Aileen (00:01):

Thank you, everyone for joining today’s episode of the, How Did They Do It Real Estate podcast. I’m your host, Aileen Prak. And today our guest is Chris Salerno. Chris is the founder and managing partner of QC capital well respected multifamily investing company. He has an extreme passion for real estate and by the time he was 24, he successfully transacted more than $40 million in real estate. And hopefully the number one real estate team in the Carolinas to produce more than the $140 million in annual sales, he has named Charlotte’s 30, under 30 elite, 50 and nominated for Forbes 30 under 30. Chris is also the founder and host of the mindful multifamily podcast. And so grateful to have you here today, Chris, how are you doing?

Chris (00:40):

I’m doing amazing. It’s a beautiful day in Charlotte. Very excited to be here and add value to everybody. Thank you for having me.

Aileen (00:47):

Thank you so much. So I would love if you can share a little bit more about your background and how did you get started in real estate?

Chris (00:53):

Yeah, very much so. So I got started in real estate. I’ve really grew up in the real estate industry about six years ago. I got myself into the residential real estate industry. So I was broker [Inaudible] as a broker here in Charlotte, residential real estate. Very quickly. I grew a small, very small company. I didn’t merge that with the number one company in the Carolinas for Keller Williams. At that time, when I did the merger, I was, I was always intrigued with business and I was reading a lot of business books and educating myself on it. And, and I found a lot of cracks in that business. So I, I really kind of fell into their operational roles or lead agent and help them really corporate systems and, and put those to work. And when I did that, I was able to make them 46% profitable in one year, compared to the three years of being stagnant with no growth at all.

Chris (01:43):

And after that, I felt like I hit a ceiling. I was networking with very large owners in the care and the whole United States actually have a large broker teams. And once I felt like I hit a ceiling, I went back to a game. We played when we were younger, it’s called monopoly. And I realized that you didn’t broke a real estate in that game, monopoly. I realized you had to own the real estate and that’s how you built wealth. So I told myself I’m doing it all wrong. So I went back to the Oh eight market and I started doing some research and I found that the multi-family market was the strongest and it recovered the quickest. And in 2011 and 12, that’s when industrial started to boom. And I said, multi-family the market I’m going to focus on heavily. This is the market I’m going to become an expert in.

Chris (02:26):

And so that’s when I started scaling and started educating myself in the multi-family industry, came across a great coach and mentor to help project the business to where it’s at today with his knowledge and was able to grow it substantially. So very excited about that and very excited you know, to, to grow with all of our partners investors that invest alongside of us and very excited to see what 2021 has to offer. Hopefully it’s for a lot of people its better than 2020, but I know it’s going to be great for our partners and us. So,

Aileen (03:00):

So Chris, you Transacted so much and you completed and were so successful before you were 24. How did you find that that drive to get to where you are today?

Chris (03:09):

Yeah, so I was actually talking to an investor who has a son who was around 20 right now. And he was so shocked on what I’ve done too. And, and very similar question. The, the big thing is I grew up at a very young age. You rarely, I rarely find them today, but there’s people out there that have old souls and I would consider myself as one of those old souls. My father is 80 years old. So I grew up very, very quickly with older gentlemen around me and doing that I never found the going out, having a good time like these young people do. Now, my having a good time as me working, closing deals, growing the company, I find that is my basically that’s what I’m addicted to compared to just going out and having a good time and like these all, all these other people.

Chris (04:04):

So very quickly early on, I was so intrigued with it. And I went back to one thing to a, is that a, whether you like it or not money buys everything. It does. Money buys the house. We live in money, buys the clothes. We have money, money, and money pays for the child’s. We have, I have a new board. He went to the NICU for three weeks when he first came out a year ago. And we got the bill, the bill is over $250,000. So money bought dad’s so money buys everything. And I realized that early on. So I started working at 12 years old. I remember my parents dropped me off at a local restaurant. I would wash the dishes. They would pay me under the table anywhere from 20 to $40 a night. And they would pick me up around 11 or so. They picked me up around 12, 1230 at night. We would close around 1130 and they’d take me home. And I would do that on my school days because I knew money bought everything. And early on, I started working two jobs, and then I started educating myself about, I need to invest. I need to have my money make money for me. And that’s when I started educating myself on real estate investing, getting into real estate and then growing it from there. So that’s a little background about myself.

Aileen (05:17):

Oh, that’s very, it’s a really incredible story, Chris, thank you for sharing that. Yeah, very much so. And so when you started shifting to multi-family, how did do you get into it and what were some of the challenges that you faced?

Chris (05:32):

Yeah, and I had this talk earlier today is I educated myself. I listen to podcasts like yours like myself I’ve read books. I networked with people. I gained the knowledge. Facebook is free and we can join Facebook groups, join Facebook groups, learn, read, but, but it’s a waste of time if you’re going to doing, if you’re going to go in there and join all these Facebook groups, they just read everything and gain the knowledge you can gain all the knowledge you want. You can become the next Mark Zuckerberg. You can become the next bill Gates if you want, by gaining all this knowledge. But if you do not take action with that knowledge, you’re not going to get anywhere. So the key is to take action with that knowledge. So go out there, network, join these Facebook groups, and listen to podcasts like yours read books. And once you gain that knowledge, start taking action and using that. And that’s how, that’s how you’re going to grow. That’s how, that’s, how it’s going to project.

Aileen (06:27):

So for someone who’s getting started in real estate and just, you know, just in the beginning stages and they want to start taking action, you know, what kind of, what are the first steps that you think besides once you have yet education, what are some of the actions that they need to take afterwards in order to get their feet wet? You know, because some actions are a little bit more we’ll project a little bit further than some of the other actions.

Chris (06:50):

Yeah. And those, those actions, that project you a little further, they also come in larger risk. So you have to calculate those risks very clearly. So after you gain the knowledge, I say the biggest thing is, is to take that action. It depends on what you want to do. You know, if it’s multi-family, if it’s smaller multifamily, but the number one thing is to start to get out there and look at deals, talk to brokers, build relationships with investors, have investors, you know understand what you are doing, that you are out there. You’re, you’re locating deals. You’re finding deals in your raising capital to, to close these deals. And so after you, you get out there and start to do that. I’m a heavy believer in laws of attraction. When you put your mind to something, you will get it eventually. And when you start getting out there and doing that, eventually you’re going to find the deals. You’re going to have the investors that are going to want to partner with you and alongside of you. And then you’re going to be able to grow a reputable company depending on if that’s what you want to do or not. Some people don’t. But that’s my take and thought on.

Aileen (07:49):

Thank you. And so can you talk a little bit about the first deal that you got into and then what are some of the challenges that you faced?

Chris (07:57):

Yeah, so our first deal is a five O six C that we got into, I actually found the deal by touring another property, which was a 91 units adjacent to it. Funny thing is, is I’m best friends with that seller who sold that 91 units we’re chatting today. And I got to give him a call later today, but I’m best friends with them. And so he did not accept our bid because we were new at the time. And so I when I was touring that property I was asking the broker, hey, that, that property adjacent to it, is it for sale too? And he said, no, but I can ask. And he a different seller. He asked the seller’s willing to sell it. I tried to do a combination of both, but the, because we were newer at the time my best friend and I always get give him a hard time for it, but he didn’t accept our offer.

Chris (08:45):

But a week later I went back and asked about that previous property and they said, yes, it’s still available. The sellers didn’t do it. So I said, I want it. And so during that property, we had some great during the property, we had some big bedbugs during due diligence. We had a FA a grease fire that damaged a unit. So we had to negotiate with the insurance on that. We also had to negotiate with the insurance on the roofs. We caught them in a lie. So we had some fun times during that due diligence when we were closing that property, but we were able to get it closed and able to get it on get the units renovated and increase the rent. And it’s performing very, very well.

Aileen (09:23):

So you mentioned that the first property that you did was the five O six C. Why did you decide to go the five O six C route instead of the five O six B? And what were just some of the mind-sets behind that?

Chris (09:35):

Yeah, so when it comes to five O six B, I think that or a five or succeed, and I’m actually hosting a panel about that in January of five O six, B five O six B and all that five O six C you can market the property is only open to accredited investors. And I knew at that time just getting started I started to build a good following on social media. So I started posting it on social media heavily to build that, that, that type of following. So that’s why we did a five O six C a is to build that following of an accredited investors only.

Aileen (10:07):

That makes sense. And so as starting off as newer investors how did how did you get the seller to agree to sell it to you guys? Did you guys have another partners who had more experience, or how did you guys go about doing that?

Chris (10:24):

It’s all about having partners. And so we had partners that had a, that have more experience and had a track record, and we leveraged our coach and mentor as well to grow to, to really ultimately get it. The partners were on the seller call with us, which was helpful tremendously. And that helped big time.

Aileen (10:41):

I see. That makes sense. And so what are some of the different ways that have helped build your confidence when you’re talking to the brokers and the sellers and lenders?

Chris (10:52):

Yeah. Putting that knowledge, I’ve gained to work putting that knowledge and taking action with that knowledge of what I’ve gained by networking with other operators, what they’ve gone through, what issues they’ve ran through that helps tremendously on, on having that confidence in speaking to future brokers about other deals.

Aileen (11:09):

And then, so how are you also able to leverage some of your strengths to set yourself apart from your peers?

Chris (11:16):

Yeah, so we always try to think outside the box, we’re always perfecting our underwriting. We’re always perfecting our company. We, we always ask for advice. If an investor says, no, they’re not interested in investing. We always like to hear why they’re not interested. Is that the deal, you know, what, what is it? Is it something that we can’t control? You know so we always like to, to get that feedback, to make sure that we’re always projecting ourselves and making sure that we can grow as a company and, and be stronger as we grow. So,

Aileen (11:48):

And after the first deal that you guys did for the five O six C what did you do after that?

Chris (11:54):

Yeah, so we had two five O six Bs and then after that, we only do five O six C’s now. But we had two, five O six bees that were, that were great deals in the Greenville, South Carolina area that we were very excited about.

Aileen (12:09):

And so, are you just primarily invested in Greenville, South Carolina? Are you also another Morgan Gates?

Chris (12:16):

All of the Carolina. So I live in Charlotte. I’ve been here going on 14 years. We focus very heavily on the Carolina market, so it’s all of the Carolinas.

Aileen (12:25):

I see. Thank you. And then so do you have any other strategies when you’re purchasing and looking for the different properties and especially during this COVID time, has your strategy change?

Chris (12:39):

Definitely it has trained. It changed when we’re looking at properties. We really look at the collections and see how collections are performing. I’ve been hearing a lot, people are worried about occupancy will, occupancy’s irrelevant to me. If the occupancy is high, that’s great, but if they’re not paying it doesn’t matter. So collections, we’re watching extremely closely on all the assets that we’re looking at. We’re also underwriting conservatively due to COVID and, and we don’t know if there’s going to, you know, I know there are vaccines that are coming out and Charlotte’s supposed to get one next week, a vaccine. But you know, with that coming out, we don’t know for sure how well it’s going to do and all that. So we always like to underwrite conservatively low, higher on expenses, lower on rent growth, just to be on the safe side.

Aileen (13:25):

And so also with the, with the tenant Bates have you had any issues with any of the tenants and the occupancy rates, especially during COVID right now and what has been some of the strategies that you implemented?

Chris (13:38):

Yeah, I think you know, if I said you know, when it comes to tenants, and if I said, no, everything was great, I’d be lying. And when some operators say that I kind of, I push them and press them on it because right when COVID hit, no one knew it was coming. It, it really hit us blind-sided, like with a right hook knocked us down on our knees. And so, right when that happened, I think a lot of apartment owners did see some collections dip. But very quickly, we, I know we work very closely with our property managers to get payment plans, set up, to really work with the tenants and to get that number back up. And we’re very excited that that number is up and is hovering around 90% for all properties. So,

Aileen (14:21):

And how have your communications been with the investors so far? Has it been more often or how has that strategy change?

Chris (14:31):

Yeah, so when it comes to communication with investors, we update investors on a monthly basis. When COVID came, we did start to update them a little more on, you know, how things are going and, and how the, how the properties are performing. But we always update on a monthly basis, keeping them updated on the process the everything renovations what’s going on. So,

Aileen (14:53):

And so Chris, what’s next for you guys? What are you guys looking to do and what are you guys looking to accomplish?

Chris (14:59):

Yeah, so after we close a lion’s gate, which we have a deal out in Greenville, South Carolina is a five O six C so it’s only open to accredited investors. So after we closed that one, we’re really going to sit down and make sure that one is performing to our strategy and really grow the company for 2021 with some unique marketing strategies and business plans, which we’re very excited for.

Aileen (15:22):

When are you guys looking to close that property?

Chris (15:25):

That will be December 18th of 2020, so a week before Christmas. So we’re excited early Christmas gift. I know. Very, yes, very much so.

Aileen (15:35):

And so with that property there, have you guys had any challenges with the lenders or anything like that? Are they?

Chris (15:43):

He is actually backed up. So we are we had to push closing beyond contract day, which was not fun, but it’s, you know, Freddy was backed up and they said we can close it, but we just needed a little more time. So,

Aileen (15:56):

And so has it been a little bit more what the investor’s relations as well, has it been a little bit more difficult or have you found investors still open to investing, especially during this time where they’ve been a little bit more cautious with everything that’s been going on?

Chris (16:11):

Yeah, so I, it, it determines you know, the type of investor and who the investor is. You know, there’s always going to be cautious investors who are wanting to, you know, want to take that back seat to watch, to see where things play out. You’re, you’re going to have those deep pocket investors that still, you know, and I have their type of mind-set is that, you know, no matter what’s going on in the market, you still have to invest, and you still have to grow your wealth and things like that. And, and back in Oh eight to 2010, the large companies that we use today, like Uber, a Lyft, Uber, or Uber, Lyft, Airbnb, all of those were created during that crash. So you really have to just take advantage of it. And, and so we’re seeing a mixture of 50, 50 some sitting on the side, some are actually jumping in head on.

Aileen (16:53):

Got it. And so, Chris, how has real estate investing impacted your life so far?

Chris (16:58):

Yeah, real estate investing. I love it. I mean, I wouldn’t do anything else. It’s been tremendous and it’s been amazing and we’re very excited about the growth that that real estate has put into our family and our life and what we’re doing with it, and just helping educate other people. That’s the biggest thing is letting them know the tax benefits that these offer and the growth that happens when you invest into real estate is tremendous.

Aileen (17:23):

And so what is one thing that, you know now about real estate that you wish you knew when you first started?

Chris (17:29):

One thing I know now and this is really when I was born, I wish I knew this is that life’s a team effort. No matter what, you know, you, you need to learn how to get along and make it a win-win situation. You can’t go throughout life trying to do it all on your own. So be open to partnerships, open to, you know, negotiations and making it a win-win situation. So everyone can grow at once.

Aileen (17:56):

So talking about partnerships how do you determine who the right partners are for you?

Chris (18:02):

Yeah, so that’s a, you know, determining on, you know, JVs or co-owners or even investors. We have extensive conversations and, and I asked an extensive amount of questions. I don’t have a list. I, I go off of the conversations and make it flow better. I find that you actually kind of can get more information out of someone when you just have it flow instead of nailing them. And they think they’re in an interview. So we, we, I asked extensive amount of questions and to build that relationship stronger. And that’s how I really determined the partners.

Aileen (18:39):

And so what is one thing that sets the successful people part in real estate, investing,

Chris (18:43):

Taking that knowledge and putting it putting it to action. That’s, that’s the biggest thing is taking that knowledge, they’re gaining and putting into action and going out there and doing it. That’s what really separates them.

Aileen (18:54):

And so, Chris, can you give some of the listeners advice if like they’re starting out from the beginning and they’re hearing a lot of no’s and they’re not getting a lot of traction, what kind of advice can you give to them? In order to keep them motivated and to keep pushing forward?

Chris (19:11):

Well, every, no you’re going to get as a yes. Do you drink Starbucks coffee?

Aileen (19:16):

Once in a while.

Chris (19:17):

Okay. I do a lot now. One thing about Starbucks, coffee, Howard Schwartz, who created the company and grew it one thing to note is that he was told 232 times, no, by all the banks, by all the investment bankers, 232 times, he got a note, the 233rd time someone said, all right, I’ll give you some money to invest. And he, they invested in what now is Starbucks, the largest coffee company in the world? I was on Mykonos Island. One time. I saw a random Starbucks in the middle of nowhere. I’m sitting I’m on this Island in Greece. And there’s a, some random Starbucks let’s go get a cup. But that’s the thing is, you know, 232 times, no, you’re going to get a note, expect the note.

Chris (20:04):

I expect notes all the time. Anytime I talk to someone I’m expecting a no. Why? Because when they say yes, I’m going to be very happy, but if I’m expecting a yes and they tell me no, I’m going to be very disappointed. So I always expect to know so it, you know, it softens the blow, you know? So when you’re getting all these no’s, just keeping your mind, there’s going to be a yes. You just got to keep pushing, keep going. You’ll get there. Don’t let anyone tell you, no, don’t let anyone stop you from reaching your goals. You can do it. A book I highly recommend called homeless to a billionaire there’s 18 principles. If you actually are listening to this and you go ahead and get it, I’ve already listened to that book four times. It is on audible. I’ll give my at the very end here and would love to book club with you. So if you actually do it we can hop on a free call and I can, we can brainstorm about that book, but that’s a book I highly recommend, and it will help you to push through all those notes.

Aileen (21:00):

Oh, thank you. That’s really great advice, Chris. And so can you share some of the tools or techniques that you’ve used in your business or your personal life that have helped you to be a little bit more efficient?

Chris (21:12):

Yeah, so time management’s huge. I’m still trying to perfect. Not, I probably won’t always perfect it, but I’m still trying to, you know, make sure time management. I mean, it’s huge. So time management is very large in personal and in business, putting everything down on the calendar and making sure you’re spending time with both your loved ones and on your business. So that’s something that that I’ve worked on tremendously to try to project everything. So I would say that right there being heavily focused on time and making sure you’re using your time properly.

Aileen (21:44):

So have you found any tips or tricks on, on being able to manage your time more effectively?

Chris (21:52):

Get a calendar? You can do a handwritten calendar or use, I use my phone as a calendar at 6:30 AM. My alarm goes off saying I need to hang out with the family. So I make sure I put everything in the calendar, so I don’t miss it sometimes I do, but I try to put everything in the calendar.

Aileen (22:11):

Has it been a little bit more difficult now with the newborn?

Chris (22:14):

I’m up with him at night? So I watch him all night and then I’m up during the day, so I sleep about three hours a night. But I run like a machine. I don’t think about it. And I just go, go, go, go, go. And I’m running as a machine. And I don’t think I’m tired reason being is if you read the book homeless to a billionaire and I have a handful of more other books that are great. But if you read that book it also talks about a Napoleon Hill of a little bit with thinking grow rich, is that if you tell yourself that you’re tired, you’re going to be tired. There’s a great documentary called beyond the secrets on Netflix. And it talks about the book, the secret in the show, the secret, which I highly recommend watching and reading those, but beyond the secret talks about very wealthy individuals that use that philosophy.

Chris (23:03):

As in your mind, if you tell yourself that you’re going to be successful, you’re tell you. So if you’re going to grow a company and build wealth for your family, you’re going to do it. And there’s a doctor on there talking about how they gave the placebo pill to people and 50 other people took the real medication and the people who had the placebo actually healed faster and better than the people who took the medication. So your mind is the most powerful thing on your body, the most powerful muscle on your body. So why not utilize it one thing real quick? I love talking about this stuff. One thing real quick, I’ll never forget. Warren buffet says is that if you can have any car in the world, what would it be? So say you say you want a, a Cadillac escalate. Okay. So with that Cadillac Escalade, if the caveat is, is that you have to keep that car for the rest of your life, you can’t trade it in and you can’t do anything. You have to keep it for the rest of your life. How would you treat that car?

Aileen (23:59):

With the most carefulness and trying to maintain it for the whole entire life.

Chris (24:05):

Correct. So why don’t you do that with your brain? You only get one brain, so why go out and pour negative information into your brain? Why go out and pour this knowledge into your brain that you’re not going to actually utilize poor, positive information in, have a positive mind-set and doing that. I promise you you’re going to live a positive life. You’re going to be successful. You’re going to knock away all those nodes and you’re going to eventually get a yes and there, and you’re going to get the deal done in close. So something about

Aileen (24:35):

No, that’s really great. I’m especially going to be using that tiredness technique and telling yourself not to be tired, because we’re just in the process of, we just had our newborn to a couple of weeks ago. Thank you. And so definitely going to use that tip and apply it to our life.

Chris (24:50):

Yeah. And it’s hard at first, but you have to just keep doing it, you know, and I don’t even think of it now. I mean, I can get one hour of sleep and I just, I don’t think of it because I’m not telling myself I’m tired. I’m just, Oh, I got to get this done. I got to go, go, and go. And it helps. And it helps when you feel good and it helps you make you feel better. So create that positive mind-set. It’s key to success.

Aileen (25:10):

Absolutely. Thank you so much for sharing.

Chris (25:12):

Yeah, for sure.

Aileen (25:13):

And so, Chris, thank you so much for sharing all your knowledge and advice today. And if our listeners wanted to find out more about you and your company, and potentially invest with you guys, where can they go?

Chris (25:23):

They can go to QC capital group.com. We do have a closed Facebook group called the mindful multifamily network. If you’d like to network with over a thousand, a thousand investors, operators, people who are pouring knowledge out, that’s the best way. Once you read that book, you can reach me@Chrisatqccapitalgroup.com and we can chat more about it.

Aileen (25:41):

Awesome. Thank you so much, Chris. Yes.

Chris (25:43):

Thank you so much for having me talk to you later. Bye.