- Chris & John
Ep 38: Self Managing and Operating in a Familiar Market with Joe Colasuonno
Having a high-risk tolerance and the grit to dive in headfirst, learn as you go, and self-manage early acquisitions can go a long way in real estate. This was the approach of today’s guest, Joe Colasuonno, a commercial real estate developer, landlord, and investor specializing in the acquisition, renovation, and management of distressed, multifamily residential assets. Joe originally thought BioMed was going to be his road to riches but after reading Rich Dad, Poor Dad, he went in on a distressed 31-unit that nearly killed him! Luckily he got out with the help of an investor and then started on a path that led him to self-managing 400 units in Allentown, running a staff of 18, and earning over $5000 in extra in cash flow every month!
In today’s discussion, Joe gets into how his thick skin and shoot first ask questions later approach, which was also highly strategic, helped him learn the game fast. We talk about how living with your parents is one of the smartest things you can do, and how each person has a unique set of resources they can leverage to the maximum amount to keep costs down and profits up. Our conversation also covers Joe’s approach to keeping everything he manages in one market, and how this can be seen as very advantageous rather than as having all one’s eggs in the same basket. Joe gets into some hellish deals compared to amazing ones, and we highlight the idea that time needs to be spent wisely as it is the only form of equity that can’t be replaced. So for all this and a lot more on the subject of earning while you learn, and doing things yourself as much as possible, tune in today!
Key Points From This Episode:
Joe’s transition from BioMed into real estate buying a 31-unit building with his brother.
How Joe renovated the distressed 31-unit with his family while he was at college.
New buildings Joe got bank loans on after an investor helped him refi out of the 31-unit.
The preference to invest oneself and not work with investors if one has the money.
How Joe’s risk-tolerant, ‘if he can do it, I can too,’ attitude related to his real estate journey.
Pros and cons to scaling unit count versus locking down procedures on a smaller portfolio.
Sacrifices Joe has made to self-manage and get so much cash flow: living with his parents.
Being accountable and understanding how to leverage the resources you have.
Support networks and how syndication can be lonely due to requiring arcane knowledge.
Flashy versus humble ways of holding oneself as a syndicator who is making money.
A high equity building that had been vacant for 20 years that Joe would never do again.
The value of time equity and how Joe has conversely made huge money on time-light deals.
Having a realistic idea of how long tasks take before making decisions.
Why Joe sticks in one market: security, relationships, and intimate knowledge of it.
Chris and John’s approach to deals in Jacksonville related to experience and fluctuations.
The value of taking a slightly less high yielding deal in order to break into a market.
All-in versus diversified portfolio approaches to investing.
New deals Joe is busy working on: approvals for a 118-unit ground up, an adapted reuse, etc.
Tweetables:
“Next thing I knew I had 200 and something units and I was managing them all with no experience.” — Joe Colasuonno [0:08:07]
“Those are the same numbers except this one took me four weeks, of which I was there for four days, and the other one took a year and a half. So it’s very important to calculate the time you will spend on a project, not just the numbers.” — Joe Colasuonno [0:37:16]
“I think there’s more security in being in one specific place, versus thinking of it as having all your eggs in one basket.” — Joe Colasuonno [0:42:47]
Links Mentioned in Today’s Episode:
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