1 (2s):
Lights that sparked Fire Nation, JLD here. And welcome to Entrepreneurs On Fire brought to you by the HubSpot Podcast Network with great shows like Salesmen. Today, we'll be breaking down how to become multi-family investors and entrepreneurs to drop these value bombs. I brought Jake Stenziano into the EOFire studios. Jake and Gino are multi-family investors, educators, and operators with over 175 million in assets under management, their students have closed 40,000 units and have 2 billion in deal volume. We'll talk about scaling up your multi-family portfolio, and then we'll talk about creating those multiple revenue streams and so much more Fire Nation. When we get back from thanking our sponsors, let's get real let's talk, Roll by ADP.

1 (50s):
The first chat-based mobile payroll app designed for small businesses and startups. It makes running payroll as easy as sending a text visit, GetRoll.com/fire to get your first three months free business made simple hosted by Donald Miller takes the mystery out of growing your business. Recent episodes, like how to attract and retain top talent and how to make more money with your current products are straight fire. Listen to business made simple wherever you get your podcasts. Jake say what's up to Fire Nation and share something that you believe about becoming successful that most people disagree with.

0 (1m 29s):
What's up Fire Nation. I love that. Wow. What a great question. You know, Gino and I talk about this all the time and that's responsibility over victimhood. And I think it's a little bit aggressive. People can maybe be uncomfortable about it, but so many times, you know, I'll, I'll be scrolling through Facebook or whatever, and people will be saying something like where, where are the people to hire for the jobs where where's this and that? And then you get the guaranteed every single time victim hood responses. I need a degree. I need a certification. I need this. I wasn't born into money. All these limiting beliefs that people come with, these preconceived notions.

0 (2m 12s):
And I'm a great example. Gino's a great example, started in a very middle-class family in rural upstate New York with absolutely nothing new, no entrepreneurs, new, no business owners, my entire life, and simply was willing to hang in there long enough to make things work and had to stay in power, to be okay, making $0 for the first three or four years of our business, then to start another business and make zilch for the first three or four years. And then when the success came to not sell assets that have appreciated by a hundred percent because it was still early in the game on those.

0 (2m 55s):
So I think so many times people push the responsibility off onto someone else versus looking inwards and saying if it's meant to be it's up to me. I don't know. I think I stole that from like Willy McGinest or something. I don't know what he's NFL champion, but really it comes down to you and somebody people want to push it off into someone else. So I think you've got to look inwards. You got to ask yourself how bad you want it and be willing to hang in there for it.

1 (3m 20s):
Jake, you are starting with the value bombs early in often my friend and I am excited to keep on rocking because we will be talking about how to become multi-family investors and entrepreneurs. So I want to start with your vision. I want to start with your core values because that's something that entrepreneurs need. And I feel like they spend so little time on these things. Talk to us about that.

0 (3m 45s):
Let me start with the vision. And I think this is a huge gaping hole in the multi-family space. And there's a book I read many years ago called blue ocean strategy. And it's this, this is essentially our blue ocean that we're attempting to play in. I always tell our team that we want to become the Chick-fil-A of apartments. Now, what do I mean by that? We believe that there's a huge gap in high level customer service in the multi-family space. You got developers coming in using third-party management. You've got third-party managers, managing assets that are not theirs. You got a huge swath of mom and pops that think, oh, apartments are a good place to park my money.

0 (4m 30s):
They attempt to manage them. And there's terrible experiences on the side of the customer. So everything we do is around the customer experience the customer journey, finding ways to create hospitality, like experiences for our residents. And that's what we work on day in and day out. If you look at, you know, we're setting a, you know, different quarterly priorities, they're based around the customer experience, the customer interactions, training up our folks to give them the best, you know, ability to serve folks the right way, because really there's a huge demand for multi-family. So a lot of people can get away with subpar service.

0 (5m 12s):
We don't want when the market changes or when there's, you know, a different type of economic environment. We want to be able to separate ourselves from the base level experience where when people finish out their year, lease with, they want to renew for many years to come because they had such an excellent experience. And then I think people have seen it time and time again. So that's that's number one, that is the vision, the experience to become the Chick-fil-A of apartments. You know, when you go to Chick-fil-A, especially where I live in Knoxville, Tennessee there's lines out the, you know, the, the parking lot into the highway, you know, in the four lane, if you will, every day for lunch, you drive, you drive by McDonald's burger king. It's not the same thing.

0 (5m 54s):
It's our pleasure. How may we serve you? All those little things add up to a huge impact from the customer's experience. And that's the difference when, when you see, you know, companies like Chick-fil-A, and that's what we're attempting to become now from a core values perspective, this was something I poo-pooed a lot in the beginning. And I, I started my career in, in big pharma. I was a pharmaceutical sales person and it was right about the time of this. Something called the sunset act where, you know, huge regulations came into force in the, in the pharma and I saw good culture. And then I saw really bad culture. So when I exited that and I started my own journey, my own path, I kind of poo-pooed core values, but then after you're in the game for a while and you're seeing, wow, this is everything.

0 (6m 39s):
This is what we're hiring on. This is what we're firing on. This is, this is who we're going to bring in. If it's a vendor, if they don't align, we're going to be removing them. So for us, we have five and it's growth mindset. People first make it happen, extreme ownership and unwavering ethics. And they really are true to who we are and true to what we want our people to pull through. And so I think that so many people can start out and they know they don't have this sort of the, this baseline or these values. But if you're not basing your relationships on your values every time that whether it's been a vendor relationship, it's been a partner relationship, there's been issues.

0 (7m 20s):
You can go back and look, and there's a values disalignment. And I think people underestimate it when they're first starting out as entrepreneurs, they don't place high enough emphasis on what their values are and who they're allowing into their lives and who they're not removing from their lives. I think so many times people may be, oh, well, you know, he must've been busy or they didn't get back to me on this email, but then there's a pattern, but they allow that pattern to continue. And it continues on. So we'd like to say, you, you promote what you permit. So essentially if you're permitting these types of relationships and you're permitting these values disalignment, you're promoting that the opposite is you remove it from your life and you move on.

0 (8m 3s):
And that's what we really suggest people to do.

1 (8m 5s):
So there's so many things I like from that Fire Nation. Number one, the extreme ownership of one of your core values. I'm such a believer in, I mean, being in the military, that was one thing that I really walked away with was I respected the crap out of my commanding officers who took extreme ownership and everything. And I was disgusted by the commanding officers in my chain of command who tried to just blame other people, blame it down the line. I just couldn't have any respect for those people. And for me, extreme ownership is such an important thing about everything we do in this world. And I love that. That's one of your core values. And I also love that Chick-fil-A store. I mean, it's kind of funny here in Puerto Rico, we have zero Chick-fil-As and then lo and behold, one's going in right around the corner from us in like a month.

1 (8m 53s):
And I've never seen people flip out more about a restaurant and these are like healthy, aren't successful entrepreneurs,

0 (9m 2s):
Decent sandwiches. They're not the best I've ever had.

1 (9m 4s):
I don't get it either. And I'm looking

0 (9m 6s):
At service though,

1 (9m 8s):
But I'm looking at the people and I'm like, I'm like, you're like healthy. Like you don't, you don't drink. You don't do it. Like, but you're like wanting this fast food restaurants. You're getting so excited about it. But it's what you just said, Jake is the other things they do. So gosh, darn, well, that really flips people in a good way.

0 (9m 23s):
They can process 200 cars in 10 minutes. It's nuts. It's not saying their systems are dialed into cultures there. It's just, it's like an entrepreneur's wet dream. So,

1 (9m 31s):
So Jake, a lot of listeners might be intimidated by the word multi-family . This might not get it. They might, they can't really see what step one would actually look like. So I would love for you to take our listeners on a story, on a journey of how you got started and bought your very first deal. What did that look like?

0 (9m 47s):
It's such a great point that you brought up because so many people that we speak to day in and day out. See multi-family is a pie in the sky. Oh, it's for the commercial guys. Oh, it's for the rich people. It's for them. I can't do it. It's too much for me. It is so much easier than running small investments. Okay. I am going to tell you right now, you can go and maybe you buy a duplex. Maybe you buy a four unit. That's fine. And I actually promote that you do that because you're going to start to see the bigger you go, the easier it gets, because you're bringing a team with you. You can bring systems, you can actually create a scalable business. When you're doing these small little investments, it becomes very challenging because who's going to do it.

0 (10m 31s):
We call it the I'm a mentality. I'm gonna do this. I'm gonna do that. I'm gonna do everything. I'm against burnout. I'm, I'm a, doesn't like what they're doing because they have a life and kids and everything, you know, maybe another job and businesses, the bigger multi-family deals, great from a tax perspective, great from cashflow and a great from a systems perspective. So on our first deal, I was simply looking to get out of my W2 job. I saw the pharmaceutical career as a dead end road. You know, I was, I was kind of like a wild child, you know, always bucking the trends saying, why aren't we doing it like this? I thought either, you know, I was going to get fired or, you know, eventually get, let go. And one of the multiple layoffs that they had over the year. So I, I felt like my, you know, the clock was ticking for me.

0 (11m 12s):
I needed to find something else. So I was looking for yield and I met Gino in New York before I left for Tennessee. And he started coaching me up. He did multi-family education and he had investments. So he was really my mentor getting into the space. And we just started looking at deals. The deals at that time, it was, it was 2011, much cheaper from a price per door perspective than they were in New York at the time. So that interested him, I was boots on the ground in the market. He was coaching me up and it took us about two years of constant rejection. And maybe I'm predisposed to just stick it and hang in there. But that's really one of the best things that, that we did as a team is we didn't quit early on when so many brokers are telling us, yeah, this is not for you.

0 (11m 55s):
Your offers are too low. We heard everything and we didn't have any credibility. So over time we started to create business plans and put credibility books together. And then ultimately we gave up, believe it or not, we were, we were probably 18 months into it. And my wife was pushing me to, you know, go buy a house. And that, that was my seed money and everything. And it just got discouraging. And you know, we, we didn't know what else to do. And then one of the brokers actually came back to us a few months later after I basically spent my seed money and said, I got this, you know, really kind of crappy twenty-five unit. I want you to take a look at, so here we go again, going through the dog and pony show, my, my beliefs are really low. At the time we go have lunch with a banker who was trying to finance the deal. And he said, no, I'm not interested in this.

0 (12m 36s):
This is not near the quality that I'm looking for. So I walk out, you know, head hung low discouraged. And he said, don't worry. I got another card here for you. And it was really this broker that really changed the game for us. He was able to get owner financing on the apartment deal for us. So the, actually the sellers held the note because they were struggling selling it. And you know, I have, I'm a little embarrassed to say this, but you know, early on we called it the crack then, because it was really a rundown, a part of it was an old motel. It was not the, the, you know, the kind of place that we buy now. So that was the first one that we could get into. But the best thing that ever happened to us, it took a lot of gut punches really was a big challenge in the beginning cause I was self managing it, but we got the deal over the line and that bet has changed my life because now we're in the game.

0 (13m 20s):
Now, everything is started that that engine is started. That fire is there to go get more, figure this out. The first six months there was septic fields on the property they failed. We had to replace them. This was at a time when the opioid epidemic was at a height. I didn't even know what that was. So I'm seeing these people and they like these needles. I'm like, are they doing heroin? Like what's going on? But they were, they were like, zombied out. And things like that. So, you know, long story short, we evicted, you know, many of the troubled residents. And then, you know, within about a year, we'd really turned the place around and we were able to refi, you know, our cash out of the deal. And that started that snowball where we started, you know, repurposing those funds, buy more deals with the money.

0 (14m 2s):
And one of the things that hit me really hard was the post office lady came up to me at the end, right before she retired. It was about a year into, it just thanked me. She said, I used to be afraid to drive through this complex. And now it's, it's a safe community and, and you did a great job and then she retired after that, but it's a bad, we didn't get to it a little sooner for, but the great thing about multi-family is it's a basic human need. It's a phenomenal business. I mean, if we're just going to be honest about it, but you're, you're able to impact your community in a great way. And it's, I think it's getting harder and harder for people to create small businesses that really matter with the Amazon effects and what, you know, what Walmart does. And the, you know, all these small little towns, main street has, has been, you know, destroyed multi-family is an amazing just vehicle for people to really become small business entrepreneurs, get in the game and do really well for themselves.

0 (14m 52s):
And it's a look, it's a basic human need. We always joke around that. People need food, clothing and apartments. It's true. You, you can't go out and get an apartment on Amazon yet. Okay. This is something that everybody has the access to go out and to invest in and change the lives for themselves and their families.

1 (15m 8s):
One thing I really loved about all of that was how you talked about getting your foot in the door and that's so key Fire Nation. When you're thinking about what is the first step? Well, the first step is getting your foot in the door. You're going to learn a lot. You're going to have some struggles in law school, some challenges, but every step is going to keep you a foot in the door and then getting further in every single step you're taking. And then boom, there you are. Here's Jake and he's rocking and rolling making things happen in the multi-family world. And we have a lot of things we're talking about. And when it comes to scaling and diversifying, when we get back from thanking our sponsors. Roll by ADP is the first chat-based mobile payroll app designed for small businesses and startups. It makes doing payroll ridiculously easy.

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1 (16m 32s):
Visit GetRoll.com/fire to get the Roll by ADP app and get your first three months free. That's GetRoll.com/fire. This year feels like the official return of conferences and in-person events. And I'm very excited to be speaking live onstage at this year's Inbound 2022 events in Boston, Inbound 2022 is happening in person and online September 6th through the 9th. And Kate and I would love to see you there this year. The in-person experience will include festival style stages, including the podcast stage. What's next stage in the main stage, aside from hosting a live interview on the podcast stage for Entrepreneurs On Fire, I am fired up about the connections and inspiration.

1 (17m 16s):
That'll be all around us at this year's event. If you can't join us in Boston this year, there are several other pass options available like the start-up pass, which is your free ticket to the spotlight talent prices are increasing, and there are only a limited number of VIP tickets available. So be sure to check out Inbound 2022 today. Inbound 2022 is built by you powered by HubSpot, learn more or get your tickets now at Inbound.com, Jake we're back. And once you got a little traction, you started to scale your multi-family portfolio. Talk to us about how that happened and how our listeners can really learn from your process and potentially be looking forward to doing the same thing with their portfolio.

0 (17m 60s):
Well, so it's a really good story actually in one of the most embarrassing but impactful moments of my entire life. There's a, a, a local gentleman east, Tennessee by the name of Jim Clayton. And he started Clayton Homes. He sold the company to Warren buffet. I believe $3 billion. At one time, they were the largest mobile home manufacturer in the world. And he then once he sold, you know, his company to Warren buffet, he started Clayton bank and trust. And on my fifth deal, we were looking for them to finance the deal. We actually, you know, had gotten quotes from Clayton bank and trust. And I was at a, a lunch with Mr. Clayton and the broker that was attempting to sell us the deal that were, we were trying to buy.

0 (18m 43s):
And we're driving around. We looked at the property that day. I had, you know, this is, this is the team. This is everything we're doing. And look, this is, this is a serial entrepreneur, started a company, sold it for a billion, you know, started a bank. So he looked, he knows what to look for. And he's like, Jake, I love your energy. I love your passion. I love your drive. And, and I'm sitting here saying, look, if, if the toilet doesn't work in one of these units, I'm going to, I'll go in no matter what we're going to make sure it gets done. We make it happen. And I, and I was pitching him on this and he goes, you gotta stop. And I'm like, oh, what do you mean to start? I didn't mean to be too aggressive. And he said, no, everything, your, your passion, your hunger is there, but you need to systematize.

0 (19m 24s):
You need to start scaling. You're just, you're just running and gunning right now. And you're going to get burned out. You can't do it all. You need better systems in place and you need to really start scaling your business. And I, and I was thinking to myself, what is, what is systems? What is scale? I, I really didn't get it. But that day look when Jim Clayton says something like that too. You start to figure it out. Thank God he believed in us enough to finance the deal. Cause there was a 281 unit deal. But from that day on, I picked up the book traction. I read that we did traction coaching. We did scaling up coaching the Rockefeller habits, and I've just read and invested literally hundreds of Thousands of dollars now into education on scaling.

0 (20m 4s):
Now we we're, we're dialed in with our L 10 meetings. We have quarterly priorities, you know, and, and it does get meeting heavy at times, but that's how, that's how a business that has so much detail and organization needs to be run it really in that look, you asked core values. We didn't have core values before we did this education. We did this training. This is the type of stuff that it takes to run a business. And in, in multi-family, some people don't treat it as a business look, multi-family investing is a business. I don't care if you look at yourself as only the owner or asset manager or whatever, it may be, the buck stops with you. You're responsible. You need to make sure that whoever you partner with your vendors, they have these values and systems in place, or it's not going to work out well in the longterm

1 (20m 46s):
Fire Nation. So more incredible, valuable takeaways from somebody who's been there. Who's done that. Who's got his foot in the door, got a little traction, scaled up their multi-family portfolio and is now rocking and rolling. But you guys didn't just stop there, Jake, like you realize that, Hey, we need to diversify because a lot of things had happened in this world. So once you have some real success with your multi-family portfolio, can you share how you've created multiple streams of revenue to really bulk up solidify and secure this revenue? This money you're bringing in

0 (21m 19s):
Multi-family is such an amazing vehicle because it allows for literally multiple streams of revenue, just done many different levels. We started a property management company. I touched on that. So, so each investment is its own entity. If there's an apartment building on 1 23 main street, that apartment building becomes an entity. There's there's myself and Gino, we go and invest on it. Boom, that's that's an asset. That's a stream of revenue. Then you have the property management company. There's another stream of revenue. As we got further on, as we purchased over a Thousand units, we said, Hey, what is this syndication all about? So we started a syndication company. We actually brought in other outside investors, their streams of revenue there there's acquisition fees, there's asset management fees.

0 (22m 5s):
In addition to the property management fees. And you're bringing other folks on to invest in your properties that allow you to scale up and grow bigger. From there, we actually started our media and education company where we do podcasts. We do live events. We have this amazing event, multi-family mastery, five, where we bring a thousand people together in Orlando, Florida every year. And we teach our framework. Bi-Rite managed right and finance, right. We've written books. And, and we actually offer multi-family education now. So we, we have the core vehicle, which is the asset, you know, and we, and we have over, you know, 30 of these, you know, multi-family holdings now. So you have those. And there's also within the, within the entity.

0 (22m 47s):
There's additional streams of revenue. Okay? You have laundry. Okay. You're in the laundry business. Many times, if you're in multi-family there, there's also many things that go along with it. There's there's pet fees, moving fees, and the list goes on and on. So, so there's, there's multiple streams of revenue within multi-family , but we keep the core vehicle. Everything we do is centered around multi-family investing, but there's streams of revenue think, think a wheel with different spokes coming off of it around that wheel. That's, that's how we've always looked at. Multi-family

1 (23m 15s):
I've always loved that kind of spoke mentality because Fire Nation need to look at things like what's your core. Okay. Now, how can we build off of this in the meaningful way? And Jake, you talked about a lot of things today. I mean, your vision, your core values. You talked us through your first deal that you went through and how that got your foot in the door. You talked about scaling up the multi-family portfolio that you've created diversifying. Once you've had some success, let's take it home here. What is the one thing that you really want to make sure Fire Nation walks away with, from everything that we've talked about here today?

0 (23m 48s):
I don't want to be overly cliche and you know, like, I'm sure many people on your show come in, but I talked about the pie in the sky before. Look, I came from a pharmaceutical background. Gino was a chef with one restaurant in the back, you know, and many times people would call out. So he was cooking or he was doing dishes. We came together, we got educated. I really believed in the multi-family space. Education times action will equal your results. It doesn't matter if you're a school teacher. If you're an engineer, you're a sales person. Whatever the case may be multi-family is available for everybody. If you apply those principles. So I don't think you should get overly intimidated by it. But if, if starting out for you means a fourplex means a six unit get into it, do it, figure it out.

0 (24m 33s):
And then as you scale up and you get into bigger properties, you're going to realize it's easier. You might be adding some zeros on, but guess what? That's a good thing. And that's a good thing for your bank account. So, so get started. Maybe you have to knock out a four unit. Maybe you have to knock out a 10 unit, but then you're going to realize the economies of scale that come with getting into bigger properties. And I believe you're going to, you know, really see, you know, the light at the end of the tunnel and realize that's the place for you. And there's no reason, you know, especially if Jake and Gino can do it, then any reason why you can't do it yourself,

1 (25m 2s):
Education plus action equals results. Love that phrase, lock it and Fire Nation. Jacob, we want to connect with you and with Gino and with the business that you're running, how do we do that? Any call to action you have for us right now. And no one say goodbye,

0 (25m 17s):
Easiest way, JakeAndGino.com. You can check us out there. And then, like I said, we have our event, multi-family mastery, five coming up this November 5th and 6th in Orlando. It's at the Gaylord palms phenomenal event. You know, some amazing speakers that are going to be there, but also we're teaching our framework. Bi-Rite managed right and finance, right? It's the multi-family conference of the year. And we'd love to have you

1 (25m 39s):
Fire Nation. You're the average of the five people you spend the most time with. You've been hanging out with JS and JLD today. So keep up the heat and head over to EOFire.com and type Jake in the search bar. His show notes page will pop up with everything we've talked about here today. Jake, thank you for sharing your truth, your knowledge, your value with Fire Nation today, for that we salute you and we'll catch you on the flip side. Hey, Fire Nation today's value bound content was brought to you by Jake and Fire Nation. Successful entrepreneurs accomplish big goals that's why I created the Freedom Journal to guide you in accomplishing your number one goal in a hundred days, and we're talking step-by-step so visit the FreedomJournal.com and I'll catch you there, or I'll catch you on the flip side.

1 (26m 22s):
Let's get real, let's talk, Roll by ADP. The first chat-based mobile payroll app designed for small businesses and startups. It makes running payroll as easy as sending a text visit, GetRoll.com/fire to get your first three months. Free business made simple hosted by Donald Miller takes the mystery out of growing business, recent episodes, like how to attract and retain top talent and how to make more money with your current products are straight fire listened to business, made simple wherever you get your podcasts.