YOUR DAILY REAL ESTATE INVESTMENT SHOW
June 19, 2022

Relationships in Real Estate With Alex Mandaro

Relationships in Real Estate With Alex Mandaro

In the 66th episode of Cash Flow Pro, we talk with Alex Mandaro, Managing Principal at Rubicon Properties. Alex has spent five years working on asset management and commercial real estate investments. His drive to push forward is to help pave...


 

In the 66th episode of Cash Flow Pro, we talk with Alex Mandaro, Managing Principal at Rubicon Properties. Alex has spent five years working on asset management and commercial real estate investments. His drive to push forward is to help pave the way for others searching for what he has found – financial freedom. Alex is here today to share how commercial real estate has impacted his life and how it can impact yours.

 

Rubicon Properties is a private real estate investment firm in South Florida. The firm focuses on education and helping others recognize the benefits of passively investing in income-producing real estate.

 

In this episode, we discuss:

  • Finding your calling and investing in it
  • Curating your target audience
  • Broker relationships and creating your funnel
  • Inflation and Tax write-offs

 

Tune in on this episode to find out more!

 

Find your flow,

Casey Brown

 

Resources mentioned in this podcast:

  1. mandaroalex.com
  2. https://www.linkedin.com/in/mandaroalex/
Transcript

Casey Brown  0:06  
Hey there, and welcome to today's episode of cash flow grow your daily real estate investing podcast and YouTube channel. I am here today with Alex met min Daro, I get it right?

Unknown Speaker  0:23  
Oh my gosh, that was pretty close though.

Casey Brown  0:25  
And we're trying to, to get get these last names, right. And sometimes there's some that are just a little more challenging. But anyway, so Alex is with us. He's with Rubicon properties. And I know I'm gonna go ahead and just introduce Alex as probably the youngest sponsor or even syndicator, or anything attached to a syndication that we've ever had on the show, as Alex is 18 years old. But as you'll find out real quick, he knows what he's talking about. He understands the business. And he is kind of specializes in brokering deals and finding deals for his, for his company. So Alex, welcome. How are you today?

Unknown Speaker  1:10  
Thank you for having me. I'm excellent.

Casey Brown  1:13  
Awesome, man. That's great. So I want you to kind of start and tell us a little bit about yourself, and what what brought you to the real estate business, although, you know, most of the time we hear we hear stories of, of failures, and this and that, and tried this and that. And now, people ended up here, but obviously, your story is gonna have a little different shape to it. So go ahead and tell us what what we need to hear. Yeah, I

Unknown Speaker  1:37  
would say I haven't really had enough time or experience to have many failures. So I'm still kind of starting and figuring things out. But from a very young age, you know, I'm already young age, but from an even younger age, I was very business oriented. And I always knew that were wherever I ended up in life, I wanted to be a business owner or kind of forge my own path. And, you know, I went through a bunch of different things I tried online, like E commerce, I tried day trading for a while, and none of those things really worked out. And I didn't really feel the kind of click that you feel like when you think, Oh, this is right. And then about a year ago, I discovered real estate. And I always thought that real estate was one of those things where you had to have a lot of money. And so I thought that's going to be for later on, I don't have any money right now. So I can't operate in that space. Sure. And then I found out about syndication. And I thought, this is the most incredible thing I have ever heard. I didn't even know this was possible. And so over the past year or so I've been networking and learning from people who are way smarter than me and just kind of getting my feet into the water, learning how to put an investment together and how to go through the whole syndication process.

Casey Brown  2:51  
Awesome, man, that's, that's I mean, you know, and there's, there's a lot of people and I guess, I guess your story is, is no different than then mine are, are probably the next 2000 people. In the regard that, you know, we all kind of tripped into this business, in in some form or another where we didn't really, you know, we we had business, you know, ideas and business principles, but none of us really kind of knew exactly how to harness that and how to get it going and figure it out. Now, where did you What did you very so for the beginning syndicator out there that's that's listening or the beginning? Somebody that's that's just starting to dab their toe in the water of this? What was the first thing that you studied, or the first kind of lesson that you took in order to that really kind of catapulted you forward?

Unknown Speaker  3:50  
Well, I think the best way to for me to look at that is the best piece of advice that I was given when I started out. And it was kind of it was almost counterintuitive when they my friend told me this, but they said to kind of pick your lane and then really dig into that lane. And so, you know, in syndication, there's typically two sides that you find there's the people who are good at finding deals and underwriting deals. And then there's the other side, who is good at raising capital and building those relationships. I am, I'm not really suited for the raising capital side, it's just not something that comes naturally to me. And so I've found that I've been, it's been easier. And I've been more successful, that, you know, relatively successful up into this point when I just focus on finding deals and analyzing deals and, you know, bleeding out of my eyes with numbers.

Casey Brown  4:42  
Sure, sure. Sure. And I actually had this discussion with somebody yesterday. You know, I, I actually and of course, we want to hear more about your story, but I want to dig in there just a little bit on where you said to dig in. I had this disk talking with somebody yesterday about defining your avatar. And, and it's somewhat relates to that, because I think so often in the very beginning it at least this is the way I saw it was people people jump in, and they're like, oh my gosh, this is the this is the greatest, neatest, most awesome thing I've ever found in my life. And then they're like, Okay, and this is my story anyway. So I was like, Alright, I think I want to focus on people who have jobs that are certain that are that are built around like systems, like very systematic people, like let's say, engineers, doctors, maybe software engineers, or software developers, people that were people that were very routinized, and very systematic about how they went about their day. All right, well, then, I started saying, Okay, what if we focused a little bit more on, on maybe, like, let's say, let's go doctors, okay. And, and even that was too broad, because what would happen is, is I would be like, I would go over there, and I would say, okay, hey, I'm getting ready to focus on doctors. And then I'd be like, well, shoot, what happens if this guy over here, this guy's an engineer, but what happens if I'm focused over here, and I miss him. And, and then all of a sudden, I missed this investor over here, because I was focused over here. And instead of doing it like that, you have to, you have to, like, almost pull that onion back and get all the way in there to the middle, and dig in. And that's that I think, is more, and the other stuff will follow. You don't I'm saying? Don't you agree. I mean, once you dig in, you still like you said, Stay in your lane, and just just go and define what you want to do. And like, and then eventually, my avatar, got like a hobby. And then my avatar got like, you know, when I say asleep pattern, but I'm just saying, you know, there's, there's just different things that my avatar has now, that that and that's where you pick up the surrounding people, is by defining your avatar, finding out what they like, because obviously, if you're like, let's say you're you're focused on doctors who are, I don't know, let's say, I don't know, a gynecologist, whatever. And you get in there, and you find out that most gynecologist like to play chess on Saturdays, you know, when you start focusing on the people that play chess on Saturdays, that's going to pick up that people that are around that. So anyway, right. I love that you said that in that you dug in that you said that that somebody had told you to dig in? And that's what you did. And obviously, if you've had some success doing that, you know, you're, you're ahead of the game for sure.

Unknown Speaker  7:55  
Yeah. And I mean, I think, you know, the whole advice of get really specific, it doesn't really matter, because there's 300 million people in America, surely, whatever subset you pick is going to have enough people. So if you say doctors, right, there's a lot of doctors, but if you say, neurosurgeons who are 10 years from retirement, that's, that's a whole group that obviously they probably have money, and they need something to do just sustain themselves in retirement. So getting specific and niching down is really the best play, because then you can focus on that one group of people, rather than trying to cast a really large net and not getting anybody.

Casey Brown  8:32  
Correct. And then and then you're you're so worried for the gentleman that I talked to you yesterday, as like, you're going to be so worried about the one you're going to miss that you're going to miss the crowd, you're so worried about the guy over here that may or may not be paying attention to you that you're going to miss the crowd that you do have a chance to, you know, info influence or get on the on the path of have right with you. So, um, so, you know, and the other part of this that you had said that you mentioned there in the beginning was was that you weren't very good, or you didn't feel like capital raising was your call. Like you you really just were like, Hey, I'm gonna go and this is part of staying in your lane and digging in. So let's talk a little bit about the deal finding and and and I think a lot of people get lost in the order of which things need to happen in this particular portion of the of the of the model. I think a lot of people think that they should just be able to call up a broker and say, Hey, man, you got to the rental, you got to the 200 unit, apartment complexes for sale, no, click Done. In fact, there's a relationship that has to be forged there. I know there is at least in my sales business, you know, the people that are good to me, they're going to get the they're going to get the deals when I find them or you know, I'm going to call them first rather and not necess really been good to me, but just somebody that communicates pretty regular, and stays in touch and talks and lets me know what they're looking for today versus what they were looking for last week. So talk to us a little bit about,

Unknown Speaker  10:10  
about that part of

Unknown Speaker  10:11  
it. Yeah, I'd say about a year was probably around six months ago, when I really started digging into building broker relationships. And the first few calls, you know, you have to know what you're talking about, and project your confidence. Because if they smell that, you know, you don't know what you're talking about, a lot of times, that's it. And I the first couple of calls that ghosted me and I was like, Man, I thought I did really good on that, but I guess not. And so I kind of just kept working at it and building the muscle. And I've gotten to the point where now I can have a conversation with Most brokers, and I will get an email or a call back, because they, they can tell that I know what I'm talking about. But it's also, like you said, it's really, really important for the follow up, you have to keep engaged with this broker. So they don't forget about you, because they have a lot of clients that reach out to them all the time. And if you don't keep yourself at the top of the list, you're gonna get lost.

Casey Brown  11:08  
And that was, so I said this early on in my real estate sales career when you know, 15 or so years ago, I guess it's been 15. Maybe it's longer than that, it's probably it's been as many years as many days as you've been alive. How's that? It's just seems like it's been how many days you've been alive that 20 years has been but anyway, I always said that, from the sales standpoint, the, whether it's somebody that's going to buy a property, or somebody's going to list a property, that client, generally speaking, will do business with the last broker that touched. And while I have continued, and this was early on, when I, when I, like made this defining thought, and I didn't realize at the time how defining it actually was, until now, looking back, I'm like, Man, how many times has that rung true? over all the years, and I'm talking about people that are like, your family, I'm talking about people that like you would expect, hey, you know, I saw that guy two weeks ago, or I saw that guy back at Christmas, it's now June. And, you know, I saw him get up, and they do business with somebody else. And you're like, what you just, it makes you want to pull your, as you can tell, do you see that? Your hair, my hair is all gone, because it's all pulled out. And so once I once I figured that out, and that that's kind of a sentiment for business in general. To what you're saying about the broker relationships, and it's the same way, because the guy that's going to get the deal from that broker is going to be the last guy or lady that that talks to them. And they're gonna be like, oh, man, hey, I need to call Alex, he was looking for something just like this. And unless you're that last guy that touched them, or lady, you are, you're, you're at a disadvantage. You're, you're coming in at a disability from the beginning. I mean, you're being you're being disabled before you ever get started.

Unknown Speaker  13:24  
Right. And I, you know, it kind of goes like this. And I wasn't the person who came up with this, but I thought this was like a really good now yet, people will do business with who they know who they like and who they trust. And so you have to get in on all three fronts. If the broker doesn't know you, they're not going to call you. If they don't like you, they're not going to call you. And if they don't trust you, same thing, they're not going to call you. So you have to it takes time to build all those things, right, the first phone call, that's when they know you. After time, they realize that maybe they like you. And over, you know, maybe even months they they say okay, I trust this person, I'm gonna give them good deals, and I want to close with them. Know, like, and trust. That's

Unknown Speaker  14:05  
the, that is the, that is the

Casey Brown  14:10  
those are the pillars of which basically business in general as built know, like and trust. And, and because and it took me a long time to figure that out. And especially through the syndication game, and as you as you'll find out as as business goes on, that there is some people in the get up every damn morning and they look for trouble every day. It's like, it's like they could they don't have any problems. Everything's good. Life's easy. No issues. Kids are happy wife's happy. Dogs are healthy, the whole nine yards and they get up and they just get pissed off and they look for trouble every single day. And then, but those same people get along with a certain sect of people that don't make sense. So it's like okay, When they come at me, I'm like, listen, we don't no, no, no, no, no, this is not we don't need trouble over here in this corner. Okay, you go find the go find the people that that you resonate with. And that's where, and that's where know, like, and trust can work both ways. Because in capital raising especially, we all think that just like I said, we all think that we need to jump right in, and we need to just be be anything and everything for everybody. Instead of saying, instead of knowing when to say, Yeah,

Unknown Speaker  15:31  
I don't I don't want this. And it's the same

Casey Brown  15:33  
scenario that

Unknown Speaker  15:34  
right. And you know, it's the same philosophy between people you narrowed down, you've narrowed down deals, right. And brokers and markets, you can look across the entire United States, you would, your brain would explode with information. So you

Casey Brown  15:48  
really not to mention your underwriting standards. I mean, yeah, it's irresponsible.

Unknown Speaker  15:53  
Of course, you have to get granular with everything.

Casey Brown  15:56  
And you have to know and you know, and that was the same, that's the same thing. Well, what if I'm focused on Dallas, but a but a massive deal comes up? That's just a stellar deal in Detroit? Well, those are two different markets and what might seem like a deal to you why you live in Pittsburgh, what might seem like a deal to you in Detroit, you know, the Dallas market. And it may not be a deal in Detroit, it may be, you know, there may be any number of different outlying factors that could come into play there. So, again, it's the it's the, it's the, it's the finding that niche digging way down in it. And when you get to the bottom, dig further, and, and they, you know, Russell Brunson, one of the greatest marketing minds of all time, or at least one of the greatest. One of the greatest, I'm trying to think how to put this he knew how to relate the content in ways that people could understand instead of talking way up here, he got down on all our level and was like, Hey, this is where the majority of the people are, we're going to talk. So what I'm getting at is, is, you know, that's, that's just a lot of the things that he does. And he just says, You have to get now. So yeah. But so tell us a little bit about these broker relationships, like like, obviously, there's a funnel that's attached to them some some form or fashion. Tell us a little bit about your exact process. You don't have to give locations or anything like that, because you want to invite competitors right in here on the show. But tell us a little bit about how that process starts. And then what what's your what type of follow up stuff you've you've put in place?

Unknown Speaker  17:48  
Yeah, so I think it really starts out with a mailing lists, believe it or not, I go on, like one of the big brokerages like Cushman and Wakefield, and I will, you know, sign up for the mailing list and say, it lets you select your profile. So I say, Okay, I want the southeast United States deals over 50 units and value add, right. And then all those deals then come to my inbox as soon as they get listed. And so if I don't have a relationship with the broker on that deal, and I want to look at that deal, I'll just reach out to the broker and say, hey, I'm interested in this, can we get on the phone? And you know, talk about it? And, you know, typically, from there it progresses? Maybe we say, actually, so far, all we've said is okay, this deal isn't for us, you know, we did the underwriting, it got past so many stages, and it didn't work. Do you have anything like it? Because I'm interested in everything that looks like this deal? Yeah. And so, you know, over time, you build a relationship, you filter through a lot of deals. So you get experience underwriting, and you know, on a couple deals, you get really close, you put in an offer, maybe you don't win the offer, but either way, the experience really helps build your, you know, your brain muscles almost Matt broker than

Casey Brown  18:59  
those two that you're that, you know, that's how they make their money to is by not just executed ello eyes, but you don't get an executed loi without a submitted LOI.

Unknown Speaker  19:10  
Right. And it's, they know that they're gonna they only make money when you close. And so if they know that you came to do business and that you're responding to their emails, you wouldn't believe it. But apparently, a lot of people when they first reach out to a broker and the broker gets back, they just don't respond. So if you can be the person that does respond to that broker, and you're quick to reply, and you always are there to bounce back off of them. They will want to do business with you.

Casey Brown  19:38  
Yep. Now what types of property classes are we talking about? Just give us a few like, What are you all mainly looking at or putting putting forth in your business right now?

Unknown Speaker  19:51  
Really, B and C Class value add? Multifamily only, but right now we're kind of looking at Oh, Almost branching out of it to maybe, you know, stuff that isn't so heavy value add because value add, you have to dump a lot of money in at the beginning. And that can affect your returns and your cash on cash. And in a, you know, wiry time like we're in right now people want certainty and they want safety, especially with their money. And so we're having to look at things that maybe appeal to our investors better for the current time.

Casey Brown  20:24  
Yeah, yeah. And that's, that's, that's so right. Because there's just there's so much out there. And there's, again, the uncertainty. And that's that kind of leans in towards a little bit towards the capital raising side where we're creating the certainty and you'd have to find the product that creates that certainty for your investor. And that doesn't, that doesn't mean find any property and then create a marketing package around it. That means find a property that really truly does do your investors money justice, so that they can obviously increase their net worth or increase their cash flow, or whatever the case is. So B and C Class value add multifamily only. And so that's the beginnings of where you start niching down now, tell us what are obviously we all know, some of the well, most, I guess, we all know, all of the big marketing numbers, the IRR, the cash on cash, the equity, multiple, the all of that kind of stuff. But what are some maybe things that you all or you look at when underwriting that maybe might be considered different?

Unknown Speaker  21:38  
Yeah, there's, there's a couple of things that we look at there, mostly for getting lending. But they also help to paint a picture of what this deal might look like, should things go south over a period of time. And that is the default ratio and the break even economic occupancy. So they basically they show at what point, you know, below current income, the property will go into default on the mortgage, you can't pay the debt service, and then breakeven. So if you are expecting 15% IRR over the whole period, your break even economic occupancy is where your occupancy is to achieve a 0% return. Pretty simple self explanatory, but we find that those are really good because what generally you want those to be in a safer spot. And especially right now, when things are so uncertain. It's good to see good numbers there, because it shows that you have some room to weather the storm. When it comes.

Casey Brown  22:38  
Yeah. Yeah. And there's and I've talked about it a lot on the show, especially in the last, I mean, month or two or even six months. Well, I haven't been in so. But the thought that we have yet to see how capital raising side, my company types, who are going to raise capital for something that has an immediate negative return. And I'm talking about negative cap, right, just just right off the get go. You're like okay, so then then how do you market that as being the lesser of all of the evils of losing money. So you either lose money in the bond market, or you lose money and not necessarily lose money. But you with the real estate side of it, you obviously have the potential for the upside of value or whatever. But what do you all find our most investors are looking for right now as far as I know, safety and that kind of stuff. But but from from specific. Like, what are your guys telling you that like, Hey, this is what we need to kind of be looking for right now. Because this is what I'm getting feedback that people want.

Unknown Speaker  23:53  
Yeah, so obviously, inflation is a big thing right now. So their main goal is beat inflation, because when you have a lot of money sitting in the bank, inflation is your number one expense. It's eating away every single day, month by month,

Casey Brown  24:05  
tax deductible expense, too. Yeah, exactly.

Unknown Speaker  24:09  
I mean, because everyone loses money. So if you right now, they just want to be the person who beats the system and doesn't lose that money. But our investor profile right now we have a couple of high net worth and investors who they also just want tax write offs, because obviously over the last couple of years, everyone has made a lot more money than previously, which comes with a higher tax bill. And so being able to write that off is helpful. Yeah,

Casey Brown  24:35  
yeah. And passing that through on the k one and, and and at least, at least there is some strategic thought process behind taking the deduction today. We all know that you have to pay it back eventually. But basically taking care of everything for this year and that's the way I think a lot of people go I'm gonna take care of things for this. You're this year, this year, this year, this year, then I'm gonna worry about next year. So it's so it all kind of comes into play there. But you know you and that's, I guess two different plays what somebody's looking for this year or whether somebody's looking to say, hey, you know, I just want to overall tax savings or whatever. So will tell us I'd like to hear just just a little bit more. You know, you said you started on the mail, and you know, you would get on their mailing list and say, Hey, anything like this, we're interested in what at what point do you start circling back through those that you talk to? Or those that you you got, you know, some some stuff worth analyzing?

Unknown Speaker  25:42  
Yeah, I mean, a lot of times the same brokers will have, you know, listing so I, if I keep getting listings, I'm consistently talking to them, because they have those listings. Yeah. But if that's not the case, every once in a while, you know, every few weeks, maybe once a month, I'll just shoot an email over their way and say, Hey, do you have anything? If not, I'd love to discuss, like, what your thoughts are on the current situation? And that's really, because even if they don't have a deal to talk about with you, it's still you still need to keep up that relationship.

Casey Brown  26:12  
Yeah. Yeah. Yeah. Because, you know, like I said, you still you're still wanting to work down. And then this is an everybody wants that. Everybody wants that, that that tip that's going to find them and off market property. And if you want to tip it's going to find you not Barker property, this was it. This was it, create that relationship, let that broker know that you're serious. And if you're serious about buying and closing on a piece of property, then and they know that, then there's nowhere to go, but up from there. Because at that point, you're like, Hey, man, I'm serious about closing this property. And then you're gonna get that call back when, hey, so and so this called and we're getting ready. We just found a 200 unit complex. That's right up here as everything you're looking for. Do you want a shot at it before it goes on the market? Yes, yes. 100%. Let's go. And that finds that coveted off market property, which again, we hear so much about, and there's so much feedback that we get that everybody's like, do more episodes about, about finding or helping us find off market properties? Or, or how do you find out more, you know, it's, it's, and there it is? That's the key, the key you want to think there it is. So anyway, all right. Alex, tell us, we've got a couple of questions that I ask every guest that comes on the show. There's no right or wrong answer. We ask the same questions. And we just we'd like to get your thoughts. What is the best book that you have recently read or are currently reading.

Unknown Speaker  27:42  
I have the best I have. This is more specific. But the best book for syndicators, especially ones who are starting out. It is the hands off investor by Brian Burke. That's actually not meant for active investors. It's meant for passive investors. But it gives you an incredible look into what an LP is looking for. And how to make sure that you structure your deal and protect them and make everyone happy.

Casey Brown  28:08  
Well, and it probably gives you some good money. And that's good marketing advice, too, when you're not not just because you want to sell somebody on an investment, but it's marketing advice to be like, Hey, make sure that these things are covered. Oh my god, we're all of these bases that you're absolutely right. It's great book. Great book. So what is a dream vacation that you have either taken or hoped to take?

Unknown Speaker  28:32  
I think it's just a vacation. I've been once but I love the Florida Keys on so I would just I could spend a month there and just work out of the keys. That would be awesome.

Casey Brown  28:41  
Man. You're, you're you're like working in a business that could potentially be remote. You're 18 years old. You're you're you're knocking on a career and and I mean, move down there go, what better time to do it. All right, well, I got a girlfriend or something like that. And I'd be like, No, who cares to go. So all right, well, listen, if if the listeners out there have heard something that resonated with them, or maybe there's somebody that's younger in the business that wants to maybe get some point or to chat with you or talk with you or somehow connect with you what is the best way for somebody to reach out get in touch with you?

Unknown Speaker  29:21  
I am most active on Instagram. And you can find me at Mandera. Alex just last name, first name. And you can also find me on LinkedIn. I'm pretty active on there. And then my website Rubicon properties.com has everything regarding my sponsorship of investments.

Casey Brown  29:38  
Awesome, man. Well, listen, Alex, it's it's difficult. I have to admit that I was I didn't really quite know where we were gonna go with this when you said I'm 18 and, and I gotta say I'm pleasantly surprised. I know the listeners are probably pleasantly surprised. And it just goes to show you that you know it And although they, they just they just don't want people to seems like they don't want people to come right out of high school and like know all of this stuff, okay? They want to like craft in the dorm room and, and keep you and although I went to college graduating college you'd be I never really used my degree for a lot of anything. And basically it became somewhat to this I'm not saying I don't even know if you're in school or not, it's fine if you are fine if you're not, but the the mentality of that society has put on you must do this, this and this before I get before you can be taken seriously or before you can. You need to put a bunch of letters after your name. I mean, that's, again, I'm pleasantly surprised at how you're doing, where you're headed, the direction you're headed and the depth of knowledge that you brought to the discussion. And I want to thank you for your time. Thank you so much, and, and listeners, if Alex had something that resonated with you, you know, feel free to reach out to me just told you right there find him on Instagram. He's, I'm sure more than happy to discuss or help in any way.

Unknown Speaker  31:10  
Of course. Thank you so much for having me, Casey. Absolutely.

Casey Brown  31:12  
Man works. We're glad to have we're glad to have you here and and listeners. Thank you all for listening today. We hope everybody has a wonderful rest of the day.

Transcribed by https://otter.ai

Alex Mandaro Profile Photo

Alex Mandaro

Rubicon Properties