Believe that you can make things happen. In this episode, Steffany Boldrini shares how we could recognize business opportunities in the real estate industry. She shares how she started her journey. Twenty years ago, she moved from Brazil to Silicon Valley, where she had a career in technology sales. Steffany has decided to focus on commercial real estate investing and is also managing her car wash and safe storage business. Through technology, she minimizes her expenses on her business and manages it remotely most of the time. She values your connection with people to fill the gaps and weaknesses, especially in the real estate industry. Tune in to learn how to succeed in your journey too.

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Recognizing Business Opportunities In The Real Estate Industry With Steffany Boldrini

Steffany Boldrini is originally from Brazil and moved to Silicon Valley many years ago, where she had a successful career in tech sales. For the past few years, she has decided to focus on commercial real estate investing after receiving inspiration from sophisticated real estate investors. She’s invested in three different asset classes since then and has achieved 36% cash on cash returns. Steff, welcome to the show.

Thank you so much for having me, Sam. I appreciate it.

The pleasure’s mine. I think you have a compelling story. Anytime someone has the courage to move from their home country, come here, launch into a new business, work in it for many years and make that transition again, there’s a lot there to be learned that those who have never left the home country don’t know anything about. The same questions I ask everybody who come to the show, can you tell us where did you start, where you are now and how did you get there?

When I came here, I was a teen and by chance of being in Silicon Valley, you’ll always end up in a tech company one way or another. I had a career in sales. It was great. At some point in your career, you’re like, “How am I going to invest some of my money?” I decided to start investing as an Angel investor in startups. At the time, I was dating a successful real estate investor. It was very clear, very soon that real estate is by far a much better, safer, a profitable form of investment, at least compared to angel investing. I decided to learn everything I possibly could from him and that’s how I started.

Often, we hear people being Angel investors and that’s how you end up putting in $1,000 in Facebook before it was Facebook and the next thing you know, you’re filthy rich. You’re telling us that that’s not the way that typically works.

For someone to be able to put money on Facebook at the time, you would have to be incredibly highly connected, successful and have a ton of money. Facebook was already a huge company even though it was a startup. It’s not what the news portrays. However, as a venture capitalist, you are much better off because you’re coming at a later stage. The chances of that company’s failing are a lot less than venture capitalists can determine their own terms then put themselves first in line even when the Angel investor was there first. As an Angel investor, I don’t think it’s a great form of investment.

That’s compelling. I think anybody who’s reading this probably has already settled or, at least as most, the concept of real estate. I don’t have to twist anyone’s arm to get involved. Talk to us about how you educated yourself, how you decided what asset classes to get into and what that journey has been like.

My mentor was in the retail space. I was asking a billion of questions, taking notes on everything and quickly realized that self-storage is a very interesting asset class because during a downturn, it will do well. That has proven correct in the last one as well. I started learning about self-storage and came up across a portfolio of carwashes and self-storage facilities. I said, “How hard could it possibly be to learn about carwashes?”

In real estate, you just need to pay more to get the better person because it’s worth it in the end.

I decided to buy that portfolio and it has been quite a ride. Every month, there’s something new happening but the returns are great. You can still buy a carwash at 8.5% or more cap rates. There are a lot of ways to add value. It’s a lot of work, moving parts, things that employees and all of that, which you need to be dealing with. I’m in the process of delegating as much as I can possibly delegate before deciding if I will do it again.

The carwashes that you purchased, are they all the exact same layout and blueprint every single time?

Yes, they’re all self-service. It’s not the ones that people go through. A tunnel is the ones that they wash their cars themselves, which is less employees and moving parts than the big ones but still, you have at least 100 SKUs of products that are related to the carwash that you need to at one point or another buy and make sure that it’s available for the employees to fix things and everything in between.

Are you buying the real estate along with the actual carwash? What’s the thought there? Is it that, “I will always keep that as a carwash,” or, “This could be held for redevelopment?” What’s the thinking behind that?

I would love to redevelop everything that has a carwash in it because of the amount of work but we’ll see. I still need to determine if I’ll continue to focus on this asset class or not.

It sounds like you have found a way to make them into decent cashflowing businesses.

I was looking at the number at the one-year mark and we were at 42% cash on cash, even after installing the credit card machines, which was a significant investment.

 

I don’t think people realize how expensive even those small readers are on car washes, laundromats and places like that. Those can add up fast and you pay a premium for that specific technology to work inside of what it is that you’re doing. That’s fascinating. Forty-two percent and you’d love to redevelop it. What have been some things you wish you had known before you bought the carwashes that you know now?

 

How much work it is, how many moving parts and how you’re dealing with a certain level of employees that I wasn’t used to and professionalism. In my opinion, you need to pay more to get the better person because it’s worth it in the end. It is a ton of work. Every month has been something new was happening at the carwash that it was like, “Not this again.”

You say that those are trading on an 8% or 8.5% cap. Is that about right?

Yeah. You can find car washes at 8.5% or sometimes more.

Compare that to what you have going on in the self-storage space. Do you have the same feelings as it pertains to self-storage or is there significant differences there?

Add technology anywhere that you possibly can and take it from there.

 

I’m loving self-storage because I barely have to do anything to it besides managing the managers. It has been a lot less work. I think we all need to understand what we are doing with our time that would make the best return for our money. Should we focus only on self-storage because we can exponentially grow there or carwashes where the money is good but you have to do a ton of work? It’s not exponential growth. Those are all things that I have to think about.

In the carwash space, there are two thoughts on that. You said that it’s not an exponentially scalable model, maybe not yet. Where they’re mentors or anyone that you brought in along the way to help you learn the business?

I don’t have any mentors now. It’s only people in the real estate world and asking you for introductions to other people that are in the area. There’s a book called Who Not How. Who can help me with this, having that mentality, implementing that and delegating? The word the year for me now this year is delegation. Who can help but you can go to conferences and meet so many people? Conferences that are targeted to carwashes or self-storage. Those things are so easy to get started on by going to conferences because you get to meet so many people and have that actual relationship versus an introduction via email.

Give us some idea of the scope of your self-storage holdings.

We have a couple of facilities and a few carwashes.

You said then that in the self-storage space was that you have to manage the managers. Do you do onsite sales? What are your managers doing for you that you have been able to offload?

They’re managing income, paying the bills and making sure people are paying what they’re supposed to pay. Now, they are not onsite. My goal is not to have people onsite. That was another value-added there where you can decrease expense. It has proven to be successful. We were at 100% capacity while increasing rents. My approach is to add technology anywhere that you possibly can and take it from there. People are able to rent and sign the lease online. They’re meeting them to give them the keys but eventually, we’ll be able to let them know where the key is and they will pick their own keys and contact lists, move in.

 

Why is it that you want to have no onsite management?

It has been proven, at least from a friend of mine, who is very successful that the numbers still make sense and they might be even better when you don’t have employees’ onsite because of that significant expense.

Do you do your investing all there in California or is it outside of the state?

Now, they’re all in Texas.

I don’t know who doesn’t love Texas. I would think that being that far away would almost make management harder but it sounds like maybe it makes it easier.

You have to start thinking, “How can I do this virtually?” By nature, you have to manage people remotely. I traveled here and there but as much as I can manage remotely, that’s the goal.

Talk to us about what your future plans are inside of real estate. If you had to fast forward five years and say, “This is what I’ve done.” What would that look like?

At some point, we’ll start doing some syndications because we only have a limited amount of money. Expanding that way and I’m looking into some partnerships in San Francisco. I made an offer on a carwash near where I live. We’ll see where life leads me but definitely to grow exponentially and bring on some investors because a lot of people are interested in it. There is a lot of money out there that wants to be in real estate, especially people in tech. They want to diversify a bit. I think there’s a niche there.

When it comes to you saying on people in tech, are you still working in the tech world? Are you 100% real estate focus now?

I’m 100% real estate.

What was that leap like and was there any fear as you made that jump?

There’s always fear. “Feel the fear and do it anyway.” You always wonder, “How much money did I leave on the table by not working at a startup?” You got to figure out what is best for you and enjoy the ride and do the best that you can wherever you are. You can think about it a bit but you keep moving forward. We cannot have regrets and be wondering what could have been.

It’s not a productive thought either way, you slice it. Talk to us maybe a little bit about what advice you would give to someone who is in the same position you were before they take the leap into real estate. Is there something you would say, “This is what I’d recommend starting out,” that you would have done differently?

There’s always fear, you feel it there but do it anyway.

If I was in my twenties when I started, I would recommend people to work at a brokerage firm first. Going to commercial brokerage because that’s the best way to learn, to meet people in the industry and you’re going to have access to deals. How incredible is that? When you see a great deal, partner, up with somebody if you don’t have money. Put your commission in the deal. I don’t know what it is. You’re going to learn so much. You’re going to get all the other people in your town that aren’t in real estate and build these connections. That is what I would have done.

That’s a very valid point. I don’t hear that very often but it’s also unique and risk-free other you’re your time and the way to get involved. You’re not plunking down millions of dollars and gambling on whether or not this deal will work out. It’s like, “We can learn all about this. I’ll get paid as I do it. If these deals close, I’ll offset that risk to somebody else.” That’s a tremendous piece of advice. What are some things you feel like you’ve done well that have helped you to scale so quickly?

I’m good at following up with offers or people that go quiet, even brokers. We were talking about becoming a broker. If you can follow up with potential buyers or sellers, you’re already like the top 5%, if not 1% of the brokers out there. Following up when I’m making an offer, with everybody that I know and checking in with people. It’s a job. You have to be on top of your game and you cannot be disorganized. If you’re disorganized, find somebody that is organized. Like a VA or whatever it is, a partner. Find where your weaknesses are and delegate that and focus on your strengths.

It’s interesting you say that if you follow-up, you’re in the top 5% because that is the hardest part and the hardest way to keep track of it. How do you keep track of your follow-ups and whom you’re speaking with? Is it at the top of your head or do you do a spreadsheet? What does that look like?

It’s on my to-do list.

 

That’s very good. Steffany, before we jump here into the final four questions, is there anything else that you feel would be of value to our audience that has helped you move to the level where you are now?

I’ve seen people say, “I don’t want to partner up with somebody because that will be half of the whatever income that I would be making.” Who cares? A 100% of zero is still zero. Just go for it and you have to be working with people that have been in the industry for a long time so you can learn with them and avoid so many mistakes that you would have otherwise made. That would be something that I’m highlighting.

If you could help our audience avoid one mistake in real estate, what would it be? How would you avoid it?

Get at least two lender approvals when you are purchasing a property. One of our lenders said, “You’re good to go for this one. No worries.” Two days before closing, they said, “We don’t think this is going to work.” That was very stressful.

You got all the way through the deal. You got everything under it. You got all your appraisals done and two days before closing, they said, “We’re out.” Is this a lender you’d worked with before?

Yeah but the good news is that I had a conversation with the president. It was a little misunderstanding and we cleared things up and agreed on a little bit higher interest rate. It all worked out in the end but I was not happy with them. I’m probably not doing business with them again.

We’re going a little bit off-script because were on the middle of a little wrap up question but do you mind sharing the details of what the hiccup was and how you overcame it?

They thought that the income wouldn’t be enough to pay for the mortgage but it was a complete misunderstanding on their part. It was great to have a conversation with the president and clarify it. Always go to the top.

How did they misunderstand the income? How did that miscommunication happen?

This one was for a short-term rental. They lived in the area and said, “You cannot even get normal rent to cover the mortgage for this property.” They had no idea that short-term rentals were doing well despite me already sending all the documentation, all the pro forma and all of that. I had to explain, “People go to your town for tourism.” He had no idea because he lives there. That was the misunderstanding.

That just goes to show you, even if you send them all this stuff, that maybe they’re not even reading it.

That’s why you have to be on top of your game and quadruple make sure that everything is going to be signed off and ready to go. Many things can go wrong. I had to follow-up many times for insurance and you have to because people are not doing their jobs. That’s what makes you stand out.

Question number two for you is this. When it comes to investing in the world, what’s one thing you’re doing now to make the world a better place?

Find where your weaknesses are, delegate them, and focus on your strengths.

I love mentoring people as much as I can. People reach out to me all the time. I would make time for them. If they’re not doing what I recommend them doing then there is no time after that. Most of them don’t do it. “Go read this book first then let’s have another conversation.” That’s it. That’s the end of that conversation.

Steff, if our audience wants to get in touch with you, what is the best way to do that?

They can go to my website. MonteCarloREI.com or find me on any social media. I’m available everywhere.

Thank you so much for your time. I do appreciate it.

Thank you, Sam.

Important Links:

• Steffany Boldrini
• Who Not How
• https://Podcasts.Apple.com/us/podcast/commercial-real-estate-investing-from-a-z/id1451874700

About Steffany Boldrini

Steffany is originally from Brazil and moved to Silicon Valley nearly 20 years ago, where she had a successful career in tech sales, and for the past three years, Steffany has decided to focus in commercial real estate investing after receiving inspiration from sophisticated real estate investors. She has invested in three different asset classes since then and has achieved 36% cash on cash returns.