Table of Contents - Marginal in Many vs. Excellent in ONE with Jason Yarusi
Dave Debeau [00:00:09] Hey, everyone, this is Dave Debeau. Welcome to another episode of the Property Profits Real Estate podcast today. It's my pleasure to be interviewing Jason Yarusi. How are you doing today, Jason? I'm doing great. Thanks for having me on. My pleasure. It's a beautiful, sunny day here in Kamloops, British Columbia, Canada. Where are you calling in from today?
Jason Yarusi [00:00:28] Wonderful New Jersey. We're having sun today, too, which will take anything right now besides the rain.
Dave Debeau [00:00:36] Exactly. It's been a long, long winter. So, Jason, Jason is a an accomplished real estate entrepreneur in his own right. He focuses on multifamily properties with his lovely wife, PLI. They have over two hundred units in their portfolio and growing and they focus primarily on the New Jersey market. So, Jason, really looking forward to having a quick chat with you today, a little bit about what you're up to and what your big takeaways have been when it comes to real estate investing. But let's get started first with Estella's it. Sounds like you're kind of a world traveler. How did you get dialed into real estate and real estate investing?
Jason Yarusi [00:01:14] You know, things happen in their own way, as you can imagine, right, and so so you figure out you figure, of course, for your life and then life because of course for you. So I. It does. Yeah, exactly. So and I met working in New York City. So was from Hawaii crazy enough. They call New Jersey, Hawaii of the East, or at least I tell her. And for that we we we met in New York City some about 18 years ago now or actually almost maybe 16 years ago now. Let's not get that wrong. Right. That running bars and live that life for a while. And we both had separate lives and she moved away and then came back to New York City and we became a couple and got married and things went that direction. But in that meantime, here in New Jersey, my dad has a heavy construction business, has a very clear focus on lifting moving building happens a lot in Canada, too. You guys lift and move a lot of buildings up there, a lot of big players. We do it a lot here for flooding reasons. Back in 2013, 2012, 2013, we had Hurricane Sandy, which decimated the East Coast. When that happened, my father's business got so overwhelmed based on just the need to be able to go out and help people just to incoming calls coming in and just going from 12, 13 lives a year to over one hundred that my brother and myself, we came out and started working for the family business, really just to help him help him push forward. Fastrack, there are a couple of years into that. Construction is a wonderful beast. But as far as anything, a lot of these activities where it's laborious, if you're not doing something, you're not making money. So looking at just the complexity of this business and the overhead, the insurances and everything, and just we could have worked twenty four, twenty five, twenty six hours a day if a lot of us seven days a week with all the work to help homeowners. And we're still busy doing that. But we wanted to find some passivity in our life. Just find another option for ourselves to be able to do something where if I wasn't out there working Saturday, Sunday, every day, that I still had an option to be able to create wealth for our family and bring in cash flow. Of course, we started with Flip's and that just become just as active as just having another job as we were doing. It then started learning about having some rentals, started doing some small rentals out of state and having these small rentals out of state and set up team work for them. I just had this this moment where I was like, well, if I can do this one or two or three family out in Indiana, well, what's stopping me from usually these economies of scale and jumping to one hundred units and that was the first start. Learn those processes, find that way that we went from having a two unit three unit and jumping to our first large purchase was ninety four unit.
Dave Debeau [00:03:46] Wow. That is a big jump. Holy smokes. So you've kind of touched on it but why do you like or why do you focus on larger multifamily properties versus flip's versus smaller multifamily versus the gazillion other ways people do real estate investing.
Jason Yarusi [00:04:05] Sure, yeah. And there's so many different options. Right. And it just comes down and you get you do have to have that focus after a while because you're either going to be marginal at many or just really excel at one. So for us, just learning this process, large multifamily gives you the opportunity to have cash flow appreciation, debt, pay down depreciation and tax benefits. Just there's so many different options that that's available to you with with buying multifamily. Now, if you look at large multifamily versus small multifamily, both have benefits. But if you say have two family, well, if one unit goes vacant, you're basically 50 percent occupied. You only have one roof covering two units now or one each could possibly or maybe two covering two units. We're on a larger property now. You have one roof that's maybe covering 30, 40, 50 units with the larger properties. You can also treat them like a business. Whereas in a small property, if, say, you have a plumbing issue, well, now you have to call that plumber. A plumber is going to run out, assess the issue, figure out the parts. He doesn't have them run to the store, runback, figure it out. And now you're just racking up these bills because you can't really afford to hire a proper staff while having a large multifamily property, maybe in some markets over sixty five units to some markets over one hundred units. You can afford to have a full time leasing partner, a full time maintenance person, or even more that are afforded by the expenses of the property that's basically being paid by the rents of your tenants. And now when and when basically a moderate repair comes up, it can be handled in-house. So really, you're a kind of scale skill that much greater compared to the smaller properties?
Dave Debeau [00:05:40] Yeah, that makes a lot of sense. Now, it sounds like you did a lot of things right from the get go. And I mean, it's always 20/20 hindsight. But knowing what you know now, is there anything you would have done differently?
Jason Yarusi [00:05:51] I would have pushed a little bit more to get quicker there, and so the thing that I feel that people should do listening is that if I find people that are doing successfully what you want to do. Right. And so could I have made this jump on my own, not surrounding myself with like minded people? Sure. But what have the learning curve have been a lot greater and would have taken me a lot longer? Sure, yes, it would. But to be able to find people that are doing what you want to do successfully and seeing how you can help them, but also having them in your corner where you can ask them these questions that that can help you along the way. And sometimes the questions aren't even big questions. They may be questions that are so small in the picture. But to you, at that particular moment, they're giant right there. These giant questions you don't know the answer to. And they can stop your momentum where if you look back in those questions maybe a year or two years later, they're so minimal in your step that if you didn't have that person on the side, they could just say, oh, it's not a big deal. Here's the answer. It would propel you to complete different track and kind of set you off from your from your ultimate goal.
Dave Debeau [00:06:50] Yeah. Again, I think a lot of people have that challenge of just finding that focus in the first place. There's so many options out there. There's so many people doing so many different things and they all look fun and exciting and sexy. So, yeah, I know you work with people and you guys run a really big meetup group in New Jersey. So what kind of advice do you give to newbies on how do they get that focus in the first place? Because that's a big challenge. I've seen at least four people, myself included at times
Jason Yarusi [00:07:16] and me, to write shiny objects where you're all over the place, OK, are we doing tax needs? Are we doing flips? We don't wholesalers. We do lease options. We don't Airbnb. And that's just a big thing. Right. And we wanted to have our meet up focus specifically on multifamily. But even within the multifamily space, you have people that are they focusing on here in New Jersey? Are they in Oklahoma or are they focus on tenants are focused on 30 units. Are they trying to wholesale apartment buildings? And my advice to them is that you don't know. You don't know. So find something that you like and just that you think you like and give it six months if you want to focus on the Oklahoma market, OK, dove in and be all in Oklahoma, be the king or queen of Oklahoma. Find the some market you work in. If you want to focus on thirty years, go after thirty units, go after all those and make that work within six months. If you don't like that. Well pivot you don't realize how quick six months goes. But right now if you're going to focus on nothing for six months going to fly by. No, you're not going to accomplish anything, at least at the end of six months. You either be well ahead in the game or find out what you don't like either. Which way will help you along your journey.
Dave Debeau [00:08:20] So when people think I mean, that was a huge jump that you took from focusing on duplexes and crab legs and whatnot out of state to jumping into your first really big deal, I think you said ninety five units, is that right?
Jason Yarusi [00:08:33] Ninety four, correct.
Dave Debeau [00:08:34] But pretty close.
Jason Yarusi [00:08:36] But I think
Dave Debeau [00:08:38] it's significantly bigger than a triple X. So how did you just like because most people think of the holy crap that's like how do you make that leap. So how do you make that leap mentally and then also financially. I mean where did you did you and the family have really deep pockets? Did you work with joint venture partners, investor partners, the syndicate? How did you jump in? How did you make that leap from small to big so fast?
Jason Yarusi [00:09:05] Well, you're absolutely right. It was first the mindset, right? That's the first thing I tell myself I can do that. And when you realize it's just more zeros and it actually gets easier the larger you go. Right. Just as we spoke about the economies of scale, also from a linear perspective, well, lenders are looking at these properties like a as a as a business as well. Right. So they want to make sure that the property can sustain itself. And then they'll look at Jason as as a as the general partner on the project and make sure that he's of course, he has at least some track record, whether it be in business or other. And then beyond that, he's not a bad actor, you know, doesn't have bankruptcies or other things in the past. But if I'm looking at a two unit or even a single family home now, it's all about me. It's all about my tax returns. It's all about me. And it's more difficult for me to go out and buy my own personal resonance than it is for me to buy a ninety four you just based on now property is being focused on instead of me. And I want to know, OK, how many kids I have in my car payments aren't all these ridiculous things and all always ridiculous things
Dave Debeau [00:10:02] that are in this. And sounds like you got as much of a financial proctology exam for financing in the States as we do up here in Canada.
Jason Yarusi [00:10:10] Do we? Sure do it. It's endless, right? Depending on some lenders, it's even more. But yeah, it's absolutely right. And we do in our deals, which means that we pool resources from a group of investors so we can all benefit from buying large properties and benefit from the economies of scale. So generally we act as a general partnership and we bring on limited partners. We do invest in our dealers as well, but we have limited partners will bring in money that will cover the down payment fees, capital expenditures, closing costs, and then we'll partner with that. All that equity with some kind of debt structure based on the property makes sense.
Dave Debeau [00:10:45] Very good. Now, that must have been quite a learning curve if you hadn't done it before. I mean, doing your first syndication must have been kind of a. A big deal, so I imagine you got some help or some coaching or some guidance along the way about that?
Jason Yarusi [00:10:56] Yeah, absolutely. Again, you have found partners that were doing it and just being able to be back and seeing how they've done it on other projects and other properties and then also getting the right partners just on your team. Right. You get a closing attorney in the state. You have a CPA that's relegated with syndications and other. Then you get a syndication internee that can handle your paperwork, finding the right property manager and the right broker relationships. And that's all part of the process is that we we do it to the point where when we're going out there to to buy multifamily, we basically learn what we're doing first, learn the terms are not on the right properties. Then we find the market. Then now we start making our relationships and building our team, start finding our bank, start finding our broker, start finding all of our property managers, our insurance partners. After we've done all that, then we start offering on properties and we actually the one part is even starting to have an investor talks. We'll do that before find the property.
Dave Debeau [00:11:50] Yes, that's that's very good. Very good idea. Says scrambling after the fact to find the money
Jason Yarusi [00:11:55] because you don't want to be desperate. You want to find a good opportunity that people can be with you. You don't want to find the opportunity and then need the money because these are great opportunities. If you find a good thing, but you want to see and be able to help people along with their financial journey, not need the money gives you a closing date that's looming on you 20 days out.
Dave Debeau [00:12:11] I've been there, man. I know that pain. It's no fun, no fun whatsoever. Awesome stuff. Jason, as usual, have gone off a little bit of a tangent. So thanks for thanks for going along on that trip with me. Now, when it comes to your sound like a very sharp guy. So when it comes to really
Jason Yarusi [00:12:29] appreciate that
Dave Debeau [00:12:32] when it comes to real estate investing, we've got what Kiyosaki calls our unfair advantages. So what would you say is your unfair advantage or your super power when it comes to real estate?
Jason Yarusi [00:12:42] I'm probably more stubborn than most people, and that comes from being surrounded by a bunch of Italians that I'll hear no six thousand times. But no, there's a yes somewhere that goes with everything. And so my advice that they all know that they'll keep saying, well, they said no. I said, well, just keep asking, because sooner or later that no becomes a yes. You just got to find the right way to ask it or the right person to ask it to.
Dave Debeau [00:13:03] Very good advice. The other part of the question was, you know, for those of us that suck at getting nose and aren't very persistent after that, what would you suggest would be a kind of a good way to get over that? I mean, you grew up in a family where it sounds like that's part of your DNA. But for the rest of us, what would you suggest to get better at that?
Jason Yarusi [00:13:23] Well, no one likes rejection, right? And again, like, it's on anything, let's just say, OK, let's talk about raising money. Right. You're going to go out there and get to know a bunch because really you're not good at what you're doing, the way you're presenting it or even talking about it. Learn those points. But you need those no's to be able to understand what the. Yes. Looks like and to appreciate yet. And like the sun never came up, you would never know how great it is to have the sun out. So for us to be able to go out there and have those talk tracks, we can learn how to talk to investors, how to make this a better opportunity to them, how to present them. And those no's come along with great questions that we can reform our conversation for the future. So talking with brokers like everybody started somewhere. And I think some of the hard points will go into these big properties. Well, how am I going to talk to a person and raise money from them? I haven't done this before. Well, how am I going to talk to a broker who's got they sold one hundred million dollars of property? Well, did they always, from day one out of the womb, sell a hundred million dollars worth of property? No, they started somewhere probably the same as some junior broker. Junior assistant worked and worked her way up. And now here here they are. So it's being respectful with their time being in spot on, with being specific what you want that really helps you along the way. I find that you get a lot of nose if you go in there and just say, hey, I want to buy large multifamily. Well, that means nothing to the brokers. They won't get great. I don't know what that means was that any new construction is. But if you go in there and say, I want to buy books at seventy five to one hundred units in the South Central, some market of Louisville built in nineteen seventy to two thousand garden style construction, that's my focus. Well, now the broker is going to say, gotcha, OK, cool, let me see what I have. Right. You have a much better chance
Dave Debeau [00:15:02] to show them that you know what the heck you're talking about as well,
Jason Yarusi [00:15:06] correct. Correct. And engage with the conversation. You'll get a lot more yeses if you're specific.
Dave Debeau [00:15:11] Good point. Good. Good advice there. So, Jason, we're wrapping up. We've got a couple of minutes. I know that you and your wife Pilley also offer coaching and assistant for people that want to get into multifamily investing. If somebody wants to find out more about you guys and what you're up to, what do they do? Where should they go?
Jason Yarusi [00:15:29] They can go to our website, Jaroussky Holdings. Why are USSI Holdings dot com on? There's a link to me, Jason, emptily. You can schedule call with us and we could talk about your multifamily goals and see if things align.
Dave Debeau [00:15:41] That sounds good. And do you have any any resources or anything like that for folks that are interested in kind of dipping their toe in and finding out a little bit more about your. You got some stuff on the side as well. I know you got a podcast as well, so they can listen to that, too.
Jason Yarusi [00:15:55] Yeah, the podcast with my wife. And so you get a lot more content from me. I just I just heard from her either stand there and give thumbs up. But is the Real Estate Investing Foundation podcast with Jason Vele also podcast like yourself? I mean, we're in a world now where there's just so much information, right. That you can get on and, you know, the car ride or sit there, I don't know, on the subway or wherever you're going, you can have access to all these resources where before you had to go search out this people to be able to give this or find books. But now you have everything on your phone. So there's just so many resources out there where you can dial in. Just as we've both said, don't get lost in the shiny object syndrome of having nine thousand points. Find your focus with the podcast and then go out there and try it and see
Dave Debeau [00:16:37] know the six months later. So that's very good advice. I was. That's good stuff. All right. So just in the last 30 seconds or so, any actionable tip besides, you know, give it a give it a good shot. Any other actionable tip to leave people with if they're interested in multifamily investing,
Jason Yarusi [00:16:56] give yourself three action items and go out there and do it. Whether that's, you know, find your focus, make five calls and go out there and make an offer. And if you do this, you know, if you make an offer, you can always say no, you can always not going to point. I promise you, no one's going to take your dog or something. If you go out there and make an offer, there's not something magical is going to happen. People get fearful of the end of this. Go out there and take action. You'll find it. It will make it so much easier the next time you take action. But that first time can be really tough.
Dave Debeau [00:17:22] And my friend, well, very nice meeting you. Thank you very much for your insight, your wisdom on this podcast. Really appreciate it.
Jason Yarusi [00:17:29] Thanks, Dave. I appreciate it. Thank you.
Dave Debeau [00:17:31] All right, everybody, take care. Talk to you next time about. Well, thanks very much for checking out the property profits podcast and you like what we're doing here. Please head on over to iTunes, subscribe read us and leave us to review. Very, very much appreciated. And if you're looking to create a regular flow of inbound investor inquiries about your real estate deals, then I invite you to attend one of my upcoming live online demonstrations. And you can check that out at Investor Attraction Demo Dotcom Ticker.