Sarah Larbi: Welcome back, REITE Club Nation, to another episode. I'm here. I'm Sarah Larbi, and I'm here with Laurel Simmons, my co-host. Hello Laurel and guys, REITE Club Nation. Welcome back to another awesome week, Laurel. How's it going?
Laurel Simmons: It's going great. There's so many opportunities out there and it is just, it's about the mindset, right? And that's what our guest is really gonna talk about this time. He's a really successful investor and it is about the mindset cause you can tell that he really had a shift in how he thought. Which affected what he did, and now I'm not gonna spoil it. You have to listen to the podcast to find out.
Sarah Larbi: Absolutely. Adrian Pannozzo 200 plus units started only 10 years ago and has built a tremendous portfolio using the BRRRR strategy. And scaled up really successfully a combo of his own, a combo of JVs. And we really dig deep into how to escalate and get started.
Before we go into that REITE Club Nation, if you do enjoy these podcasts, don't forget, write and review us on Apple's podcasts and wherever else you listen. And also check us out online. It's free to register at thereiteclub.com starter profile. Look at our forums, communicate, and find team members. We talk a lot about teams in this podcast, who to build on your team.
Look at our right partners on the website. You're gonna be able to have, and every single week we're adding more stuff to the website. But there's gonna be some really key things that you're gonna want aka, building your team and finding team members that you can trust that are investors and can help you propel yourself as an example. But many more things well.
Laurel Simmons: Go to thereiteclub.com if you haven't already signed up and it's free. So get in there and we'd love to see you and we'll connect with you. So Sarah, should we go to the interview?
Sarah Larbi: Let's bring in Adrian. Adrian, welcome to the show. How are you?
Adrian Pannozzo: I'm awesome. How are you, sarah?
Sarah Larbi: Good. I'm excited to have you on the REITE club podcast. You also have been on my, where should I Invest One and you've got a really interesting story. But before we go into how you got involved in real estate, I'm just curious what you currently do as a strategy and what your portfolio consists of today.
Adrian Pannozzo: As a strategy, we incorporate the BRRRR by renovating, refinance and rent strategy predominantly in the city of Hamilton. And been a real estate investor for 10 years now, and we've accumulated a portfolio of, I think we're up to 207 doors. And just over 50 units. Again, mostly in the city of Hamilton.
Sarah Larbi: That's awesome. So that is not a small portfolio that is really awesome. It's incredible. But we wanna focus a little bit on, really your start. And what you went through, some of the ups and downs, how you got started, and without necessarily sugar coating everything because you got to where you are today. Obviously mindset is important. But I'd love to get some realistic things that you went through along the way. When did you get started and walk us through the early journey?
Laurel Simmons: Actually, you know what, can I ask a question before we even get into that? Adrian, why did you decide to do it? Why did you decide to get into real estate investing?
Adrian Pannozzo: My mindset 10 years ago was I wanted to have a little bit of a passive income because my plan was to complete 30 years as a police officer and then subsidize my pension. And I guess the difference in pay once you retire. To obviously your full salary. So my mindset was I'll have a couple properties to create some passive income, so when I retire from policing, I'll be able to still live the same lifestyle and have the same income as I would when I'm obviously not retired. So it was to generate some passive income to subsidize the difference in pay.
Laurel Simmons: What happened because going from just subsidizing your pay to having the number of doors you have wow, what happened? How did that happen? Why did it happen?
Adrian Pannozzo: How did it happen? I still scratch my head and wonder how it moves so quickly. Because that was never the intention. It took 10 years in the making and The mindset I think was important, but needless to say, we scaled it.
My wife and I purchased our first five on our own and really the learning curve was incredible. Given the fact that we chose the city of Hamilton to invest from and I actually live about 30 minutes north of Wonderland, so a city I wasn't even familiar with other than reading articles and whatnot and knowing it was a great place to invest.
After our five, our first initial five properties, and if I can back up the tape, we had no money. So when we started we basically started by a home equity line of credit. We didn't have a lot of money in our savings account or whatnot, but we had this equity in our home and The mortgage consultant we were working with. We had an appointment with him to re actually just renew our mortgage and our primary residence.
In conversation with him, he's okay, yeah, we can definitely help you out to renew your mortgage, but you know what, like you have all this equity in this house. What are you doing with that? And the mortgage agent at the time was also an investor, so he opened up the blinds too.
What does equity in your home mean? What can I do with that? What's a home equity line of credit? I didn't have a clue what all that was 10 years ago. Just went to work, paycheck to paycheck, so to speak. So we borrowed, we leveraged that equity, and I think we started with about 150 thousand on a line home equity line borrowed everything we had.
Jumped in with both feet and. Did the sign of the cross and took it from there. So that's how it started. It all started with a home equity line of credit, and after our fifth property we then began to join Venture. We had built quite a bit of experience out there and a team around us, and we started the joint venture after our fifth property. And then from there it just really exploded after that happened.
Sarah Larbi: That's amazing. So I like that you right off the bat, were talking to a mortgage broker that was able to give you that insight because this is why I don't recommend going directly to the bank. The bank will try to just. Keep renewing your mortgage, maybe sell you some mortgage insurance. Cause that's how they make their money. And they will not tell you about this because they just want you to be, I don't know, saving your money to put into their mutual funds and stuff like that.
It is important. This is why we listen to podcasts. This is why we educate ourselves because and also why we associate ourselves with other people that are doing it. So the fact that your mortgage broker was already an investor, I think, was super helpful because that's a different mindset and a different way of thinking than a person at the bank. You know that is huge because if you guys are listening to this REITE Club nation and you have equity in your property and you don't have a mortgage broker, it's gonna be really tough, right?
Build the right team and have the right people, but also they're gonna give you ideas and strategies of how you can actually propel yourself forward, just like Adrian did. So Adrian, so then, like once that was essentially mentioned to you like how long did it actually take you to go ahead and find an investment property from the time that you realized that you can actually unlock your equity?
Adrian Pannozzo: Obviously you jumped through the hoops with respect to the mortgage broker and sending 'em all to your documents, your T four s, your T one s, the house. Our original home had to get appraised, and then obviously that appraisal report would show the value of your home and then the equity in your home.
Start to finish. By the time I bought my first one, maybe three months, give or take, maybe a little bit less, but he obviously being an investor segued me into looking into Hamilton. Obviously I live in the New York region. I'm like, why am I gonna go to Hamilton? It's an hour and a half from my house.
Like, how am I gonna check up on my property? How am I gonna make sure my tenants are still there and this and that? And he said this, let's go for a road trip. And let's, Hamilton's really known for cash flow. Let's go for a road trip. I'll show you the city and we'll take it from there. So I didn't know north, south, east, west, I knew zero, but my personality is more of a risk taker and take chances.
For me, even though I was taking a risk and a chance, I still felt comfortable that I was investing in real estate as opposed to listening to a tip about the stock market. And if that tip is wrong and the stock goes belly up, Your money's gone, but I knew I was buying bricks and mortar at the end of the day, and worst case scenario, if the market dipped a bit, I'd still be okay cause they still had the asset.
We went for a road trip and fast forward did the analysis on properties and the cash flow was very lucrative and pulled the trigger two and a half, three months after that initial meeting.
Laurel Simmons: I think it's it, you said something just to, when you started talking in this little bit of the discussion about, how do I do this and how do I do that? Cause I think that's a really common theme for especially people who are just getting started. The how do I's, and I call them the cursed hows, because so often we get caught up in how do I, and it really, if you only focus on the hows. You're never gonna do anything because there's always a How do I do this and how do I do that?
There are people out there who can help you figure that out, right? You pick up the phone, you ask somebody, you go to the REITE club, even you, you talk to people who can tell you how to do something. So you don't really have to worry about that. It's why you're doing it and what you're doing.
That's really important. So you obviously had a lot of hows, but you set those aside and went off anyway and took your road trip and really figured out what was going on and why you wanted to do this and what you wanted to do. And I think that's the piece that a lot of people don't really think about obviously, cause you, you are now really successful by any measure.
Adrian Pannozzo: Absolutely. And I think surrounding yourself. And doing your research on what city you wanna invest in, doing your research on the numbers, surrounding yourself with professionals, getting involved with the REITE club and the education they can provide you and so on and so forth through their membership and the other professionals that are in the REITE club as well.
You can't put a price on that. It really will yield you some, probably save you a lot of money and maybe help you avoid some common mistakes down the road and just give you overall that maybe that confidence you need to take that step and just get in the market. At the end of the day, you gotta get in the market like you can't score unless you actually, you're on the ice.
You gotta get on the ice and shoot score. My advice deals with as many professionals as you can get involved with the right people. Surround yourself with a good team of professionals, maybe joint ventings for you. Maybe it's not, I definitely made a lot of mistakes.
Cost me some money. I bounced back without any hesitation. But maybe joint venture and working with a professional will help you avoid those mistakes, give you that confidence, and then maybe the second property you do on your own or the third property you do on your own, and then you start to joint venture and coach people as well and whatnot. Like you said, there's so many people out there that can help you be successful in this game.
Sarah Larbi: Absolutely. And like you said, surround yourself with those people. So now that you have 10 years of experience, can you share early on what were some of the things that you wish you knew how to do or that wish that you did not do, or that you did do as in, maybe some mistakes that or some things that you went through that you can share so that somebody listening to this can learn, from your 10 years ago self.
Adrian Pannozzo: What things did I learn? I touched upon it as far as surrounding yourself with a really strong team. Had I, could I go back and start from the beginning?
Sarah Larbi: Like what would you do differently?
Adrian Pannozzo: Probably have 300 doors. Now. What I would do differently is start off with a coach. And or a mentor and or a joint venture partner because they could really cut down your learning curve and they could really help you accelerate quicker. Now, if your goal is, and again, my goal is to have two properties and now we're over 50, so that kind of went by the wayside quickly, but I could probably have a lot more in the time I wasted.
It took me probably two, three years to really learn what I was doing and hiring a coach or a mentor or a joint venture partner could have really accelerated that learning curve for me. And yes, you have to pay for that, whether it's coaching, some sort of mentorship or joint venture. I can't stress enough how that's so worth the money. It really is worth the money. And again, whether it's coaching or becoming a member of the REITE club and networking with different professionals, that's so huge. And I never did that. I never did that because being a police officer when I started, most police officers don't trust anybody.
It's just the nature of the job and the nature of the people you deal with every day. And everybody's a liar and nobody tells the truth. And most police officers, I'm talking at a turn here, but most police to police officers really don't like people because they deal with the worst of the worst every day.
I had that same mentality as opposed to opening up my mind and trusting people that could really accelerated me because when I was buying in stuff in Hamilton 10 years ago, I wish I would've, the other mistake I did, I wish I would've bought 20 properties my first year and not two, because today those properties everything I bought 10 years ago is more than doubled in value, and I still have those properties in my portfolio.
We were buying legal triplexes for 300,000 fully renovated, and now you can't touch triplexes in Hamilton. In a distressed state, typically 2000 square feet, 2200 square feet distressed in the market today, you're 550,000 all day long. So when I would say coaching, mentorship, joint ventures, and the mindset of abundance could really accelerate and help in your success. That kind of answer your question?
Sarah Larbi: Absolutely. That's awesome. Some great insights for sure. Some great things for the REITE club nation to be able to, jot down and take some action on and move and to move forward on. How long did it take you from the first time that you bought that property when you started until you left your job and you were able to successfully say, I don't need that police income anymore.
Adrian Pannozzo: From the very first property I bought I wanna say seven years. Seven years and can't remember the total amount of cash flow I was generating for me to financially be able to take that step. But seven years start day one to the day I left. My $140,000 a year police officer job.
Laurel Simmons: I think it's really interesting when you talk about years, cause I can just see some people listening to this and going seven years, I don't have seven years. That's a long time. But what we often forget is that seven years is going to pass whether you invest or whether you don't. So there's no better time to start investing in real estate than right now, because seven years from now, if you don't, you're gonna look back and say, damn it, I didn't invest. And you did it, and now you're doing what you wanna do.
Adrian Pannozzo: Life goes by so quick, right? Like before you know it, five years is like the blink of an eye. So really seven years for financial freedom in the big picture. It really is so quick to the point where you could walk away, from $140,000 a year, income pension benefits, the whole nine yards. I turned that around in seven years, and it's really nothing at the end of the day.
Sarah Larbi: It's not. It took me seven years as a wallet. It does fly by. And I'm glad I did it too. Like literally I started investing in October, 2013 and left my full-time job October 1st, 2020. So roughly, the same timeline you have a family, you've got a spouse, were they on board with you saying bye to that career?
Adrian Pannozzo: I think it was actually my spouse that kind of pushed me because I was juggling both things at the same time and I was burning the candle to both ends really and financially, like I said I didn't need to continue with the police career and she pushed me towards we're good.
We have the passive income coming through the properties, the cash flow, you need you're killing yourself. Cause I would go to work at night shift, come home, sleep for three hours, run out to Hamilton, go check out more properties, go check on my properties, show some of my units to prospective tenants for vacancies.
Then I'd go back in for the night shift again with three hours of sleep. So I was getting old pretty quick and yeah, I had the full support from her and she actually was a contributing factor to it's time to hang it up and move on with life.
Sarah Larbi: That's awesome that you had that support. I did too. Actually, Matt was telling me to leave like a year and a year. I was stalling. Installing. Installing. At some point it makes sense, right? And then you just have to just trust in what you've built so far and take the leap.
Laurel Simmons: I would just like to add in there, Sarah, I also told you to leave a year ago.
Sarah Larbi: That's true. Actually. Everyone was telling me to leave, but you know what? In a way, I just, it was not the right timing. My boss's spouse or wife was very sick. So the timing just didn't work out. And then, things happened and it made sense at the time that it made sense.
I think it was not so much. Income and the, and what I had as much as it is the loyalty to people that have always been there for me too. Which is a big factor. So when did you start utilizing joint ventures? At what stage and how quickly did that propel you to your 200 plus units that you have now?
Adrian Pannozzo: Really took off in 2017. The market was crazy hot, like it is now. In 2017, and again we had built up a portfolio of five rental properties, all multi-families, again, in the city of Hamilton. And we started to develop a team of professionals that we dealt with right from, the mortgage components to construction, to our lawyers, accountants, stuff like that.
We had everything in place and we felt confident enough to be able to deliver what we were saying we were gonna deliver based on our experience. So after five properties in 2017 we decided to start marketing ourselves and whatnot, and attract different investors and it just exploded.
In that year, I probably did. I don't know, 20 deals that year as far as joint ventures go. And since then, it's just been a continual progression since 2017. So I think when you start a joint venture, you have to really bring an expertise to the table and have that person who's gonna provide a lot of money.
Cause for the most part, Obviously our joint ventures are bringing the capital to the table and we are executing on that capital. So people are bringing a lot of money to the table and trusting us with it. So I really wanted to make sure I was the real deal and I had everything in place and not just, obviously not just my first rodeo, so to speak. And it's really, obviously after retirement then became a full-time business for us where we do it as a business now.
Laurel Simmons: You say that you, you decided to joint venture and I know that, that's definitely a shift in the mind, right? You have to, because you're used to doing it by yourself and then you gotta go out to other people as almost all of us do, unless we have millions and millions of dollars in our back pocket when most of us don't.
You gotta go out to other people. But how did, when you say you marketed yourself, like what did you do? Like how did you think about it and how did you approach people? I guess, and I know we could spend a whole couple of hours on this, but it just isn't an overview like, What were your initial thoughts and how did that move change a little bit as you went along?
Adrian Pannozzo: We had tapped out on our debt service with respect to lending and getting a conventional mortgage after having, so the five properties plus our principal res our debt ratio now is at a, was at a peak and we'd have to go to a b lender.
To get traditional financing. So rather than doing that, it was still an option because I think the numbers back then would've still worked. But in networking with my business partner, Sandy McKay, Sandy runs a podcast as well, and Sandy interviewed me on his podcast when we got into business together, or shortly thereafter.
Told my story and our level of experience. And essentially, yeah, we're, if anybody wants help or they're looking potentially for a joint venture and want some help with that or get into business together, here's my contact information and A lot of investors, I guess my story and my background resonated with them and they started reaching out.
I was getting calls and emails and that's how it started. Hey Adrian, I just heard the podcast. That's amazing. Really like your story. Can we meet for coffee? And then, most of the time it's a good fit depending on what their goals are, what our goals are. And not worked that way and built up the business just from that original mindset and podcast at the time.
Sarah Larbi: That's awesome. Thanks for sharing. Just curious for, with your JVs and the people that you meet, is, what's the exit strategy? What do you guys discuss in terms of exit strategies?
Adrian Pannozzo: We're looking for a five year commitment. Most of our pretty much every single one of our JVs is a buy, renovate, refinance and rent. And our knowledge on the market and the people we have in place to help us succeed, enable us. I think we're batting 99% on extracting all of our capital and our construction costs. Essentially, like I explained to the joint venture partner, when you have an acquisition, you have that asset.
You essentially, at the refinance point, we don't have any money left in the deal. We're still cash flowing on the property. We have debt pay down, we have passive appreciation. There's really no need to sell that property because it's doing all these wonderful things in the background for us.
That being said, life changes for people and whatnot. For whatever reason, but typically we're looking at a five year commitment and then we'll reevaluate and they'll have first right of refusal if they wanna be bought out and vice versa. Or ultimately we just put a sign on the lawn and it goes to market. If ultimately we both want to sell or that's the direction we go in.
Sarah Larbi: Okay. I think it's just always important to talk about exit strategies right? Before you get into business with somebody to understand, be on the same page with that and plan it ahead of time. Have there been any, and you don't have to share obvious names, but any JVs that did not pin out the way that you were hoping?
Adrian Pannozzo: No. The only JV that didn't pan out the way I was hoping was we left 20 grand in the property. And how the fourplex got appraised at, I wanna say 970 and we ended up leaving 20 grand in, so 20,000 of our capital was left in on a $970,000.
Sarah Larbi: Which isn't that bad?
Adrian Pannozzo: Still incredible.
Sarah Larbi: But nobody that likes needs to get their money out or exit server, any of that. That's where I was. I was trying to like, Here, like cause there, there's good and bad to join ventures, right? It's definitely more complex and there's more stuff to do. And some JVs start off well and you hear stories where unfortunately it just doesn't end well. And just taking those wood.
Adrian Pannozzo: That hasn't happened with us. We're looking for people that wanna potentially learn a bit. But they're okay being hands off. And really leave it to the experts, which is us. And I remind them that's why they're partnering, that's why they're joint venturing with us, cause we have this down to a fine art.
Sarah Larbi: If they're not into that and they're gonna micromanage. And that being said, there's a lockbox on the property you want to check up on every day, go ahead. But if they're gonna be skeptical and micromanage every single step, by the way, probably not a good fit. And they need to ask themselves then, why they leave, why they're not leaving it up to the experts. Which is the reason why they're partnering with us cause we like to consider ourselves the experts.
Laurel Simmons: That really speaks to the point that you really have to invest some time in getting to know the joint venture person cause when it comes down to it, it's about relationships, right? You can have the best contracts in the world, but a contract is only a promise to act, behave in a certain way, and if the relationship sours, then you are heading to court or whatever it is, litigation, like you don't wanna go there. So it always is.
Always comes down to the relationship. So you gotta get to know people and set out your goals and find out what theirs are. And like you said, if you're a micromanager if your JVs are micromanagers, then walk away because you don't deal with those people. It's just an irritant.
Adrian Pannozzo: Yes. And nothing really, at the end of the day, nothing gets done. Things will take so much longer cause everything is questioned and triple questioned and knock on wood, I haven't had that experience. I've heard of certain, like Sarah was mentioning, I've heard of some JVs going south because they end up scrapping it out or can't agree on anything anymore or whatever. Some are ill towards feelings, knock on wood. We haven't been there yet. So yeah.
Sarah Larbi: Awesome. Thanks for sharing your insights. And we could keep talking for many more hours with you and we can take it in different directions because you've got so much experience. But the next part of the podcast is our lightning round. We're gonna ask you a series of four questions. You're gonna answer the first thing that comes to mind. Are you ready?
Adrian Pannozzo: Let's do it.
Sarah Larbi: All right. Question number one. What is the best advice that you have ever received from another investor or at a networking event?
Adrian Pannozzo: That's a good question. Can we save that one for last or we gotta go on order?
Sarah Larbi: We can come back to that one. Laurel. Question number two. Okay.
Laurel Simmons: What's your favorite resource for real estate investing? And it can be anything. A book training a person, an event. What's your favorite resource? The REITE club.
Sarah Larbi: All right. Number three, what is the one attribute that has made you most successful?
Adrian Pannozzo: Abundance mindset and taking risks.
Laurel Simmons: Okay, and what do you typically do on a Sunday morning?
Adrian Pannozzo: Sunday mornings, I'm usually at the cottage. Another luxury I was able to afford, thanks to real estate investing. But yeah, Sunday mornings I'm usually at the cottage and I get up early in the morning. I'm a morning person and I'm walking the dog along the sandy beach.
Sarah Larbi: Sounds awesome. I'm actually headed to the cottage myself this afternoon. That's probably the last nice day that we're gonna get.
Adrian Pannozzo: Oh my. I think the last time we spoke, Your husband was having a boys weekend and you were jealous.
Sarah Larbi: Yes, exactly. So now I get to go there all by myself. I actually have a BRRRR class that we're doing in Peterborough. So I'm gonna go up there and spend the weekend and do the BRRRR class on Saturday. Awesome. Let's go back to question number one, what is the best advice that you have ever received from another investor or at a networking event?
Adrian Pannozzo: I would say from another investor at the time what started all this from my mortgage broker, leverage the equity you have in your home to purchase income properties. And that's really what took off my career with respect to real estate investing.
Sarah Larbi: It's a powerful message. So Adrian, where can the REITE Club Nation reach out, find out more about you? How can they do that?
Adrian Pannozzo: 4169382641, or firstname.lastname@example.org.
Sarah Larbi: Awesome. Any final last words of advice for our REITE Club Nation before we go?
Adrian Pannozzo: No matter what you do, invest in real estate and there's always a way to get started and get started like tomorrow, today for that matter.
Sarah Larbi: There you go. Get started. Awesome Adrian, thank you so much for being on the show.
Adrian Pannozzo: Okay guys. Thank you.
Laurel Simmons: Sarah, he has a really powerful story, doesn't he? Wow. Like I just can't believe what he's accomplished in 10 short years. And like you said, even after seven, it was like, wow, he doesn't have to worry anymore about relying on the paycheck, does he?
Sarah Larbi: Exactly. And it goes to show that even if you have a pension, it is not always the golden handcuffs. Police officers, I'm pretty much married to police officers, and yes, the pension is great, but it's not the be all and end all. And you can over time replace that. And Adrian's did a really good job with shifting his mindset, with shifting his goals and going after them. And in really doing it strategically. I think it's super exciting. I think it's awesome that he was able to quit his job after seven years and that he had the support too from his spouse and from his kids and from his family to be able to take that leap.
Laurel Simmons: I think too that it was really cool the way he went from when he started investing just talking ab or thinking about, I just wanna be able to when I retire which was many may have not decades in the future when I retire, be able to top up my pension income with my passive income from my real estate so that I can, I don't lose credit of my lifestyle. It didn't take him very long to figure it out, wait a minute. I can surpass my income, my salary and whatever pension income I would make by factors of whatever. And he jumped.
Sarah Larbi: Absolutely. It's and he said it too, right? He wishes that the first year he went into Hamilton, that he bought many more properties than he did. Because, and even at today's price, in 10 years from now you'll still be happy. You may not be happy in a year or two because it's gonna take time or we never know in the short term what happens to the market.
In the long term, in a 10 plus year or more, You will do well in real estate provided that you do buy something that's somewhat cash flow so that you can take the ups and the downs. Don't buy something where your tenants are living there and you're paying extra. Don't do that, but the cash flowing properties over the long term are the best, in my opinion.
Laurel Simmons: Yes. And you said it's a long game, right? It's not if you're going in for short stuff, that's speculation. So don't even think about that. Or at least that's what my opinion is. You wanna speculate, go somewhere else. But look at the long term game and long term can be two years, three years, four years, five years, 10 years, whatever it is. But that time's gonna pass anyway, just like we talked about in the podcast.
Sarah Larbi: Goes by with the blink of the eye. So don't waste the time, educate yourself, which is awesome cause you are listening to this right now and you're tuning in. Hopefully we see you again next week. Get educated at, make the right moves. Build the right team, REITE Club Nation. Laurel, what do we say to the REITE Club Nation?
Laurel Simmons: Come grow with us.
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