I'm not a scientist. I'm not, I'm not a statistician. I'm not an economist. I mean, I just go on, read everything that comes out. I pay attention to economics, but I still, I asked people I said, Well, tell me how Finance my properties, right? And we created a great situation for our tenants. How, how is this a risky investment? So even in the middle of a pandemic? I mean, we're not fortunate, we don't have much disruption. But even if we did what's our breakeven threshold if we were 60% occupied, or 70%, occupied, and we can still break even great. Now, the fact that we've raised four or 568 months of reserves for emergencies, well, guess what we're in an emergency right now, you may not even have to use those reserves.

But I think that you have to take if you're going to spend all that time and underwriting deals and spend all that time raising money, spend all of that kind of mental fatigue dealing with dealing with the lenders and putting all the reports together. make sure you're positioned to weather as best as best you can encounter. there's a lot of cool programs out there right now with the characters In the payroll Protection Program that have forgivable money. I mean, obviously, it's free money, but there's a lot of things, there's a lot of societal guardrails that people can utilize to come out of this even stronger.

Taylor   29:15  

I think it's very instructive. What you said, when I first asked the question about more millionaires being made in these tough times, then that was your first response to the question is where's the, where's the horse to go back to the analogy that you gave? So I think that's a good insight in that you're not initially looking for the negative you'll get to the negative part and then how do we update that but the first thing is, what's the positive  focusing on that? So I think that is an That in itself.

Jason Pero  29:51  

Yeah. another positive in all of this. I mean again, like for whether you're single or married kids, whatever. cases you have time to be in solitude and, and for me I  we're social so we've jumped jumped on our zoom calls several nights a week with friends and having having these happy hour so it's great to stay connected, probably more so with with friends that like I call it friends that we'd see each other once a year now we've been on zoom calls every Friday night for the last round.

It's fantastic and you saw one hand that brought you know should bring you back into appreciate what maybe it's taken for granted in the past. But even with our kids at home, I mean, we've been able to play board games and  so our favorite courses monopoly but you can sit and play board games a couple nights a week and watch movies and eat dinner as a family together when we're not running around like crazy. my fear is that we come out of this and maybe forget that we had a really some really cool opportunity while we're all shut down. Yeah, there's all this uncertainty and there's a lot of people suffering and it's, there are some really bad negative things going on. People are dying physically And, and from a business standpoint, but at the same time there's a bright side to everything. I think that for us, I mean, being able to be home with our kids we working out at home a lot of virtual workouts and running around the neighborhood or whatever it is, but being able to do things differently and just try to try and do appreciate that.

when we come out of this, maybe have a a little bit more empathy for for our fellow man and maybe just try to have a greater connection with other people, because sometimes you just and that always last post post crisis that that happened after the Great Recession happened after 911 there was this unity and people were, were friendly, but I think that as a world, you kind of we need that you need need to be able to reconnect and have that ability to like, smile at your neighbor and not just like hide your head when you're walking by I mean, so, so try to use us every bit of this downtime is a lesson and then time to recharge and appreciate the things that maybe took for granted before this.

Taylor   32:05  

Wow, I love that and it's been great getting some insight into the two aspects of self management in real estate investing. I love that as a topic. Jason if folks want to learn more about you and your investments and syndication business and all of that, where can they get in touch with you? They can get a thing go on my website, it's pero real estate calm if anybody wants to schedule a strategy call always have to take 15 or 20 minutes and link up with anybody whether they're brand new investor or

Jason Pero  32:37  

you know somebody somebody that's been in business long term I don't don't have anything to sell just it's always good to hop on and just kind of get to network and meet people so I can go on calendly com forward slash Jason peril and connect with me there and  hit me up on Facebook and LinkedIn and all the all the usual places.

Taylor   32:53  

Awesome. I talked to so many real estate new real estate investors who are not technically real estate investors yet but they want to get in and they Say what do I need to do? Who do I need to talk to? And there's a great one. a lot of people, shockingly, will not accept that offer of a quick conversation. that can put you so far ahead, talking to somebody who's experienced I wish

Jason Pero  33:18  

I would have had that opportunity early on. I mean, we sound like it wasn't that long ago 20 years ago, but I mean, the internet was still, we still have flip phones, it's funny and, and payphones nobody knows what that is anymore. But it's now with social networking. you can hop on the phone with somebody from halfway across the country and network that way. It's just a beautiful thing. yeah, I mean, anybody feel free to hit me up, I'm more than happy to take time with new or experienced investors.

Taylor   33:52  

Great. I love it. Well, thanks for joining us once again, for everybody out there. Thank you for tuning in. If you're enjoying the show, please leave us a rating and review on Apple podcasts is a very big help. If you know anyone else 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 tuning in. Once again, I hope you have a great rest of your day and a great week and we will talk to you on the next episode. Bye bye