How to Buy Real Estate All Over The US With Marco Santarelli

How to Buy Real Estate All Over The US With Marco Santarelli
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Table of Contents - How to Buy Real Estate All Over The US With Marco Santarelli

Podcast Transcription

George El Masri [00:00:01] Hello and thank you for joining the Well-off podcast. This is George El Masry, the host of the show, and I welcome you as always. I interviewed Marco Santarelli today who lived in Calgary, was raised there, and then ended up moving to California in nineteen ninety eight. So on this episode, we talked about how his investment style he is somebody who likes to invest out of state. He strongly believes in not investing in California because of the pricing. He thinks it's a little bit inflated and the numbers just don't work. So he decided to start investing all over the US different markets. He talks about the systems that he implemented to make that possible, to be successful, and it talks about a top down approach. So not picking a property, but starting with a certain market and then breaking it down to the neighborhood and from there figuring it out. So if you are somebody who has ever thought about investing in the US, I think there is going to be some good stuff in there for you, actually, if you've even just thought about investing outside of the area that you live in. For example, if you live in Toronto and you decide to invest in Sudbury or something like that, there could be some good stuff in there for you. So I hope you'll enjoy the episode and just want to connect with you. I wanted to see if there is any way that we can discuss what your plans are or what your goals are, if there is any way for me to help. I'd love to have an opportunity to chat with you. So feel free to go to the website. Well, off that book, a call I'd be more than happy to connect. I hope you'll enjoy and we'll talk soon. Welcome to the podcast, where the goal is to motivate, inspire and share success principles. I am here with Markus Santarelli today. Marko is an investor and author and entrepreneur and the founder of Narada Real Estate Investments. I hope I said that right. Right. Yeah. So his mission is to help a million people create wealth and passive income and put them on the path to financial freedom with real estate. And he's also a fellow real estate or sorry podcast hosts. The podcast that he hosts is called Passive Real Estate Investing. So, Marco, welcome to the show.

Marco Santarelli [00:02:05] Doris, it's an honor to be on your show. Thank you so

George El Masri [00:02:08] much. Yeah, I think you're the first person I interview from California, so

Marco Santarelli [00:02:15] Canadian as well

George El Masri [00:02:16] as a Canadian. That's right. Yeah. So actually, that's how I like to start off. I like to ask you about your childhood, where you grew up, and if you want to tell us a few things you remember from that time

Marco Santarelli [00:02:26] from my childhood. Well, that goes back a ways. Yeah. Yeah. So I grew up in Calgary. I mean, Calgary is my home, my hometown. And I spent a good part of my life most of my life in Calgary. So obviously went to school there and had a lot of relatives in Calgary. Still have, of course. But I also have relatives in Toronto and and, you know, I've got family people around the country. My upbringing wasn't all that exciting. I mean, I had great family and there was a lot of love in the household, of course. But, you know, I, I. We didn't make a lot of money, but with both my parents worked, my mother worked actually two jobs to try and help bring income into the house. So I always looked around and I thought, jeez, you know, there are people I recognize who are actually doing pretty well. You know, they're maybe not uber rich, but they're wealthy. And the one common denominator I noticed growing up as a kid, I probably noticed this when I was eight years old, is that they had real estate. A lot of them had real estate. And, you know, with that in the back of my mind, as time went on and as I became a pre-teen, I recognized that I thought I need to be financially independent. I don't want a job. I don't want to work for someone else. Even though I've had many jobs over the years, I just knew at a young age that I needed to study money. I needed to learn wealth and business and real estate. And I did that as a teenager. And that that just kind of put the writing on the wall when I bought my first rental property at the age of 18 in Calgary. And, you know, it was kind of a textbook thing, but but I didn't have any special financing treatment or a gift of cash. I basically worked at the grocery store since I was 16 years old to save up the down payment to buy that first property at the age of 18. But, you know, I grew up with my mother, father, my brother, one brother and my grandmother and grandfather in the household. So it was a household of six. And growing up, my brother and I actually slept in the living room. It was it was only two bedrooms. And so we we we were sleeping in the living room for a good part of our childhood. No, that's that's my upbringing.

George El Masri [00:04:30] OK, well, did you guys have a kitchen in the basement?

Marco Santarelli [00:04:34] Yes, we did. Of course, I tell family has to have two kids.

George El Masri [00:04:38] Yes, definitely. Yeah. I had a hard time understanding why there were always like everyone would spend time in the basement, even though, like, the upper level was fully furnished and everything. But in a time family, it seems like everyone likes to hang out in the basement.

Marco Santarelli [00:04:53] I never understood that either. But you always had to have two kitchens, one basement, and they actually used it. My family always used kitchen in the basement. Understand why.

George El Masri [00:05:01] Yeah, it's where they have plastic on the furniture too.

Marco Santarelli [00:05:04] For a period of time we did it eventually came off, I think it was my brother and I probably poke holes in it as we grew up.

George El Masri [00:05:11] Yeah, that's funny. All right. Sounds good. So what don't we get into your real estate journey? First of all, how did you end up in California? Was that something that you did recently or did you move a long time ago?

Marco Santarelli [00:05:22] No, I my wife and I moved in nineteen ninety eight, that's actually the year we got married, so we literally got over a bout with cancer, got married that summer, and then immediately moved shortly thereafter to California, which was a process that took about two years to actually go through all the legalities and paperwork. What what inspired us to move to California, aside from the weather, was an opportunity where my quote unquote cousin from Calgary who had moved to California several years earlier, had started a small business. Long story short, we were in the middle of this heated dot com era, you know, in the 1990s where everybody was going online and creating their own dotcom business. So he wanted to spin off a division of his business and create a dot com business. Now, what's funny about that is he knows nothing about technology. He's the most computer illiterate person you would meet, but he just knew that there was an opportunity there. I was heavily into the Internet and technology. I grew up on technology. In fact, I was coding at the age of 13. I literally taught myself assembly language and was coding on a RadioShack computer at an early age. So with that, he approached me, said, hey, I'm looking for a third partner to co-found this business and you're a technology guy. So why don't you come on board as a minority partner and be the chief technology officer? So that's exactly what I did. So that's why I moved California is to co-found this business. And we ultimately raised nine point five million dollars of venture capital funding, which mostly came out of San Francisco. And with that funding, we started the business, launched it, hired the staff, grew it. And unfortunately, when the stock market crashed, the Nasdaq crashed. All the tech companies basically had to fold if they weren't cashflow positive. That means venture capital funding dried up for us. And because we weren't cash flow positive, we had very high burn rate of about one hundred thousand dollars per month with one hundred and five employees. So we had no choice but to basically unwind. And I had to start laying off most of those employees. So I was the third person to come on board at that company, the third partner and co-founder, and I was the third last person to leave. So it was quite a ride. It was quite the journey. But that story is essentially the reason that my wife and I moved to California, but we never went back. It was one of those things where you get accustomed to where you're living. You like it, the weather's great. There's a lot of things to do. We've got Disneyland like thirty minutes from my house. We just decided to stay. And at that time we got our citizenship as well. So, you know, now now we can just go cross-border without a problem because we're dual citizens.

George El Masri [00:08:16] Cool. That's awesome. That's a cool story. But the venture capital and and the company that you started. So at that time, were you investing in real estate as well or did you start investing after the dotcom boom?

Marco Santarelli [00:08:29] Funny, funny thing, that's a good question. Yes, I was investing in real estate, but in a very light manner, this could be a point of conversation. But back then, in the early 2000s, that's when real estate markets throughout the United States and probably throughout most of Canada started to heat up. Prices were accelerating, and the people that were buying real estate thinking they were investors were not actually investing. So the answer to your question is yes. I was buying some property here in Southern California when it was still reasonably priced after 2003, prices started to become somewhat unaffordable. But by 2005, they were definitely unaffordable. And it became much like what Toronto, the metro Toronto area or Vancouver area is today, which is overpriced, unaffordable and arguably a bubble market. Certainly, there's a lot of price inflation there. We were seeing that start in 2000, accelerate in 2003. That's the time when I was in real estate here in Southern California. But then I changed my model. I started investing out of state. I started investing in markets that were much further away from me because the numbers made sense. So, yes, I was investing in California, but not for very long, because I recognized probably by 2004 that that was that was not sustainable. It was not going to work long term. Now, the point I was trying to make, actually, when you first asked this question, is that a lot of these so-called investors and I say that in air quotes, we're not actually investing. They were speculating they were buying property in the hopes that prices were going to continue to go up because they felt that, hey, you know, if I have this property for a year or two years, five years, it's worth more. And I've made my returns in terms of capital appreciation. But the thing is, is you don't realize those gains. They're not actually dollars in your pocket until you sell the property. So it's paper. It's a paper game. If you sell the property and you realize that gain, you put dollars in your pocket. OK, great. Now you've made a return on your investment. That's an investment. But that's not how I define an investment. For me. It's got to put money in my pocket. Cash flow. If it's putting money in my pocket every month, that's my investment. But the point I'm trying to make is that a lot of the people back then who thought they were investing real estate were nothing more than speculators.

George El Masri [00:11:03] Right, exactly. And that's a pretty common thing. I mean, all all advanced investors know that you need to have positive cash flow to survive long term. There might be other scenarios where maybe you could survive kind of in a speculative manner, but I don't really see that being a very good strategy if you plan on investing for for a long time.

Marco Santarelli [00:11:26] Yeah, I totally agree.

George El Masri [00:11:27] So. So are you still investing out of state today or do you invest in California?

Marco Santarelli [00:11:33] No, I don't touch California with a ten foot pole. So my is based out of California. I live in California. I operate my businesses, several businesses out of out of California. But I don't touch California at all. And the reason is what I just said before, it is overpriced. I think there's a lot more downside risk than there is long term gain. And the numbers just don't make sense. It's hard to cash flow. And even if you do cash flow with a large down payment, your cash on cash return is is is much lower than what I can get in other markets. So currently I'm I'm in escrow for some property in Kansas City, Missouri, which is one of our twenty five markets. And I'm also in the process of purchasing five properties in Wisconsin, which, by the way, is not one of our markets, but it could be as a company. So yes, I'm investing, but I'm investing two thousand plus miles away from where I live. And it's, you know, some people might hear that and they say, well, how are you investing in markets that you can't even, you know, get to quickly and easily? The answer is very simple. You know, it's all about having a system and having the right team. The team of people is critically important. So I've been doing this since twenty three. And, you know, I do this in my sleep. Basically, it's just become a process that we do and do every day, day in and day out with people. So once you have the right people, the team and the systems in place, it doesn't matter whether you're investing down the street or ten miles away or a thousand miles away, the process is exactly the same.

George El Masri [00:13:09] Can you tell us a little bit about your systems and your team?

Marco Santarelli [00:13:14] Yeah, so kind of at a thirty thousand foot level, I refer to it as a top down approach. First of all, it's actually my sixth rule of my ten rules of successful real estate investing. It means take take a top down approach, focus on the market. That makes the most sense. And we can talk about this in more depth, if you like, but start with the market mind. Then once you've identified the market that meets investment criteria, then you look at the submarkets, then the neighborhoods that again meet your investment criteria, and then you start identifying the properties that again meet your investment criteria. But you take a top down approach. You don't start with the property. And then then as an after an after thought, you consider the neighborhood or the market that it's in. It really should be the other way around. And that's how we identify the twenty five markets that we operate in as a company for our investor clients because we've identified those as good markets. So once you've identified the market, the submarkets, the neighborhoods in the properties, you underwrite that property. Make sure the numbers make sense. They're good for you as an investor and then you build your team around it. And, you know, I'm kind of glossing over this a little bit. But just to give you the conceptual idea so you know, the key people on your team, well, there's five, but the main person or the main company is the property management company. So the two the first two people on your team are the acquisitions person or the acquisitions company. And the second person or the second company is the property management company wants to identify the properties and the ones that you're going to buy or put under contract to buy after you've closed escrow and you own that property. Now, you hand it off to your asset manager, which is your property manager. They're going to handle everything from soup to nuts. If you work, whether you work with a full service management company, they're going to handle everything from marketing, tenant placement, tenant turnover, inspections, maintenance and repairs. They rent collection, et cetera, et cetera. They handle everything for you. And that's the key, is to have the right full service management company on your team. If you do that, then you can go on and live your life, work on your career, spend time with your family, go to Johnny Soccer game on the weekend and do all that kind of stuff because you've got your portfolio of properties professionally managed. Every month the income comes in, you check in the mail, as they say. That's really the system in a very high level nutshell. So if you don't have these people on your team, you obviously have to find them that them, you know, whether through referrals or your own research, you know, we we work with these people day in and day out. So it's really part of our network that we just pass along to investors. But if you don't have those people, obviously, you need to find those people. Once you find them, they're like gold because they're working for you and they're on the same side of the table in every transaction they're there. Your success is their success and vice versa. So that's the system or the process at a high level.

George El Masri [00:16:10] OK, you mentioned, I believe you said there are five key people that form your team. You said acquisition person or company property manager, slash asset manager. What would be the other three?

Marco Santarelli [00:16:22] Yeah, so you're correct. The first is your acquisitions people, whether it's our our company or a local real estate agent or broker, or if you're if you're more of an active investor rolling your sleeves up and fixing and flipping to yourself properties, then you're working with maybe wholesalers, but you've got your acquisitions person number one. Number two is your management company, your property managers. And again, I refer to them as full service professional property management that you want them to cover everything from front to back. The third person on your team is could be more than one person, that is your financing team members. So those are the mortgage lenders, the lending institutions, the banks. If you want to work with the banks, basically they're mortgage brokers and lenders that are going to finance your acquisitions, you know, because unless you're buying all cash, then you don't need that person. But it's real estate. Why would you want to pay all cash? You know, you've got the power of mortgage financing, which is historically cheap today. Go with the financing the fourth person. The fourth and fifth are your professionals, and that would be your asset protection attorney, slash real estate attorney and then the fifth person is your tax adviser, very important person. And that's not a bookkeeper. That is actually someone who is giving you strategics tax advice and counseling because that person is going to help tie it all together and minimize the tax impact and take advantage of all the tax benefits of real estate investing. So those are your five key players on your team.

George El Masri [00:18:01] Awesome. That's great. What kind of properties are you investing in? Are you buying like single family homes or are you buying apartment buildings?

Marco Santarelli [00:18:10] Well, I love it all. And that's the beautiful thing about real estate, is there's there's so many ways to make money and there's so many ways to invest, whether it be from syndications through to, you know, building a portfolio of a specific type of property and being what I call market agnostic, and that is investing in multiple markets to diversify. And all these things tie into those 10 rules that I was talking about before. But in terms of the product type, me personally, I love single family homes. Now, I would invest in single family duplexes, plexus and for plexus. And the reason for that, I don't know if it's a little different in Canada. I think you guys have the same lending laws or regulations that we do. But anything up to a four unit property is considered from a lending perspective, residential. So the financing becomes different when you have more than four units in the property becomes what they refer to as a commercial loan. Is that true in Canada?

George El Masri [00:19:09] Still, the majority of the banks treat it just like you said.

Marco Santarelli [00:19:13] Yeah, OK, so that's the way it works here in the US. So I have no problem with an eight unit 12 unit 50 unit hundred unit property. It's just a different animal. It's still call it a mammal, still a mammal, but it's a different, you know, different type of beast. But I really love one to four unit properties for several reasons. One, it's highly abundant. It's more available and abundant than other product type. So it makes it easier to find what you're looking for to in most markets, you'll find that the cap rates and generally speaking, the overall rates of return are actually higher than a lot of the apartment complexes today because the competition has been so high that cap rates have been compressed across the board with multiunit properties. They're still deals out there, but they're harder to find and it seems like everybody's chasing them. So it becomes a more competitive space. But for every one small apartment complex, there's probably one hundred and fifty single family homes as far as ratio goes. So as you get into larger, multiunit property sizes, they become fewer and fewer and fewer in terms of availability. So I like the the availability, like the the rates of return, everything else being equal, they tend to be higher. Third, the liquidity there is no type of real estate, more liquid in terms of the asset class being highly liquid or relatively speaking, but highly liquid. Single family homes are the most liquid form of real estate. So when it comes time to exit because you are trading up or selling, the single family homes are going to be the easiest to sell. Just because you're buying audience is the largest. You have the largest pool of potential buyers for a single family home versus anything else that becomes larger and larger and larger. So for me personally, I like one to four unit properties. They just provide all the benefits I like and and it allows me to easily diversify across markets geographically. And really, it's true. That's that true kind of spills over into our company. What we offer our single family duplex fourplex properties to to our investor clients so we don't get involved with apartments, indications all that much. That doesn't mean we don't do syndications. They're not necessarily always advertised on our website. We get involved in other kinds of syndications as well, including cannabis related stuff, which you guys talk about a lot up in Canada, it seems. Yeah. So we're involved in different kinds of projects, but yeah, single families and duplexes for places are my preferred anyway.

George El Masri [00:21:52] Cool. OK, that's that's good to know. And you make some good points about single family homes. They are, like you said, the easiest to sell, most liquid, the easiest to find. And you just have to deal with the one tenant. It's a lot simpler. You keep it simple when you're investing in a single family home. Yeah. Yeah. OK, so what are your thoughts just in general on the market? Obviously, there's a lot of turmoil. There's a lot of unknowns. Everybody has an opinion. I'm just curious to know what you think. Are you still investing right now where you kind of holding on to cash, expecting things are going to come down?

Marco Santarelli [00:22:25] Well, I'm actually ramping things up and we're actually finding with the amount of investors coming to us, mostly from the US. So we have some clients out of Canada. We've actually had our busiest year. We've had two or three record months in twenty twenty, even with covid over the last. 16. How many? Two thousand, four, how many here this is that. That's 16. Yeah, yeah, 16 year 16 going on 17 here very shortly. We've had our record months this year. Even with Kodet, people are essentially doubling down on real estate. And the reasons are probably very I think a lot of people are becoming more fearful of the inflated stock market. The volatility is not making them comfortable. The amount of funds being generated by the central banks like the US Federal Reserve or even Canadian Central Bank is creating fear in terms of inflation. And so people want to be in more hard assets like real estate that also form an inflation hedge. And so real estate is becoming more favorable. The tax benefits are tremendous. I'm not sure how they've changed over the last few years in Canada, but with the two thousand in twenty seventeen with the I believe was the Jobs Act, real estate has actually become the most tax favored investment, even over oil and gas. So it is the most tax efficient and most tax favored investment to be in. So a lot of people love real estate and love it more so now. So your question was more about the markets. I mean, you had two questions there. Am I still buying? Yeah, I'm still buying. I'm in escrow for two plus five coming up after that. Right now as we speak in different markets in the US, as I mentioned before. But when we talk about the condition of the market, you have to stop and ask yourself, well, which market are you talking about? You know, I hear this question often. What you know, what do you think about the real estate market? How is it doing? The reality is there's no such thing as a real estate market, not in terms of a national real estate market. It's not this nebulous block. It's really how is the real estate market in Toronto. But that's not even good enough. How is the real estate market in Mississauga or in Woodbridge or in Scarbro? And you could even be more granular than that. That's what you have to look at. You have to look at real estate as a local phenomenon because it is it's local. In fact, it could be argued that real estate is even hyper local. So generally speaking, I'm bullish on real estate. More specifically, if if you're investing in the right markets because the fundamentals are there and the numbers work, then again, I'm bullish. So picking the right markets means that the real estate market is strong and healthy. And, you know, of course, we could cite many examples of that. Now, would I be interested in a market like, again, in general terms, Vancouver? I mean, obviously bankers, a huge market or Toronto in general terms, or San Francisco, California or Manhattan or like New York City? No. Why? Because it is so expensive. The prices have been inflated so much that rents have not been able to keep up to the price appreciation in those markets. It lags behind and continues to like further and further behind. So what you have is this increasing differential where the numbers don't make sense anymore from a rate of return, like a cash on cash return. Not only that, when prices get that frothy, they're inflated that much. You start to increase your downside risk. The downside risk potential increases because at some point the market reaches a point of unaffordability where prices are going to stall and possibly pull back. And then all you need is a match need just a catalyst where it sparks that price drop, such as interest rates going up, like mortgage rates start to go up. You can be guaranteed that fewer people are going to be able to afford real estate and therefore demand is going to start to drop. And if demand starts to drop, there's going to be fewer people that can afford or want to buy or can buy real estate. And that's when sellers are in a position where it's no longer a seller's market, it's a buyer's market. So they have to lower their prices if they're wanting or need to sell in order to attract the buyers to get it because there's fewer buyers. And so I don't like being in overpriced or frothy markets like that.

George El Masri [00:27:02] Right. Do you do you think that the interest rate will be coming up any time soon?

Marco Santarelli [00:27:08] No, if anything, I think rates are going to stay this low and probably go lower.

George El Masri [00:27:13] Yeah, why do you say that?

Marco Santarelli [00:27:14] Well, because we are. You know, maybe I won't go as far as saying that the economy is grasping for life support, the economy actually has been doing quite well prior to that covid just a whole other conversation. But the economy has been actually pretty strong. We've had record on record low unemployment. Businesses have been producing very well. Almost every industry has been doing extremely well. I'm talking prior to February of this year. So the economy's been very strong. But housing, housing and housing starts and construction make up a pretty significant portion of the overall U.S. economy and I would imagine is probably true. And, you know, for the most part in Canada, I'm not exactly sure the exact number, but I've heard numbers as high as 17 percent of U.S. economy is based around housing, and that's a pretty big number. So if you increase interest rates, you're going to start to affect and probably even start to stall the housing markets, the housing market in general terms in the US. And if that happens, then you start to disrupt local economies and it becomes a cascading effect. So it would be bad for interest rates, specifically mortgage rates, to start to go up because you're going to start to effect a significant portion of of the economy. At the same time, we have a very strong need for housing. We actually have a housing deficit here in the US. And I don't know if this is true in Canada, but there is a strong need for additional housing. We just don't have enough housing to fill the organic growth for housing. And I think that's getting worse because of millennials starting to move out of the house and people getting tired of being at home with each other right now. They need to get out, find their own place. I'm tired of being trapped, you know, with this covid stuff. So demand will continue to increase. I don't think rates are going to go up. And some of my close associates in the industry also believe that we are going to see low interest rates for the foreseeable future, like for years to come.

George El Masri [00:29:38] Fair enough. Yeah. I think most people are kind of well, most people that I've spoken to feel the same way that you do, but interest rates.

Marco Santarelli [00:29:45] Yeah, well, that's good. I mean, look, I love where the rates are. I think I think it makes it a great opportunity for you and I as real estate investors. But people who legitimately can afford housing and really should have housing their own housing, not as renters, but homeowners, this is good for them. You know, it's good. It's it's great if you can actually afford your home and be able to buy it. And if the low rates help you to do that, great. What we don't want to see is a repeat of 2006 where people were just taking advantage of easy credit to basically just game the system and juice, you know, juice the markets and buy property that they really shouldn't be buying and can't afford. And they're just doing nothing more than speculating. So we're in a different dynamic today than we were back in. Twenty six people who are getting mortgage financing at these low rates are actually qualified. They actually have the credit and the income for it.

George El Masri [00:30:46] Yeah, definitely. There's a huge difference. It's just it's just interesting to see how this is all going to play out. I mean, there's so many different theories, so, yeah, I don't know. I guess we'll have to just wait and see what happens.

Marco Santarelli [00:30:59] Well, time well, time will tell. Time will always, you know, unveil what's going on. But but I'm concerned about the the the bubble markets and the coastal markets of Canada, the US, because they've just been inflated so much. But the interior, they like a lot of the local markets within the interior, the Midwest, the south, southeast pockets of the Northeast, I don't know if I could say the same thing for Canada, unless that's true for Manitoba and Saskatchewan. But I know even Calgary has just had such a rapid price appreciation for many years now that it's not it's not the affordable market that I left, you know, that I saw many years ago. The last five to ten years have been incredible price appreciation in Calgary. So so I'm concerned about those markets, you know, the unaffordable markets as they continue to get unaffordable. The only way that's sustainable is if it incomes increase and continue to increase year over year at the same pace as as price inflation in the market. You know, housing, utilities, like energy, food, your basic necessities. If those all keep in lock step and price means nothing. It doesn't matter if it's a dollar or a million dollars, if everything else is proportionally related to that price, then then you can afford it because your income goes up along with everything else. I mean, they just move in lockstep. But but when they get disconnected and unaffordability drops to a very low level, like in the low teens, that's a danger zone.

George El Masri [00:32:34] Yeah, definitely. Yeah. Well, like you said, we'll have to wait and see how this plays out before we before we move on to the next topic here. I was going to ask you, do you have any anything you want? You want to share anything that we didn't touch on?

Marco Santarelli [00:32:53] Wow, that's a wide open door. I mean, we can talk about a lot of things, you know, I, I if your audience is, you know, people who are interested in real estate investing, they're they're already investing or they're thinking about investing for those people who are on the fence, I would basically say two things. I mean, again, we can talk about a million things here, but one is. It is still a great time to to be investing in real estate. You just have to do it intelligently and be smart about it. And that means making sure the numbers make sense. Do your due diligence, invest in the right locations, the right markets, in the right locations. Take your emotion out of it. You know, this is a very rational, objective numbers game, but if you do that, you'll be very successful. So if you're thinking about it or you're on the fence, you know, don't let that hold you back. You can mitigate. I like to say that you mitigate 70 percent of your your risk in real estate by actually choosing the right market and having the right team of people. If you do that, you really mitigate your risk of being the right market in the right neighborhoods. As long as the numbers pan out on the on the on the investment property, meaning there's no deferred maintenance. So you don't have any capital expenditures and you have positive cash flow and you're in a stable market, you will do well over time. It's hard not to it's it's kind of actually really hard to screw it up. Just don't be your own worst enemy can get your own way. You know, the right people being the right market by the right property. If you don't know what you're doing, get help. Seek the right people to put those people on your team, find a mentor. But the opportunities are out there for people are saying, hey, I live in Toronto, I can't find a deal. Everything's too expensive. And when I find something that looks good, there's like a hundred other people looking at it, submitting offers and bidding it out or whatever. If you've got twenty five people submitting an offer on a property, walk away, you know, that's a sign, you know, that tells you that No. One, you're going to be overpaying for that property if you do go in and try to purchase that. Number two, you're probably in an overheated market. You should be looking elsewhere.

George El Masri [00:35:17] Yeah. And that's pretty much the market that we're in. I'm sure it's the same for you guys. I've heard that there are a lot of places in the US right now where you are seeing 15, 20 offers and we're seeing that here as well.

Marco Santarelli [00:35:28] Yeah, when there's low supply, high demand, and especially in expensive markets like, you know, where I live here. That's true. But that's why I don't, you know, touch a market in California at all. You know, this is not it's a nice place to live, but not it's not a good place to be investing right now. Not at least not in the residential space. I mean, they're in the right commercial sectors. There's opportunity, but. But not residential.

George El Masri [00:35:52] Yeah. Sounds good. Well, I appreciate you sharing all that. Let's go on to the next section, which is a random five. So I'm going to ask you five really tough questions. I lose a lot of a lot of people think they're very tough, so they're completely random. Never the same. Two questions except the last one. The first question is what odd smell do you really enjoy?

Marco Santarelli [00:36:14] What what

George El Masri [00:36:14] odd smell?

Marco Santarelli [00:36:16] What I smell.

George El Masri [00:36:17] Yes. Do you really

Marco Santarelli [00:36:18] gasoline? You have gasoline a lot.

George El Masri [00:36:21] That's the first thing I thought of too. Write right. That's funny. Yeah. What else?

Marco Santarelli [00:36:26] It's not because I'm from Calgary either. It's just I don't know what it is about. Organic chemistry, organic smell. I just love gasoline.

George El Masri [00:36:32] Yeah. All right. What elements of pop culture will be forever tied in your mind to your childhood? Pakman, Pakman, cool,

Marco Santarelli [00:36:43] definitely Pacman, Donkey Kong, Pacman, I mean, that whole era of those Nintendo games will Pacman I don't think was Nintendo but yeah, I grew up, you know, going to the arcade all the time. And I love playing video games and arcade games. I mean, back then it was right after Pong, but that's when Space Invaders came out asteroids than Pacman, Donkey Kong. You know, I'm sure you remember those games.

George El Masri [00:37:12] Yeah, I do. Yeah.

Marco Santarelli [00:37:14] Yeah, that I mean, that was one of my favorite time periods of time.

George El Masri [00:37:19] That's awesome. I like that you're coming up with these answers really quickly. Do you like things to be carefully planned or do you prefer to just go with the flow?

Marco Santarelli [00:37:35] Both it's I guess it just depends on what it is, you know, if you're if you are building a business, making decisions that involve hundreds of thousands or millions of dollars, you want to be thoughtful and have a plan. But but sometimes opportunities come and go quickly. And if you don't make a decision quick enough, you will miss out on that opportunity. So there's something to be said about not dragging your feet on making decisions. But I'm also very thoughtful and I do like to think and analyze. I'm an analytical person, so I like to think sometimes overthink and analyze what I'm doing and my decisions. But I I've come to recognize over the years that there is a point in time where you actually do need to make a decision. You just can't. It's the law of diminishing returns. You can analyze something to the point where you can make a rational, good decision, but taking more time doesn't really give you much more of a gain.

George El Masri [00:38:42] Absolutely. That was a great answer, no, for what scientific discovery would you are sorry, what scientific discovery would change the course of humanity overnight if it was discovered?

Marco Santarelli [00:38:56] I can come up with probably a lot, but I would say I would say a cure for cancer like these might be already out there and we just don't even know it because they're just under lock and key. But if they're really if there really was a way to eradicate diseases, particularly cancer, that I mean, obviously that's a game changer. So that's just one of many. I mean, there's a lot of things that would change humanity, but that's just the first thing that just came to mind. Cool.

George El Masri [00:39:26] It's awesome. Our last question, what success principle do you live by?

Marco Santarelli [00:39:32] Yeah, oh, well, there's more than one the first thing that came to mind was take action because too many people become their own worst enemy. They study and they learn and they have the knowledge to do what it takes to get to be successful, but they don't take action. And that's actually how I started this business in 2004, in a nine month period, in a nine month period, I went out and purchased eighty four doors in a nine month period, and those properties were over two thousand miles away from my home. Many of those properties I'd never seen with my own eyes. Still to this day, I've never seen that property with my own eyes, only through photos. So, you know, that's how I built my business is just having those systems in place to be able to allow other people to invest in other markets. So so the thing is, is investors were coming to me saying, hey, I see you're buying a lot of property and you're just taking action and we're in the same boot camps and learning the same stuff. Can you coach me? Can you help me? Can you mentor me? And the answer was sorry. No, no, no, I don't have time. And I honestly didn't. But what I do have is deal flow. I'm looking at a lot of properties that I'm not buying and there's still decent deals. I'm happy to hand them off to you. Well, that morphed into let me just sign the contract to you, and that morphed into a model where now, although all our services are free to you and we just get compensated on the sales end of it, just like a real estate brokerage, because we are a real estate brokerage. So now we're getting paid on the sales side. We provide all our resources, the knowledge, the information and the properties will push them over to you for free and it becomes a valuable service. But that came out of the people coming to me saying, hey, I'm learning the same stuff, but I'm not pulling the trigger. So take action. Is is the answer to your question is, is just, you know, learn educate yourself. That's critically important. My number one rule, educate yourself, but don't stop there. Take the action. Like get off the sofa and move yourself. Push yourself. If that doesn't work, get get an accountability partner or build a team that's going to keep you long or hell. Just call my investment counselors. They'll guarantee they'll motivate you, but do something right.

George El Masri [00:41:50] Yeah, that's that's a good piece of advice. You're right. A lot of people are afraid or whatever. They're just holding themselves back for whatever reason.

Marco Santarelli [00:41:57] Totally. Yeah. It's a shame because there's so many people that could be better off financially in five, ten years from now that are not taking action today. And they're going to regret it. They're going to look back five and ten years from now. They're going to look back and say, yeah, I heard Marco talking about this like ten years ago or five years ago, and I should have done something. But now I'm five years further behind, right?

George El Masri [00:42:18] Yeah, exactly. Yeah. Cool. OK, so I think that's it then. Do you just want to share how people can reach you? And I'll be sure to include that in the show notes as well.

Marco Santarelli [00:42:30] Yeah, thanks for asking, George. So first of all, thank you for having me on your show. It's been an honor. I've enjoyed this conversation and keep up the good work, keep doing what you're doing because more people that can hear the stuff that you talk about, it's just going to help more people. Right? It'll it'll educate inspire them. Really, the best way to contact my team and I is through our two websites and it's pretty simple are our main website is Narada Real Estate dot com and Anuradha real estate dot com. That's the mothership, if you will. The other website, which is the sister Web site and the home of my podcast is called Passive Real Estate Investing Dot Com. And of course, the show is called Passive Real Estate Investing. So thank you for that.

George El Masri [00:43:14] Awesome. Well, thanks for sharing. Any final messages before we end things.

Marco Santarelli [00:43:19] No, just other than thanks for your time today. I just hope that people got a nugget out of today's interview and and hopefully we've inspired some people to move forward, take action, whether it's with you or on their own or with their team or whatever it is. Hopefully we've changed a few lives today.

George El Masri [00:43:39] Yeah, I hope so, too. That's the whole whole mission here. All right, Mark, thanks so much for your time and for sharing your story. And we'll be in touch again.

Marco Santarelli [00:43:47] Thank you, George. Appreciate it.

George El Masri [00:43:49] Thanks once again for listening to another episode of the Well Off podcast. Just want to remind you that if you do appreciate the content, all I ask is that you comment, maybe like it if you can, on the platform that you're listening to it on and finally share it with friends and family. I'd love to get the message out there and it would mean a lot if you can share it. And finally, I just wanted to offer you as a valued listener, a free copy to the roadmap to real estate investing, which is a document that I've put together which helps you identify what strategy would best suit your needs at this current time. You go over certain things that are included in this document step by step, and it'll hopefully provide you with some clarity. So have a look. You can go to w w w well off Dossie Forward Slash guide to download your free copy.

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