Investing in Real Estate-with Aaron Fragnito-EP39

During this episode of the Lab Coat Agents Podcast, host Jeff Pfitzer and guest Aaron Fragnito discuss the world of real estate investing. Hear about Aaron’s journey from being a New Jersey real estate agent specializing in distressed properties to growing a business that now manages a ten-figure portfolio of private real estate holdings for investors. This episode will give you several great ideas if you want to start investing in real estate in 2020.  Episode Highlights:  Aaron Fragnito became licensed in 2010 and initially worked with distressed properties. His license allowed him to develop a real estate investment company which is his passion. Aaron shares how he found his business partner and first investors. He buys some properties to hold and others to flip. Wholesaling is a great way to make cash. They did about 60 wholesales last year. Wholesaling is completely different from being a realtor. In wholesaling, it’s all about finding the right numbers for investors. They do direct mail marketing and auctions and they try to get a new deal every week. You can turn around neighborhoods over time where there are many abandoned properties. It took Aaron years to understand auctions and do well with them. The more units you have paying in, the better. Anything six units or over they will probably syndicate. He flips single-family homes and condos. They just bought a property for 60k, put about 50k into it, and it appraised for over 200k. They will pocket about 20-30k tax-free. They discuss tax strategy. A 1031 tax exchange is their exit strategy for all their big buy and holds.  1031 is something you have to understand as a realtor if you want to get into the investment side. Once you sell the property you have 90 days to identify the property you're going to buy after the sale of your original building and then you have 180 days after that to close on the real estate. Every property they get is a new LLC. Every loan they get is a commercial loan. By going to credit unions you can get more flexibility but may pay more for the money. Your bank relationship is everything. Once you have a good relationship it gets a lot easier. Aaron’s company uses mailers to find motivated sellers. He built his buyer's list through real estate networking events. On the investment side of the business, it's repeat buyers. Syndication is when you pool capital together and the investors in your LLC don't have a voting right. In syndication, real estate is a tool that you use to put their capital to work. Aaron started by being a realtor that was selling properties to investors with cash. To this day, he works with many of these investors. Refinancing is an exit strategy. Syndication gets you into an arena where very few people are playing. Relationships are critical. Don't let the guys who are doing huge syndications scare you. 3 Key Points:   Wholesaling is completely different from being a realtor. It’s working for yourself and finding the right deals for investors.   Hold properties that are 6+ units. Flip condos and single-family homes.   Syndication is an investment strategy in which you pool the capital with several investors to make a larger overall investment. Resources Mentioned: LCA Marketing Center: LCAmarketingcenter.com Lab Coat Agents: LabCoatAgents.com   Aaron Fragnito LinkedIn, Facebook   People’s Capital Group New Jersey Real Estate Network meetup    Connect with Lab Coat Agents: Lab Coat Agents on Facebook Lab Coat Agents on Twitter Lab Coat Agents on Instagram Lab Coat Agents Facebook Group