Premier Source for Turnkey Cash-Flow Investment Property.
Marco Santarelli is the Founder and CEO of Norada Real Estate Investments and the Host of Passive Real Estate Investing
Norada Real Estate Investments helps take the guesswork out of real estate investing. By researching top real estate growth markets and providing fully renovated turnkey investment properties, we help you succeed by minimizing risk and maximizing returns. A turnkey real estate investment means investing in a rental property that will give you continuous profit with little hassle.
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0:00
Welcome to The Thoughtful Entrepreneur Show. I'm Josh Elledge, Founder and CEO of UpMyInfluence.com. We turn entrepreneurs into media celebrities, grow their authority, and help them build partnerships with top influencers. We believe that every person has a unique message that can positively impact the world. stick around to the end of the show, where I'll reveal how you can be our next guest on one of the fastest growing daily inspiration podcasts on the planet in 15 to 20 minutes. Let's go.
And with us right now, we've got Marco Santorelli and Marco, you are the Founder and CEO of Norada Real Estate, and you are the Host of the Passive Real Estate Investing show. Thank you so much for joining us.
0:48
Thank you, Josh. It's an honor to be here.
0:50
And I should also say you have the recognition of being on the Inc 5000 list as well. So congratulations on that.
0:58
Thank you. It was a it was an honor. It was a lot Stretch 15 years in the making, as they say,
1:02
Well, how did how did you do it? Like What Did you have to do to kind of get to that, that level that that earns you that spot?
1:10
Well, this might come as a bit of a surprise to you and shock some of your listeners. But I, I came to the realization realization A number of years ago, that the only way to grow is to get out of your own way. You cannot be everything to everybody. And you have to just learn to delegate because until you actually eliminate things, automate things, and delegate tasks and responsibilities or company functions, you can't scale your business. And I think intuitively I knew that and kind of in the back of my mind, I knew that but being when you're an entrepreneur, I think a lot of entrepreneurs are very controlling like they are a plus personalities, their drivers, and they have a hard time letting go of certain things and they have this Well, I still have a hard time believing this but a false belief that if anybody could do it, I can do it and I can do it better than anybody. Else. The problem with that is is that you tend to take keep ownership hold ownership of a lot of the functions and tasks that you can delegate. And it's until you start building a team around you of people that are just as competent as you or maybe even more competent, you will not be able to grow and scale your business. So that was really the revelation or the turning point for me to finally understand that okay, for me to grow this business, I have to multiply myself it's the whole concept of leverage, right? That's what happened.
2:33
What were some of the biggest jobs that were tough for you to give up?
2:38
Well, I always have a marketing hat on because I just need things from a marketing perspective, right? So for me it's really hard for me to let go of marketing tasks but I've slowly been doing that kind of stuff. The first thing I let go though, was sales Believe it or not, like you know, I was doing all the counseling the what we call strategy session, but the count counseling with with the clients to help them understand what we do and how we can help them and then help them map out a roadmap or plan to invest and build a real estate portfolio. So they can retire or be financially free. But that but I realized that in order for me to work on the business, I cannot be working in the business. So I needed to step away from sales. And I delegated that. So I brought on an investment counselor, and then ultimately to investment counselors. And today we have six going on seven. Wow. So so if you free up your time on sales, then you can shift your focus into other things like marketing or business development or creating joint ventures or whatever you know, else is important to your business to grow it.
3:38
Man, that has been my biggest challenge. And I would imagine one of the things you were probably concerned with, was that as kind of the face for the company, everybody wants to talk with you. So what do you do?
3:51
Yeah, you're well first, the first thing I did is I took myself off the Auto Attendant I remove my extension so people couldn't get got a hold of me. But then they could still email me. I mean, I was still available via email. But ultimately I got myself an assistant, she was able to take and feel that and handle a lot of those, whether they be phone calls or emails or whatever it may be. But again, it goes back to delegating. If you get an email and someone's asking you questions that you can answer. You got to stop yourself and just say, you know what, I'm giving this to my assistant, or I'm giving this to my sales person, I'm giving this to somebody on my team that can handle it. And that way you're not. You're not stuck in that loop. Because the problem with email is it creates an endless loop. If you reply to it, you're opening an invitation for a response back so you get a response back and now if you reply again, guess what? You have this game of ping pong going on. And now you multiply that times 235 1020 emails, guess what you you're going to be on email for three hours a day having these email conversations. You You got to get to a point where you stop responding to email or not just handed off.
5:06
Delegate. Wow. Were you afraid of maybe offending people when you start delegating that out? Or like I would imagine, those are these? If you haven't guessed, these are the questions. These are the insecurities I have. I mean, I we're slowly kind of like peeling me away from a lot of this stuff. But I'll be honest, Marco, there's some things that I'm like, I should not be doing, like web development for whatever reason is like, I you know, I because my background is in web development. You know, it's as if I wanted a certain way and right. So I got my hands way to dirt. I get my hands way too dirty in our own web development.
5:44
Yeah, I got that sense that these questions were probably, you know, self self self serve as well. Yeah, but we all go through that, like, yeah, I'll have these these challenges with, you know, how do we how do we manage our schedule and The reality is, is you just have to know that you have so many hours in a day and how you allocate them will determine how much productivity you have at the end of the day at the end of the week and the month of the quarter, and so on and so on. So, that's really hard to do. If you're an entrepreneur, it's really hard to do that. Because you want to know what's going on and being control of every piece of your business. So yeah, I mean, I still have this challenge today. But even with the email to go back to your question, I had a hard time, you know, delegating a response to my email because it's not coming from me and I was afraid that I was going to offend somebody saying, hey, well, it's not coming from Josh. Right. And so they might think, Well, okay, he doesn't feel that I'm important or important enough for his time. The reality is, is that you can only be in so many places, you know, over the course of a day and you only have so many hours to give You know, if you're just responding to emails all day, you're not gonna get anything done. Anything else done?
7:05
Can I ask Marco how you were able to particularly on the sales side of things, so it sounds like if you've got six on staff that's doing pretty good. Any tips for for hiring great sales professionals because that's, you know, that's your front line people that are representing the company and that's, you know, that's going to be this, you know, all these touches for people that ultimately you're going to be doing business with.
7:30
The best? I guess the best answer to your question is to bring on people that already understand the business and the industry. So you don't have to educate them on what it is you do and the benefits that you can provide. If you don't have to teach them that then that helps because those are the skills and the knowledge that they need in order to be able to communicate and talk and sell. Obviously, having soft skills like people skills is great. Important, just being able to work with people. I am a believer in soft selling, not hard selling. So
8:09
I think those days are,
8:10
please, I think if you provide enough value and answer enough questions, people will just automatically want to latch on to you, they'll want to work with you because they feel that you understand them and that you already have the answers. So the answers is not become secondary to the fact that you understand them comes the most important thing, right? So just know just bringing people in, especially from your own industry that understand the business and the process and the benefits, not just the features, that that goes a long way. And the best person to bring on is someone who actually fits all of that, but they're actually coming to you because they're coming from a competitor. So if they come from within the industry and you're not poaching them, soliciting them, but they're actually coming to you or they're you know, throwing throwing a hint out there that hey, I may be looking to move. Those are the people that you want to have conversations with because they're already on board. You just haven't officially onboard them. Right?
9:10
Right. I like that. Okay, so mark, let's talk about what you do with Miranda then. First of all, what is neuritis stand for?
9:19
I'd have no idea. It's okay.
9:21
It's just a cool sounding name.
9:23
It was. Well, there's an interesting story. I'll tell you real quick. I new company long ago in Canada, I met with the owners. This goes a long time ago, was back when we but they were called the radda Corp. And I asked them the same question what doesn't work out? I mean, because they probably get asked this question a lot. But what they told me is they needed a name for the company and they came up with 100 names that they felt were brandable names something that was unique, not just a, you know, an English word. And they ultimately created a list of 100 submitted this list to some sort of psychological test test down. I don't know what the test was or who does that kind of test. But when the results came back word no rata and or ADA came out at the top of the list as being the most psychologically impactful name of the hundred they submitted. And I thought that was so fascinating that I filed that in the back of my head. And then many, many, many years later, when I was looking for a name for my company, and I couldn't find the URL, a domain name that was available for what I wanted. I just got thinking, Well, why don't I take something that's unique and brandable, like, no rata and put real estate investments after it. And sure enough, of course, domain names are taken for that. But it's something I could have worked with and used and branded. And that's ultimately what ended up happening. So I don't know what it means, but it worked out to be good.
10:40
And and when did you launch it? Right? I mean, this is 16 years ago, right?
10:45
Yeah, January 2004, is the official launch date.
10:49
And and when you launched it, what was the first iteration?
10:55
The business is pretty much similar to what it is today. We've just obviously improved the Planet streamlined, you know timed up on the systems that the processes, the branding, the marketing, everything has just been been improved. In the very beginning, I actually was charging clients for the first probably six months, we were charging them a service fee for for what we were providing. But I quickly flip that on its head. And now everything we provide all the all the knowledge, education, the podcast, everything is free. The resources we have all the contacts of the companies that we bedded and work with are at no cost. And, and the properties we don't charge a fee for that either. So really, we're providing a service that we never build our clients for ever. But we provide a ton of value. And I find that model to be incredibly enticing because people are drawn to us, because they get tons of value. We don't cost them anything. We help them avoid mistakes. We help them to be successful. And at the end of the day, they're spending Not a penny more than they would otherwise in investing in rental properties because it's the same Down Payment 20% it's the same closing costs, you know, to close on the transaction. So really, they're miles ahead.
12:08
Yeah. Well, it seems kind of like the the perfect storm in terms of, you know, having that business where it's, it's a no brainer for your clients. So just really, you know, again, just explain how no rata makes its money then.
12:25
Well, I think you and I share a similar problem here we both have a great business a great product, we provide a lot of value, you know, it's it's, it's a good we provide a good service. But the the biggest mistake I make and I don't know if this is true for you, is I don't market it well enough to let enough people know about what we do to help more people. And and that's not a problem with the business. It's a problem with the person wearing the marketing hat, which I'm not getting the message out there to enough people fast enough. So So that's something I'm actively working on. And it's something that you know what you and I started a conversation on and still have to continue. But to answer your question, how do we generate revenue, it's very simple. We are a real estate brokerage, I am a licensed broker. And so we get compensated just like any other traditional real estate transaction. And normally how that works 99.9% of the time, is the seller of the property is paying essentially a commission or marketing fee or a referral fee to the brokerage or selling agents. And that's exactly how we get compensated, it's on the sale side of the transaction, not on the buy side of the transaction. So that's why you as a client, an investor, a buyer, working with us don't need to pay any fees and we don't need to charge any if we don't want to, because we're we're our compensation is built into the model. And, and the kind of the added benefit of that which is not apparent at first is that it allows us to be unbiased meaning agnostic, so we're not We're agnostic across the board. We're not married to a market. We're not married for builders or providers or property managers or or asset protection attorneys or lenders or anybody at all. That allows us to be very nimble and unbiased. So we can let your investment goals and your investment criteria drive all the decisions that are made in your best interest. It doesn't steer us in one direction or another.
14:25
So talk to me about why you launched obviously, you do a ton of content. Chief among them, or you know, among them would be your passive real estate investing program. Why podcast?
14:40
Are you asking me why the podcast?
14:41
Yeah, yeah. Why did you start a podcast?
14:44
Well, interestingly enough, at first, it was a way for us to educate more people in less time because you know, you and I are having a conversation on the phone or via email. I may be, you know, educating you and making you a very, very smart in business. When it comes to investing in your financial future, but but, but I'm saying the same things answering the same questions over and over and over again to multiple people yeah all the time. And so why not take that same message and talk about the same things and answer the same questions and have a one to many relationship so now I can do it one say it once but I can hit hundreds or thousands of people with that same recording. So it's again it goes back to leverage it allows me to leverage my time and leverage my my my resources and my knowledge and hit more people, educate more people help more people with without having to spend any extra time that's, that's how it all started. But ultimately, after about six months, I came to realize that we were getting calls from people off of the podcast saying, hey, I've been listening to you for six months. I love what you do. I love what you have to say it resonates You know, I've been looking for someone like you for four years where have you been my whole life and they just end up becoming you know, client So, so it's become a great marketing tool, not just an educational tool.
16:06
And so, Marco, how, and you also have a book as well The Ultimate Guide to Passive Real Estate. It looks like you just give it away.
16:16
Yeah, so that's a 47 page guide. It's really an incredible primer. It's a scaled down version of the actual book, which is done. It's in manuscript. We've had a publisher give me a written offer. And in advance, I actually turned them down. Wow. I said, Thanks, but no things. I'm going to be self publishing the book, the paperback and giving it away for free. So it'll be available as a download or as a paperback very soon. I'm shooting for January 5. I don't know if I'm going to hit that date, but that's my goal. The reason is, is because that's my birthday. So, but right now the download the Ultimate Guide to passive real estate investing is a free download on both of our websites, and still There's no cost, no obligation, it's just there.
17:02
So what are the kind of the main tenants of your message in terms of passive real estate investing?
17:10
Well, that's a two hour conversation.
17:14
So give me like the Wikipedia article version of it.
17:18
So the idea is to you, first of all have to identify yourself as being a passive, not an active real estate investor, do you want to be swinging hammers and managing crews and taking a lot of the risk and fixing distressed or ugly properties and turning them nice, there's nothing wrong with that. But that's that's not invest investing as much as it is a business. So you need to, first of all recognize yourself as being a passive, not an active real estate investor because you want to do two things. You want to create passive income, and you want to create wealth, and that's ultimately what we all want to do. So once you're past that, then you just have to understand that we live in a big country with over 400 metropolitan area, statistical areas and where you live. may not be the best place to invest. You might live in an expensive market via the coastal markets like California, New York, New Jersey could be Denver, Colorado, it could be Washington, DC, Seattle, Washington. I mean, there's a lot of expensive markets where the numbers don't make sense. Yeah. So when you understand that we live in a big country, and you can invest virtually anywhere, then you open up a lot of opportunities for yourself. And so what we look for are large, stable markets that have great fundamentals, a broad economy, meaning that there are jobs across multiple industries. So the economy is strong and stable. You have jobs and job growth, you have population growth, you have numbers, that makes sense. So the rents are high enough that generally that will generate a good cash on cash return for you immediately. And then obviously, along with that passive income, you have equity growth over time, and of course, we look for markets or states that have landlord friendly. That's that's the third 30,000 foot level. So the 22 markets that we're in are basically what I just described. And now it's just a matter of having the right inventory of properties in those markets, and the right team around that. So you can be a successful passive real estate investor. That's what we talked about a lot. We educate people on what to look for how to do that, you know, what, what, what is going to make you successful, what mistakes to avoid. But that's the overall premise. I mean, I could drill down into all those things, you know, much more deeply. But I think if you just have a conceptual idea of what that looks like, and not be afraid to invest in a market that's going to do the best for you. In other words, put your investment capital to work the hardest, then you can step away from saying, Hey, I have to invest in my backyard, meaning one or two hours away from where I live, that doesn't change anything. Unless you're managing the property which I don't recommend you do. It doesn't change anything you become a better, smarter, more successful investor picking the best markets that work for you.
20:04
So in terms of where we are now in, you know, 2020 in terms of timing, I mean, what do you think? I mean, again, I know you don't have the crystal ball, but it is now the time to buy. Should we be waiting? What do you think?
20:23
Well, that's an interesting questions. People ask the same question in different ways. They phrase it a little differently, right? It will, you know, how, how is the real estate market? And my my response to that is, is this the wrong question to ask, there is no such thing as a housing market because what you're implying is that is that there's a national housing market and it doesn't exist, there's no such thing you can't point to it. You'll never be able to show me a national housing market. All real estate is local. So what happens in let's say, Laguna Niguel, California is different than what happens in Detroit, Michigan, which is different than what happens in Memphis, Tennessee. And you can take that one step further and you You can be more specific within that market, you can talk about sub markets and neighborhoods. So you, you're basically, I'm basically telling you that real estate is hyper local, not just local. So when you understand that, then you can ask a smarter question like, what, what is happening? How is the Memphis real estate market? Or how is? I'm not sure where you live? I think you said you live in Denver, Orlando. Orlando. So yeah, so how is the real estate market in Orlando? And then you can be more specific because you can break Orlando down into sections. Yeah, and and neighborhoods. Right. So to the to your other question is now the right time. There's There's never a bad time. What changes are two things, either the location meaning the market you're investing in, or the strategy that you're employing within that market based upon where you are in the market cycle in that local market. So there's always opportunity, there's always a way to make money in real estate. It's never been a bad investment. It's just what changes are the strategies and the locations that you will employ in your marketing or your investing strategy. We're always buying like we as a me and my team, we're always investing in real estate we're always buying I'm in escrow right now for on five properties in two different markets and I just finished closing on 22 others. So we're always buying we just know that we need to look in different markets for different things at different times. And it's not about timing because that implies you're a trader or a speculator and you never speculate in real estate you always have to be invest on cash flow and fundamentals, not on market timing. If your market is trying to time the market. You're speculator and that's really more like gambling and I we don't we don't really want people doing that.
22:45
Nice, nice. Okay, great. Well, Marco Santorelli thank you so much for joining us. And again, you're the Founder and CEO of NoradaRealEstate.com that's N o r a d a real estate.com. There's a blog, you've got The Ultimate Guide A Passive Real Estate Investing where you can download right now. And then of course, if you're listening to this podcast Well, it's really easy. You just do a search for passive real estate investing, and you'll find Marco's show, Marco, thank you again so much for joining us.
23:13
Josh has been a pleasure and thank you for inviting me on the show. It's been a lot of fun.
23:18
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