This week on the podcast, Aaron Mazzrillo shares how he survived the Great Recession, finds off-market deals, the magic of messaging combined with hyper-targeted lists, and how he continues to stay busy in a tight real estate market.

The Data Driven Real Estate Podcast #20 – Hyperlocal Real Estate Investing and Wholesaling with Aaron Mazzrillo #DDRE20

Written by:
Aaron Norris
Written on:
November 5, 2020

Aaron Mazzrillo is an entrepreneur, a real estate investor, and a marketer based in the Inland Empire. Hailing from Massachusetts, Aaron became involved in real estate in the early 90s after he and his wife decided to pack everything up and move to California. Since then, he has been buying, rehabbing, renting, and selling properties. This week on the podcast, Aaron Mazzrillo shares how he survived the Great Recession, finds off-market deals, the magic of messaging combined with hyper-targeted lists, and how he continues to stay busy in a tight real estate market.

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Show Topics

00:00 The Data Driven Real Estate Podcast welcomes Aaron Mazzrillo

02:08 How and why Aaron Mazzrillo got started in real estate and how he survived the Great Recession and lived to talk about it

16:21 What Aaron did that was key to his success during 2009-2012 and the one regret he has wholesaling deals at the time

18:39 Use of capital as real estate investors and what separates pros from the newbies in the business when calculating ROI

21:33 Rent or Flip? How do you make that decision as a real estate investor?

25:32 What does it take to become a real estate investor

27:17  Matching a hyperlocal list to a hyper-personalized message

30:14 Aaron shares tips on how to connect with different types of sellers

34:52 Which marketing channels is Aaron using in his business?

35:36 The importance of hyper-local marketing strategy

39:17 How did COVID impact Aaron's real estate investing?

43:36 Repeatable processes and the technology stack Aaron has deployed in his business

51:14 The difference between suspect and prospect in real estate investing

52:13 Data privacy laws investors need to understand and how difficult and expensive compliance can be

57:26 What real estate strategies Aaron is focused on for 2021

Show Transcript

 

AaronNorris  00:03

Welcome back to the Data Driven Real EstatePodcast Episode 20. This week we have real estate investor Aaron Mazzrillobased in sunny Southern California. He started in construction, became awholesaler, real estate flipper, landlord, and does other kinds of projectslike commercial. He has seemingly done it all over the last 20 years. We talkabout the data that drives his business, marketing tactics that he's deployingand trying, and how to build systems and automations to make things scale. Andone of my favorite parts is a prospect versus a suspect. That and much more.Don't miss the show this week.  Hey,welcome to the Data Driven Real Estate podcast, the podcast for real estate professionalsdedicated to driving business using data. I'm Aaron Norris and with co-hostSean O'Toole with PropertyRadar. And today we have got Aaron Mazzrillo. Hello,Aaron, how you doing?

 

AaronMazzrillo  00:49

I'm doing great.

 

AaronNorris  00:50

Where are you park today at the beach orhigher.

 

AaronMazzrillo  00:54

My background is the beach actually took thisphoto, but I'm in the Inland Empire. It's where I am out here Monday throughThursday evenings and then met the beach Thursday night through Sunday night.Sometimes that bleeds over to Monday, depending on how I feel but, you know, Idon't serve anymore. I had a catastrophic surfing accident where I actuallydrowned and was drug out of the water and resuscitated on the beach, ended upin the hospital in the neurological ward, and walked out of the hospital thenext day. So I said, you know what, it was fun, but I'm over it.

 

SeanO'Toole  01:35

Okay.

 

AaronNorris  01:36

Stick with fishing.

 

AaronMazzrillo  01:37

You know, I find that surfing is more of abrutal full-contact sport than kickboxing was.

 

AaronNorris  01:45

That's right, you have a kickboxing background.Do you still practice?

 

AaronMazzrillo  01:50

I don't because now I have a pretty bad neckhave some problems in my neck. So, I don't anymore, and but I watch it almostevery day. It's like, you know, just a tear rolls down my cheek, but it is whatit is. I find other things to do. So, it was just keep pushing forward.

 

AaronNorris  02:08

Now, when did you get into the real estategame?

 

AaronMazzrillo  02:11

Uh, I had a tax. So, I tell the story to acouple times before. Most people like oh, you know, I was working my crappy joband I read Rich Dad, Poor Dad. And then I, you know, went to some seminars, Istart real estate. I had a great job. I actually really liked my job and I wasmaking at the time I thought a ton of money. It was more money than ever madebefore a couple hundred thousand a year. The problem was, I was an estimatorfor a subcon we were subcontractor. So basically, a construction company. So,the only write offs I had were, you know, pencils and paper and you know, gasand a leased vehicle. So I was paying very large estimated quarterly taxes,which I did not like doing. And I talked to my I had some kind of interest inreal estate. I like I had been reading some books I had read the Rich Dad PoorDad book after I saw the author on Oprah, you know, I figured, well, she's gota good reputation. She must, you know, he must be okay. So, you know, I was kindof like reading some books I could find at Barnes and Nobles and stuff. But Igot into real estate because I had a tax problem and asked my CPA, I was like,this has got to stop. I'm bleeding money here. I work so hard. I make all thismoney. And I'm giving back 50 60% of it to the government every, every threemonths. He's like, Well, no, no, I'm going to read. So, what I do is like, getyourself more read. I use paper and pencil like how many pens do I have to goto Costco buy like a pallet of pencils. Like where would I store that? Youknow? So, I What are your other clients do? What do they do? You know, you musthave other people that are my situation is like, yeah, they buy real estate,like I'm gonna go buy some real estate. So, I just, yeah, I just started buyinghouses from the MLS, paying whatever they were asking, but this was early2000s, make a phone call get alone, not a problem, you know, go to a seminar,some guys selling turnkey new construction, I'll take one of those. I wasbuying stuff everywhere and stuff in five states. I was buying whatever,whenever I could to stop the bleeding. But then that just turned into a newkind of bleeding. So, and then I actually, it was Jack Fullerton. We all knowhim, great guy. He turned me, I actually, the story goes back one step further.Steve Dexter pointed me in the right direction. He finally pointed me to JackFullerton who bribed me to go to a Pete Fortunato seminar. And I went there.And once I got there, and I saw what people are doing, I met people that I waslike, this is what I'd rather be doing. This sounds really cool and fun, right?Because I'm still negotiating, negotiating large contracts, which is what I wasdoing in construction. But now I don't only get 5% of the gross like a commissionnow I actually get the house of the equity. And I kind of like and it's funnybecause I was also a licensed real estate broker at the time, and I had nevereven been to an open house. It had just taken the classes and pass the test.And it's like, oh, you're an agent. I was like, Oh, cool. And I live nearIrvine Valley College. So, at night, I had nothing to do and no kids, I wouldjust take my classes. And I was like everything electronic music and yoga andeverything. So, I had taken all the classes for, for real estate, and I saw Iwent took the test and then I was a broker. And I had no idea.

 

SeanO'Toole  05:25

Straight to broker.

 

AaronMazzrillo  05:26

Yeah, I was eight...well because I had acollege degree and at the time, you could be a broker if you had a four-yeardegree. So, I had a college degree and I had taken these classes have no ideahow to do any paperwork or nothing and here I am a California licensed realestate broker. Which is scary, right? So yeah, so I was just buying houses outof the MLS. I thought getting my broker's license would help me get betterdeals. But you know, I could save a commission. But yeah, that's not the way todo the business. I lost my train of thought a little bit. My assistant came in,I was like, Ah, it's important, like nothing's important right now. We leave soI don't remember where I started on that bad but I got distracted.

 

AaronNorris  06:05

So 05', 06' come around, did you switch gearsat all? Were you still buying out of the MLS?

 

AaronMazzrillo  06:11

So I was 05', 06' I was still yeah, that's likemy prime time of buying straight out of the MLS and paying retail and going toseminars and buying whatever people were selling as far as Oh, we got houseshere and houses there. I just I just didn't know any better. Also Jack sents mePeter Fortunato, I liked what Pete taught I wanted to learn more about that, Istarted to kind of get away from the MLS stuff, but I didn't know how tomarket. I didn't understand how to talk to sellers. So I started going to alocal real estate, a landlord meeting that wasn't far from my office. And, andI would go in and it was every Friday morning was a breakfast, and I get there,I get to my office, I you know, kind of get sorted out and then I leave, and Icome back in like an hour. And then next week, it was like an hour and fiveminutes. And the next week was like an hour and 15 minutes. And then you know,after a couple of months, it's like I would leave on Friday morning and I wouldcome back Friday afternoon. I would just stay with like I want to be like theseguys. They just hang out all day. This is the best. Mic Blackwell was there.And he sent me to this, you know, it was his private group at the time, hismastermind at sizzler, the Tuesday lunch. But they're still doing that it's notprivate. Everybody goes but it's not a sizzler anymore So I started goingthere. And I had equity so I have HELOCs, right because if you have equity in2006, you got to have a HELOC. Right. So I had HELOCs with six-figure checks,you could just write for fun. So I started buying from the wholesalers in theroom and one, in particular, Mike, we all know Mike, right? So I started buyingfrom one wholesaler, because I had heard a lot about him, but I'd never methim. And I really wanted to understand what he was doing. So everything he hadI wanted to buy. And so I started buying stuff from him. And then the marketkind of melted down. But while I was buying from him, I was studying hispaperwork, and I was asking him questions. And I started to kind of figure outwhat I needed to do to walk away from the construction business and then goback into the construction business. Right. So.

 

Sean O'Toole  08:06

I'm gonna pause for a second because I don'tthink most people know who you're talking about actually, like, we have abroader audience. So, Mike Cantu is the guy. Right. And his, he doesn't do alot of speaking he doesn't do much training and that kind of stuff. He did puttogether this series of, I guess, audio recordings or book called… what was it?Real Estate Island?

 

AaronMazzrillo  08:32

Don't Get Voted Off Real Estate Island.

 

SeanO'Toole  08:34

Don't Get Voted Off Real Estate Island. And Ihave to say, I've read a lot of the books and other things over the years. Andthat is one of my you know, all-time favorites, just like how practical it is.And you know, kind of down to earth and like talking about how to negotiate adeal. And, you know, put it in just really good terms. It's one of myfavorites.

 

AaronMazzrillo  08:59

Mike's superpower is taking very complexthings, and making them extremely simple. It's just that I mean, it's he can dothat better than anybody else.

 

AaronNorris  09:08

I always tell him I want to create a children'sbook because he is famous for his hilarious one-liners of doing just thattaking something complex and irritating and simplifying it into a one sentencehilarious. Just moment and I'm like I want to create an illustration book forkids to introduce them to real estate.

 

AaronMazzrillo  09:26

We needthe Tao of Mike and it can be Cantuisms. Right?

 

SeanO'Toole  09:31

Cantuisms.

 

AaronMazzrillo  09:33

I've hadthis in my head and I live next to him. And I'm just like, I gotta go overthere like on a Friday night and just like try to get him to start feeding meis Cantuism and writing them down and documented like the Tao of MikeCantuisms. So.

 

Sean O'Toole  09:45

All right, well.

 

AaronMazzrillo  09:46

Very smart guy.

 

SeanO'Toole  09:47

How did you survive the downturn like because,you're saying you've got you're taking out loans, you've got HELOCs. So thatmeans you're tapping all the equity of these things to buy more and you'redoing it all over.

 

AaronMazzrillo  10:00

I'm still one of those today, still paying offone of those HELOCs today. So, I mean, I can write the check, but it's like,it's like now it's gone into the fixed-rate mode. It's not fixed, right? It'sthe amortizing mode. So, you know that, but it's like 2.75%. So, like, I reallywant to write that pay that off or so yeah. So, I had a lot of houses. And Ialways felt like, for me, I want to be a person of my word. But I want to besomebody who doesn't want to do it. And I'm going to do it when I say I'm goingto do it. And that, to me is more important than anything else. So, I hadhouses that were way over-leveraged, I was over a million dollars in negativedebt, but I had made the commitment to pay these loans. And I had tenants I wasa good landlord, I had studied MrLandlord.com at the time, that was a greatresource for learning how to be a landlord. And I had read some there were somebooks, you know, that had been published on landlording. And it was a local guywho bought one. And so, I felt like my landlord chops were pretty good.

 

SeanO'Toole  11:03

How many doors did you have?

 

AaronMazzrillo  11:05

It wasn't many, maybe between 10 and 15? Idon't remember, wasn't a lot. Right. So, but when you have a $300,000 housesthat are now worth, I mean, the neighbors were selling for $60 or $80 grand in2009. And you had 200? Well, I had I shouldn't say you I had $250,000 loans. Itwas brutal. And at the time, there were the interest rates in 2007 worsebetween, I think 6% and 7%, around 6 and a quarter, 6 and a half for landlords,right? So, I was paying a pretty, pretty good rate on them. I was getting clippedpretty bad every month. But I was flipping houses and we did some great deals.And I think that in time things work themselves out. And Jack Miller used tohave a saying, just get the houses dig your nails in and hang on, right? So, Ikind of thought this will turn around, this will get better. It's not going tolast forever. It's just a temporary bleeding. And I saw a lot of people doingstrategic foreclosures, which I thought was extremely unethical. Maybe from abusiness sense, it made sense. But I didn't want to do that for myself. Iwanted to have whenever I do an application, and I knew inside that I alwayswant to do bigger things. I wanted to get $3 million, $5 million, $10 millionloans and on those loan applications. I imagine there would be questions likehave you ever had a foreclosure? Have you ever had a bankruptcy? And I alwayswanted to say, No, I've never had that. That's never been a part of my businessmodel. I've always stepped up and made my payments when I had a commitment. So,I just kept working. flipping houses more in 2008 and 09' wholesaling more. Andthen, like I say, in time, things worked themselves out. Suddenly, I wasgetting like these FedEx packages, unsolicited. And it's like we have torefinance your house. And it was hard. And I had all these houses were hardloans. So they went from six and a half or six and a quarter to 30-year fixedat like four and a half. And suddenly, they're all cash flowing like crazy. Soyeah, so it was if you dig nails in and hang on, Jack Miller was right.Eventually, things worked themselves out. And I still have some of those housestoday. And they're doing phenomenally well. And they're worth more than whatthey were worth back then. So, it's it's, it's all worked out.

 

AaronNorris  13:24

It's a small world.

 

SeanO'Toole  13:25

Go ahead, Aaron.

 

AaronNorris  13:26

It's a small world and people talk, I don'tthink some people really appreciate that. And that, you know, your reputationmeans a lot in this business. So, we've had a chance to work together over thelast decade and I really appreciated your perspective and your ethics and yourhonesty. So thank you for you know, playing that role in our industry. We needmore of that.

 

AaronMazzrillo  13:46

Sometimes it can be brutally honest, and thatmight show through on my Facebook profile, but I don't use that for business.It's more of entertainment, which to is to my own detriment.

 

SeanO'Toole  13:58

We're definitely gonna have you give up yourFacebook profile so people could follow you because it's it's a it's a fun,fun, follow.

 

AaronMazzrillo  14:05

I try to tell people just remember, I'mlaughing when I'm writing this. I'm not trying to install you're just all canhave a good time. So, I yeah, it's social media. It's not anti-social media.I'm not trying to be a jerk. But, you know, I'm northeast. I'm from thenortheast. I'm New England. I'm from Massachusetts. You know, we have areputation back there and sarcasm is how we communicate. So, I apologize.

 

SeanO'Toole  14:31

Your kickboxer background I guess makes you notafraid to put yourself right in the middle of things like when riots were goingon and you're standing out front with a baseball bat protecting your propertieswas maybe not with a baseball bat but it felt like that.

 

AaronMazzrillo  14:46

It wasn't a bat it was actually a [laughter]

 

SeanO'Toole  14:50

It was something.

 

AaronMazzrillo  14:53

It was sorry, but it wasn't a bat a little moreeffective than a bat and I'm very well trained in using that tool. So yeah, Iwas definitely down in downtown Riverside protecting my property. You know, youcan protest all you want but don't destroy people's personal property that'sunacceptable in my opinion.

 

SeanO'Toole  15:12

Yeah, yeah. don't disagree. Okay. So, we're,we're getting through, you dug your nails in, hung on. And now you land inprobably the greatest period of time to be a real estate investor of hallhistory, which was, you know, 2009 through 2012.

 

AaronMazzrillo  15:34

The decisions I made back then have, they'veallowed me to, to make better decisions today or make easier decisions today.So, the decisions I made back then, now, it's the houses that I bought that Ikept, they allow me to show up at work when I want and, and I try to run it likea business and a company. But at the same time, I don't need to, it's more. toreference back to Mike again, scoreboard, it's just more for like, he only needto beat the team by one point to win. But you know, what's an extra 20 or 30points? That's, that's okay, too, right. So, you know, now I feel like I'm inthis more for the challenge of getting that next deal. And for the fun ofcashing that big check, not because I need it to go buy groceries and gas.

 

SeanO'Toole  16:21

Before we jump into it. There's bad feedbacksomewhere, sorry. Before we jump into what you're doing today, talk to us aboutthat period from 2009 to 2012, what you did how you put yourself in a positionto take advantage of that, and put yourself in the position you are in now. Likewhat was what was kind of the key to your success through that period.

 

AaronMazzrillo  16:45

So, I have a background in basically coldcalling doing sales calls. And I had, I felt like I had, I had some skills, Ideveloped a skill set that it put me in a good position to transition into realestate and talking to sellers. And I was listening to I don't even know ifyou'd call it a podcast back then I was listening to like a weekly seminarwhere in the back then the the gurus would they would do a recording like aconference call and then they'd mail it to everybody on the CD. Right. So I'mtalking like Richard Ropp, like I was in his club. So, I'd get the CD. And I'mlistening to it. And Ryan Scala is on there complaining that he has too manyleads. I was like, what was too many leads, right? Especially today, right? Imean, there's no comparison. So I tracked down Mike, I'm like, Who is this guy,Ryan Scala that's complaining about too many leads? He's like, oh, he lives inCorona, he's an investor. So, I got to meet this guy. I got his phone number.And he had built way ahead of his time, he had built an amazing CRM, and it didphenomenal mail tracking, and I'm sure he showed you his latest stuff. Yeah,Sean, that you've seen it? I mean, he's a great coder. Right? Is he a greatidea guy and a great coder. So, he built this amazing CRM. And he showed it tome, I'm like, I need to be on this. So, he had all these leads. So, I juststarted going through his leads and digging out the golden there. And we startedclosing deals. And once we started closing deals, he's like, Hey, you want topartner up and work full time? I was like, yeah, so I'd actually drive thishouse Monday through Friday, and sit in his house. And we were, we were sendingmail and we were going after REO, but we were mostly focused on older absenteeowners, that was really our target demographic. And we did pretty well backthen probably my biggest regret was A. not keeping more houses and B.wholesaling too many of the deals that we got, I wish we'd flipped more,because we left a lot of money on the table.

 

SeanO'Toole  18:39

Oh, all right. Yeah, that is the downside ofwholesaling. You know, it's it's an interesting thing that I find withinvestors, everybody looks at the cash, right, the total cash. And one of thethings you need to think about too, is if you have an available pool ofcapital, right? What makes what really separates good investors from bad andwhere wholesaling can actually be good, is your ROI is based on how well youkeep that cash to play, right? So, if I've, if I've got a million dollars,right, and I do a deal that makes you know, 10 grand, 1%, right. But I do thatin a day. And I do two of those a week, my total return on capital over theyear is going to be much better than somebody who did a deal that made 20% buttook them a year.

 

AaronMazzrillo  19:34

For sure. I like I like the snowball effect. Sowhen I was in the construction business and do an estimating, I would get adeal and I'd be excited about it. And the guy kept he was kind of coaching mehe's like well listen, it's you got to keep working and get the next deal andthe next deal and keep lining them up because I know you sold this contract. SoI was selling windows to multifamily builders. Well, they don't go out andbuild 300 units at once. They do it in phases. So it might take a year. So Iwould get a little bit of a check and a little bit of a check. And he's like,well, you have to get the snowball effect. So once you start that building yoursnowball, it's going to start throwing off more and more money moreconsistently faster, and then your income is going to exponentially go up. Andso that's why I like the flipping businesses is that I always try to have stuffin escrow that I'm buying, at the same time stuff in escrow that I'm selling,and then a pile of inventory that we're rehabbing. So we always have stuffcoming to escrow. And the snowball effect where you can consistently get thesefive or six-figure checks on a weekly basis on a monthly basis or you know,every two months if you don't have that much volume. But if you leave half ofthat money, at least on the table when you're wholesaling unless you're, youknow, an excellent buyer. I, for me, I always felt like wholesaling wasn't a businessmodel, it was a way to dispose of excess inventory.

 

SeanO'Toole  20:54

Right.

 

AaronMazzrillo  20:55

So I think the number one thing people shouldfocus on is raising private money, because that'll help you grow faster if youhave more money that allows you to do more deals. So if you would like spendmore one or two hours a week focused on just like my financial Friday, I'mgoing to work on my private money game, you raise private money, you get enoughprivate money behind you, it allows you to work on that snowball to build upyour inventory of flips. And then as you get more leads in, and you've run outof private money, I can wholesale those off. And that gives me the cash flowtoday to sell my immediate cash needs, but have these bigger checks in theworks coming? So for me, that's the business model I like best and I rarelywholesale anything anymore.

 

SeanO'Toole  21:33

And you do keep those as well. So how do youhow do you make that decision? Because that's, that's one of the other thingsthat's really hard, right as a flipper, and Okay, I'm gonna make 30 grand onthis deal today. Or I can go rent it out, and I'm gonna make $200 a month orwhatever. Like, that's pretty hard trade off. So how do you decide what tokeep? And how do you have the discipline to do that?

 

AaronMazzrillo  21:57

Two things. The first one, which I, my friendwas high-volume wholesaler here in California. He's doing a ton of deals morethan 100 deals a year. And he was just wholesaling, wholesaling wholesaling.And one day I said to him, I said, you know, what, that's a great house in agreat neighborhood. Why are you gonna wholesale? It's like, do I make 40 grandon it? I was like, Yeah, but if you keep it and rent it out, that 40 grandcheck is still there, it hasn't disappeared, just because you rented the houseout, maybe you get a little less, because you actually closed on it, you fundedit, you did some work on it, you rented it out. But if you get the tenant out,and I mean, in this environment, that's a little more difficult. But you know,pre-COVID, you could get the tenant out in 60 days, or 30 days if they're lessthan a year, and maybe make more money on a full retail sale. So that kind ofchanges percent. She's like, man, I never really thought about that. It's yeah,I know where you can sell it to another landlord who might pay more than theguy who wants to flip it. Because it's rent ready or is rented out, there's agood tenant, they're paying market rent, there's a fellow investor landlord whomight be interested in that. So, I just think that mentality is knowing thatcheck just because you kept the house, that check hasn't gone away. And theflip side of that is coming from a high tax bracket and paying lots of taxes. Igot on a real estate to get out of the tax, the game of you know, taking moneyand then giving it back to the government. I wanted to keep as much money aspossible, so.

 

SeanO'Toole  23:21

You're basically doing enough flips to fundyour operations and food and taking care of yourself. And anything any profitsyou generate above that. You leave them in the deals and keep them that kind ofa rough way to manage your your taxes and income.

 

AaronMazzrillo  23:38

Well, I've become a little more picky becausehaving the stuff that I bought in the 2009 to 12. It's allowed me to do that,right. So, I've become a little more picky. So in the beginning, it was like,oh, I'll keep that rental and Banning I'll keep that rental in Hemet and thoseare his were tertiary Aaron's good with vocabulary, like these secondarymarkets. Right. So no, no third, third market. So the third world markets inother markets, they're just very far away from my core business, right? So Iwould keep houses and Benning and Hemet and places that were like on theoutskirts of I don't want to say civilization but the outskirts of where thethe core population, the work, the the jobs and all that I would I would keepthese houses, because I knew I could grow the equity up and keep those houses.But now it's to the point where, if I buy a house in like an a neighborhoodnear a good school, and flipping it knowing that, hey, I've been in businessalmost 20 years, and I've never bought a house in that neighborhood before.What are the odds that I'm going to get another one unless I pay retail?They're probably slim to none. It'd be crazy for me to sell that house. So,it'd be better if I sold something in San Bernardino or just took the moneyfrom this next flip and kept that A Plus or even B Plus neighborhood house, whichI don't get the opportunity to buy very often, which leads me into when I drivethrough those neighborhoods and I see a guy flipping a house. It makes methink, like, I haven't figured this game out yet. He's doing it all wrong. Whywould you sell that A Plus house that you bought at a wholesale price? To get ahighly taxable check of short-term capital gains, I, that's not the businessmodel I want. So, it's really all about tax management, the whole strategyabout tax management, which is a bit scary now, because we don't know wherethat's all gonna go.

 

SeanO'Toole  25:32

Talk us about. I mean, the markets are bettingthat it's not going to go too crazy for us. appears. So talk to us about your,you know, game today, like you mentioned, cold calling is a personal skill,right? That's one of the strongest, I think skill sets, like people that aregood at door-knocking, people are good at cold calling, nobody wants to do thateverybody wants to, like, get some magic list, right? You know, do somethingsuper simple, where they press a big easy button, and suddenly get a call andbuy a house with $100,000 of equity. And we know, that's not how it actuallyworks. Walk us through a little bit what you know, you recommend to folkstoday, who want to get into this business of what it really takes to to buy,you know, buy off market deals.

 

AaronMazzrillo  26:27

So quickly. And just to touch back on somethingyou said is about these, like secret lists these magic lists, right? Imentioned that to one of my friends, all of this guy's milling this this kindof secret list that he is like secret is are there neighborhoods? I don't knowabout? Is there, like a secret community? I was kinda like, Yeah, he's like, ifit's a house on the street, it's not a secret list. Right? No, that makes a lotof sense. It's just, you know, maybe there's some other criteria in there. Butevery house out there is known. And you can find out information about it,maybe you need to set up some certain data points that you're looking for, toadd that particular house to your list that matches your marketing message orwhatnot. But there's no secret list by I mean, everybody's basically highequity, long term ownership. I mean, there's not a really a lot people aregoing out to these days.

 

SeanO'Toole  27:17

And I want to pause you just right there,because you just said the most important thing ever. It's a list that matchesyour message, right? There is no secret list. But there is huge magic in takinga good up a list that matches a message, right? So that targets those specificpeople, but it's about the message and then finding the list that matches themessage, in my opinion versus the other way around.

 

AaronMazzrillo  27:44

I always like to think of when I try to explainthat to people about marketing is like imagine you own a hamburger stand. Ifyou stand outside the door and try to con every person in tea, you're gonna getlots of no's and be very disappointed. What you want to find are the peoplethat like meat, right? You want to try to cater to the vegetarians, they needto have some money, right? So, they need equity. And there's a whole sub to andyou know, all that nonsense, you know, there's that whole market. But generallyspeaking, you need that they need to have some equity or some money, and thenthey need to be hungry. Right? You might have money and love hamburgers, but ifyou just ate, you're not coming in my so yeah, so you got the message, we sellhamburgers. And now I'm going to cater to those who are ready, willing andable, they want to buy what I'm selling. They need what I'm selling, and theyhave the ability to take advantage of my services. So.

 

SeanO'Toole  28:37

I think there's a difference $2 hamburger jointand the $12 you know, fancy burger joint to right. And that's a differentmessage to a different market.

 

AaronMazzrillo  28:47

Exactly. Yeah, exactly. So, if you're lookingto get started in this business, just doing mail is going to be extremelydifficult in today's market. So, this is, you know, early November 5, 2020.Right now, today in the Southern California market, if you're just doing mailto absentee homeowners, you're going to throw away a lot of money, you need tobe more focused, like more of a sniper shooting a rifle instead of a shotgunapproach. Right. So Well, I think your best opportunity probably lies indriving for dollars, or looking at a tax default. You know, we can't really geteviction information here. That's very accurate. And currently, there's none ofthat anyways. So, tax default code enforcement, if you could get somebody who'son both of those lists, or and then take it another step further. If you getsomebody who's tax default, they got code enforcement issues and they're alandlord who lives out of state. You know, you got you got the magic, Yeah? Yougot the magic number that you getting letters on your houses in Florida Aaron?

 

AaronNorris  29:56

Yes, I get text messages all my rentals inFlorida.

 

AaronMazzrillo  30:00

But they're probably just pulling like an outof state owner list or something very generic. And then, you know, doing somebroad so we do texting here. And it mean, you have to send a lot of textmessages, a lot of text messages to find a good deal.

 

SeanO'Toole  30:14

Oh, I come back to, you know, you mentioneddriving for dollars, right. And I always tell people, even if you're going topull a list, like pull a list and go start by driving that list and knocking onsome doors and talking to those folks, because you probably can't develop a goodmessage until you actually understand who that person is you're talking to, andhow much do you think that's an issue? Like do you find for yourself, like, youconnect with certain types of buyers better than other types of buyers? Likethere's doors you knock on? And if you know, a particular person answers, likeyou're no way you're getting a deal, because you just you have a tough timechatting with them. Right? So....

 

AaronMazzrillo  30:55

Yeah, some people can be very standoffish. Somepeople can be angry. But the response is not you don't respond to anger withanger, you respond to anger with, you know, you back off a little bit, say,hey, all right, you know, Hey, sorry, I didn't mean to disturb you. So, we sendtext messages. And generally we'll end it with something that causes them notto respond with anger. So, you know, I don't want to give away all our goods.But we, we have a statement in there that it doesn't solicit an angry responsefrom people. So, we've been able to really dilute that down a lot. We don't getmany of those anymore. Were when we first started. Yeah, it's a lot of angerresponses. So, like the other day, I was driving in my neighborhood, and I seena house that I've been stalking for months. And I like put like put, you I liketo leave behind. I like to put something behind. So, I'm knocking on the door.There's nobody home, I try to skip trace it, I can't find the people that turnsout, they've passed away. So, I'm putting like bandit signs wedged in there intheir screen door not not, you know, a door hanger or see, I'm putting anentire bandit sign in their front door, like you can see my message from thestreet. So, I find out that, you know, it turns out that the the heir happensto be a guy who's been on TV flipping houses, so not much of an opportunitythere. But at the end of the day, this is nothing more than a conversation.Nobody needs a negotiation seminar. So I see you at the side of the street, youknow, taking out bags and bags of trash to this house in the front doors, openthe windows or open the garage doors up. There's something going on there. I'mgoing to pull over. And hey, what's going on? You need any help? Oh, no. I'vealready brought some value to the table. Hey, you need some help. I don't knowwhat you're doing. But I'm gonna ask anyways. Well, you saw the house got allthe doors and windows open. I mean, I'm thinking cats, you know, lots ofspilled beer or something, right? There's something smelly. Maybe somebodypassed away? I don't know. So what? Well, I just happen to be a local and Ialways present myself as a local landlord. Hey, I'm just a local landlord. Andyou know, I love to buy rental houses. I you know, it looks like you're havinga problem here What's going on? And so you just ask a conversation, and you tryto get to what are the pinpoint? What's the actual issue that would cause thesepeople to, to consider selling? So if you can find that pinpoint, and agitatethat little bit and then offer a solution? Generally, you're gonna have abetter relationship than just, I buy houses. I pay cash. Right? So I mean,nobody who owns the burger stand sells we sell cheap hamburgers, right? I mean,McDonald's, they do that, but they don't say we sell cheap hamburgers. Hey, wegot the dollar menu.... fill you up. It's really delicious. You know, us it'stasty is yummy. Right? So I always look at who are the big players in themarketing space? And how can I mimic what they do on a smaller scale? Right,McDonald's has had the same commercials, oh sorry, McDonald's has beenadvertising to their same core demographic, children, for 50 years or whatever.Right? And they have, there's, there's things in there that connect theirmessage, right? So they always have the weird clown or the Purple Guy, or, youknow, there's something in there and that, you know, the the Whopper, The BigMac or I don't know who sells I don't know, I don't know what they saw. I don'tthrow in a Burger King stuff here. So, but ultimately, their goal is to justsell hamburgers, right? So I try to do the same stuff with my marketing. Idon't say we pay cash, we buy houses, I say, Hey, what's what's going on withyour house? Is there something I can help you out with? You know, I'm in thebusiness of solving these problems. And, you know, maybe you could call me andwe can talk about it. And then at the bottom, I have some kind of catchphrasesthat are consistent with all my marketing pieces. So it ties them all together.So I remember that guy because he always puts that in there. Right? So I thinkthat's kind of the key to a successful marketing campaign is you can touchpeople five or six times but if there's no connectivity between those touches,then it's like you got five or six different mailers.  

 

AaronNorris  34:52

Uhm, how, how many different channels are youfocused on right now? So you said text I've heard you say signs direct mail.

 

AaronMazzrillo  35:00

PPC driving for dollars, text messages, directmail. And surprisingly, I bought more houses off wholesalers this year than anyother source. And most of those came from Instagram of all places.

 

AaronNorris  35:15

Get out of here. Really?

 

AaronMazzrillo  35:16

Yeah, I buy a lot of houses off Instagram. It'svery strange.

 

AaronNorris  35:19

You're not the first person I've heard thatfrom so interesting. I'm gonna have to look at your hashtag, sir.

 

AaronMazzrillo  35:27

I just copy and paste other people's I don'tknow, I'm not good at the ash tagging.

 

AaronNorris  35:32

Hey, if it works, who cares?

 

AaronMazzrillo  35:33

Now my Instagram is more business. So, there'snot a lot of jokes or anything like me picking up or whatever you want to callit bullying deal. It's more I buy houses is what I do walk through theproperties that I'm flipping and things like that. So

 

AaronNorris  35:46

How important is the hyper local angle and Ionly bring this up because I own the property that you were in the neighborhoodyou had properties. It's a house I my only property I ever bought from MikeCantu. It was my lesson house. I learned a lot of very painful lessons with thehouse. But you know, the area? How focused are you on specific neighborhoods?

 

AaronMazzrillo  36:06

There a wholesaler called me today on a house,it's like just on the other side of my hill here. And I was just like, I'mgonna buy and keep it and I know what I pay for it. It is relevant. You know, Iwas like, well, at this price point, I can still keep and make it work. I'llpay more. But I don't want to because then I I'll almost be forced to retailit. And I would hate to let that go. When I moved into this neighborhood. Ithere's a country club at the top of the hill. And I remember sitting up thereone day eating lunch to say, all right, my business model is to get 10 housesin this neighborhood and just rent them out and I'm good. And in 20 mile 15years, I've never bought another house in the neighborhood. And all of myfriends have bought houses in the neighborhood. Like Sylvio flip one rightbehind me. And all my neighbors have, I was the youngest guy on by like 20years, it was a lot of retirees, they've all passed away, all their houses havebeen sold, investors have come in and flipped both houses on my street. I'venot bought anything, because, you know, I am a numbers guy. So it's as much asI want to deal. It's got to pencil out. It's got to work. I just, I don't I'mnot in the business of losing money. And maybe I'm too conservative some pointsI let deals get away. But going through 2007 to 2009 it gives you a differentperspective. So there's I don't want to buy deals anymore, right? I want I wantto get houses that make me money. And back then I would take any I was heliumhand, right? I'll take it. I'll take I'll take it right I everybody. I'll takeit helium man, Aaron. I'll take it. I'm not that guy anymore. And I was like, Ibuy it at this price. But as far as rentals go, I mean, I've own and rentalsall over the country. There were pros and cons to all of it. But I really I reallylike just being here because I have an assistant in my office and she dealswith all the management, she can go into annual walkthroughs. It's just a mucheasier business model and everything's local. And we just don't really have wegot some crazy laws in California, but that are quite anti landlord. But if youplay by the rules, and you run a clean business, you don't have any issues.I've been eviction court, I don't know 40, 50 time?, I've never lost I knockedon some bioethicist would last at it. I've never lost an eviction. And twotimes, I've entered the judges, like one time the judge says, you know, Mr.Mazzrillo, we need more people like you in this business. You provideaffordable housing to people. California Courts appreciate you what you do. Iwas like, Wow, that was cool. I never expected that. And another time...

 

AaronNorris  38:33

Can I get that in writing?

 

AaronMazzrillo  38:35

Yeah, like a photo with him. Another time, hepointed at the at the plaintiff or, I mean the defendant and said, You are aparasite. I couldn't believe he said the whole court's going, ahhh! I was like,he's right. You are. Yeah. He said you're a parasite. Right? So they're notanti-landlord here. They're pro-landlord if you follow the rules that they'velaid out. If you follow the rules, they're going to be on your side. And like Isaid, I've yet to go to court and have it not go my way. But we we do theproper paperwork, correct filings, everything's in order. And there's always alegitimate reason. I mean, I want my tenants to stay and pay. I don't want tothrow out but they got to go because they're doing something that, you know, isnot in the guidelines of what they agreed to do, so.

 

AaronNorris  39:18

COVID-19 has caused some interesting things inthe Inland Empire. I'm hearing some investors say that flips are getting $50kto $100 grand more than they were expecting when they started the project. Areyou seeing that and How comfortable are you with that heading into 2021?

 

AaronMazzrillo  39:33

So, they still need to appraise and it's notlikely in the Inland Empire, you're going to get people who throw down and sayno appraisal contingency, at least not at the price point that I play in andI'm really pro FHA the government's giving away a lot of money. The newsubprime maybe 3%, 3.5% down. These people the day they close escrow, they'reupside down, they can't sell their house, right. I mean, they're there. They'renegative equity at that point. By but So that's really my business model.Because worst-case scenario, I'm stuck with a couple of rentals that I probablydon't want, but I can easily I can, my portfolio can carry them. So that's whyI like that business model. If you're in Orange County, or if you're maybe inthe middle of higher-end, then yeah, you can see that. But every single housethat I've bought, I expected it to sell for X when I bought it. When I listedit, I listed it for X plus 10%. And the offers are X plus 10%, plus another10%. On top of that, so we're making a lot of upside bonus money in the tune of10 to 20%. I have one in Banning of all places, probably the last affordableBastian in Southern California, I bought, I think I'd sell for $220k or anescrow for $237k. It's, it's pending an agent go and show it and said, Hey, we'regonna just slide this in, just in case it falls out. $257k, which is crazy,right? That's crazy. And my $220k price I'm still making, I bought, I think I'dmake probably I don't like to do less than, like, it has to have a minimum of$25k grand, I'm not going to do the deal. That's, that's my bottom line number.So that was probably like $30k, $35k, and now, you know, we're, we're $17kgrand more on the first offer. And then you know, $30k, whatever, $37k grandmore on the second offer. So, and I've been seeing that pretty consistently,most deals that I've been selling, even on my FHA entry-level, they're $30k,well, $40k, $40k to $100k grand profit per deal. Oh, you've got to try to dolike 10. And I try to keep 10 in the works at all times. And I'm not flipping10 a month, I'm not making that statement, I do 10 a month. Don't ever believethat. I try to do 10 at all times doesn't always work out sometimes.

 

SeanO'Toole  41:53

You know, everybody who's listened to me alittle bit will hear me use the grocery analogy, right? Like, the way a grocerystore makes money to very small margins. But they're turning their inventory alot of year. And I alluded to that earlier. How long does it What's youraverage time from the time you buy it? Put the money out to the time you're outof the deal?

 

AaronMazzrillo  42:14

165 days.

 

SeanO'Toole  42:16

165 days.

 

AaronMazzrillo  42:18

From close to close. So, I have a contractor, Ionly use one contractor it's two brothers. They're both licensed. If I broughtit into the contract, I could probably current turn deals faster. Because Ihave my my contractor also doing I do other stuff other than just flip houses.So, I have the I don't know if you've seen my development project downtown. So,this is a $400,000 rehab so I'm do i do other things besides just the turn andburn on the FHA houses, but I like relationships. I'm this faithful as a dog,my cat is 21 years old, okay? been married for like 22 years. I just I findwhat I like I my wife ran out of town one time. And it was like at the time waslike, like, not vegetarian, but you know, not eating a lot of red meat. I atetofu hotdogs every day for 30 days straight. Like, I find my thing. And I juststick with it. Which is good. Like, if you do visit with me, I can probably getcheaper money. But I have my guy and he's a great guy. And I just, I don't careat all 8, 7, 3. But I got my guy. He's 10%, I love that guy. I'm just going tocall him because he makes it easy, right? So, I just I have my things that Ilike, and I stick with him. So yeah, I can probably get them turned faster. ButI have my guy and he does a great job for me. So, I just stick with him.

 

SeanO'Toole  43:36

It sounds like this happened for you naturallybecause it's your personality. Right? But like one of the things that we seewhen we look at our customers who are really successful, right? Is they put inplace systems and repeatable processes sounds like that's just a natural thingfor you. Is that something you focus on at all? Or you know, is that somethingyou build into your businesses?

 

AaronMazzrillo  43:59

So, the conversation I had with my, I have anacquisitions guy that works from a conversation I had with him right beforethis call is, I said look, we're getting these text messages back, right?There's going to be the these you're going to see this this consistentresponses. I don't know how many there are because we haven't quite figuredthat out yet. But there's going to be a consistency in in this response everyonce in a while you get the off off you know, color one or whatever butgenerally they're going to be you know, one of so many things. So, we we needto build out like a tree, right? So if we get this response then the nextresponse from us should be this and then the next response would be so we canbuild out this this reply tree and then we can create this marketing thatessentially takes us out of the game and it's an automated so off like yourreplay that guessing game 20 questions, right. So, it's was it that no, it mustbe this or that right? So yeah, when I was in the window business, we had a lotof different materials. So, there was aluminum, there was vinyl. And then therewas different colors. And then there were different types of glass. Well, my,my friend started the business and we were just wholesalers, we were sellingother manufacturers stuff. And then they brought me in a sales. So, we didn'thave anything, we didn't have any forms or anything like that. And so maybe youcall me you want to order like bronze aluminum windows. So, I'd have to createa new sheet and put in like the all the heat gain and the sound things and fillall that out. And then you know, you call up you on vinyl windows, and I dothat, you know, and then I ship those bits out now, you know, I was like, man,why did I keep recreating this stuff? Why don't I just have a form that saysall the information for bronze aluminum windows with low E glass and whitealuminum windows with low E glass? So yeah, I've always been the mcdonaldizationof things. It's always been at my core. And, and not because I'm extremelyefficient. It's because I'm extremely lazy. I don't want to do this stuff,right. So, I just I want to make it super easy. Like, you know, mediumchocolate shake, there's a button, you just push and put the cover. And youknow, as long as you got the right size cup, you're good to go. That's the wayyour business should be run like oh, somebody comes in. And, you know, here'sthe houses there. And we know, I say like I from a cold call, I know nothingabout the house. From the time the phone rings, I can have you an offer within10 minutes. Because of the system that I've created. I have a spreadsheet,totally dialed in every, all I have to do is change the square foot, I changedthe square foot, so whatever Redfin or the MLS says, based on the size of thehouse, the age and location what that rehab budget might be and have doneenough house, I'm usually pretty good at guessing that I never go look at anyof these houses. And then I will add in like a rehab premium, like, oh, itneeds a new roof, that's going to be an extra eight or 10 grand as a swimmingpool. That's actually a grand. So, I have just so those three numbers, if Ichange those, that's all I need to do. And I can have an offer, it tells mewhat I should pay, like the most I should pay. So yeah, I like to systematizethings only so that I don't have to work. And then it allows me to have waymore time to go do the things that I mean, I truly enjoy and love real estate,if you stop down the street, and start talking about real estate, my wife andgo crazy, like we shut up already stopped. You know, I can't stop. But I alsolike to do other things, you know. And so, if I can focus in and get this alldialed in, and then go on with the rest of my day. That's that's great for me.

 

AaronNorris  47:24

You said you have it as an assistant. And Iknow your sales guy. How about your guys doing your rehabs? Do you have atechnology stack to sort of keep on top of that? Or do you let them handle thaton their own?

 

AaronMazzrillo  47:36

So, my system does that. You know, I'm not outpicking collars and you know, taking Facebook photos or any of that. And onsome walls today, if I have to go for a walkthrough because I'm meeting anarchitect, or there's a design change in the plans, then I will go and, youknow, opportunity presents itself. I'll take some photos, post, hey here's somestuff that I'm doing. But yeah, we we manage it on slack. So, every channel isa property. And it's great because you can go to that one specific channel andget all the data, the entire history of that rehab. So, the bids go in all, thephotos go in, updates go in my acquisition guy has to go. We try to get him outthere once a week to walk all the jobs. My assistant will at the beginningevery week. She's like, what did you get done last week? And what do you expectto get done this week? Right? So, then we can check. Well, all right, whathappened here? Why did you not get the windows done? Or Oh, they forgot toorder them or whatnot. Right? We can kind of keep track of that. So yeah,everything's done on slack. And we I never go to the jobs I try not to I wantto see him. Usually, when they're done, I'll go out to do my agents visualinspection because I am a broker and I do sell my own listings, because it'sextremely easy. It's one trip to the house to the agents visual walkthrough,and 20 to 30 minutes to do all the disclosures and you know, agents, you payingpeople, two and a half 3% for that. That's you're giving away way too muchmoney. It's so easy to do this.

 

AaronNorris  48:56

It's a good thing. You're after Patrick Ferryjust covered that same sentiment, so.

 

AaronMazzrillo  49:02

Yeah, yeah, there's no reason to be listingyour in house flips with an agent not gonna happen. So, I kind of want to talkabout data, I mean, data driven, and it was such a data-driven society nowwrite a word like. So, here's a great thing that I was thinking last night. Ipull on this too, too. I have the Starbucks app on my phone. Right? I don'tknow if Target has an app. But you know, I have Google Maps on my phone. I haveFacebook on my phone. Right? So, I pull in to the Starbucks parking lot. AndI'm thinking, Man, they know where I am. Right? Somebody's tracking this andsoftware is tracking this. Why am I not getting hit with a coupon? Hey, Aaron.We got a Venti Soy Latte waiting for you. Five bucks instead of 550. Come getit right now. Yeah, I'll take that and walk in and grab my starter. Right and thenI'm walking her through the store and they know Oh, you're at you're at Targetbecause you buy, I don't know what I don't really ever go to Target, but I wasthere for a toothbrush last night which... Generally I don't go there, but Ifyou do go there a lot, you know, like maybe you buy cat litter. Hey, you know,you must be here for calorie cat litter. Hey, we got cat toys on special buy,you know, buy cat litter get, you know, 50% you know, so I think you can take,I see the world going that direction where I don't know why they're not doingthat already and everybody blindly signs use's agreement so they could justslide in and like hey, you give us the right to market to you when you're inthe park a lot of stores that are on board with us. You can get to that pointwith data. Right? So I'm sure you've been online, none business at some pointtoday. Each of you right we've each done something right had to check somereturn or whatever bought something or check the news on the on the on theelection. You're essentially leaving behind a digital thumbprint. Right. So youonline is tracked, everything is tracked everything. I mean, I like to sayFacebook knows when you take a dump, right? Because that's that's the 10 or 15minutes a day where suddenly you stopped moving, right? And you're scrolling,scrolling, scrolling, scrolling. So they know, right? So they might hit you atthat time. Say hey, you like to buy you know, Marshall toilet paper. Here's aguy Oh, man, I am fresh out of it. Hit that button, buy that right there. Butthey know everything about you? Well.

 

SeanO'Toole  51:08

You're here a little too long. Here's asoftener product.

 

AaronMazzrillo  51:14

Everything going okay there?  So, but you can essentially do the same thingwith your with your, I like to call them suspects. They're not as theirprospect when they call it contact me. Until then their suspect. Are theyseller? I don't know. Right. So we have suspects prospects, right? So they'resuspect, you can do that with your suspect. So, you know, we're hitting them onFacebook, right? And there's, there's, you can do redirection where they go tosome other site, and, you know, your ad starts showing up there. There's justways to track these people and find them. So my brother's, he's a softwaredeveloper, he's worked for the government. And so I reached out to him, it'slike, you need to create a platform where, you know, people take all theseleads that they've skipped traced, they can't get a good email or a phonenumber for them. And then you can start giving back, hey, you know, here'stheir Instagram account, here's the Facebook profile, here's, you know, andpeople pay good money for that. I would I mean, I pay $5, $10 dollars a leadfor that kind of data.

 

SeanO'Toole  52:13

It's interesting, you know, we had, we offeredthe Facebook profiles for a while, and there was a company that specialized inthat. And they got into a pretty big cease and desist potential lawsuit, etc.So...

 

AaronMazzrillo  52:28

From Zuckerberg?

 

Sean O'Toole  52:29

Yeah, exactly. So, um, you know, the, you know,and then, you know, like, Facebook's fairly easy to do the matching on, butthey're pretty aggressive about it, right? And we're seeing more laws likeCCPA, and the rest. So, you know, for us, because we're in that business oflike, helping you say, Okay, I'm looking for these types of owners, and I wantto create a custom audience so that I can I can market to them online, like,that's a feature we have. But there's definitely a fine line, right, with CCPA.California just voted for CPRA, which kind of takes that up, you know, add somemore requirements for privacy for companies like ours, you know, it requires,you know, we spent with CCPA, but I think the industry spent something like $50billion to get ready for the CCPA and do not sell information. And I think mostfolks, the problem is, is everybody says they care about privacy. But peoplelike you kind of said, they just click through on the agreements...

 

AaronMazzrillo  53:39

And they blindly agree, are you sure? Whatever,whatever...

 

SeanO'Toole  53:41

Everybody their information. Right? And, youknow, and so they, they don't take any actions to show they actually care abouttheir privacy. It's like everybody, if you ask people, you know, is your birthdate,private data? You go, yeah, it's private data. But then right on Facebook,people are saying, hey, happy birthday, right? There's your birth date. Andthere's how old you are right? Like so. And, what's crazy about like that is sowe get these laws that say, Okay, if you're a legitimate US business, you can'tuse the that birthday that this person posted online for the world. But nothingstopped in North Korea or any company in any other country from using it andselling their goods online, including you online or on the dark web, right?Because California, the US doesn't have control over those companies. And it'sthe internet and we've decided we're not going to censor the internet. So,nothing stops those companies from selling it to you here and there's nothingthose laws can do. So, they're kind of just anti. It's a tough problem. But sofar, the privacy laws that we're seeing are just anti US company anti USbusiness laws because they don't stop when you posted your stuff online, it'sonline, it's public. And so anyways, it's a I totally agree with you and butit's it's not. We have hundreds of thousands of dollars invested into ourprivacy compliance into our Do Not Call compliance. We have large systems wehave dedicated people that if you say do not sell my information, we're gonnago research it and we're gonna make sure we don't sell it and we do complianceand there's audits and like, people don't understand like, Oh, yeah, I'm justgonna go skip trace and like, half the people selling this stuff aren'tcompliant with the law, and it's really hard.

 

AaronMazzrillo  55:41

I, the one that provides me I asked him, do youhave the DNC that do not call? No, we don't offer that. Like, wait a minute,you're selling all this data? If you have no idea what I'm gonna do with it,and then you don't even filter out the litigators like the people that are onthe list you they're like no, we don't do that. That's on you. Like I don'tknow.

 

SeanO'Toole  56:00

We don't we don't offer Do not call right. Andit's but here's here's the thing, right? So you say do we offer Do not call? Ican't offer Do not call unless you pay for it. So it's actually illegal for meto provide you do not call unless you are Do not call subscriber as a marketer.And what you have to do you get one area code for free. But nobody lives byarea code, people move into your area and they bring their phone with them fromall over the US. Do you know what your cost Aaron is to be compliant with Donot call?

 

AaronNorris  56:34

Oh,

 

SeanO'Toole  56:35

You have to do it. Even if I provide it to forme to legally provide it to you have to do it $16,000 a year?

 

AaronMazzrillo  56:44

Wow.

 

SeanO'Toole  56:44

Is what you would have to pay to do it legally.

 

AaronNorris  56:48

Wow.

 

SeanO'Toole  56:50

So it's you know, it's a fact, I mean, we couldspend the whole rest of the conversation on this but so for me to legallyprovide you do not call you have to be a Do not call subscriber and you have topay the fee. $16,000 a year.

 

AaronNorris  57:04

Oh.

 

SeanO'Toole  57:05

Sorry. I didn't mean to blow your mind. Thisis, we could talk about this...

 

AaronMazzrillo  57:08

It's just amazing that they put theserestrictions on you, then they make it very difficult to meet those restrictions.It's like, we have speed limits, but also we sell our Ferrari's. Like wait,what? Yeah. Is Ferrari's if you want a governor on it, so you're within thespeed limit? You're gonna have to pay 16 grand? Wait a minute, that doesn'tmake any sense.

 

AaronNorris  57:27

We're about up on time, unfortunately. What areyou what are you excited about for 2021? What are you gonna be focused on?

 

AaronMazzrillo  57:33

A man? Well, I'm trying to buy a building, youknow, if you're in real estate, and you're not seriously looking at these SBAloans, I don't know, seems like you're missing a big opportunity there. Like,it's two loans. First and a second. The first is like, three and three quarterpercent. The second like two and a half percent 25 year fixed, fully amortized.So if you're running a real estate office, and you're renting space, and you'renot considering buying, you only have to occupy 51% of the space, if you're notconsidering buying your own building, you're missing out. So that's that's whatI've been focused on. I've spent a lot of time door-knocking building owners.As weird as that sounds, I've been doing that. So yeah, I've looked at acouple, one in downtown Riverside, another one over here, near the free 60freeway. So I'm trying to find some legit office space to move my business intoand capture one of those 25. And I'm not buying the office space so much as I'mtrying to get a million dollars at two and a two and a half or two and aquarter percent for 25 years. I mean, it's a money play, right? Because thegovernment's I don't know how many trillions of dollars, they're printing andjust giving away. And I recently heard, like, these loans, anything under 50grand that they gave out, they're gonna forgive. I don't know if that's true ornot, but I'm so glad I got some of that money. Yeah, they're gonna give itaway. And that has to cause some inflationary reaction to the market to the tothe dollar, right. So if I can grab a seven figures at two and a quarterpercent and inflation is three, four or 5% a year, I'm way ahead of the game.So I'm focused on buying a building and doing more more apartments I justhired, hired an architect to do I own a small building, I'm going to knock downand build a well I don't know they said 11 units, but I think it's too many.We'll probably go like eight. So and then looking for more of thoseopportunities. I got another one that I'm looking at a little bit further eastin the state of California, which is further east of my location. That's on themarket. That looks like a good play as well. So yeah.

 

AaronNorris  59:43

Mentone? Blyth?

 

AaronMazzrillo  59:45

Not that far east.

 

SeanO'Toole  59:48

I'm shop, I'm shopping as well right now forsame thing business for expansion for us in other areas. So yeah. And for mypersonal portfolio. Yeah.

 

AaronMazzrillo  59:58

Look, I mean, they're giving away money. Whynot take it? So yeah, so it's all about capturing low-cost money while they'regiving away because, you know, we're in a time where they're giving all themoney away, and nobody's taking it. But they all like, man, I can't wait to getback to 2009 number of prices on houses because they're giving away houses.It's like, well, the opportunities here, but you're looking at the wrong thing.You looking at $300,000 houses expecting them to crash for I don't know whatreason. So they can go back to 2009 prices, you can take advantage of somethingthat's not going to happen again, when the opportunity is not a house play. Nowit's a money play. So you should be focused on like, how can I capture moremoney, right? So I have a friend who's like, I haven't written it off for lessthan $10 million in like 18 months, and he's buying big apartment buildings.And the rates on those just keep getting lower and lower. And he's like, man,these things just keep getting better and better. So that's all money playsright now. Grab the money.

 

SeanO'Toole  1:00:50

Awesome. This was fun.

 

AaronNorris  1:00:52

It was fun. And you have to check out Aaron on Facebookand Instagram. I will definitely post my favorites when you call out lazyprofessionals. In quotes, if you're listening to this, in quotes, where youtake snapshots of ridiculous things, particularly that agents do that drive youbonkers. And, I laugh I'm on the other end laughing hysterically.

 

SeanO'Toole  1:01:13

Yeah, I think if you're gonna follow Aaron, onFacebook, it is a great resource for investors. But you've got to be okay withnot politically correct all the time. Right? Is that a fair statement?

 

AaronMazzrillo  1:01:26

I think I actually think I'm like, havesomething wrong with me. Like this? Yeah. There's like some people like youhave no filter. I'm like, I don't even understand that. Like, I just thinklike, maybe genetically, I have something that's slightly off or my, you know,I look at everything as entertainment. And if you can't laugh at it, then whydeal with it? Right? So.

 

SeanO'Toole  1:01:48

I will say, though, I'm surprised, right?Because I think you've offend, you say things that I would think maybe peoplewould take offense of on both sides. And, but you do it in such a way that Idon't see a lot of blowback. So like, I think people realize you're saying itwith a smile, even though, you know it is... So anyways, it's a fun follow. Ifyou want followers, I assume you want followers?

 

AaronMazzrillo  1:02:13

Why not? That can come or go I have this app onmy on Facebook that tells you who who's like removed you from their account.Every day, it's like this guy's blocked you, blocked. I'm like, I don't knowwhy I wasn't trying to be mean. I'm just having a good time over here.

 

AaronNorris  1:02:27

Hey, it's my holiday card do you have to send?

 

SeanO'Toole  1:02:31

Where do they find? Where do people follow you?Where can they learn more about you?

 

AaronMazzrillo  1:02:35

So I mean, there's only one Aaron Mazzrillo inthe world very uncommon name. So that's me on on Facebook, and I'm Aaron theHouse Buyer on Instagram. So that's probably that's the only social mediaaccounts I have. I like to TikTok about man and it's just the the garbage pitof humanity. I found no value in that at all. It was horrid. Yeah, if I had mydaughter's five, but if she were older, I would just that I would never let herhave that on her phone. That is just, it's complete trash. So yeah, not onTikTok. Not gonna be there. But Instagram. I like, Instagrams, It's really goodfor businesses, too.

 

SeanO'Toole  1:03:09

Aaron has no strong opinions.

 

AaronNorris  1:03:13

I don't know. All right. Well, thanks forjoining us today. This has been awesome.

 

AaronMazzrillo  1:03:16

Hey, my pleasure. You guys, and hopefully I getup there we can fish the Truckee one day, so.

 

SeanO'Toole  1:03:21

Come up anytime I have space for you. And theTruckee River is just a couple blocks away and there's lots of fishing.

 

AaronMazzrillo  1:03:27

You're killing me. You're killing me.

 

SeanO'Toole  1:03:28

I know. You're welcome. Anytime really soon.

 

AaronMazzrillo  1:03:29

I love your app.  Thank you so much. I make so much money offevery year. We use it constantly. So I appreciate you for putting that outthere. It's like extremely valuable to my business. So.  Awesome. Thank you, Aaron. Hey, have a greatday, guys.

 

AaronNorris  1:03:43

All right, bye. Thank you for listening to theData Driven Real Estate Podcast, you can find show notes and links to some ofthe resources mentioned in the show at datadrivenrealestate.com. Click thatjoin the community, and you'll be forwarded to the PropertyRadar communitywhere you can ask questions about the current show and even see upcoming guestsand ask questions there. We'd love to engage with you in the community. Socheck it out. Please don't forget to like, favorite, subscribe and share on yourfavorite platform where you're listening to the show. It helps us out a greatdeal. Thanks for listening, and we'll see you next week.

Written by:
Aaron Norris
Written on:
November 5, 2020