Ep 113: Doing Your Due Diligence with Tony Coretto
When performing due diligence, most investors focus on what might be wrong with a deal while ignoring all the factors that need to go right for you to make money from that same deal. As investor and business expert Tony Coretto explains in today's episode, doing due diligence also means avoiding deals that rely on an if, and, or but. We open our conversation with Tony by exploring his impressive corporate career and experience in real estate. After talking about his approach to investing and why he favors local multi-family deals, we dive into the mistakes that Tony has made, including how he invested in a fraudulent deal. He shares the red flags that listeners should look for and how this bad deal strengthened his business. We then discuss Tony’s best practices when performing due diligence on both investors and sponsors. A key theme in this episode, Tony highlights the importance of building a margin of safety into your deals. Throughout our discussion, Tony draws from his extensive experience to give listeners insights into growing their business and making smart investments. Tune in and benefit from Tony Coretto’s hard-won lessons.
Key Points From This Episode:
Introducing Tony Coretto, investor and NYSERDA entrepreneur-in-residence.
Exploring Tony’s real estate background and his investing approach.
Tony shares his experience dealing with fraudsters.
Learning how to move forward after being involved in bad deals.
Top tips on performing due diligence on investors and deals.
The importance of taking the time to get to know investors or sponsors.
Why you should always ask yourself: “what needs to go right for this deal to work?”
Hear why Tony prefers investing in local multi-family.
More advice on vetting your deal sponsor.
Insights on getting started in the industry, finding and evaluating deals, and growing your business.
Empowering yourself by making mistakes and educating yourself.
Whether taking on debt should impact the deals you make.
Why Tony always builds a margin of safety into his deal.
“When you’ve got all the right pieces in place, it’s hard to do due diligence fraud.” — TCoretto [0:14:20]
“Never invest with anybody that you haven’t already invested with before. And if you’re starting, then sincerely get to know the people who you might invest with.” — TCoretto [0:16:02]
“A key part of doing due diligence is to ask yourself — ‘what are the things that need to go right for this deal to work out.’ If that list is long, then it’s probably a lousy deal.” — TCoretto [0:26:01]
“I like local multi-family investing because very little has to go right for me to make money.” — TCoretto [0:28:50]
Links Mentioned in Today’s Episode:
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Toro Real Estate Partners - http://tororep.com/
The Real Estate Investing Experience - https://www.thereiexp.com/
The REI Experience YouTube - https://www.youtube.com/channel/UCjt6pmkA8ogACZ26oqhBM0g
The Real Estate Investing Experience Podcast - https://podcasts.apple.com/us/podcast/the-real-estate-investing-experience/id1481520260