During this HyperFast Wealth segment, host Dan Lesniak speaks with Marco Santarelli who runs a portfolio of hundreds of rental homes and has helped many people do the same. They discuss how to use real estate investing to build wealth by educating yourself, building a supportive team, and taking implementation seriously.
Episode Highlights:
- Marco Santarelli bought his first property at 18, and knew at a young age that he wanted financial freedom.
- His first rule of success is to educate yourself.
- Many people don't take the time to educate themselves and look for quick fixes.
- Many people fall into the trap of analysis paralysis.
- The other trap is becoming an expert when you just need to start with a foundation of education.
- After gaining an education, you need to start building a support team.
- In 2003 Marco decided to attend a real estate investing event in California. He signed up for a boot camp that got him back into real estate investing full-time. He went out and executed on a high level.
- The first reason he thinks many people have a difficult time implementing is that they often want a lot of hand-holding.
- The next reason they fail to act is fear.
- Marco runs a brokerage. They have investors/buyers on one hand and then sellers on the other hand. Their compensation comes from the sale side of the transaction.
- They have 80% single-family homes. The other 20% is duplexes and four-plexes.
- Typically these are three-bedroom homes in B/B-/B+ neighborhoods.
- In 2020, cap rates are ranging from 6-8% as a general rule of thumb based on market and neighborhood.
- The ideal RV ratio is 10%.
- If you're chasing appreciation, then you're speculating. One of Marco’s rules is not to speculate.
- There's also the passive approach, which requires buying the right properties in the right markets.
- Both models work, but ask yourself if you want to be an active investor or a passive investor.
- Don’t manage your own properties. Focus on your career and your business. Don't be involved in the day-to-day of managing properties.
- Find highly recommended property managers in your area and don't take on that work.
- Include a vacancy factor and maintenance costs in your pro forma.
- Marco uses his podcast as an important educational tool.
- His biggest advice to a new real estate investor is to take action.
- His biggest challenge has been deal flow.
- His biggest advice to a seasoned real estate investor is to analyze your equity and know how to leverage it.
3 Key Points:
- Educate yourself before becoming a real estate investor.
- Commit to implementing. Don’t wait for someone to hold your hand and don’t let fear stop you.
- Do not manage your own properties. Hire it out.
Resources Mentioned:
- Learn more about Hyperfast Academy; HyperFast Wealth
- Dan Lesniak bio, Facebook, Twitter
- Marco Santarelli LinkedIn
- Passive Real Estate Investing website, Podcast
- Norada Real Estate website
- Rich Dad Poor Dad (book)
- Nothing Down (book)