Stace is the owner of Trust Deep, a branding agency and evergreen North properties. Stace has 20 years of investing experience and currently has four properties: a small apartment building and syndication. Stace was involved in real estate for 20 years at the same time building a career in branding in advertising. Stace got interested in the real estate business when his mother started buying single-family homes and renting them, Stace saw the profit potential and got interested in investing in the business as well. In today’s episode, Stace will share how he started in the real estate business and how he faced challenges along the way.
Stace Caseria Real Estate Background:
- Owner of Trust Deep, a branding agency and Evergreen North Properties
- 20 years of investing experience
- Currently has 4 properties, a small apartment building, & a syndication
- Based in Boston, MA
- Say hi to him at: www.trustdeepagency.com
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Best Ever Tweet:
“Mindset matters. Change your mindset. Don’t pursue solely transactional relationships.” – Stace Caseria
Ash Patel: Hello, Best Ever listeners. Welcome to the Best Real Estate Investing Advice Ever Show. I’m Ash Patel and I’m here today with our guest, Stace Caseria. Stace is joining us from Boston, Massachusetts.
Stace, how are you today?
Stace Caseria: I’m doing great, Ash. How are you?
Ash Patel: Wonderful. Thank you for joining us. Best Ever listeners, today is Skill Set Sunday, where we talk about a specific skill set that our guest has. Stace is the owner of Trust Deep, a branding agency, and Evergreen North Properties. Stace has 20 years of investing experience, he currently has four properties, a small apartment building, and a syndication. Stace before we get into your skill set, can you tell us a little bit more about your background and what you’re focused on now?
Stace Caseria: Sure. So I’ve been investing, like you said, for about 20 years. I’ve also been involved in advertising for about 20 years. So the same time that I was building my career in branding, advertising and marketing, I was also building my portfolio of properties. And my focus is right now on my business, but I’m hoping to shift that to real estate in the future, so that I’m handing off some of the duties of my job to the folks who work with me and going out looking for new investment opportunities, and hopefully being able to take a little bit more time to do that and less time behind the desk.
Ash Patel: That’s interesting. A lot of people almost do it the other way – they hand off their real estate tasks and focus on their career, but you’re looking to transition into real estate.
Stace Caseria: Absolutely. And there are things I’m trying to bring over to my real estate practice from my marketing practice. What lessons have I learned helping people build brands, retain customers, build loyalty? How can I translate that to my tenants and how I deal with them? And hopefully, instead of having small buildings in the future, someday I have large buildings, that I can look back on and say, “Yes, I’ve built this business the same way I would have helped the client build any other business.”
Ash Patel: Let’s get into that. But I would love to find out how you got into real estate.
Stace Caseria: So I had graduated college… My mother owned a restaurant at the time, and restaurant – it’s a grueling, grueling occupation, so she was trying to get out of that long hours; health was an issue. So she said, “I’m going to start buying some single-family homes and renting them.” And I saw her doing this and I saw the profit potential, and she showed me, she said, “Hey, this are what my mortgage and expenses are, this is the rent every month; you can do the math, it’s very simple, it works. And it’s not a 9-5 job. It’s not something that needs my attention all week long.”
I saw that and I said, “You know, I’d like to give this a try.” It took me a while to get fully invested in the idea… Like, your parents tell you things, like – of course, in one ear, out the other. It takes you a while to say, “This thing really could work.” So I’ve had properties for the past 20 years, but it’s only recently that I’ve been much more passionate about becoming more active in it.
Ash Patel: So a background in branding and marketing – what attributes do you take to your real estate investing?
Stace Caseria: A business doesn’t really exist unless it has customers… And I’m trying to bring the belief that our tenants are our customers and we have to treat them like we would treat any of our customers. So if I owned a shoe store or a car dealership or a restaurant even, too often I see landlords and investors treat their tenants as a necessary evil, not focusing on them as customers, not saying, “How can I provide better value for them?” When we talk about value-add, we talk about, “Oh, we’re going to put in new sinks or countertops” or, “We’re going to paint the place.” We don’t talk about necessarily adding value to somebody’s life or how to make them enjoy that property more.
So I’m trying to bring over the idea that apply customer relationship and customer service tools and processes, apply that to your investing and treat every tenant like they’re a customer. They are a paying customer, they just happen to live in a building rather than buy a product or service from you.
Ash Patel: I have to ask you, I do mostly non-residential commercial investing, but I still have some residential, and I have the same outlook as you with my commercial tenants. I treat them as partners. My residential tenants – I’m very skeptical of interacting with them, because it almost seems like every time I do, I open up a can of worms. So help me be more at ease with that. Is there a fine line where you can’t get too deep into their issues and fall victim to them pulling one over on you?
Stace Caseria: Sure. And I completely understand where you’re coming from. But let’s pretend instead of owning a building, you owned a car repair service center. You wouldn’t necessarily have to get involved into your customer’s life in order to serve them, but what you have to do is understand their need and you have to make sure that you’ve done everything you can to fix their car and get them on their way. The difference with owning real estate is that it’s somehow more personal to that person, and they’ve taken some ownership of your building because they literally live there. But you have to think of them as customers, and you have to think of them as having real needs that you can meet, without overexposing yourself or without being taken advantage of, and there is a line.
I was having a conversation with a syndicator once, and he asked me a similar question. And I tend to think of my tenants as my aunt or uncle who I would want to do well for, I want to help them. But if they asked me for the shirt off my back or something that’s going to hinder my ability to run my business properly, that’s the line. So I will be as helpful as I can, but I’m not going to give product away. I’m not going to give service away. I’m not going to let someone escape from their responsibilities. I’m going to hold them accountable. But understanding that we are partners in this, the same way any business looks at its customers and says, “We don’t exist without those customers.”
Ash Patel: What are some things that you’ve implemented, where you see a lot of other real estate investors have failed at, in terms of customer service?
Stace Caseria: A couple of things. In my business, we try to get our clients to survey their customers and there’s a couple of reasons why we do that. First of all, you get excellent intelligence, understanding where you’re doing well and where you’re doing poorly. But it shows people that you care about improving your process. So even if somebody has negative feedback, the fact that you asked for it is helpful. It will change their perception in some small way; it might change it in a large way.
So I’ve begun asking tenants, how are we doing? What things can we improve? And I don’t think that’s novel. I don’t think that’s new. I don’t think I invented that. But actually listening to people and stopping by—so I have a building here outside of Boston that I self-manage… And I try to head out there at least once a month. And I will knock on every door and see if people are home and just ask them how’s everything going? I’m hoping that they say, “Everything is awesome, thank you very much; here’s the rent.” But it doesn’t always work that way. Somebody might say, “Hey, while you’re here, can you come and take a look at something,” or, “This happened,” or, “That happened,” or, “This guy’s parking in my spot,” or whatever it might be. And I don’t necessarily want to hear those things, but I do want to fix those problems if they exist. If I don’t ask that question, the problem still exists; it’s just not going to get resolved. So this works the same – even if you have property management in place, you want your property managers to work the way that you want them to work.
So if you want your tenants treated in a certain way with a certain level of respect, or if you want hold a hard line to them – that’s the thing, you have to get your property managers to work on your behalf. So the same way, when I go in and I’ve got my agenda, the things I need to get from people – you’ve got to get your property managers doing the same thing.
Ash Patel: How do you get them to be as attentive as you are?
Stace Caseria: That’s a fantastic question. This is what we do at our agency. So a trustee—we’re a branding agency, and we help brands identify what their mission is, what their purpose is… But then the important part is translating that to employees.
Recently, we did a branding project for a restaurant outside of Boston, and their issue isn’t so much that the marketing people don’t understand the brand or the mission… It’s difficult translating that down to the kitchen staff or the wait staff. So the same way we created a manual for their employees, I would say to you if you have property management in place, you have to figure out what is important to you, the way you want things run, and not just mentioned things casually to people. You have to codify it, document it, put it on paper, give it to them, make sure they read it, quiz them on it; get them to understand that this is real, it’s not a suggestion.
And this is what I mean about translating processes or procedures over from marketing or running a business, or even working in the corporate world, translating that over to your real estate… In corporate America, we would have a procedure manual, like, standard operating procedures of how we do things. There’s nothing wrong with having that for your property manager. So they probably have a ton of landlords who they work for. And they run the gamut, from people who really care, people who don’t care, people who want this, people who want that. You have to let them know, crystal clear, “This is what I expect from you.” And putting it on paper is the way to do it, checking in with them, the progress every quarter or something like that, holding them to those things… And it’s not just the guy who owns the property management company. It has to filter down if he has people working for him. People who are knocking on doors looking for rent – it has to filter down to those people.
Ash Patel: That is great advice, because there’s so many people who complain about their property management company… But had they implemented some of these systems and quiz them and follow up, the experience could be a lot different.
Stace Caseria: Oh, yes. We can’t expect people to know what our intentions are or our expectations, unless we put those out on paper. I mean, they’re basic things like “I expect rent to be collected on the first. If there’s a problem with the plumbing, they call me.” Those are basic things. But you have to go beyond that and say, “How would another business run?” Whether this was a bakery, or a bowling alley, anything like that – how would they run? They would have a set of procedures on how to get the best work out of their employees.
The same way with a property manager or running a business – you have to say, “How do we optimize what they’re doing?” And it’s not like, “Hey, guys, please do a good job for me”, because everybody wants to do a good job. But what does that mean? You’ve got to be specific about what that means.
Ash Patel: Have there been instances where this customer service mentality has backfired on you?
Stace Caseria: Why do you ask?
Ash Patel: Because I’m still thinking of a lot of my colleagues that are residential heavy investors… And hearing this, I’m sure in their minds are thinking, “No way. I want to interact with my tenants as little as possible.” So I want to hear about how this backfired, and what advice would you give to those people that have just had so many bad experiences interacting with residential tenants? Maybe it’s a class C apartment, where there’s professional tenants that know how to game the system. I’d love to hear your thoughts on that.
Stace Caseria: Sure. So I do have a set of tenants who fit the bill here. And I have to keep reminding myself that for me, this is an investment, and at the end of the day, I leave and come home to my family, but they live in that building. So they’ve lived there far longer than I’ve owned it. So they’ve been there 20 years, maybe 18 years. And they have a feeling of entitlement or ownership to the building. And I will do most things that they request, as long as it still sits within my objective. So they’ve asked for a few things and I’m like, “Okay, fine; we need to make some improvements, renovations, that’s fine.” But when the tenants start to ask for something that makes me deviate from my plan, whether that’s the profitability or time commitment or a nuisance to other tenants, for instance, that’s where I draw the line.
And I’ve had to do that recently and say, “Listen, you’re starting to sound like a homeowner here, which is a good mentality to have, but not here, because I’m the homeowner here.” And so I said, “If you want to own a home, that’s fantastic, but this isn’t it.”
So we had to have a clear understanding. You have to do that dispassionately. I couldn’t get upset with the guy, because he’s going to take it much more personally. But like I said, at the end of the day, I leave and come home. He lives there. He thinks that’s his home. It’s not his house, he doesn’t own the buildings. I do. But he believes it’s his home, and he should feel that way. I do like when people feel ownership of the property; they will take better care of things. But when they cross a line, you have to redraw that line and say, “This is where it is, this is how it is. At the end of the day, I own this place. I’m going to try and make you as happy as possible.”
It’s like the same thing — it’s like you walked into the car dealership and said, “I want this car for free.” Nope, no level of customer service is going to allow somebody to break their rules of good business. So that’s the same thing I would say to people. It’s not about being a pushover or it’s not about letting your tenants walk all over you. It’s about recognizing them as human beings, as people who have hopes and dreams and stuff like that, just like I do. But there’s a line and I’m going to do everything I can to help them until we get to that line.
Ash Patel: Stace, in your opinion, has this mentality helped you retain tenants?
Stace Caseria: Yes, not just retaining tenants… So every year, there’s an annual rent increase. So something I’ve started doing is I use Rentometer to get data on rents in the area. I also do a search of https://www.apartments.com/. So whenever somebody’s lease is coming up and I want to increase the rent, I put a package together and I show it to them and say, “Hey, I’d love for you to stay if you can, but I have to raise the rent. And if you can’t stay, here’s a dozen other places in the area.” Of course, I’m not being selective. I’m showing them a range of places. And my property looks pretty good compared to these other places, given the amount of rent. So I find that to be very useful. The last time I did this with a tenant, his reaction was—he looked at the rent increase and said, “That’s not bad. That’s what I want.”
So this is the same thing other businesses would do. They would tell you, “We have to raise the prices,” but they would tell you what you’re getting for that, they will tell you why they’re raising it. Rather than somebody just saying “Hey, I’m raising the rent because it’s January.” It’s very arbitrary to a tenant. I mean, giving them a reason why and giving them a way out, and saying, “You know what, if you don’t want to live here, that’s cool, too.” Nobody has left since I started doing that process.
Ash Patel: And you go there in person and deliver a rent increase?
Stace Caseria: Generally, I mail them. It happens that I was on the property for something else and I handed it to this guy, and he opened it and read it right there. But typically, I would just throw them in the mail. As much as I’m saying I want to be this great guy, I do want to limit my time out there, because I have other things to do. I have a business to run, I’ve got a family. But if there are times when I need to be there just to make sure that people know who I am and recognize me, and they have a personal relationship with me, I will take those opportunities [unintelligible [00:17:11].06] to knock on doors. If I’ve driven all the way out there – because its outside of Boston; if I’ve driven out there, I’m going to spend the time and knock on doors and talk to people and do what I have to do.
Ash Patel: So with your personality, I feel like your rent increase letter is not the norm. What does your rent increase letter say?
Stace Caseria: It generally will talk about the conditions. So right now, the past year, it mentioned COVID. And I said, “I understand that things are tough for everybody, and if you need help with rent assistance, let me know; I can put you in touch with people .” And that happened with one person that said, “Hey, I could use help paying my rent.” It’s better that — [unintelligible [00:17:44].02] pay his rent, then he doesn’t pay me. So it’ll talk about the economy, it’ll talk about things that are going on in the neighborhood…
I think once there was a new building that was being constructed, saying, “I know that there are other options, there’s this new building being constructed.” Spoiler alert, it was much more expensive to live there than in my place, but I just want to be transparent about what’s going on.
I might also say, “In the past year, I’ve also done these renovations to your apartment, whether I painted or put it in a new carpet or something like that. But Just so we’re on the same page, I’m not doing this arbitrarily in giving you a new carpet because I’m an awesome guy. This is a business for me.” So I want to be human, but I also want to be professional about it.
Ash Patel: I love that approach. I wonder how few people actually do that. I would envision a lot of people just say, “Hey, by the way, your rent is going up January 1st. Here’s the new amount period.”
Stace Caseria: The problem with that is, if somebody questions it, you need to have a rationale for it. The same way if your cable bill is going up, you want some sort of rationale or this is going to bother you, right? If they said, “Hey, we’ve added 16 new channels and now it’s in HD and you’ve got this DVR thing and—.” They go, “Okay, I’m getting value for this extra increase.” If they just said, “Hey, your cost has gone up. Take it or leave it” you’ll be like, “Why? I need to understand why things are happening.” And if you explain things to people, for the most part, I think people get it. They understand that you’re there; not as a humanitarian, but as a business person.
Ash Patel: That is a great philosophy. How have you used your branding and marketing background to attract tenants for vacant units?
Stace Caseria: I have to say, I’m jealous of people who own new construction, because I don’t have a building like that. But I look at new construction and I say “So what elements are here other than the box that is an apartment? What other things?” So I’m like, “Okay, so there’s branding on the building,” or, “There is signage inside the building,” or they might provide a welcome package to tenants. So I try to do little things like that where I can, to maybe get closer to what the experience might be in a much nicer building; because I’m in the C Class building. But I would love to have a much nicer building, bigger building, newer building. So I’m trying to—
Ash Patel: Bigger mortgage?
Stace Caseria: Bigger morgage, right. But there are things I cannot provide. It’s an old building, low ceilings… I can’t provide big open concept. There’s no dog park, there’s no swimming pool; I can’t provide those things. They’re never happening; covered parking, never going to happen. But I look for other things that I can do. And I tried to index a little higher in those small things that might have some effect, rather than just throwing up my hands and saying, “There’s no way that I’m going to be able to compete with those other buildings.” But there are things I’ve learned also from the Joe Fairless book about how to add amenities… And it’s not necessarily always adding things like swimming pool or covered parking and things like that; it’s just like small touches that people might appreciate. It sounds so minor when I talk about it, but outlets — the USB outlets [unintelligible [00:21:07].06] I put those in an apartment that I renovated and people were so happy. It’s just a $5 outlet. But looking for small things that will make a little bit of an improvement. Those are things that that I look for.
Ash Patel: Stace, what advice would you give to somebody – let’s say they have 30-40 Classy C units, they’re kind of inundated, they’ve had their fill of tenants stories… How do you get them to reposition their mindset? And what are some practices that they can start doing to get to where you’re at, and build this allure or build an environment where the customers, the tenants all know “Stace is my landlord, great guy.” How do you get somebody who’s been jaded, inundated, to adopt this philosophy? And what specific tasks could they implement?
Stace Caseria: I think before you get to tasks though, with anything in life, mindset matters. You have to change your mindset and you have to understand the relationship not as a transactional relationship, but one where you are providing value and they are providing you with income for the long-term. You have to see people as customers, and you have to see them as your partner.
As you said in your commercial space – you have to see people as partners. So the actual tactic is for somebody who is jaded is I would start with one or two tenants. I always try to start with the biggest problems first, and see if I can solve those. And so if you have somebody who’s a real nightmare – not to the point where you need to evict them, because if that’s the case, then hopefully, they would have evicted them. But see if you can change their behavior toward you by changing your behavior toward them. Call them out of the blue and say, “How’s everything going?” Or send them a letter saying, “I appreciate you being there.” Send them a “thank you” after they’ve paid their rent; that’s going to be odd for a lot of people to receive this thing that says, “Thank you.” And there might be negative consequences to begin with. If someone’s going to say, “Of course, I’m paying my rent, but you never fixed my faucet.” Well, that’s an opportunity to fix the faucet.
But I think once you do that and you show people that you have empathy and you’re a little bit more human, then you can work on the ones that are easier. Start with the hard ones first and get a system in place. Because if you can make a difference with that person, you can make a difference with everybody else.
Ash Patel: That is a great philosophy. That’s one thing that I don’t do, is randomly send “thank you” letters. I host dinners and happy hours for my commercial tenants, but there’s a lot more that I could be doing. What’s your hardest lesson that you’ve learned in your real estate investing experience?
Stace Caseria: This applies to a lot of things in life… It’s not hesitating to make decisions. When you have a decision and you’re pretty sure you know which way you’re going to go… In the past, I’ve waited too long to make decisions. I sold a property last year that I should have sold years before. And I just held on to it for emotional reasons, not looking at the numbers. Because as humans, we make decisions emotionally, we don’t make decisions rationally. I wish we did sometimes. But I held on to this property and I think I was barely making any money each month; it was barely cash flowing. That’s because from the time I bought it to the time I sold it, it had flood insurance, because it was a waterfront property. And flood insurance had gone up 10 times year after year after year. And I kept saying, “Maybe I’ll catch up to this”, and there was no way rent was ever going to increase at the same rate. And I just loved the property being on the water and everything, but I had to realize I should have done this years ago and then just taking that cash and putting it in something else.
Ash Patel: Lesson learned.
Stace Caseria: Hey, something else I wanted to mention before—you said you do happy hours with your commercial tenants. Something that I started doing with my residential tenants is every Thanksgiving I send them a gift card for the local supermarket, because Thanksgiving is an important time with my family. So that’s a way that I can show them some appreciation, and people were blown away the first time they got it; it wasn’t a lot of money that I was sending each person but it was certainly noticeable.
Ash Patel: That is amazing, and simple practices for people to implement.
Stace Caseria: Absolutely.
Ash Patel: Tell me more about your syndication.
Stace Caseria: I’m working with a syndicator now, so I’m invested completely passively in that deal. I would love to transition into syndicating myself, find a syndicator I can work with who might be looking for somebody who brings marketing and branding experience, and sort of have a value exchange there. But I see that as such a powerful force… I know I’m on the Joe Fairless show here… He opened my eyes to this thing called syndication. And whenever I read the book a few years ago, I was like, “This is an amazing thing.” I want to become more active in syndications, and I’m trying to invest in them passively at the moment to sort of understand how they work beyond just reading about them in books; see how they work in real life.
Hopefully, soon I will work with a syndicator and blend my skills, whether it’s how to deal with people or managing the property or helping with marketing and branding of the property itself.
Ash Patel: I think you would do very well using your skill set, your mindset and your customer service practices on a much larger scale. So Stace, thank you very much for joining us today. Your outlook, your mindset – you’ve given me a lot of things to think about, the things that I could do better, very simple things. And for our Best Ever listeners that have a lot of units that they’re inundated with, I think you’ve helped to transition some of that mindset as well. So thank you again for being on the show.
Best Ever listeners, thanks for joining us and have a best ever day.
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