MB 214: What Syndicators Can Do to Navigate COVID-19 – With Jason Pero

No good comes from making decisions out of panic or fear. So, what can multifamily syndicators do to navigate the next couple of months and cover the bills—even if our tenants can’t (or won’t) pay the rent on time? How can we reassure our investors that their money is safe and leverage the available safeguards to make it through the Coronavirus shutdown?

Jason Pero is the multifamily investor and syndicator behind Pero Real Estate, one of the leading real estate firms in Erie, Pennsylvania. Jason and his wife bought their first duplex in 2001 and continued to invest in small multifamily properties while he worked full-time in medical device sales. By 2012, Jason had built a 300-unit portfolio and was able to leave his 9-to-5 to pursue real estate full-time. He started syndicating deals in 2018, and today, Jason owns and self-manages 1K units in Erie County.

On this episode of the podcast, Jason joins me to discuss why he waited so long to get into syndication and why he self-manages his own portfolio. Jason explains how he is navigating the COVID-19 crisis, sharing the safeguards he has in place to get through the next few months and describing his approach to the situation as both a property manager and syndicator. Listen in for Jason’s insight on the buying opportunities coming on the market right now and find out why this is a good time to invest in yourself!

Key Takeaways

What inspired Jason to get into real estate

• Internship with financial planning company
• School teachers worth $5M (passive income from real estate)

Why it took Jason so long to take action on syndication

• Limiting belief around loss of control
• Realized could still call shots and serve more people

How the Coronavirus crisis elevates Jason’s mission

• Watched stock market investors’ net worth plummet by 40%
• Real estate provides predictable long-term investment

The safeguards that are helping Jason navigate COVID-19

1. Withhold distributions to see how next months play out
2. Can still pay bills with 30% economic vacancy
3. Go to forbearance only as last resort

Jason’s take on the impact of the Coronavirus as a syndicator

• Lenders still bullish, agency debt still in play
• Social distancing poses challenges to due diligence

Jason’s approach to the Coronavirus as a property manager

• Extend olive branch to good tenants
• Waive late fees, work out payment plan

The buying opportunities coming available right now

• Sellers more flexible with due diligence
• Willing to consider financing contingencies

What makes Jason successful in a rural area

• Greater metro area of Erie = 350K people
• Large influx of outside $ (Buffalo, Cleveland and Pittsburgh)
• Decision to self-manage properties

Why Jason self-manages his own portfolio

• Didn’t know any different in beginning
• Track record through economic upheaval reassures investors

Jason’s advice on navigating a difficult time

• Don’t freak out, look at situation from practical standpoint
• Research options (e.g.: SBA programs)
• Communicate with investors + don’t run out of cash

Jason’s advice for aspiring multifamily investors

• Find mentor or coach who’s been where want to go
• Keep learning and stay humble

Connect with Jason Pero

Pero Real Estate

Jason on Calendly

Jason on LinkedIn

Jason on Facebook

Email [e-mail]

Resources

Register for Deal Maker Live

Join Michael’s Deal Maker Mastermind

Read Michael’s Free Report—What’s the Best Investment: The Stock Market or Real Estate?

Join the Nighthawk Equity Investor Club

Join Michael’s Mentoring Program

Rich Dad Poor Dad by Robert T. Kiyosaki

The Millionaire Next Door by Thomas J. Stanley and William D. Danko

SBA Programs for Coronavirus Relief

Podcast Show Notes

Review the Podcast on iTunes

Michael’s Website

Michael on Facebook

Michael on Instagram

Michael on YouTube

Apartment Investor Network Facebook Group