Podcasting to a 1,000 Unit Portfolio w. Anthony Scandariato

Welcome. This is the Insider's Edge to Real Estate Investing with James Nelson, the Principal and Head of Avis & Young's Tri State investment Sales Group. In this program you'll learn game changing strategies to outperform the market. James will teach you how to source, execute and capitalize on the best real estate opportunities in New York and around the world. Now here's your host.

Welcome everyone to show number 139 of the Insider's Edge to Real Estate Investing. This is your host as always, James Nelson. I'm Principal and head of Tri State Investment Sales at Avison Young. Thank you so much for joining and your support. I know many of you have connected with me on LinkedIn amesnelson nyc or on Instagram and Twitter where I'm starting to get more active. Stay tuned for some future Twitter spaces.

That I will be hosting.

I really enjoyed that experience a week or two ago with Chris Okada, my friend who's also been on this show a couple times. And then also for those of you who have not already, check out my new website jamesnelson.com where you can pre order my upcoming book which will be coming out at the end of January with McGraw Hill. You can also arrange for bulk orders if you your company might have interest, so really appreciate the support in that regard as well. So for today's show we have Anthony Scandarito who is co founder of RedKnight Properties and the host of the Discovering Multifamily podcast and I had the pleasure of speaking on his show so was happy to reciprocate. We start off the conversation by talking about how podcasts can leverage your presence in the market and help build great relationships. Maybe you'll consider starting your own podcast after listening. Anthony graduated from Cornell University with a Bachelor's degree in Applied Economics and Management. While at school he had the entrepreneurial drive so co founded Ridgeview Partners that sold college Apparel at over 110 retailers within the first year of their operations. After a year he decided he was looking for something more permanent, so he learned the real estate business at Vision Properties where he was in Acquisitions and Asset Manager Manager VP for their nationwide Class A office portfolio. He later said that his experience in those markets would help him branch out to build his own nationwide portfolio. Anthony recounts how he started with a two family and ultimately built up a 70 unit portfolio with his partner Brian Leonard who played eight years in the NFL. And after they established a track record, they brought on outside investors for their first large scale acquisition of a 51 unit apartment building in northern New Jersey. After selling, they have now parlayed it into a thousand plus units not only in New Jersey, but New York, Pennsylvania, Florida, Ohio and Alabama. There are some great lessons to learn from this podcast, from the importance to being hands on to keeping your investors updated on a monthly basis. Anthony states that there may never be a perfect time to start your own portfolio, but planning is essential when you do to hit the ground running. You can find out more about Anthony and his company@redknightproperties.com or or you can find him on LinkedIn. So we're gonna have a brief word from our sponsor and we'll get right into that interview with Anthony.

A Different Approach to Putting Our Clients first Avis and Young's Tri State Investment Sales Group sells multifamily office retail development and specialty sales throughout the New York metro area. As experienced thought leaders in their industry, our 35 member group is available to help you make informed investment decisions around by advising you on your current holdings or identifying new opportunities in the marketplace. Our one unified team is built on an industry unique platform which promotes unparalleled collaboration and teamwork. We share core values of hard work, integrity and expertise. We put our clients first, providing tailor made strategies to achieve superior results. Please Visit us at aytristateinvestmentsales.com and and follow us on Twitter LinkedIn and Instagram amesnelsonnyc to learn more.

And now it's time for our Investor Spotlight. And with us today is Anthony Scandariato who is the co founder of RedKnight Properties and also the co host of the Discovering Multifamily podcast which I just had the pleasure of being on. So Anthony, welcome. Thank you so much for joining us today.

Thank you James for having me. Good.

So I want to definitely get to your story, but just because it's fresh and top of mind, I'd love to talk to a little bit about your podcast. I know you now have 215 episodes. So you've been going on is this, this is a weekly show that you've been doing. Maybe you can tell us a little bit about the podcast and I've got some, some questions on it. Being a a fellow podcaster myself.

Sure, yeah. Podcast is called Discovering Multifamily. You can find it on pretty much any platform that hosts podcasts, iTunes, Spotify, Stitcher, etc. And I started it, you know, like a lot of other people during the pandemic and it started out to be probably three times a week during 2020 because everybody was at home and they're trying to come up with different ways to grow our business. And I've always wanted to do it and figured that would be the time to start it and find good guests and create good content. So started it then. And yeah, fast forward to today, kind of towards the end of 2022, we're recording this over 215 episodes. James will be, I think 216 or 217, that'll be out shortly. So excited to post that. And yeah, we talk about everything, you know, real estate related, particularly we focus on the multifamily asset class, whether you're an active or passive investor. Really the reason I started it was really more for education and to educate myself, to educate my audience and also to network with different people from across the country. It's really interesting. I've done business with some of my guests and, you know, I've been able to refer different clients to different guests that I have. And it's kind of cool to have that at least the virtual ecosystem going. You know, nothing beats in person, but it's still, still a great avenue.

That's fantastic. And again, it was part of the reason why I asked because I'm sure for our listeners out there, maybe some of them have thought about hosting their own podcast and I never talk about it on my show. Kind of what it's evolved, how it happens. And yes, there's a certain amount of production and set up and there's certainly producers out there who can help you do that. But yeah, I mean, it can definitely be some work going out, finding guests. I mean, having done, you know, like you said, 215 episod. How are you going about finding your guests? Who are the kind of people who you interview and kind of. What's the time that you spend per week doing this?

Yeah, it's kind of minimal now in terms of time spent because as a new podcaster, at least for me, I wanted to get a lot of content out. I didn't. The quality wasn't great. I didn't really have an editor working on it. I just kind of just posted content and myself edited it myself a little bit to the best of my ability and just got the name out there, got the word out there. So I focused on that. And then once it started to build traction, when you get a good listener base, you're starting to see some results, started investing some dollars into it and getting better equipment and you know, getting, you know, people to help me with the editing and to help with artwork and, you know, it's not a huge investment for me, to be honest, but it's definitely an avenue. And for new podcasters, just figure out what are you trying to get out of the podcast? Because it is a time commitment. I mean, typically, I know James is 45 minutes to an hour. His podcast, mine is 20 to 30 minutes. So typically I pick a day now just to record back to back to back. So I'll pick a Monday or Wednesday, let's just say, and record two or three on those days and block out certain times time. So. But that's. And a lot of podcast shows operate that way, from what I understand, just time management wise. And then it, you know, it takes a couple days to edit and record and then ultimately, you know, you create content for the next week or two weeks. I know people who create content for months out. So, you know, it depends on your flow. But for new podcasters, getting started, for me, it's just about the content.

Yeah, no, and I definitely feel the same way. And after you've been doing this for a while and we're only been doing this for a little over two years and it's a weekly show, so we're still in the 130s, but I know we'll make it to 215. It might take me another year or so to do that, but I agree it's a fantastic way to meet people and it's kind of a balance. Now, my show where half the people I have coming on, I know. And so I asked them, I've either done business with them or I've met them through my travels. And then the other half is that I have PR agents, people reaching out, asking to be on the show. And I know with my upcoming book I have a PR company that's going out reaching out, and they were kind enough to put us in contact. And then I find out that you're investing in multifamily in New Jersey and up and down the East Coast. So again, it's a great way to connect with people. So I would urge you all who are listeners to maybe think about doing your own show. And Anthony, one other thought question. Just curious what else you are doing besides podcasts? Is it social media? I've heard a lot of investors now are active on Twitter, so I don't know if you spent any time there, but that's something that's definitely on my mind right now thinking about how much to engage on that platform. I mean, there's only so many hours in the day, but maybe share with us kind of what you do to get the word out on yourself and your company.

Yeah. And I kind of glossed over your other question. I'm going to go back to the how do I get guests and how to guest find me now the guests find me. Like you mentioned, you had your PR agency reach out to me. I have a lot of that now. And to be honest with you, that's really all. I don't do much outbound reaching, reaching to find guests. It's more inbound through recruiters because I have now there's so many reaching out to me every week. I'll have maybe five on a Monday and then three on a Wednesday and just record. And it happens every week. They just reach out. So. But that will happen. So you get a little bit more established. And then when I started out, there were a few websites. Podcast guest.com is one of them. You can search by category, you can search by specialty. Podcaster, I think is another one. Since I started, I guarantee you there's probably like five or six more that broke out post pandemic, so. But those are, those are the two I used. I was able to get probably at least my initial 50 guests from podcastguest.com, so that was a big help. And then to answer your second question, you know, for us, we're, as you mentioned, we're multifamily owners, operators, property managers. You know, we have about a thousand units ourselves, and we have a nice group of partners that invest together in acquiring the assets. So for us, it's. Our marketing is more at this point focusing on what we've done as a company, not so much on the podcast. So focusing on some of the deals we've acquired, maybe we've turned around, we've refinanced and sold. What were the returns like? So it depends on the maturity of your company and what you're trying to aim for. The podcast side and the marketing. Yeah, when there's a new podcast, I'll post it to YouTube, Twitter, LinkedIn, Facebook, Instagram. So I have all that. I don't have TikTok, so I don't, I don't use that. But a lot of the most, most responses, I would say, at least in terms of actual. Seeing actual Results is from LinkedIn, you know, and because it's professional, I see some results from Facebook, but it's usually, you know, friends of mine. It happens every once in a while. But I haven't seen really anything from Twitter, anything from Instagram. If you. My, my suggestion would be if you have the funds, you Know, obviously hire somebody who has experience with those platforms, but I certainly don't. But people, yeah, I see multifamily guys on Twitter posting. Sometimes these guys post. It's like every hour. They'll come up with content. I don't, I don't know how they're doing it. For me, I don't have the time in the day. I don't have a full time social media marketing person on my staff. So I'm sure you can do it. But you know, my results were on LinkedIn.

Yeah, no, it's definitely a balance between you want to get out there, you want to share everything that you're doing, but also if you're spending all your time doing that, then you're not actually doing the business that's helping you, you know, develop that track record, so.

Well, good.

Well, we'll definitely circle back to that because I want to also talk about your website and it's a really interesting portal that you have there as well. But Anthony, why don't you tell our audience now a little bit about your story, where you grew up, maybe what you were thinking about doing in school and how you ended up finding your way into the business.

Sure. So to make a long story somewhat short, I grew up in northern New Jersey and I graduated from college 2014. During college, I had a startup company with a couple of other partners. We were selling college sunglasses and sweaters to college bookstores and online and really loved entrepreneurship and kind of everything that went into growing the business. And we were in about 100 stores. And after graduation, we teamed up together. We worked on it full time and ran it for six months to a year. You know, unfortunately there was a partnership dispute, so the company ended up going down. But it, for me, it was a great experience. I actually was the first one to leave because I kind of saw writing on the wall and you know, I had a couple of. I've always had an interest in real estate. I didn't study real estate. I studied, it was called Applied Economics and Management. So basically general business. I wish I had a concentration in real estate, but, you know, I, after I realized I didn't really want to be at the old company I worked for. You know, I kind of did some soul searching and it didn't take me that long because I've always had an interest in real estate. But I just started talking to people in my alumni network, people in my professional network, social network, anybody I could that was in real estate. Doesn't matter if they were a part time, you know, Real estate agent and only sold one house every two years. I just wanted to talk to them. So I did that. I must have reached out to I don't know, maybe 500 people and just kind of got understanding for the the industry and just kind of network my my way to be honest into a position, an analyst position basically underwriting which grew into a VP position by the time I left. But you know I worked for a office operator. They were buying multi tenant class A office up and down the east coast. When I started they had about 600 million under management. By the time I left it was about seven years I was there, it was a little bit over a billion in office. And we were buying in Georgia, Florida, New Jersey which is where we were based as well Kentucky. So markets that I'm actually in now with my company RedKnight Properties except different asset class multifamily. So basically when I worked there I kind of saw how he was running the business, the main principal and basically probably worked definitely over a hundred hours a week there, maybe more. But really wanted to learn the business and help grow a pipeline of new deals coming in, help raise capital. Kind of saw everything. Property management, asset management, construction management, project management. And you know I ended up buying some small deals on the side. I bought like a two family house. That was my first deal. I still own it. It just basically cash flows. All my money's out just from cash flow. And bought a two family by myself. And then I ended up meeting my. I have a business partner as well. So I ended up meeting him through a former coworker while I was working and he was retiring. He played for the NFL and he was retiring at the time but wanted to be active. He was only in his early 30s and yeah wanted to buy some local real estate. He read a few books on multifamily but didn't feel the confidence in doing it himself. And I told him hey, I'm buying these small two families on the side. I got my full time job now but I'd eventually like to get into something bigger. So started talking. Then we bought about 70 units together, just the two of us in a joint venture, basically just a partnership. And we're able to turn a couple of buildings we acquired around these were in northern New Jersey and you know we're able to do a nice cash out, refinances and a couple of sales. And so we took that and that, you know those case studies and we're able to leverage that. When we started to look at some of the larger deals, 50 units and up. So ended up buying our first 50 plus unit when we brought out outside capital towards the end of 2019. And you know, fast forward to today basically into 2023 almost. We're over a thousand units, as James mentioned, up and down the east coast between six different states, a little bit over 120 million under management.

That's awesome. I love the progression and how you're able to kind of build this portfolio from scratch. And I think, I know a lot of our listeners are probably, you know, maybe they're doing this on the side as well. Maybe they bought, you know, a two, four family. That's where a lot of people start. And then, you know, one thing leads to another. So that's really exciting to hear how you built this over time. So before we, we get to Red Knight and kind of how you built up that portfolio, I do want to go back and you said you, you started as an analyst, work your way up to acquisitions and a vice president that was at Vision Properties, I believe. And I guess the question for the audience would be starting off as an analyst, I've got to imagine to have a fundamental understanding of the numbers is very helpful. Maybe you could talk about how you learned to underwrite and then maybe talk about how you made the transition from an analyst to the acquisition side, where now you're actually trying to go out and find, you know, the deals. And I would imagine having that underwriting background was helpful as you looked at opportunities.

Yeah, absolutely. So when I started out as an analyst, I mean, I wasn't required to go out and educate, like take the ARGUS class, which I did on my own. So self education played a lot of role into my real estate knowledge. But then obviously, working for somebody, that was that education, that was an education within itself. I mean, that was like 20 years of experience, jam packed. So, yeah, you know, I would say the self education component was key. I took ARGUS class, I took some underwriting classes. There's a bunch of different, you know, educational programs to do. So. But really what, what made the difference was just working in the field of being around professionals that have been in the industry for 30 plus years and knew what was a good deal versus what wasn't a good deal. How do you understand the capital market side? What's the best way to source deals? So I was able to learn that and then kind of just take that ourselves and apply it to our own business. And even for the firm when I was there, I was able to source a few opportunities on the deal side. And also on the capital side, so on the equity side, just through networking, so really learned a lot, worn a lot of different hats. I wouldn't say it was, you know, we had, we had a lot of aum, but it was a very small firm from a corporate level, a lot of third party management was put into place. So that's part of the reason why. But it was great, had it, had a great experience there. I still keep in touch and you know, from that I was able to wear a lot of different hats and saw what was going on pretty much every single day. So that was the key, I think to our success now. So just seeing how seasoned professionals are able to underwrite the deal, source the deal, figure out how the capital from a debt end equity perspective is going to work and then ultimately how to drive their business plan, maximize their value, what was their end goal, depending upon the deal from an exit strategy perspective and help with that process, and was involved in that process. So now, you know, they're buying $100 million office properties, we're buying 10 to $20 million multifamily properties. But it's, it's, you know, everything from what I've been experiencing has been very similar in terms of how to structure the deal and how to set everything up and how to, how to grow the firm. So I would say that was my best experience in terms of education and also working.

I love how you have that institutional experience that, you know, help you create that foundation for your own business. And again, I, I think a lot of our listeners are probably working at a big firm right now and maybe they're thinking about doing something on their own as well. So learning how to do things in the right way. And even though you started with the two family, you know, you had experience doing those hundred million dollar plus acquisitions and understanding what goes into a transaction of that size. So when, when you started buying up these buildings with your NFL partner, did you have any idea where this was going to go? Is there a business plan or was it just kind of one thing led to another?

Yeah, no, we had a plan. There was a plan. For me, it happened a lot quicker than I thought, but there was a plan in terms of growing the business and getting to a certain amount of assets under management. We didn't realize we were going to bring on outside partners. We just didn't, we didn't know where it would land eventually. We just knew he had an Alec, he had a capital requirement, I had some capital requirement. Not as much as he did at the time. But we put both heads together, and we're able to buy those units. And once we started turning around some of these properties and getting some capital back, wow, this is. I wouldn't say it's easy, but it's like, this is great. Let's see if we can do this with bigger deals. And when we started looking at larger deals, we're like, well, we don't have the capital to put in a few million dollars ourselves on our first larger deal. We need to figure out how to do this. And that's when we took the syndication model and started to grow that into something bigger than I thought.

So for those first 70 units, was it just your and your partner's capital? So you guys were basically. You had saved up some money, you were putting them into a deal. After you improved it, you refinance, you use some of that refi proceeds to keep building. Was that kind of. And that. That's what you got to 70 units. And then you said, all right, well, if we really want to take the next step, we got to bring on some outside capital.

Yeah, basically that. That kept us out. Yep. The 70 units internally kept us out for sure.

So. So talk. Talk to us about the. The first raise that you did with outside capital. Maybe tell us a little bit about the deal. Be curious also, how you find these opportunities. You know, were you out there looking? Were they on market, off market? How did you find it? Yeah, how did you go about raising the money for the deal?

Yeah, it was a CBRE source deal, actually. You know, the relationships I had, I was cultivating while I worked for Vision, but that was on the office side. So when I started opening my mouth a little bit and said, hey, looking for some multifamily on the side and still. Still vision. But, you know, if any opportunities come up, let me know. So I guess words started to get around and. And there was. There was an opportunity that was on the market, but it fell off that I was looking at. It was much higher, much higher price at the time. And I kept telling the broker that, but then it eventually came back around. This was mid-2019, early 2019, when this came on the market. We ended up picking it up at the end of 2019. So, Paige, it took us a year to figure it out. How do we can buy this deal? So patience played in to that effect. But yeah, it was just through our relationships that. That I had. It was a 51 unit building in northern New Jersey, which is nice because that's where I lived. That's where my Partner lived. We were able to go there within 40 minutes and it was basically a perfect fit for us. And kind of knew the market. We knew where the rents, rent potential was, we knew the comps, we knew how much capex the buildings need needed. And yeah, it was 50 unit, 50, 51 unit. I think we bought it for about 5 million and change and then we put in about 5 to 600,000 into improvements. The average rent at the time was 840, I believe somewhere in the eights. And they were mixed between one and three bedrooms. We're talking this property's for context, Midtown Manhattan, I would say about 40 miles southwest of midtown Manhattan. And there was a lot of good things going on. There's no train line or anything but you know, it was, it was a suburban slash tertiary area in New Jersey. High cap rate at the time, I think it was like six and a quarter on in place. And we were able to get the rents up to the average, ended up being 1300 and we were able to do that within 15 to 16 months or so. I had to re tenant probably 70% of the building. It was 100% occupied. We had a lot of bad apples in there and we did it right before COVID hit. Most kicked out most of the bad apples because we all know what happened when Covid hit. We couldn't do anything with the evictions. So we were very fortunate in that respect. And yeah, we're able to turn the building around. We ended up refinancing in April of 2021. I think the appraised value came in at 9.7. So we were able to give everyone their money back. The initial raise is around 2 million. So we were able to give that 2 million back, including ourselves. We put our own money in as well and we're able to buy something else with those proceeds. And then we cash flowed the asset for I think it was about another 15 to 16 months. And I sold it this year in October. We sold it for I think it was like 10 and a half million, 11 million give or take via a loan assumption. So we all ended up basically, I think it was like a 2x equity multiple within 28 months, give or take was the hold. And yeah, so we're really happy with that investment and we're able to roll now we're looking to roll the proceeds into a new opportunity.

Wow. Well, I will say that that sounds like a tremendous opportunity. And you know, everything, you know, the buying, the going in cap, I mean I think even before 2019 2019, before the rate going up, that was still a great yield and you had upside too. So this definitely has a lot of the ingredients here for a great opportunity. And I think also maybe the lesson learned here, I think oftentimes people think, oh, well, off market is going to be the, you know, the best deal here. This was on market, but you just had to track it. And sometimes staying in touch on these deals that come off market and waiting can sometimes, sometimes the sellers just, you know, it's timing, sometimes they just need to try everything else before they finally say, you know what, we're ready. And sometimes, you know, it takes a couple false starts where people tell them, you know, higher numbers and don't perform. So obviously you were persistent, you stayed on it. So talk a little bit when you say we, you know, improve the property that we, you know, removed a lot of the tenants. So are you self managing all these properties and if so, what, you know, what's involved with that?

So up until about hands on, absolutely. And I glossed over, we have a management arm as well. So I have a bookkeeper on staff, I have a management, you know, a senior property manager. I have maintenance technicians at every site, I have leasing agents at every site that we oversee. So I don't outsource that portion. So it's all in house. This particular deal basically up into the 70 units plus the 51. We were self managing. Like me and my partner, I didn't have a staff, so we would literally, when the tenants didn't pay, guess who's knocking on the door? I knocked on the door for cash, for keys. I did a bunch of crazy stuff with my partner. We went up there, we were picking up garbage and there was garbage line or it was just, it was so silly. But we learned a lot and, and you know, I wouldn't trade that experience. We met with Housing authority, we're trying to negotiate with them to raise the rent. Like, it's just like crazy stuff. You didn't think a principal would do. So we were doing all of that up until, like I said, we had like 115 units. And then we acquired another property in July of 2020. That's when we brought on the staff. So that was nice. Yeah.

Well, I got to imagine also having this personal experience when you're overseeing a manager, you've done it. So I mean, you have a pulse for kind of in an understanding of how the business works and if maybe you just spent all your time as an analyst and going and finding opportunities and then outsourcing all that, you might not kind of understand what can actually be done with an asset and understand the reality. So impressive. So talk about that $2 million that you raised for that first deal. So how many different investors did that come from? How did you find them and to what extent, you know, how did you structure that arrangement?

Yeah, sure, I think it was like maybe 1 8, but it's called 2 million. But I think we had about 18 partners, including myself and my partner, so called 16 outside. I think my partner brought in half, I brought in eight. Eight, eight and eight people. It wasn't that crazy. We had a $50,000 minimum. We had some put in 50, some put in 100. So it was pretty, it wasn't that difficult to get into. But I would say it would be hard, harder to do that if we didn't have those 70 units where we can, we did X, Y and Z to these properties and return them from here to here over this time period. If we didn't have that experience, plus, you know, if I didn't have some institutional background, I think it would have been a lot more challenging. I don't know if I would be where I am today. So it's definitely, it definitely took time and we had time because we were trying to negotiate the price. But we were close throughout kind of like mid-2019. It wasn't like too difficult. I kind of reached into, I reached out to a lot of people at the time. And you kind of, at least now I know, okay, here's my contacts that are interested in partnering and putting money to work in multifamily. I'm glad I did that and reached out to a lot like basically my whole network and was able to put it together. My partner reached out to his network as well. So those same partners are in multiple, multiple deals now. So I wasn't looking for like a one off relationship. And that's kind of how I thought when we started bringing on the outside capital, we're like, well, we can't just do this one deal. We have to grow this business. To your question earlier, a little bit greater than just a one off transaction. So that's what we ended up doing.

So that's fantastic. And you know, bringing on that investor for the first time, I mean that is the biggest challenge. But then once they're on board, maintaining them and getting them to commit for the future. So we probably don't do enough of this on the show talking about investor relations, but can you talk a little bit about how you stay in front of Your investors, Is it a. I mean, I'm sure it's a quarterly report, but are you picking up the phone? How often are you interfacing with your investors to tell them updates at the property?

Yeah, so pretty much on the dot at the end of each month. If it's an existing deal, I'll give them a deal update. Which means where are we at with the business plan? So how many capital improvements, how much capital improvements have we spent in terms of percentage basis? Are we over budget, under budget? Where are we at with the rent roll? You know what, sometimes I'll export the rent roll to show them where we bought it and then where we're at now, you know, where we have collections, what's the occupancy rate? You know, are we looking to, what's the next step? Are we refinancing? Are we selling? What, what are we doing? Are we holding? Kind of always keeping everyone in the loop. At the end of every month it's a little bit more information I think that most operators would give, but I think that's only been to our benefit because I've had people tell me you guys over communicate, but I really like that. I think if I didn't communicate, I think I would get a lot more calls. I don't get. The only calls I get are from partners who are like, when's your next deal? Kind of. Or like, hey, I'm looking, I'm doing some estate planning. You know, do you have any other opportunities? I can get my mom involved. You know, it's just like stuff like that. And then we'll get into chit chat about what's going on sometimes. But I think staying on top of it. I mean, as you mentioned, we have the podcast. So if they want to listen to fresh content from my mouth or my partner's mouth, they can do that every week. Hope. You know, for the most part we put on monthly, usually monthly networking events, whether that's in person or a combination of virtual in person. So we're always kind of staying in front of everybody and they're all invited, including perspectives. So there's that. And we have educational webinars. And yeah, I'd say the key is those monthly updates are key, which really helped drive that investor relations to a new level.

Yeah, no, I mean that sounds fantastic. And just also high level I think is I'm a limited partner in dozens of transactions and sometimes I get these reports and there's a lot of information, but it's very difficult for me to digest exactly what's happening at the property. So it sounds like almost like you give like a bullet point of, okay, this month, this is what happened. We moved the rents from X to Y and this is how much we spent. This is where we are in relationship to budget. This is where we are on the time frame, just high levels so the investors can hear progress or setbacks. And I'm sure if something happens, you let people know because clearly you're managing those relations. Because if the only calls you're getting are investors asking you how can they give you go in on your next deal, you're obviously doing the right thing. So that's great to hear. So, all right, so let's talk a little more about now expanding into other markets. Because I actually had a guest a week or two ago, Brian Adams, who was talking about expanding geographically and other markets. And he actually said, look, I expanded too quickly. I went into too many markets too fast, spread too thin. So maybe talk about, you know, your decision to go and start buying outside of New Jersey, where you obviously, you know, live and work. How are you tackling these new markets and how are you ensuring that you don't spread yourself too thin?

Yeah, no, it's great because we have the management component too. So you got to be really careful spreading yourself too thin. So, yeah, we started out in New Jersey and then the next state we bought was in New York state. So right over the border, we bought an Orange county, no longer in that property, but we did well on it. So we got some experience there on our own, me and my partner. So. And then we bought in Pennsylvania. That was the next state we did. That was our next syndication also outside of New Jersey. So it was almost like a test for us. Okay, are we able to self manage outside of state? But even that was crazy because I could get there within an hour and 20 minutes. So Pennsylvania bought there and then we bought in Florida next. Kind of keeping this in mind, these are all markets that I acquired in for the old company that I used to work for, Vision. So like I bought in Tampa, I bought in Orlando. The same thing we same markets we bought in, the same presence we had. So I kind of call and leverage some relationships there in terms of getting boots on the ground, making sure someone can oversee our properties. We recently bought in Ohio. We're doing something in Alabama right now. We had, again, I had relationships in Ohio. So for me, and I'm looking at a new market, to me, it's. To me, it's not really a new market because I've kind of, I've been there, I've already done business there, although not on the red knight side, but on my former company side that I used to work for. So that comfortability really plays a huge factor into it for me to buy. I get deals in Wichita, Kansas. I don't know anything about that. Maybe a great market. Kansas City, it's been on the radar too. I never did any deals there. So for me it's definitely harder to get over that hump of I don't have any knowledge of it. So yeah, you could definitely spread yourself too thin for sure. Usually when we're under contract we'll post job postings for like our maintenance technician or leasing agent. We'll do that while we're under contract. So by the time we close we'll have our team essentially plug and play and ready to go to execute on the plan. So I think that helps us instead of relying on a third party manager because if the management out of state, really the management's going to make or break it because you're not, you can't get there, you know, quickly. So I got to tell you, our best management right now is in Florida and I go there once a quarter right, right now because everything's fine. If things weren't fine, I'd probably be there more often. But that's our best management. That's our furthest away property and it's an all mouth.

So you have a third party management company that you use for your Florida investment, but then you also have an on site leasing technician and an on site, you said maintenance technician. So again, maybe tell us a little bit about kind of the staffing and the cost. I'm thinking two full time people or maybe you tell me they're part time. But you know, unless of these, these deals are you know, 20, $50 million a piece, I gotta imagine that you gotta be, you know, careful with your payroll as well to make sure you're still profitable.

That's, that's key too. And just to clarify, so the management company is us. So we have a management entity that we, we're the manager. So I have my staff, I have someone who works for me who's bookkeeper and then I have another person, my overhead for a senior property manager. So she coordinates with the leasing agents on site and the maintenance tax work orders and then move ins, move outs, renewals, etc. So I have that aspect, my overhead. And then at the property level it's like you said, it's a maintenance technician. Sometimes they'll have a assistant, but usually for every hundred units, I would say at least one maintenance tech and one leasing agent. So if you get over 100, you know you're going to have at least two of each. So when we have grown and when we bought in markets, I usually start at least now I start out with at least 100 unit minimum because I know I'm going to have to afford the staff on site. So to that point, that's generally how we look at things. And when we, when we go after a market, like for example, we bought in Ocala, Florida, which is what I was telling you about, we started out with 112 units. A few months later we bought 60 units and then a couple months later we bought another 60. So now we have almost 300 units. So I have, you know, staff of like four people there right now and that they're able to handle it. So which is great. So that's, that's how we've been able to manage.

Really impressive. So Anthony, with only a little bit of time left here, would love to hear about your investor portal, if you will. So I'm looking at your, your website, RedKnight properties.com and you know, clearly there, there is a log on here invest with us. So, you know, curious if you feel comfortable sharing, you know, how many of these investors that you currently have are those friends and family people, you know, as opposed to, you know, someone might be listening to this show right now and they might really like your approach and how you're going about this and they might log onto your site and invest. So I'm curious, this whole investor portal and as our listeners are thinking how they build up their own investor network, you know, friends and family are always kind of the first, you know, go to and most reliable. But you know, the goal for many is to, yeah, bring in investors as well who are, who are out there who are, I assume, accredited and are following what you're doing.

Yeah, absolutely. So it's a combination of both. Obviously, as I mentioned, we have our existing relationships that have grown. A lot of it's through referrals from those old existing relationships. Like I mentioned, oh, can my cousin invest or can my brother? So a lot of that happens. And then I would say, yeah, of course the social media, the podcasts help for sure. I'll usually get an inquiry. There's a lot of SEC compliance I have to deal with. So I need to get to know the person and have multiple touch points over a certain amount of time before they can even invest with US that's just part of SEC requirements, accreditation I had to verify and all that stuff too. But yeah, I do get inbounds, you know, through the website and usually we start with the call. If they're local, I'll try to meet them in person. Getting to a point where we could be more selective too, because like you mentioned before, you got to really, the investor relations component is key. And if someone's not going to understand what they're getting into, I really don't want to. I really don't need their money and I don't want them in the deal. Someone who's going to annoy me or text me on the weekend, hey, did we lease up the basement unit yet? Come on. So it's getting to that point, but, you know, it's definitely important, I think, to have that portal. And when you log onto the portal, at least for us, we got to make it seamless so anybody who's new or existing can see. Okay, here's all our offerings. If we have any open or if I'm already in a deal, what's my position in the deal? What have been my distributions to date? What have been my return metrics to date? When are the projected new, you know, new distributions are. So that's all tracked through that portal and you create.

Well, I see it says powered by investnext. So you didn't figure out how to build this back end, that there's investor reporting tools out there that you can take on to. To. To create that on your website?

Yeah, invest. We partner with InvestNext. Obviously we, we pay for that. You know, it's cheap compared to what we had to pay an engineer to build it ourselves. But it's a great portal, great platform. We, we put our operating agreements and subscription agreements in there and ppms so people have access to it all the time. So never really. Because when we first started out, we didn't have a portal like this. I literally PDF subscription agreements. They would have to figure out how to print it, scan it. It just for somebody to sign up and commit 50, 100,000. That would take two weeks for someone to actually give me back the paperwork. And we're thinking if we're really going to grow, we need to. This needs to be a little bit more seamless and they need to figure it out within 20 minutes.

No doubt. So the title of this show, my upcoming book, the Insider's Edge to Real Estate Investing. I really believe that real estate is an insider's game. A lot of it is, you know, the People, you know, but, you know, having that inside track. What, what would you say your inside edge is to real estate investing?

Yeah, I'd say inside is, it's, it's really, really. It's a relationship based business and I think we have really good. Once you start closing on properties, you know, brokers are going to take you more seriously. But, but it's good to have, especially if it's markets you want to continue to grow in long term, to have those relationships, to establish them and then keep them going. When you're looking to sell a property, call that broker first, give them the opportunity to sell it for you and then be like, listen, what else do you got? Oh, I'm working on this. It's not on market yet. You guys might actually like it, Take a look at it. So a lot of the new deals happen that come across our plate in that regard. So yeah, I'd say the relationships and then also the infrastructure. A lot of operators of our size kind of playing in the middle market don't have the management component in house and that can really make or break, really make or breaks in operations. So we have the management component and the relationships are, I think, key.

That's fantastic. And then last, what advice would you give to the aspiring investor? Maybe it's someone who's working at a big shop right now and thinking about going off on their own. What advice would you give to them to start, Start off?

Definitely think about it. For me, it was a big decision, you know, for me I wanted to build up passive. I wouldn't say passive, but I wanted to build up another income stream before I ended up leaving because you're going to lose that paycheck. So try to build that up beforehand if you can. Even if it's small like my two families. Build it to a point where, you know, you can cover your costs and beyond. And, and then, you know, you could go from there. I know, you know, listen, I know people. I didn't have kids at the time, wasn't married at the time. I know people who have done this in their 50s that have kids that they have to support them, that are married and they have a lot of obligations. So it's never too late to start. I've, I've interviewed them on my, on my show. So for me it was, you know, yes, I was younger for sure. I was in my 20s. So yeah, it was definitely easier, but it was still, I didn't think like it was easy just because I was so used to getting a check for the W2. So definitely for me, it was building up that income stream, getting comfortable to go out on my own. So I wasn't, you know, hopefully in trouble if something were to happen and then going from there.

That makes a ton of sense. And I would imagine also it was important that as an investor working for Vision, you were acquiring office. Clearly the multifamily that you were looking at was not competitive to what they were doing. Because I think also for our listeners, you want to be. You know, I'm sure you were respectful of your employer. That wasn't taken away from the core business, certainly weren't competitive. And I'm sure you probably told them also, hey, if you don't mind, I'm also, you know, would like to start building my own portfolio. Clearly, you could still get both jobs done. But, you know, I think you also need to do it in. In the right way, which I'm sure you did.

And it takes a lot of planning. And yeah, you know, that's a. You gotta be careful with that conversation. When the time comes, you gotta be. You gotta be ready for it. For. For me, I was ready for it. We had that property closing. We closed that property at the end of December 2019. So I knew that was in the bag. And then in mid 20, in mid December, we got awarded and we were under contract for our second property. And that was 64 years. I said, there's no way I'm going to be. I can't now. I can't do both. So you got to realize in your head, okay, when is it the right time to step back so. And plan for it. Don't just leave. I know people have just left before, and then they sit on their hands for two years and say, oh, I can't buy anything. I can't find anything. Just have a plan for it. And there's never a right timing to anything, but if you could try, if it works, then that's obviously an ideal scenario. But planning, I think, is key. Don't just go off on a whim because you're miserable every day. You know, it's even to get financing. You know, to have that job at the time is pretty important for you to grow your business in the real estate game.

As you know, Anthony, it's great advice and just really appreciate your coming on the show and sharing your wisdom. And I had a lot of fun on your show. So for our listeners, definitely check out Discovery multifamily as well. I'll put that in the show notes as well as your Red Knight property site so people can learn more about what you're doing there. So Anthony, thank you so much for joining us today. I really enjoyed it and I know our audience will get a ton out of it.

Thanks for having me James. Really appreciate it.

Wonderful. This is your host, James Nelson. The Insider's Edge to Real Estate Investing thank you as always for joining. If you have not done so already, please subscribe. Tell your friends that's what helps others find this show. And as always you can go to james nelson.com where you can find the show notes, you can find find an exclusive video series white papers that I put out and most importantly, you can pre order my upcoming book which I've spent the last two years, a lot of time and the wisdom that I've gathered through this show as well as the thousands of transactions that I've seen and worked on for my coming up on 25 year career. So really appreciate the support as always. Until next week, thank you.

Thank you for listening to the Insider's Edge to Real Estate Investing. We appreciate your subscribing and sharing with your friends. If you haven't already, please connect with James AmesnelsonNYC on LinkedIn, Instagram and Twitter. Please also visit jamesnelson.com where you can find the show notes and other episodes along with an exclusive video series and other helpful resources so you can gain the insight. Insider's Edge to Real Estate Investing until next week.