From Goldman Sachs to Developing a $20,000,000 Commercial Project

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The Sal Buscemi Interview

How do you build relationships with high-net-worth individuals who have the resources to invest in your real estate deals? By treating them like friends, not ATMs. 

Sal Buscemi is Managing Director at Dandrew Partners, a market leader in short-term loans and equity financing. He mentors aspiring fund managers through The Commercial Investor, a division of Dandrew that teaches wealth creation through real estate the Wall Street way. Sal started his career as an investment banker with Goldman Sachs before transitioning to real estate, and to date, he has raised a total of $500M in capital for other people’s projects as well as his own. He is also a sought-after speaker in the realm of real estate finance and has written countless articles on residential and commercial investing.

Today, Sal joins Oliver to discuss the details of his current project, a 166K square-foot class A industrial development in Las Vegas. He shares his three rules for choosing an operator and offers advice on vetting real estate deals ‘like a jilted ex-lover going through the cell phone records.’ Sal also provides guidance on presenting deals to potential investors, staying top-of-mind without becoming annoying, and conducting a capital call for a new deal. Listen in for insight into how Sal raised money for his current commercial investment and learn how to build and nurture positive relationships with a network of investors! 

Here is how the interview breaks down:

[0:45] An overview of Sal’s current project 

  • 166K ft2 industrial development
  • Class A (credit-worthy tenants)

[3:54] Sal’s background and experience

  • 5 years at Goldman Sachs
  • ‘Hired gun’ for family office
  • Two distressed credit funds

[9:42] Sal’s 3 rules for choosing operators

  1. Audited track record
  2. Been through 2 market cycles
  3. 10% hard equity in game

[21:01] Sal’s advice on vetting deals

  • Compare to market (cap rate)
  • Rental income drives value

[24:38] Why Sal prefers industrial to multifamily

  • Fewer inefficiencies
  • Steady, credible tenants

[31:18] How to present a deal if you can’t put your own money in

  • Equity in building business and relationships
  • Demo conviction in other ways (e.g.: no management fee)

[35:20] Sal’s guidance around raising money

  • Talk to people trust, build following
  • Handle concerns re: liquidity

[40:16] How to build positive relationships with HNWI

  • Get involved with charities, boards
  • Treat network like friends
  • Avoid conspicuous spending

[46:33] How to present deals to potential investors

  • Reach out with newsletter on market
  • Host cocktail mixers at office

[48:43] How to stay top-of-mind without becoming annoying

  • Send article or text once per quarter
  • Dedicated time to reach out via email

[59:36] How to conduct a capital call

  • Offer fast-action bonuses 
  • Be specific with deadlines to create urgency

[1:06:07] How to deal with overbearing investors

  • Recommend different asset
  • Put in place (professional, passive investment)

[1:09:23] Sal’s process for offering a new deal

  • Send out tear sheet
  • Wiring instructions on page 1 of email

Listen Here:

Key Takeaway:

Learn the process of how Sal Buscemi went from being a top executive at Goldman Sachs to developing his latest $20,000,000 commercial real estate project from the ground up.

Links to your favorite other players:

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🎥Watch Full Video on YouTube here: https://youtu.be/7A-enw0rivY

Full Transcript Below:

Oliver: Welcome to another episode of Founders Club. Today, I’m out here in Las Vegas interviewing Sal Buscemi, one of the co-founders of Dandrew Capital Partners. We’re going to be talking about this 166,000 square foot industrial development that he’s got going on out here. He’s going to be talking about how we found it, how we funded it, his exit strategy.

Sal Buscemi: When you’re doing any sort of analysis on anyone, you really got to look at it as if you are a jilted ex-lover going through the cell phone records of your ex. And when you look at it that way, then you know that you’ve covered everything.

Oliver: And all sorts of great tips on raising money from private investors. Looking forward to getting started. Well, first off, cheers.

Sal Buscemi: Cheers to you, yes. Enjoy the beer. I got a long day.

Thanks for helping us out.

Sal Buscemi: Thank you.

Oliver: So I’m enjoying 805 today and Sal’s enjoying a Smartwater and we’re here on site at his beautiful construction project and we’re going to be kind of dissecting everything and talking about how you put this thing together. But why don’t we just start by kind of giving an overview of the whole project?

Sal Buscemi: Sure. So this is 166,000 square feet of class A prime industrial, it has show space. If you see where we are. I remember I was telling you, meet me at the Pepsi Distributor. If you look at the location of this property, it doesn’t get any better. Vegas is traditionally always been a very transient neighborhood, a very transient, low wage jobs comes in for a hotel, gaming, so on and so forth. But over the years, Vegas has become a lot more cosmopolitan and it’s become a lot more sophisticated. You have the Golden Knights, which is just absolutely amazing. You have the Raiders coming in. So naturally there’s going to be a lot of ancillary services that are coming into this place. We really put a lot of work into this, we’re very choosy about the deals we go into and we’re very choosy with the partners who we go into as well.

Sal Buscemi: But finding these opportunities are very important because this is the type of opportunity that a lot of investors would gravitate to. The reason for this is because you’re dealing with credit worthy tenants, right? So if you look at this, you have Milwaukee tool, they are a company with a balance sheet. You don’t have to worry about them not having a job tomorrow, whereas you’re not sure if somebody who’s working two jobs putting things together if he’s going to have a job tomorrow or not.

Sal Buscemi: So a lot of people and a lot of our investors who we call family offices who are a 100 million minimum assets on their management or more, and these are people who have sold businesses and they come into a lot of money, they want to put it into these things. But there’s a lot more to it than that and I’m sure you have many, many different questions and I saw it was on the Facebooks, in the Twitters and everything. So fire away, good to see you though. Thanks for coming, appreciate it.

Oliver: Yeah, appreciate having you.

Sal Buscemi: You look better than Sam actually.

Oliver: Thank you. Don’t tell Sam.

Sal Buscemi: You look like you’ve lost more weight than Sam. Don’t tell Sam that though. Yeah, I know. It sounds good.

Oliver: 166,000 square feet.

Sal Buscemi:Square feet, class A.

Oliver: Class A, four different buildings.

Sal Buscemi:Correct. Very modular, location, location, location of course. But there’s also other things that I like about this, which are like the high ceilings and you have the corrugation over here. It’s modular, you can move in and out of it.

Oliver: So the plan in here is to make it very plug and play to where-

Sal Buscemi: Exactly.

Oliver: someone wants half or they want just one little slice.

Sal Buscemi: Correct, exactly.

Oliver: And everybody gets one of the big roll up doors and they get some store frontage if they want it or need it.

Sal Buscemi: If they want that, I mean this is a premium, right?

Oliver: Yup.

Sal Buscemi: 00:03:25 Not everybody’s going to need storefront, it’s not everybody’s going to be Boyd Gaming showcasing their new products and stuff, this is where the stuff happens over here.

Oliver: So I want to get into more about why you chose to do it that way, and I think we’ll get into that in a minute here.

Sal Buscemi: Sure. And there’s very hot sweaty studio that we’re…

Oliver: Yeah, we’re working hard, we’re in Vegas, there’s no air-conditioning, we’re on a construction site, Sal sitting on a bucket and we’re going to have some fun.

Sal Buscemi: Yes, we are. I love this.

Oliver: So tell me about your background. You worked at Goldman Sachs.

Sal Buscemi: Correct.

Oliver: So that kind of, was that your springboard into raising money?

Sal Buscemi: It is and people like, “Well, I can see how that works. And you know, I’m not like them.” Well, hold on a second, I started out in college, I was a biology and chemistry minor and I thought I wanted to become a surgeon and I’ll tell you what, it was the best decision I did not do was going into that. And I wound up on Wall Street working at Goldman Sachs and it’s a very, very difficult today to get a job there, but it was even more difficult back then before social media. And the legendary interviews and all this stuff, if you guys really want to know what it was like to work on Wall Street during that time. There’s a book called Monkey Business swinging through the Wall Street jungle and it’s hilarious. It’s not politically correct, but it talks about all this stuff.

Sal Buscemi: And now everybody sees billions and it’s all super glamorized and everything, which is great. But I started out there and I built networks and you and I have known each other for a while, Sam too, there’s networks, we have great networks, I have great networks in New York but I also have a good reputation too with being a good asset allocator for these families putting them into these deals.

Sal Buscemi: So they’re looking for the best possible deals they can risk adjusted, meaning they’re not looking for a 10 or 12 because they know there’s going to be a lot of risk with it, but they just want something that they don’t have to worry about for the next seven years, maybe in the next 14 years. And that’s the way we engineer these deals.

Oliver: Safe, solid.

Sal Buscemi: Safe, solid.

Oliver: Predictable.

Sal Buscemi: Exactly. And so it’s like, okay, you know, this is trust fund money, this is what wealthy people invest in. And if you have like for example, like some of the families, they sold a fence company for $60 million, what are they going to do with it? They’re looking for the best possible assets to put that into so they don’t have to worry about things because if you think about it, the wealth creator has busted his butt so long to get to the point where he has $60 million. Now, what is he going to do?

Sal Buscemi: Capital today is more of a commodity and you have to treat it as such and I told you and Sam that many times is that there’s a lot of people who have money out there and it’s looking for a space, but you have to actually know where to find the right deals to get into and that requires as you know networking.

Oliver: Tell me a little bit more about the journey to getting here. So you were at Goldman, for how many years?

Sal Buscemi: This is great. So I was there for five years, I started out in the Equity Capital Markets Group in the Investment Banking Division and I actually befriended the partner who worked in what we call the real estate principal investment arena. And he said, “Look, if you want to learn how to go from driving a rocket ship to a greyhound bus come over the real estate side. And I actually fell in love with it and I’ll tell you why. It’s a little slower but it was great because there’s a lot more money that is earmarked or it’s a lot easier to raise capital for real estate deals than anything else.

Sal Buscemi: I also like it because we did a lot of distress work when I was there to stress work, meaning people overpaid for stuff. How do you help them? Working with things, maybe your viewers have heard of these things such as capital structure, mezzanine, we’re talking about preferred equity. That’s what I sort of specialized in. And then after that I was a hired gun for a Chinese family office in New York and I was basically, I was in operations, but I was more business development and they wanted to get an apartment building on East 87th and first during the boom of 2006 and 2007. I won that, and then I’ve had some personal issues too.

Sal Buscemi: My father passed away when I was at Goldman at that point I made a promise to myself I was going to swing for the fences. And in 2007, after 40 institutions slammed the door in my face, I finally got one institution to give me $30 million and we basically became the kitchen sink for Bear Stearns and we were buying all their distressed whole loans. And then I did what all smart people do after that and just continue to move on, and I came out here because we bought a special servicer for a dollar. And this service, service servicing bad hard money loans against commercial real estate.

Sal Buscemi: So I’ve done two credit funds, two distress credit funds and since then we’ve leveraged those relationships with the families who have invested with us and we’ve gone back and invested into them into what we call more private equity venture stuff and had a lot of success with that. And we’ve really like it because it feels good because you’re actually investing in something that you know, that is affecting people’s livelihoods.

Sal Buscemi: And one of the things I always worry about is I always want to make sure people understand what they’re investing into. And just because it’s real estate doesn’t necessarily mean they’re going to come, right? The tenants are going to come. You have to have a real good team and a real tight network that pulls something like this together. But when I started at Goldman, I really understood how the world of finance works and it’s basically raising capital and putting it into these types of assets, which is going to be paying a lot of reoccurring revenue, not just to you but to your investors as well, because you don’t want to destroy their life savings.

Sal Buscemi: People work very hard, life’s savings to me is stored labor after work and it stored labor after tax. So when you retire, you’ve already paid taxes on all this stuff, the government’s already taken it. I’m just make sure that it’s preserved and it’s growing in the commercial real estate space, people want to get more aggressive. We move into other things, GP insurance and credit funds and stuff with that.

Oliver: Project isn’t done yet?

Sal Buscemi: Right.

Oliver: But you already have Milwaukee tools as a tenant?

Sal Buscemi: We have this pre-leased, I don’t know if I can really talk about this but we went in underwriting this a dollar per square foot that we would lease it out. And anything more than that would just be great, greaty, right? We’re at between a $1.25 and a dollar 40 per square foot and the leases were coming in 125% faster.

Oliver: Wow.

Sal Buscemi: Yes, so we’re happy. The most thing that’s important to me is the credit worthiness of the tenants in here. So we purposely know what our investors want and we clubbed in with them and it has been a tremendous experience so far and we have some rules that we follow and we can get into that. But this is the way the world’s going today, we’re in a very low interest rate world and you have to be extra careful. That does not give you the right to overpay.

Oliver: Yeah, exactly.

Sal Buscemi: That’s my role.

Oliver: So how are you pre-leasing these, how are you marketing it? Are you marketing it as it’s a shell built a suit?

Sal Buscemi: No, no, no, no, no. It’s being sold by the commercial lease source who have the relationships. I’m not doing any of that stuff.

Oliver: Got it.

Sal Buscemi: So they’re going out there and that was all-

Oliver: So the brokers just handle that for you.

Sal Buscemi: They handle it for you.

Oliver: It was this dirt when you bought it?

Sal Buscemi: No, no. So this is what we call a joint venture. So this is a family who has been building all over the southwest for a while, they’re located in California. Very, very good reputation and they approached us because we’re capital providers, we’re allocators for family offices. So if I’m managing your money, we use different structures but, and really the three boxes we look at when we get into these things are as follows. Number one, I want to see if the operator’s doing any of this stuff that they have an audited track record, if their track record is so good, why didn’t you pay someone to audit it and you want to be able to see that? A lot of people don’t do that right now.

Sal Buscemi: A real development management company is going to have that. Number two, and this is something that a lot of people get rubbed the wrong way, I want to make sure that they’ve been through these operators and developers had been through at least two cycles. So that means 1999 and 2008. 2008 was really just Darwinism for people who are financially stupid, right? I mean when I was out here, Jim coaches in San Diego, we’re buying sight unseen three investment properties in Las Vegas and they were paying nothing for it. They were basically not using any of their money. They were getting 105% loan to value, loans back and that all just wiped out.

Sal Buscemi: So we want to work with people who have been through this, they got the scars on their back, which leads me to the third thing is depth of pockets. We want to make sure that we have people who are working with these developers that have at least 10% hard equity in the game. That’s not market equity like, I bought it for this and now it’s worth this. No, that means they’re putting their money into it and I want to make sure that they’re not sort of pinching between the pillows and the couch to make sure that they can actually, that they’re actually well-funded. I think a lot of people, especially in what we call value added deals, rehab deals, they get into it, there’s expense overruns, they don’t know what they’re doing, they overpaid for it, they’re over levered. And that’s where the problems come in. So we do that.

Sal Buscemi: And when you pay attention to those three rules, you can sort of go to bed at night figuring, “Okay, there’s a good chance I’m not going to lose anything, because you’re working with the best in class that you can find and of course there’s all sorts of other background checks and things that you do with that.” But going forward, once you get to that part, then you have something to work with and that’s something that you might want to look at as far as channeling energy, direction, time and resources and to co-investing.

Oliver: And so those three rules were audited track record.

Sal Buscemi: Audited track record. Audited.

Oliver: Two cycles.

Sal Buscemi: Not that some guys in a strip mall. Yeah. I mean two cycles and 10% equity-

Oliver: And 10% hard equity.

Sal Buscemi: hard equity and it became cash.

Oliver: Cash.

Sal Buscemi: Cash. Okay?

Oliver: Okay.

Sal Buscemi: And even then, I want to know where that cash comes from, because there’s people out there and it’s very popular today and especially in multifamily. And again, Sam’s not going to like that I’m saying this, but a lot of people go out there and they’re like, “Oh, well this person’s putting in 10% but where does that money coming from?” You’re married, right?

Oliver: Yeah.

Sal Buscemi: You don’t want to lose your mother-in-law’s money, right?

Oliver: Right.

Sal Buscemi: So let’s align capital, so if you said to me, will half of its mind but I got some money from my mother-in-law, that’s fine. But if you’re going out there and you’re syndicating it from people who you never met on Facebook, you have absolutely, your heart isn’t in it. And if anything goes wrong, you can just walk away and those people are going to be sent back.

Oliver: Left home the bag.

Sal Buscemi: They’ll be left home the bag and it’s like, “Well…” So that’s why it keeps hearts and minds together all there, right? It keeps hearts and minds together. And that’s why we ask the hard questions to make sure where is this equity coming from? You’re putting in 20% well, what does that 20% really mean? Well, it’s from a bunch of people who I met on Facebook in a group and then I also there’s market equity because this is what it’s going to be worth afterwards. Well, you’re buying off it today not tomorrow. So that’s the rules that we play by and again, you’re adding unnecessary risks if you violate any of those rules.

Oliver: I like those three rules.

Sal Buscemi: It goes with apartments, industrial, retail, I don’t care where, I don’t care either.

Oliver: Can you speak on that audited track record, how that works, et cetera?

Sal Buscemi: Usually somebody will pay about four to $5,000 to have a firm audit their financials and track record.

Oliver: Got it.

Sal Buscemi: Which shows them exactly, “This is what I got in it. This is what I got out at. This is what the investors got.”

Oliver: So that’s different from like an accounting financial audit.

Sal Buscemi: No, it is, it is, it is.

Oliver: Okay, got it, got it.

Sal Buscemi: You want to make sure that what they’re saying the numbers are correct because there are more lies told through an Excel spreadsheet than all of word documents and books put together. Remember that there are. I can make the number, I can dazzle you with numbers.

Oliver: You would massage it all day.

Sal Buscemi: Yeah. It’s all ledger domain. It’s all people like, “Oh, we’ll do this.” And I see that now and that’s why, as a PSA, and thankfully I mean I’m glad to be on this podcast, we’ve been talking about it for a while, but I think now we’re at a seminal point because a lot of people feel as though their company, they have to get into multi-family or they need to get into real estate because prices are going up and they don’t understand what’s driving the prices going up.

Sal Buscemi: And I just want to make sure that people really have a fundamental understanding is that if you’re writing a check, whether it’s from your retirement account, somebody else’s retirement account, your savings, whatever, that if you’re following the three rules, you’re probably not going to get hurt. And that’s something I learned to Goldman, a bunch of other things, like the money always has a voice, right. But more money has a louder voice and all that kind of stuff.

Oliver: Totally.

Sal Buscemi: But the way I look at it as operator selection is the most important part to me, operator and the numbers and I want to make sure I understand the numbers and that’s why we’re pleasantly surprised that we’re getting a $1.25, a $1.40 a square foot.

Oliver: When you ran the deal on a dollar?

Sal Buscemi: Yeah, on a dollar. So to me it’s like great because that means my incentives go up and the investors are happy and they’re going to be much more amenable to opening their wallet for other types of situations and that’s the most important part. There’s a lot of brain damage that goes into this and if you don’t know what you’re looking at, you should ask for help. So we’re sort of a boutique level, we’re not a Goldman Sachs, but we’re a boutique level. But that’s enough for them to say, “Okay, well we worked with this company everything went very well with them. Now we can move on and do other things.”

Sal Buscemi: There’s other things as far as negotiations concerned too that you bring it up but as far as that, it’s usually what we’ll do is we’ll offer a term sheet, they’ll send us a term sheet, we’ll go back and forth. But the one thing that was very important to me and why we like working with established operators, because they have experienced and they know what can go wrong. And a great example of this to me, for example, would be what I call the put-call, the put call. So what does that mean? That means that there’s going to be a put, so in seven years, most of these they have like what they call a buyout option.

Sal Buscemi: So the buyout option comes and they say, “Okay, so in seven years we’re going to buy you out.” Okay, so who determines the value of that?

Oliver: Right.

Sal Buscemi: So usually what you see and you hear is like a partnership blow up and they’ll say, “Well, Oliver is going to offer me 20 million for this, but it’s really a worth $40 million.” And I’m going to say, “Well, okay, if that’s the case then I have the right to buy you out at 20 million.” Now all of a sudden it makes the conversation a lot more serious. You see what I mean?

Oliver: Yeah.

Sal Buscemi: And it’s the experience that you have to have in order to do that, to get to where you need to be. But getting to your point, and I know I talked to Sam about this and you a couple of times when I’m in California, is okay, you’re in the dealer, you’re getting cashflow, but what happens afterwards? Right? What happens afterwards? And that’s the most important thing that you need to understand is, “Okay, how do we break up?” And that’s called a partnership agreement and that’s what you talk about. And a partnership agreement is no different than a prenup. That’s what we call it, it’s more expensive, it’s a little thicker, but it says, “Okay, if this, then that, if this, then that, and how everything is going to be handled and who’s responsible for what?” A lot of people, a lot of now as investors get into this business, they don’t have… It’s like, “Hey, I just met you at a seminar. Hey, why don’t we become partners?”

Oliver: “You seem like a great guy, so let’s do something.”

Sal Buscemi: “You seem like a great guy, let’s do something right.” And you don’t know anything about him. And you have all your reputation at risk. I’ve talked to people about this, you know, and I’ve worn them away from people, but a real partnership is like a marriage and that’s the way it is. You either share a checking account, a better both.

Oliver: Love that.

Sal Buscemi: So if you’re not sharing a bed or a checking account to someone, you’re not partners, right?

Oliver: Right.

Sal Buscemi: Because the only way to open up a joint bank account if you’re not married is to have a partnership agreement with an LLC, you know that kind of thing.

Oliver: Any other part, which I think is huge to your point is outlining should there be a breakup, how it’s going to work in advance.

Sal Buscemi: Nobody thinks about that. People are going into deals today and multi-family and they’re just like, “This is great because there’s a lot of hype.” I’ve seen a lot of bad things happen and there’s only so much I can do. And that really becomes an issue at that point, but people need to really understand, “Hey, what does this look like at the end? What happened in seven years? Are you going to wait seven years from now or what?” And that’s why part of the negotiation is what does it look like? How are my investors…? Let me say that again. How do I show my investors that I have their best interest with them first?

Sal Buscemi: Because I come from the school of Goldman Sachs, if anything goes wrong, you score stiff and you don’t want to do that, but you don’t get into that point if you are working again with the three rules that I talked about, competent, operators who’ve done this, who’ve been through this before, had all their properties like this. This is not something new, we’re not paying for tuition here. And I think a lot of people, a lot of investors today going into multi-family or paying tuition. And I think that’s not investing.

Sal Buscemi: And these are the hard questions unfortunately that you and I have talked about, but your family here should know that, “Hey, you got to always look at the end game too as well.” And also I want to know what that end game looks like, is it a sale or is it a refinance? Because a lot of the investors we have are longer term money, they’re going to want to keep it and let it go. Short term investors usually poor investors, not accredited investors, they just want the money in and out and they don’t really understand that.

Sal Buscemi: So it really takes understanding what your investors want and keeping to those promises so that they understand, “Hey, this is the best, we have your best interests at heart. So when you’re communicating the deal, you can say in seven years there’s put back if you want out, that’s fine.” There’s a liquidity event. If not, you’re going to get liquidity anyway. It’s going to be tax advantage cause there’s going to be a refinance, the commercial real estate Grand Slam. And then you get all that money back and then you can reinvest it into other things.

Sal Buscemi: But the opportunity so and so today are interesting to me because I think that’s given people a license to over pay for some stuff and we don’t want that to happen. So you got to be careful, you got to know your basis and what are you getting in at? What is the comps look like? You got to look at when you’re doing your comps or you’re doing any sort of analysis on anyone, you really got to look at it as if you are jilted ex-lover going through the cell phone records of your ex.

Oliver: Damn, that’s good.

Sal Buscemi: And when you look at it that way, then you know that you’ve covered everything. If you’re not asking the hard questions you don’t, but think about it, we’ve all had crazy exes, they’ve all been stuff like show me your phone and everything are burden of proof is on them. You keep asking for the questions if things don’t feel right, do the gut check. If the gut says no, get out. And that’s it.

Oliver: What sort of advice do you have on like vetting these types of deals?

Sal Buscemi: I would always compare to what you’re doing today versus what the market’s doing. You really want to make sure that you’re getting in at a cap rate that you’d be able to get out of. I’m going to tell a story here if I may. So we gave back $19 million in 2013 and what we were going to do at the time was by what’s called a lot of broad line necessity retail, necessity retail.

Sal Buscemi: These are things in parts of Middle America called Alkos, Shopko is not one of them and Pamida. Shopko has a very bad balance sheet. And these things had been trading at between a nine and 10 cap, going all the way back to Moses. Until some dentist with a signature loan bought one for a six and a half cap. And if you know anything about cap rates, you want to buy high cap rate and sell at a low cap rate because that’s inverse to the value.

Sal Buscemi: What happened here is there’s dentists who didn’t know anything made a market according to the rate that was selling it in the broker that was involved, and we had $19 million in equity to buy from this triple net lease, what we call necessity retail. This is where people go, you’re never going to have a drone service in these parts of the country. Actually, AJ, my COO owns two of these things, so we know the asset very well, but he overpaid for it. And I said to myself, “I’m going to give the money back,” because if anything went wrong and they will, I’m not going to be able to sell that at a six cap ever again, they’re going to want like an 11 or 12. So that’s why we backed out of it.

Sal Buscemi: You always need to know how you’re valuing these assets before you get into it. That’s the first thing because even the best operators in the world are not able sometimes to get out of an over leveraged, overpaid property. And that’s where you’re going to feel a lot of problems happen today in commercials especially multi-family, especially in C class, what we call, and this is I know I’m going to get a lot of hate on this, but it’s going to be a lot of the class C stuff that people bought it a five and a half cap.

Sal Buscemi: And we can get into the value added stuff in a second, but this is what’s going to happen and that’s going to be really an issue where the smaller balance stuff say between 10 million and less. People overpaid. If AJ, for example, and my COO, he is a real estate investor, he sold his multi-family for a price he never thought he was going to be able to get for it. From a guy who has no idea what the hell he’s doing.

Oliver: Who just wanted to get in because it’s hot.

Sal Buscemi: Because it’s hot and it’s going to go up further. The problem with this is that, what drives value of commercial is rental income, nothing else. And a lot of reasons why people like and they gravitate towards something like this is because they know that the consumer’s already tapped out, right? So if you look at it from an economic standpoint, me being from New York City, living in New York, renting in New York, owning in New York, you spend about 50% of your after tax salary on housing. The rest you spend on shoes, food and lifestyle. And once that becomes more than 50%, you can hike it anymore because now it’s like, “Well you know what? Screw this, I’m going to go across the street because that guy is going to give me economic incentives. He also has a nicer two and a half horsepower whirlpool bath for my wife, he’s got a front desk, a newly paved parking lot and I can get in there for $100 a month cheaper. So I’m just going to move out.”

Sal Buscemi: And that’s what you’re going to see is, you know, some sort of a migration I think when people who are weak, inexperienced operators think that they can just go in there and hike the rents, that’s never been something. Also the expense ratios on something like this much lower and multi-family, it’s 45% to 50% if you know what you’re doing.

Oliver: And why is it so much lower on these types of properties?

Sal Buscemi: Because these things are really, the tenant improvements are already been put in that, they do it themselves for the most part. So they come in, Milwaukee tool knows what they want, there might be some TNI but they’re there for the seven years so you’re recapturing it back. But it’s also sort of like at the time now where if they’re coming in at this point, they’re probably going to be here forever. And that’s actually a good thing for us. So the expenses are really, you’re not really too worried about, there’s no toilets here, there’s no air conditioner we know that very well, but there’s no heating for each unit that you’re responsible for because your tenants don’t care to shut the windows and things are going on. There’s just a lot of inefficiencies with multi-family that you don’t get in other asset classes.

Oliver: Yeah, that’s interesting. That’s a good point too.

Sal Buscemi: I mean, we’ve heard the stories like guys flushing concrete down the toilet. I mean, that’s a couple of grand right there, right?

Oliver: Right.

Sal Buscemi: I mean they’re upset with the landlord or they’re smoking cigarettes and minus 20 degree weather with the heat on, with the windows open and you see this all over the place but it really comes down to the quality of the tenant that you have and what they do.

Oliver: Interesting. So that’s why you like the office as an investment.

Sal Buscemi: I like multi-family at the right basis, I like workforce housing at the right basis and that’s not a five cap first. I liked that much more than where it was traditionally trading like north of an eight back in the day. I think that’s going to come through, I think there’s going to be some distress in that area where you’re going to see some people come in and we’ve already starting to see some of those things. But getting back to your point, it’s not just, “Oh this isn’t really offices, it’s industrial, but I like to have a very steady, credible tenant.”

Sal Buscemi: Think about it this way. If you were to go to bed at night pulling the covers over your head, there was another earthquake say and you’re worried about the end of the world. Are you going to look at your wife and say, “Damn, I’m glad I have 200 deadbeat tenants who could never afford a house if they even tried to.” Or, “Damn, I really glad I have publicly traded companies with balance sheets who pay every month and I don’t have to worry about that.” How would you want to retire? Because everybody thinks just owning something means that you’re going to pay. It doesn’t, that’s what we call credit risk, right?

Oliver: Yeah.

Sal Buscemi: So were you going to trust your retirement on Joe Sixpack having a job tomorrow after he’s gone through a second divorce and his kids hate him? Or are you going to bet your retirement on something where you might not get the same high return but it’s much more stable and much more longer duration, what we call. And that’s what people want, they pull the covers over their head and go, “Oh.” I mean there’s times I drive past this over here, come from the airport, I’ll have a bad day, but I’ll pass by this. And I’m like, “You know, life’s not too bad.”

Oliver: Yeah, exactly. So I want to go a little deeper on the money raising because I feel like that’s one thing that you’re an expert in.

Sal Buscemi: I love it.

Oliver: And have done a lot of, how much money total would you say that you’ve raised in your career?

Sal Buscemi: 450 million in equity for other people’s projects and for my products, I had one fund that was 30, I had another one in the second one, which was a special situation that was 15, that’s all institutional money that’s come in. With the retail money now and the stuff that’s coming in with that, we’re starting to see more money from retail people come in. So I’d say I’d be comfortable saying around close to half a billion dollars.

Oliver: Wow. Yeah. That’s a lot.

Sal Buscemi: Since I’ve left Goldman., yeah.

Oliver: So you’re mainly working with family offices, which is basically really wealthy people-

Sal Buscemi:Very wealthy.

Oliver: who are looking for ways to continue to make their money work?

Sal Buscemi: They care about their legacy, they don’t care about anything else but their legacy. They don’t have to invest, they need to be kept busy but they also want to know, “Hey, if I die, what is going to carry on my legacy?” And that’s what they’re worried about is that you have the wealth creator and then you have the second generation who’s usually kind of into it but the third generation usually loses everything. I call it the Greek diner role, it’s like the first generation comes, they’re the wealth creators, the second generation, they support it third Generation. It’s like Paris Hilton, they just blow it away on yachts, parties, the visa and stuff.

Sal Buscemi: I’ve seen these rich kids on Instagram, they get held hostage, there’s ransom insurance that Lloyd puts out for these people, it’s actually kind of interesting how this…

Oliver: Ransom insurance.

Sal Buscemi: Ransom insurance, yes, because if your kids go out to Tijuana and they take selfies and everything, there’s going to be a Bandito that’s going to kidnap them and it happens a lot. But we raised money because I liked to do things and when you raise money I think people look at it from the standpoint and they say, “Well, they’re looking for like a quick hit, they’re looking for it, they don’t know what they’re doing.” And the last thing you want to do is to come into a family and say, “Hey, how are you doing by the way? I got this great deal.” It’s like asking for sex on the first date. You know what I mean? You never show up with four pounds of paper. You build the relationship. The first question I ask is, “Tell me about your family. What happened?” Because there’s only one person who’s more into that story than me and that’s you telling the story.

Oliver: Let me tell you about that.

Sal Buscemi: Trials and tribulations and me and then in Texas I was run out and who know. I mean there’s always a story and that’s how you build familiarity is by getting to know people because they want to trust you, they don’t want the mechanical, technical, sterile relationship where it’s just an email with a PDF or something like that, they want follow up. When I’m raising capital, you’ve heard me talk about this. I always tranche it out, I always use deadlines. If you’re not using deadlines, your deal’s going to go stale. If you’re not using trenches, your deal’s going to go stale. “Oh really? South show me this four months ago now he’s still doing it.” Well, the first tranche went over and now we’re going on. You always have to keep it fresh, you have to have a story. When people communicate these deals, I tell the story of this. The story is this is a very prominent family, they have a lot going on, they have very deep pockets.

Sal Buscemi: They are very well-respected, it gives them creature comfort and it’s like, “Hi, they’re very wealthy. They’re allowing us to invest alongside them. It’s great, we’re building what we call the club deals. We’re clubbing in together.” You guys call them syndications when you have like many people with like $10,000 checks, this is what we call a club deal. “I’m going to club in with these guys on this one.” And I always put in some money whether it’s from my own or my late brother’s estate or my mom’s estate. I’ll tell them, I’m putting in a hundred grand of my own money and they want to see that part of the conviction.

Sal Buscemi: Now, I can’t afford to seed every deal that comes around but they know when you’re starting out, when you tell people, “Hey, this is how much I’m putting in, it shows that you have conviction.” Money is always, always shows conviction.

Oliver: Yes, and I totally agree with that and I actually have a question around that is one, are you putting money in on every deal yourself?

Sal Buscemi: Not all of them.

Oliver: Because I’d imagine no-

Sal Buscemi: No.

Oliver: Because you know you can’t.

Sal Buscemi: No, I can’t, but I will tell them that.

Oliver: But so my question is, how do you present that because I’m sure a lot of investors, their first question is, “Well, are you getting in on this deal?”

Sal Buscemi: They will. And these are investors who have known for a while, but when you’re starting out you just tell them, this is the way I have it too. I said, “Look, we’re building an investment business here. My equity is in the business and the relationships that we’re doing, and we’re getting to the point right now where we’re able to co-invest alongside some of the most successful developers, best real estate class A right here. This is a privilege, this is an opportunity, here’s the story behind it. This is why I am very, very convinced or I have strong conviction in this even though I don’t have the money to put into it. I am going to perhaps maybe not take a management fee,” or something like that. You can always incentivize people by showing like a quid pro quo.

Sal Buscemi: Like for example, forget the management fee or maybe lower your incentives, so that if it’s your first deal. So did investors feel like, “Okay, I like this. I totally understand this.” Another way to do this too, if you want it too. You could always set up your own, and this is getting a little deep here. And we talk about this in my act par certification, but you can always set up like a GPLP structure where you raise the money for the GP to put into… There’s all sorts of ways that you can do it. You just have to be creative and you have to be upfront and honest. And when people start doing things where they start shuffling things around, you can’t get the right answer you’re like, “Yeah, I’m putting money.” “Well, I mean, what are you doing?” “Well, I’m recycling my fees and that’s not really, it’s not…”

Oliver: Exactly.

Sal Buscemi: I want to know where’s this coming from? And I might tell people it’s coming from my mom, they know that she’s in an assisted living facility that has a burn rate of around $6,500 a month in New York before we moved her out here. It was $9,200 a month. So I invest in these things to pay for that stuff.

Oliver: Absolutely.

Sal Buscemi: And they understand that but you have to have a good, credible story. And when you’re starting out, you don’t want to do this yourself, you don’t want to be the operator, find the best deals, raise money around it, build your track record that way and continue to move on, very simple.

Oliver: Right, yeah.

Sal Buscemi: A lot of these people, these hardos come out, they’re like, “Yeah, I’m going to buy a multifamily, I’m going to fix it myself, I’m going to do it.” Why? Life’s too short. Life’s too short. I like this model, this is the banking model. This is the merchant banks have done this for years and this is just the way it works and you don’t have to worry about so much other things too, or you can choose the investors do you want to work with. And the networking amongst those investors are just amazing because you were the one family, here’s another one, here’s another one, here’s another one. After I see you next week in California, I’ll be in Chicago talking to a bunch of other families who are sitting on a lot of cash and they want to know what are the things that Sal is looking at that’s going into it. I would say always talk to your investors, but always see them first.

Sal Buscemi: I wouldn’t say, “Hey,” I’m like, “Yeah, we’re doing a lot of different you know, we’re…” Everybody’s going into multi-family today, we’re actually going to move into something else but the numbers make sense but from a longevity standpoint, a duration standpoint, a lot of the wealthy families that we managed money for really are looking into this. Maybe that’s something you should look into. See?

Oliver: Yeah, that’s good right there with the deal sheet.

Sal Buscemi: Yeah, with the deal. And the deal sheet should never be more than three pages and you’ve seen them. But like just compared to a guy that comes and he’s like, “All right, I got…” I don’t want to see that, I don’t know you from Adam, I don’t know anything about you. People want relationships today, we call this indoctrination. I spent a disproportionate amount of time writing letters to investors so that they understand my viewpoint and how I want to look at the world. And either you agree or you don’t, you either agree or you don’t. If you don’t agree, don’t invest, go to the other guy that’s paying for four and a half cap for Class C in Georgia that he’s never going to get out of, it’s not me.

Oliver: So, okay, so for the people that are looking to get started with raising money, they’re probably not going to be talking to family offices.

Sal Buscemi: No, they’re not. I think they need to talk to people who they know and trust. For example, when I first started doing deals, the first five million I raised after I left Goldman was raised in the men’s locker room with the New York health and racket club on Whitehall Street in New York City. Now it sounds kind of shady, doesn’t it? But these are guys that are watching me grow up on Wall Street. It was kind of like a big chest pumping thing to me when a lot of my co-workers at Goldman invested in me. And we’re doing this now through our mentoring is, there’s always going to be friends and family but if you talk to the friends correctly and you tell them what you’re doing and you keep going, you keep following the narrative because everything’s a narrative much like what Sam does every day with his video stuff.

Sal Buscemi: That’s how you build a following, that’s how you build trust. And the best way to do this is not just to put out a pitch book, but just to talk. What do you say about the markets? Yeah, I think rates are going to go down before they go up. That’s me. I can justify that and talked in the podcast about that. However, that is what differentiates you from everybody else. “What are you investing in these days?” “I don’t know, the market, the election coming up.” And the other thing too is that one of the things the bogey man or the 800 pound gorilla in the office that you need to consider here is that everybody’s scared of real estate at one point and they won’t tell you why but they don’t like the illiquidity part of it.

Sal Buscemi: Liquidity to me is a very expensive convenience for you to make emotional mistakes with. Do you think the family that owns us cares about liquidity

Oliver: Right, not at all.

Sal Buscemi: If the stock market drops 50% tomorrow, this is still standing, Milwaukee tools still be here or whoever it is will still be here. If the stock market drops, I think a lot of retail investors are in sophisticated so they don’t understand it because they’re thinking is that they were probably raised by depression era, great grandparents, grandparents parents who have given them a very skewed view of the world as it relates to liquidity. “Oh, well it’s not liquid.” What’s the liquid event? If you can’t have scrape up $40,000 or $20,000 or something like that, you shouldn’t be in this game if you need liquidity. But you can put liquidity preferences into deals like this to make yourself look like a rock star.

Sal Buscemi: There’s a little advanced, we did that seven years from now. But you have to handle the big 800 pound gorilla in the room, not Sam, got you boobie. But a liquidity, okay?

Oliver: Yeah.

Sal Buscemi: And say, “Look, this is a liquid, this is what wealthy people invest,” they don’t care about liquidity, either you’re sophisticated. I thought you were a little better than that.

Oliver: That’s good right there.

Sal Buscemi: You’re a little better than that. Well, yeah. All right. Well, the liquidity. The other thing too is that you need to hold the story and hold it. Whenever you’re raising money for real estate, you’re going to come against people who are going to tell you that it is illegal to invest in real estate and brokers, people who have incentives that are not aligned with yours. What do we mean by that? These are people who don’t have an alignment of interests. If you call up Schwab and you sell shares of stock, they’re making their percentage, you’ve got your liquidity but they got their percentage. If you buy the shares of stock, you pay another fee with that.

Sal Buscemi: And these people are going to be very protective, especially if you’re going to start taking money from a tax advantaged accounts such as recent based accounts, self-directed IRAs because those guys are going to fight like hell and tell your investors that what they’re doing, there’s no such thing as a self-directed IRA. And I actually have a book coming out, it’s my third book. It’s called The $100 Million Dollar IRA and there’s a picture of Mitt Romney on the cover of it, because if he got away with it, everybody else can.

Sal Buscemi: And it’s really like private equity, commercial real estate strategies, getting back to your point, you have to handle talking to them about liquidity and understand their comfort with liquidity. And I think as an investor, one of the things you’re going to be talking about is, “Well, okay, it’s not liquid, it’s for grownups.” You want liquidity? Go buy a $60,000 house.

Oliver: So you mean $50,000 is like a five to 10 year…

Sal Buscemi: This is a seven year, seven.

Oliver: Seven year.

Sal Buscemi: Seven to 14.

Oliver: Got it. And after seven, there’s going to be a refinance which will…

Sal Buscemi: Or sale. Yes.

Oliver: So people can get out if they want.

Sal Buscemi: Correct. Yes.

Oliver: Or they can let it ride and stick around with you guys.

Sal Buscemi: And I’ll tell you right now we did polling, we know who the LPs are in this deal, almost all of them want to just let it ride because they don’t think they’re going to be around. I mean there’s a lot of these families we call it generational events, we’re waiting for someone to die. That’s in the family governance agreements, people who are attracted to these deals don’t care about liquidity, they just care about cashflow, they care about good basis. And extensively, this is probably safer than keeping $1 million in an FTIC insured account anyway.

Oliver: Well yeah, no doubt about that. So in terms of the money raising part, it’s don’t come in hot with a deal.

Sal Buscemi: No.

Oliver: Plant seed.

Sal Buscemi: Plant seeds, talk to people.

Oliver: Have conversations.

Sal Buscemi: I’ll tell you the smartest thing I ever did, I like to get onto charities, boards where there’s a lot of board wealthy people and that’s how you’re able to build prominence and influence, it’s becoming like someone, I would go to meetings, we have people I know who they’ll go to affiliation type thing. So if you are, say, Chinese American or something like that, you want to hang around those people, you the affinity’s help. If you’re of one demographic, one religion or something, that’s something to start. But I like to start, I started out by doing this by sitting on the board of managers of the Chinatown YMCA in New York because I was there originally to find a bride because I networked with the president of the New York Stock Exchange at the time, who told me to call Paula.

Sal Buscemi: And I was in the real estate dealing in real estate the time and said, “Well there’s two of them. There’s Harlem and then there’s Chinatown,” and at that time in 1998 Bill Clinton just moved to Harlem so they didn’t need any help. But Chinatown was great and I built a lot of great relationships down there too as well. And that’s how actually I got some family office money from a Chinese family office that I worked for a little bit afterwards as a hired gun, and then they were the ones who seated me on some other deals.

Oliver: That’s great.

Sal Buscemi: And they would come in as well.

Oliver: And then what are you just getting their contact information to…

Sal Buscemi: Get their contact information? I treat them like friends, you know what I mean? So I have a friend who is very into boats, I love boats. And so I’ll be like, “Hey, I’m at the boat show.” Treat them like friends, don’t treat them like ATMs. Treat them like, “Hey, you coming to Vegas, let’s meet up.”

Oliver: It’s a big distinction.

Sal Buscemi: It’s a big distinction. You know what I mean? There are investors I know who, I have a two door car, like, “Hey, I’ll pick you up at the airport,” prep 10 minutes with your coffee to start. I have the whole loop down here in and out, and that’s it. But you have to treat these investors, not like they’re just someone different. You’ve got to treat them like friends because that’s what they really want is the friendship and the level, and if you look at anyone who’s been very successful in this business is that they’ve all learned how to raise capital number one, but number two they’ve treated their investors not like ATMs, but they’ve treated them like real people. I mean, if I asked you for a check and it’s the first time I meet you or you’re going to be like, “Oh, it’s a good deal, but I don’t know this guy,” you want to get to know me a little bit.

Oliver: And so what does that getting to know you process look like?

Sal Buscemi: Today, be careful what you post on social media, people are judging you. I would say that there’s some people I know who I was… there’ve been other operators who I know have been successful, but some of the things that they’ve done or showcase on social media I don’t really agree with and I don’t really know if I’m investing in the property or in someone’s ego. And when you’re investing in someone’s ego, they will screw you every single time. I am judged by the car I drive, I know. Everybody’s like, “Well, you’re your own boss.” No, that’s not true. That’s not true. I would not show up with a cherry red Porsche. If I was a plastic surgeon out here, who cares? It’s expected, I probably wouldn’t drive a Bentley, it’s a little bit too conspicuous.

Sal Buscemi: And from my days at Goldman, they always showed us wealth as meant to be saved, not shown. We always use story, I’m wearing a nice watch now but we always wore Timex Ironman. There’s all sorts of stories in that cult and everything that I’m sure Michelle would love to hear, but the point is, is that people are judging you and especially today and in social media, they’re judging who you’re with, what you’re doing and that is what I like to do. I like to say, “Is this guy really real?” For example, Sam, I think he does a great job, I’ve been checking him out for a while, I would invest in one of his deals if he was qualified.

Sal Buscemi: But somebody else who I didn’t know, I’m looking at them, they’re spending a lot of money, very conspicuous consumption. That’s a red flag, I don’t like that, that goes against my rules. You know, so I look at this and I say, “Okay, it’s fine.” But I know that there’s some very wealthy guys when I pick up, they don’t look wealthy, but they’re going to be looking at the car and be like, “What? Why are you driving a Cherry Red Porsche?” “I’m not, but you want to look like you’re doing well, but not too well.”

Oliver: Not too well, yeah.

Sal Buscemi: Because then people think that you’re charging management fees for self-gratifying conspicuous consumption.

Oliver: Okay, so I liked that.

Sal Buscemi: I know a lot of people like that and I know a lot of people are going to take issue with it, that’s the way the world turns.

Oliver: I think that’s just part of the reality is like, people are judging you and in the real closers group what kind of car do you drive? Conversation comes up a lot. And I think that to a certain extent, it depends on where you’re at, like if you’re selling rural farmland in Montana, you’re not going to roll up in a new convertible Benz.

Sal Buscemi: No you’re not, no.

Oliver: But if you’re selling in Beverly Hills-

Sal Buscemi: That’s the whole different thing.

Oliver: And you roll up in a beat up 1996 Ford F-150, then you know, no one’s going to take you seriously.

Sal Buscemi: Exactly, because people do judge you, they judge you. I mean the joke in the industry, it’s like, all the, I’m not going to plug my Instagram page but we always talk… The deal fledge, you know what I mean? I don’t want to make fun of a lot of people, but if you see a guy coming in and he’s like a banker or he’s like a guy like me or something and he’s wearing rubber sole Veyron shoes that haven’t been shined in 20 years and they’re black and he’s wearing a suit that doesn’t fit right. Even if he’s overweight, it should fit right and he looks dumpy, it just tells to me that he does not pay attention to detail.

Oliver: Yeah, no, that’s a really good point. Especially the boxy suit thing, like, how do you not notice that your suit doesn’t fit or it’s like three sizes too big.

Sal Buscemi: I don’t know but we’re beyond like the junior high school dance days, right?

Oliver: Yeah, exactly.

Sal Buscemi: So you need to know, “Okay, is this guy really going to, is he… Tony Robbins has a great theory on this that I’ve read and it goes like this. It goes, “People will gravitate towards people who are like them or who they want to be.” And you always have to think about that when you’re working with investors, your investors, all they care about is you having a relationship with them. That’s it. How’s things going? I have a guy who has a significant amount of money in here. You would never know it, but I always treat them with dignity and respect.

Oliver: And how are you transitioning them from like meeting at the Y on the board to getting them to trust you over time?

Sal Buscemi: You’ve seen these, I write letters and those letters talk about what I’m feeling at that time about the market.

Oliver: Yeah, and they aren’t great, I get the emails too.

Sal Buscemi: You can download, I haven’t released these years yet or at least compliance has, but there’s one they can get by going to theDandrewletter.com and you can read it and people say, “I like it.” Because that is you and your voice talking to them, the way I talk to them as if I’m talking in those letters as if I’m talking to you right now across the table at a Starbucks and this very 105 degree hot thing. Another thing I like to do too is to always talk about what’s going on, “Hey, we just closed this deal. This is great.”

Sal Buscemi: Just keep on top of them, keep on top of them. And then the last thing I do too is every once in a while and this is something I would host what we call like some sort of like a giveaway, like a cocktail mix or something. So they come to our office right? Now, we’ve done this more with Mexican families in Vegas because they’re underserved and they have a lot of money. So we actually have someone in our office who speaks Spanish and we’ll have like a meet and greet and they’ll launch with something and we have everything put together and that has been translated professionally into Spanish-

Oliver: Oh that’s great.

Sal Buscemi: Ttat they could understand. So again, I might not speak Spanish, but Nate over there does and I trust him to say, proper things-

Oliver: Yeah, totally.

Sal Buscemi: Not like, go to hell San Diego, things like that. But when you have these meetings and you bring people over, they want to see you. They’re like, “This is great.” I’ve actually brought busloads of people here to see this from one of my events, it’s real, it’s really, really real and they like that, and just like text messages. If you know some guy that’s like into like shady type of jokes, suddenly shady joke, every once in a while, there’s always that guy.

Oliver: No, that’s good.

Sal Buscemi: If you’re like somewhere, “Hey, I took a picture of something the other day with like some weird rim on a car or something,” and I know this guy loves rims and stuff, he’s from southern California and so I’m like, “Hey, look at this,” oh that’s great. It’s just keeping in contact because they want to know that you actually care beyond the dollar.

Oliver: I love the caring beyond the dollar part, and what I want to ask you is where’s the line between keeping good follow up and staying top of mind and like being annoying and bothering people?

Sal Buscemi: This is private equity, right? So this is slow. Once a quarter, I’d say maybe like, you know what I purposely have made a point of doing right now is I used to do a lot of like fun back and forth through group texts with people and everything. Right now I’ll just be like, “Send an article from like zero hedge to an investor. Hey, I thought you might like this.” Or, “Hey, I met with this guy, your name came up, all balls going well. I’ll be in Chicago and there’s going to be very, very prominent families there and I’ll just probably take a picture of like him and I and send it to another guy that I know that knows this guy.” Just keeping it together so that shows that, “Hey, you are a spot here, you just don’t show up when convenient.”

Sal Buscemi: And I made it a personal goal at night. I’ll basically like 8:00 o’clock or something like that when my wife’s watching all those bad TV shows, I’ll just start emailing like articles and follow-ups and stuff. And I dedicate the time to do that every other day.

Oliver: Carve it out in your schedule.

Sal Buscemi: Yes, I start on Tuesdays, I do it on Tuesday, I do it on Thursday. And then I do it sometimes on Sundays because everybody opens their emails on Sundays.

Oliver: I love that. That’s really.

Sal Buscemi: And it’s to say, “Hey, I know you like Mercedes too, look at this G Wagon my friend got.” It’s something stupid like that, you know what I mean?

Oliver: But it’s real and it connects with people.

Sal Buscemi: No, it’s real, it’s real. It’s like, “Look at this.” He’s got this tech flat, whatever, like all this stuff.

Oliver: It’s not like, “Oh look at my company newsletter.”

Sal Buscemi: Yeah, no, no, no. It’s not that.

Oliver: Or, we did this recipe car.

Sal Buscemi: No, nobody wants that. They’re like, this is great, this is a real guy. He’s approachable. I can get in touch with him. Really funny Story. These investors, some of them know what they’re getting into, some of them don’t, and the shortfalls is that they have access to you. And in 2003, I’ll never forget this, there was an invest… the husband was very smart, but I don’t think he really got along with his wife that well. And so the wife had a problem because Martha Stewart was indicted for insider trading and the stock went down like this and they had the bulk of their daughter’s college education in Martha Stewart online on the media.

Sal Buscemi: And this is how you sort of frame the boundaries of the relationship here, and her name was Martha and Martha was nice, she was the second wife to this guy who is a former Goldman partner. And she called up and she said, “Hey, we need our money out of this deal.” I said, “What do you mean?” She’s like, “Well…” And I knew the husband’s set her up for this, and I said, “Well, why? Why are you calling me?” “Well, Martha Stewart’s stock is down.” I’m like, “Well, call Martha.” “Well, what do you mean? I don’t have her number?” “Well, why are you calling me then?” “Well I have your number.” “But you understand and you know, and I can say, you can re reference the docs and I’m sure Harold will tell you this. However, this is an illiquid investment. This is not something you can… there’s always going to be a way…”

Oliver: You can’t call the cash dude.

Sal Buscemi: You can’t call the cash dude, there’s no liquidity. And I said, “Just because you have my cell phone number doesn’t necessarily mean that I’m going to be your bank account or your slash fund here because Martha does, call Martha up. And by the way, why did you invest in Martha of anyway?” And then she opened up a whole Pandora of questions she didn’t want to answer and it was fine. And the real case scenario, she had a significant amount of money into it. But then I could always say, “If there was really an issue, I’d be like, hey Oliver, I got an LP and this is my favorite part of the business. The LP secondary as well.” They have 250,000 in this deal but I’ll let you in. You can get $250,000 worth of value. It’s probably worth 300 right now, but I’ll sell it to you for a hundred grand.

Oliver: Or 150.

Sal Buscemi: Yeah, 150.

Oliver: Right, exactly.

Sal Buscemi: And now they’re out, you’re happy because now you have a two and a half X spaces. So that’s the sort of the deal making that goes on.

Oliver: That’s a great tip too, yeah.

Sal Buscemi: But you don’t want to do that, and the reason why it’s so deep is because it’s an inefficient business. Real estate is inefficient, right? It’s not like Google where you’re going to find an inefficiency, but you’re like, “Hey, I’ll scrap that up,” and we do have money on the side sometimes for that kind of stuff because…

Oliver: People on deck.

Sal Buscemi: Yeah.

Oliver: Definitely.

Sal Buscemi: No, exactly. And it’s a lot of fun.

Oliver: That’s cool.

Sal Buscemi: But it’s like, “Hey, there are always ways to do that when you structure the deals to provide some instance of liquidity but that scorch the earth and I never want to talk to you again.”

Oliver: Totally.

Sal Buscemi: Okay, 250, you come in with 150 you’re happy, you’re getting a deal, you’re showing up like, “Oh my gosh, I got…” So if he’s getting a two X, that means I’m getting a four X because I got in at a 100. And it’s easier to sell it that way and that goes with part of the capital raising process.

Oliver: Totally.

Sal Buscemi: Always talk to people, you don’t have to know your deals, you just have to know and talk to people. Really, you just have to talk to people. Yeah, you’re going to have to know some stuff and everything. But when you first start talking to people, and remember if you’re raising capital, you put that money into other people’s deals who are smarter and more experienced than you, and you won’t get hurt and that’s how you build a track record, don’t try to be the hero who’s going to go out there and do all this stuff yourself and rehabilitate 200 units because you will die, your wife will hate you, I’ve seen this happened before. It’s like, they’re in this deal. They’re not spending time with their wives. They’re managing it themselves because they overpaid for it.

Oliver: It’s driving everybody nuts.

Sal Buscemi: Yeah. I always have a joke at my events. I say, “How many people here manage their own multi-families?” Proudly, I’m like, “Really?” I said, “Is that your wife? I want you to turn to your wife and tell her you don’t love her enough to pay 5% for management fee.” “What do mean? I love my wife.” There’s only two reasons why you don’t have a management company. You’re overpaid or you don’t like your family. It’s just really it. There it is. And if you don’t like them now you certainly, they won’t like you by the end of it. And that’s the way you got to look at it.

Sal Buscemi: But you don’t want to go out there and be the hero, be the person who provides solutions, be the banker, don’t be the landlord, if I can urge you guys to do anything. And that’s exactly what I’ve been telling Sam and you guys, you know how we’ve been doing this and you guys would do that because then this way, if anything goes wrong, it’s not just you, everything else. And there’s a lot more problems I think that people see going into things as being an operator with no experience, and that’s where a lot of problems happen.

Oliver: And so the rough framework for raising money is-

Sal Buscemi: Get social.

Oliver: Connect, right?

Sal Buscemi: Yes, connect with people-

Oliver: Be real.

Sal Buscemi: Go out with comfort. Be real, be very real.

Oliver: Quarterly event in person.

Sal Buscemi: Quarterly event or a letter.

Oliver: And or letter.

Sal Buscemi: That you don’t have to write about.

Oliver: Quarterly or monthly.

Sal Buscemi: For us, we do it semimonthly because we’ve been a little slow, we’ve been very purposeful with the deals that we’re getting into but that doesn’t necessarily mean that I’m not going to write a letter to them telling about the market where I see it, my views on liquidity, we actually do have a newsletter called alternative access. We just released it, I’m not plugging it but it’s another way to get that hand newsletter. It’s like, “Oh Sal, I wrote this article and some other things too,” but they really look for the letters that I write that are sort of tombs and you don’t have to do that.

Sal Buscemi: Today, with the internet, you can outsource all of that stuff and say, “I need to write a letter to my investors that tell me what it is and I want it to look like this and I want to handle all of this.” And you can hire someone for 200 bucks to write that letter in Upwork.com, financial writers, don’t hire your sister-in-law to do it for free because it’s cheap, because she’ll never pay attention to it, you’ll hate her, she’ll hate you because she has to do it for free. And then you’re going to feel guilty because it’s going to be two months before you get it and you really wanted to have it a week before the event that you’re going to with the Lion’s Club or whatever.

Oliver: And the example letter that you referenced was thedandrewletter.com, if someone should check that out.

Sal Buscemi: Yeah, thedandrewletter.com, so you can download it, it’s an option because we got to know who’s in there but there’s no sales or anything on that. It’s just this is what you want to show, this is how you want to speak to your investors, use it as a way, as a conversation starter when you talk to those investors, you can just plagiarize it.

Oliver: Borrow it.

Sal Buscemi: Yeah, you can borrow it. Yeah, okay, I forgot who I’m talking to, Sam. Anyway, but yeah, I mean you can borrow those ideas to use that at the Watercooler to talk to these people about it. What do you think about this? Because I’ll tell you what everybody’s really worried about right now is low interest rates, and I think and again, this is something I say that I go out there and I throw it on the table. I say, “I don’t think rates are going to increase in my lifetime or yours.” “Oh, what do you mean?” I just grabbed their attention and now all of a sudden we’re building a relationship.

Oliver: Yeah, that’s good. That’s a good book too. So the quarterly events, the emails and then the texts in between of just text real stuff.

Sal Buscemi: Yeah, text. Same crap I send to you guys.

Oliver: Stuff you like. Stuff they like.

Sal Buscemi: Yeah, I mean it’s definitely, but it’s of interest to them. “Hey, I know I wrote in college and I know one of our investors they’re rolling right now, they’re trying out for the national team.” And I would always say, “Hey, I followed, you know, Stacy, it’s gone through it, she did a really good job and she’s in this boat with this other girl I know and everything. Just building that commonality, bring it together and use it to your advantage.

Sal Buscemi: I think Joe Polish wrote a great book on it, is how to use everything to… I’m going to slaughter this and I’m sure I’m going to be shamed for this, but he wrote a great book on how to use everything you can to your advantage and I can’t remember what it is. But even if you have something in common, whether it’s boats or football or something like that, just do it. You don’t have to hang out with them all the time, I don’t like…

Oliver: And I think the important part of it too was carving that time into your schedule.

Sal Buscemi: You have to.

Oliver: So that you actually do it. It’s not just random.

Sal Buscemi: Right, so if you’re like a real realtor, for example, you’re always going to be on the phone, you’re doing the calls, you know that’s part of it. For me, I get buried a lot in minutiae, that I have to do, that I’m responsible for. But I always carve out Tuesdays, Thursdays and on the weekends just firing off emails or maybe like just, I mean, with a video or a picture today there’s no excuse. Sometimes I’m in my car and I have a like a little magnetic thing and I hang my phone on it and I’d say, “Hey, I’m stuck in traffic, I just want to tell you I got your email.” Whenever you’re going to be somewhere. I’m going to be in Chicago next week, I love to catch up with you, let me know. “Oh yeah, great.”

Sal Buscemi: Well, it’s so funny because we’re going to see some game with the owner of the Chicago cubs and stuff like that but you know, you get to that level by starting out and connecting with people first.

Oliver: And the reality is even if they can’t, even if they’re not available, it’s just love the fact that you touched them and reached out and thought of them.

Sal Buscemi: It’s so important.

Oliver: Yeah.

Sal Buscemi: You have to treat these investors like they’re your friends and you don’t have to hang out with them all the time and everything, but just treat them with dignity, don’t walk in and say, “Hey, you’re an ATM. I need money.”

Oliver: You got money, I need money. Let’s do this.

Sal Buscemi: Somehow like, “What’s that most stepbrothers? Hey.”

Oliver: Yeah, totally.

Sal Buscemi: Let’s enterprise.

Oliver: And then, okay, so then at the point in time when it’s time to ask for the money.

Sal Buscemi: So here’s what you have to do. You see it and feel, “Okay, we’re going to be doing a capital call on this project, this project we’re going to be, we’re calling the capital, you will have a for tranche one and you always put in the first few tranches all the goodies. You don’t do that in the end.

Oliver: And hold on, not to cut you off there but for the people that don’t know, what is a tranche?

Sal Buscemi: A tranche is basically like different segments…

Oliver: Like phase one, phase two, phase three, yeah.

Sal Buscemi: 12 Exactly. So a tranche would be, “Okay, if you’re coming in, you’re getting an equity kicker and an income kicker,” but you have to come in by this date.

Oliver: Got it.

Sal Buscemi: Your tranche one, done.

Oliver: So it’s almost like a fast action bonus.

Sal Buscemi: It’s a fast action bonus.

Oliver: Okay.

Sal Buscemi: All right, if Sam comes in, he’s not getting the equity kicker. So when we refinance, he doesn’t get that you do.

Oliver: Because I’m in tranche one.

Sal Buscemi: Because you’re in tranche one, tranche two is a little slow, maybe he needs to run a little more, I don’t know but he’s got to get a little faster with it. And in tranche three you’re lucky if just to participate, so you watered down the incentives. What you’re going to find is you’re going to see a lot of people who are going to be like, “Well you know I had this life event, somebody almost had cancer or something.” And I’ll tell you that you do this once, but you have to really frame the boundaries of the relationship.

Sal Buscemi: You can’t just go in there and say, “Well it’s tranche three but I’m going to give you tranche one anyway,” unless they’re like big guys and you trust them and stuff, you’re like, “I’m sorry, I have to put this in front of the investment committee and I can’t answer why your investment committee.” I had to put this in front of the investment committee, which is Nate for this.

Oliver: What’s up, Nate.

Sal Buscemi: I have to put it in front of the investment committee why you’re coming in two weeks late for tranche one when that already closed, and then they’ll say, and then you can use that as negotiation and be like, “Well, you know, instead of 50,000, we’ll let you in for 100,000.” Oh by the way, did you know that somebody abandoned their tranche one spot, I can give you that tranche one spot. There’s still a hundred grand available in that slot.

Oliver: Got it.

Sal Buscemi: Now, when you’re starting out, here’s a secret, you give them all the same because you just write the docs once, and if tranche three gets the same, “Oh, shame on me.” Well, you know, you won, I lost. But you have to make sure you’re on top of them with it. When I call him, we text message, we use Google, you can do Google texting, I text from my own phone, it’s a pain because we have so many, but we have texts. People respond to texts, people don’t check emails all the time, we also do phone calls too as well.

Sal Buscemi: We use a slide broadcast, “Hey, just want to let you know tranche one will be closing, and I always do this on Friday at 5:00 PM New York City time.”

Oliver: Got it, very specific.

Sal Buscemi: Very specific. Specificity gets you funded. Okay? It closes on Friday. Well, no, 5:00 o’clock, New York City time, I highlight it and bold it because when you put deadlines in, that’s a negotiation and it also allows you to communicate to your counterparties or this family here, for example, this is how much we can expect to bring in for this based off of how we’re running our book right now.

Oliver: Great. Love it.

Sal Buscemi: Yeah, you have to, you call them up. “Hey, we didn’t get this. Hey, a person we know named Laurie is always flustered.” So tying her down is always been hard. She sold her business, she’s busy, but I’m like, “Lori, I really want you in this, you know this, can you please do me a favor? And my hands are tied, if I can’t get this in by Monday, the latest, I know you’re very busy, please do. Okay. Okay. Okay.” Just treat them very, very well.

Sal Buscemi: And say, “This is a club deal, there’s very sophisticated people here.” They’re not waiting.

Oliver: We’re all waiting, yeah.

Sal Buscemi: We’re all waiting. You know why, why? I’m sorry that your horse is sick or your dog died. But this is money.

Oliver: So I love the timestamps, so then-

Sal Buscemi: But you also have to, and there’s another side to this too, is that not all investors are going to be good investors for it because I can’t tell you how many people have come around and they’re like, “Well, they got all this money and everything,” but they don’t respond to that are very flaky. You just say, “Look, I don’t…”

Oliver: Or the opposite, they want to be all up in your business, they want to be all up in…

Sal Buscemi: That’s another thing like hold that second, okay, because that’s another very, very important issue. But the thing here that you want to talk about, the most important part about this, I have investors who trust me to do what I say I’m going to do. If I can’t trust you to follow instructions, to sign a simple E-document on your iPhone, you always use write signature. I don’t want you as an investor.

Sal Buscemi: Now you’ve turned the tables right now it’s like, “Oh, I’m all rich and powerful. You can’t come into my club now.”

Oliver: Now you don’t qualify anymore.

Sal Buscemi: Now you don’t qualify because I can’t trust you, and I would always say something like, a lot of the investors, they always say, “I trust Sal with my wallet.” I don’t know if I trust my wallet with you because you have not been able to perform in a way that I’m used to having other very successful, wealthy investors richer than you, and I don’t really care about your move or your dog dying or anything like that, or are you going to step up your game and be a grownup man and woman? Or maybe you should buy $40,000 impoverished property in middle America.

Oliver: That’s better for you.

Sal Buscemi: It might be better for you because you’re a little too busy.

Oliver: That’s the takeaway.

Sal Buscemi: It’s the takeaway, yeah. There’s a lot of people who are very used to getting what they want, and we have a timeline here, it’s a courtesy that you’re in this deal. It sounds obnoxious, but where else are you going to find a class A deal like this? Oh, I don’t know. Well, it’s not about you. It’s about your kids. You’re putting your kids trust into this, right? Well, I haven’t set up the trust yet. You have a week to set up the trust and you need a phone number?

Sal Buscemi: Here’s a guy in New York to call, he’ll get it done. It’s like the liquor store, you might not have a shirt on, but it works and it’s fast.

Oliver: Exactly.

Sal Buscemi: And then before you know it, it’s great. But yeah, you always have with the investors, they’ll be like, “And I see this a lot too, especially with doctors and dentists, because they’ll look down on people who are not doctors and dentists.” And I’ll say, “Look, there’s a reason why we don’t use doctors and dentists is because they always want to think that they’re smarter than the rest.” Just because you have a PhD in an entomology or you’ve cured some sort of degenerative disease, that’s great but that doesn’t necessarily mean you know real estate.

Sal Buscemi: And that’s a huge thing and that’s where a lot of people leave their egos at the door, they don’t leave their egos, you have doctors who come in and say, “Well, I want to have a say in this stuff.” Okay, well here’s a question for you, doctor. You’re very good at what you do. You’ve cured sicknesses. However, what qualifies you to make decision making? Here’s a better way of putting it, how do I justify to my very wealthy investors that you have experienced and are qualified to do something like this? And then just shut up.

Oliver: The overbearing people.

Sal Buscemi: What’s overbearing mean to you?

Oliver: That means the people that want to meet all of them and deal-

Sal Buscemi: The needy people. They want to know-

Oliver: They want to want to know everything all the time, they’re blowing up your phone.

Sal Buscemi: Yeah, you don’t deal with them.

Oliver: And how do you respectfully tell them to kick rocks?

Sal Buscemi: I tell them that what you’re asking for is something that we’re not prepared to provide because this is a slow business, it’s dirt, it’s real estate. This isn’t stocks, it sounds like you should be in something that trades maybe cryptocurrency would be better for you. However, this is a professional investment, you will have no say in it, it’s completely passive and there’s people involved in this deal who are much more experienced than you are and they do not want you having a voice in this deal.

Sal Buscemi: If you do not like that, then go somewhere else, Bitcoin, if not, if you want to work with people who are very smart, established operators, you are welcome to join along. However, I don’t want to kid you for a second that you’re going to have a seat table when other people who are bringing $500,000, they’re going to want to know why did you let this guy in with 25,000 in the first place? And second, why does he have a voice? Just because he’s a doctor doesn’t mean anything.

Sal Buscemi: Unfortunately, a lot of guys like, I can get along with that and I know families who are very wealthy medical families, but when you’re working with these doctors, you got to put them in their place. If you’ve been a realtor for years, I have 20 years experience as a realtor, I know real estate better than you do.

Oliver: And I think that confidence just comes from experience and just being able to be like, no. And it’s the same way you can almost even flip it on. I’m like, “Look, if I’m on the operating table and I need you to remove my appendix, I’m going to trust you that you know what you’re doing and I’m not going to be, oh no, move this over here, cut the incision a little lower or whatever.”

Sal Buscemi: One other thing, this is a great example. So there’s a good friend of mine out here is a plastic surgeon and I helped him by his surgery center and it’s nice, it was a $2 million center. And the story I use is okay, just because I helped you buy that surgery center, does that mean that I can start doing breast augmentations too?

Oliver: No.

Sal Buscemi: It’s the same thing.

Oliver: I don’t think so.

Sal Buscemi: It’s the same thing. And the other thing too with the deadlines is that when you are talking to investors for the first time, make their spouse show up, especially if you’re working with doctors and dentists, because doctors have a great way of saying, “Well I got to talk to my wife about it.” Well let’s just even the course here, you spend the amount of time you do making life or death decisions every day and now you have to talk to your wife about a $100,000 investment, what does she know about this deal that you don’t? And why is she all sudden coming into this? Right?

Oliver: Yeah.

Sal Buscemi: Isn’t she like 20 years younger than you and yeah, okay. And they’re like, “Well and I would never talk to an investor especially a doctor and dentist if they did not show up with their spouse,” because I want to talk to both of them.

Oliver: Right, at the same time upfront.

Sal Buscemi: At the same time upfront. And then this way there’s no, “Oh, I got to talk to my wife.” No, don’t give me that. You make life or death decisions, you graduate from medical school residencies and everything and now you’re telling me you cannot control your own finances. How did it get to this point? And it’s usually because they don’t understand something and that requires a little more.

Oliver: Flush out the objection.

Sal Buscemi: You flush out the objections, exactly. What is it? And you know what it comes down to? Liquidity. And once you handle that liquidity thing, it’s a little smoother than that.

Oliver: And then just to put a pretty little bow on the raising money thing. So the new deal, you have a new deal, you send out the email and the letter.

Sal Buscemi: Tear sheet, you send out a tear sheet-

Oliver: The tear sheet.

Sal Buscemi: When you have the deal, you send out the tear sheet.

Oliver: The tranche one.

Sal Buscemi: Tranche one, two weeks.

Oliver: Then you’re pounding the phones-

Sal Buscemi: Yeah, the same, this is it.

Oliver: You’re following with everybody, you’re texting.

Sal Buscemi: You’re following the phones, you’re texting them with Google tax.

Oliver: You’re putting a deadline on it.

Sal Buscemi: You’re putting a deadline on it. You have to have the documents already done and everything. So you send it out to them. I always use DocuSign because there’s always going to be friction because somebody has an inkjet HP printer scanner at home and it ran out of ink. They’re not going to print out a 90-page document, right? You make it very easy and with iPhones today, especially DocuSign, I’m not saying it’s like anything, it’s like check, check, check.

Oliver: Click, click, click, right.

Sal Buscemi: It’s all filled and done, and then you have a permanent record of anything could happen and where that is and you don’t have to worry about chasing that guy down because the less friction you remove from getting the money from them, the faster you’re going to get it, and that’s the whole point. So it’s just, it’ll take two seconds. “Laurie, I know you’re on your farm, if you have cell phone service, just it’ll take two seconds.”

Sal Buscemi: And then in the front page of the email, you always put the wire instructions, never accept checks like she can’t believe I have to say this. Never accept checks. You always put the wiring instructions on the first day. Here’s the deal, here it is right here in the email. We put this on this email printout, this email and bring it to the bank because it has the wiring instructions. Make it easy for them because you don’t want them to say, “Well, I couldn’t find the… Oh, this.” And yeah, everybody’s going to have an excuse, especially when they’re getting upset and it’s coming down to the deadline, everything becomes my fault at that point.

Sal Buscemi: And you have to make sure that you make it easy for them to be able to grease the shoes as we say, so that there’s less friction and then you just continue on, you call them and then you send them updates and be like, “Oh my gosh, we are oversubscribed,” and it’s true for this, we’re oversubscribed. Well, I mean, we’re not going to have a tranche three anymore, we’re going to have a tranche two and that’s it and we only have about $500,000 left of tranche two.

Oliver: Get it while it’s hot.

Sal Buscemi: Get it while it’s hot.

Oliver: Yeah.

Sal Buscemi: Otherwise it’s closed. It’s up to them. You have to have a sense of urgency with them. And unfortunately, that’s something that the financial services industry that never really put into this is a sense of urgency when talking to investors because most investors they talk to or they’re professional investors, but when they’re dealing with retail investors, which your mom and pop investors anyone I would say less than 50 million in assets, those are retail guys, you’re going to want to have to really put the hammer down as far as deadlines and defining the boundaries of the relationship because it’s your reputation at the end of the day with the family developer or something. And if you want to do another deal with them in the future, this is what you have to do.

Oliver: Love it. Great tips on raising money. Really cool project you got going on here.

Sal Buscemi: Thank you.

Oliver: So the exit strategy is just

Sal Buscemi: Seven years.

Oliver: Seven years.

Sal Buscemi: Yeah, that’s it.

Oliver: 14 year, and then maybe you guys will see what happens then.

Sal Buscemi: Yeah, 14 years is not a lot of time.

Oliver: Right, exactly.

Sal Buscemi: We’ll see. But collecting checks for, we have money in this deal, but I mean people can get into this deal, a deal like this without putting their money into it as long as they structure it correctly.

Oliver: Cool man.

Sal Buscemi: And they’re upfront with our investors.

Oliver: And if people are interested in learning more about what you’re doing and what investments you have coming up is there…

Sal Buscemi: The Dandrew Letter.

Oliver: Okay.

Sal Buscemi: Go to thedandrewletter.com.

Oliver: That’s it.

Sal Buscemi: And we’ll send you some information, some of my propaganda, the letters and stuff.

Oliver: Cool.

Sal Buscemi: And if you’re interested in raising money, you might want to model what I’m doing off of that with the templates and the letters if you’re interested in co-investing alongside of us, that’s another discussion we can have too as well.

Oliver: Great. So thedandrewletter.com. That’s where they get all the-

Sal Buscemi: That’s where it is. That’s where the Gospel is.

Oliver: Very cool. Appreciate it. If you liked what you heard today, leave us a comment, hit the like button, subscribe, and really appreciate you having us out here.

Sal Buscemi: Thank you so much.

Oliver: Now we can get out of this sauna and go relax, maybe have a couple more beers.

Sal Buscemi: Absolutely.

Oliver: Thanks a lot, Sal. Really appreciate it, man.

Sal Buscemi: Thank you very much, man. I appreciate it, bro.

Oliver: Cheers!

Sal Buscemi: Thank you.

Pullout Quotes:

“There are more lies told through an Excel spreadsheet than all of the Word documents and books put together.”

“When you’re doing any sort of analysis on anyone, you’ve really got to look at it as if you are a jilted ex-lover going through the cell phone records. When you look at it that way, then you know that you’ve covered everything.”

“Money always, always shows conviction.”

“Liquidity is a very expensive convenience for you to make emotional mistakes with.”

“Real estate is not liquid. It’s for grownups.” 

“Treat investors like friends. Don’t treat them like ATMs.”

“Investors want to know that you actually care beyond the dollar.”

“If you’re raising capital, you put that money into other people’s deals who are smarter and more experienced than you, and you won’t get hurt. That’s how you build a track record. Don’t try to be the hero.”

“Be the banker. Don’t be the landlord.”

“Specificity gets you funded.”

Connect with Sal

Connect with Oliver

Resources:

Other episodes of Founders Club you might like:

From Dumpster Diving to Building a $3.4 Billion Dollar Business ft. Sharran Srivatsaa

How to Crash Proof Your Real Estate Business ft. Mike Ferry

Thank you for watching!

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