After getting his real estate license, Dom Santaniello’s main goal was to make extra money on the side and help pay off his student loans. Since then, he’s dropped his corporate career and turned full-time real estate investor. Dom is sharing his insights for turning a side hustle into a full-time business, three top tips for taking on private capital, and capturing motivated seller deals in three simple steps.
Dom Santaniello Real Estate Background:
- Full-time real estate investor
- 20+ flips, 25+ wholesale deals, 20+ BRRR units — average net profit per door is between $500 and $650/ month
- Based in Western Massachusetts
- Say hi to him at: https://www.naples-group.com/
- Best Ever Book: Never Split the Difference: Negotiating As If Your Life Depended On It
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TRANSCRIPTION
Ash Patel: Hello, Best Ever listeners. Welcome to the Best Real Estate Investing Advice Ever Show. I’m Ash Patel and I’m with today’s guest, Dom Santaniello. Dom is joining us from Western Massachusetts. He has done a combination of flips, wholesale deals, and BRRRs, and also owns multifamily.
Dom, thanks for joining us, and how are you today?
Dom Santaniello: Hey, thanks so much for having me. I’m doing awesome.
Ash Patel: Great to hear. Dom, before we get started, can you give the Best Ever listeners a little bit more about your background and what you’re focused on now?
Dom Santaniello: Yeah, no problem. So I’m 29 years old, I live in Western Mass, I have a fiance, Claire… I was a degreed engineer working for corporate for seven years and recently made the switch to a full-time engineer. Right now I own two businesses, Naples Realty Group and Naples Home Buyers, a fix and flip company focused on flipping, wholesaling, buy-and-hold apartments, and then we own a real estate brokerage as well, that has 18 real estate agents focusing on residential and investment properties.
Ash Patel: All of this while you’re still a full-time engineer?
Dom Santaniello: I’m not a full-time engineer anymore. I’m a full-time entrepreneur running those businesses. But over the past four years, I’ve got a real estate license, was doing transactional work, got into the investment space, and was definitely working second shifts for a while before making the jump.
Ash Patel: Tell me how you got started, Dom.
Dom Santaniello: So pretty much I didn’t really ever think I’d be here. I got a real estate license to make some extra money and bought a duplex to live for free, so I could start paying off my student loans. I started meeting people in the area that had sizeable apartment complexes and portfolios, and really was intrigued by real estate investing itself. So I started by accident, just looking to save some money, and then when I realized all the benefits and started reading and researching, I became obsessed with cash flow, passive income, and making money through real estate and all assets in all areas.
Ash Patel: After your duplex, what was your next real estate investment?
Dom Santaniello: It was actually another two-family, and that was definitely a point I wanted to make. So obviously you guys interview a lot of people in a lot of different phases of their careers. And for the longest time, years, I listened to this podcast every day and was always inspired by some of the people that had, maybe not just gotten started, maybe they’re just getting momentum, and wanted to give some feedback on how I made that jump, because it felt like I was on the sidelines for three years, waiting to buy the perfect deal, paralysis by analysis, and then once I figured out how to do it, I scaled pretty quickly.
So second deal – basically, I negotiated a three-house in a package deal. So what that looked like, and at the time was a pretty risky maneuver, I was still fishing around for a deal, talking to a seller, and figured out instead of just purchasing one, that he was looking to sell his whole portfolio. And at the time being an agent – rounding the numbers – this was going to be a two-plus million dollar deal, six-figure commission. I was pretty green in the space at that point. So this was consuming all of my bandwidth. But really, what got me thinking different was looking at the commission split between the broker and myself. So right off the rip, I was losing 30% and then paying another 35% in taxes. So that, call it, 100K, was going to go down to 40k pretty quick.
So at that time I started reading and researching different methods and ended up facilitating in lieu of a commission of 100% percent owner-financed house at more than a 50% discount, which obviously allowed me to later go refinance, pull out a ton of money, have an asset, and then keep that money moving.
Ash Patel: What a win. Dom, were you working as an engineer while you were transitioning into real estate, or did you just cut the cord clean?
Dom Santaniello: That’s a great point. I was working, and actually, my last day in corporate America W-2 was June 1st of this year. So I was running both in parallel, burning the midnight oil, taking long lunch breaks, a lot of doctor’s appointments, stuff like that, just go show houses, look at deals, that whole thing. And really, that’s—one thing that I disagree with on social media and a lot of the influencers is just the “dive in without a plan.” So being an engineer and being pretty Type A, I’m a detail freak and like to have everything mapped out. So engineering an exit strategy was a big thing for me, and pretty much working backwards from “What do I need monthly to live? What do I want to have in excess of that? How many deals do I need to do to get that in passive income?” And then pretty much just attack that goal non-stop until I hit it, and then that’s when I left.
Ash Patel: In your calculations, did you fund all of your purchases, or did you use other people’s money as well?
Dom Santaniello: Well, it depends on what kind of deal it is. For fix and flip stuff, we started using our own money and quickly scaled out of that and started raising private money and using that to fuel the fix and flip operation. I used my own money for buying personal deals, and then now in the partnership that I have we raise private money, do the fix and flip deals and/or wholesaling, take those proceeds, roll them into retail purchases, and then also utilize the BRRR strategy to try to eliminate having a ton of capital of our own tied up in deals.
Ash Patel: Dom, can you walk the Best Ever listeners through how you first started taking on private capital?
Dom Santaniello: Yeah, the first one’s the hardest. It seemed impossible back in the day to find someone that would trust us enough to give us a 100 grand, 200 grand, whatever the amount is. And really, to do that and gain trust just with our presentation, confidence, and experience, so trying to present the deal professionally with photos, really good looking analysis, showing personal financial statements that at the time both my partner and I had good income, credit, reserves, all that sort of thing… And explain that we’re looking to build relationships and scale out of doing one or two houses at a time to bigger picture.
So the first pitch was more, “We don’t need the money, we need the relationship and want to scale both together.” And once we got the first relationship, others came in the future, and then now we’re at the point where we have people calling us, asking us to fund deals and get involved on a weekly basis.
So for the listeners, the first one is definitely the hardest and most important, and that’s where you want to stick to the details, and once you can get that and build a little momentum, it definitely becomes easier.
Ash Patel: That’s a great mindset. Thanks for sharing that. You wanted to build relationships and scale that. Again, that’s great. So you’ve done a combination of flips, wholesale deals, BRRRs… Are you still doing all three of those today?
Dom Santaniello: Yep. Our two businesses, the brokerage, and then the investment business touch all elements of real estate. So I like to say that we have a lead generation business, and then when a lead comes in, we figure out how to service it. So we’re throwing out all sorts of nets to get motivated seller leads, retail leads, et cetera, et cetera. And then from there, we figure out, is this a fix and flip deal? Is this a wholesale? Is this a wholetail? Are we just going to retail it for the person, or can we maybe do an off-market deal with one of our clients?
Ash Patel: What are some creative ways you find motivated sellers?
Dom Santaniello: So that’s the million-dollar question, and right now we’ve been trying to track and invest in different areas. But honestly, right now that we have an established brand and presence, we’ve been getting a lot of referrals. So it’s hard to track and forecast that. It just seems in the last two quarters we’ve been getting a lot of referrals. But pretty much, the market seems pretty saturated with a lot of people trying to get involved with wholesaling and such. So we slowed down on mailers and more conventional methods, and we’ve switched over to running some pay-per-click ads, stuff like that. And really just networking with a lot of the local agents has paid dividends, and it’s just sweat equity really at that point.
So step one, creating a reputable brand; step two, raising awareness of the brand, and then step three is we figure out where to deploy your money and resources. Long-winded answer, but it’s definitely not just a simple—I wish it was just “Send mailers and get leads or run an ad and get leads.” But they come in in spurts, from all different angles and that’s always something that we’re fine-tuning and looking at basically 80/20, where we deploy the capital.
Ash Patel: Dom, other than single-family homes, what other asset classes are you looking at?
Dom Santaniello: Right now we’re specializing in the 2-4 units, just based on a number of factors that we’re looking at. That’s been the sweet spot for us on the BRRR method, and we’re really heavy on only acquiring things that need a value-add, either through CapEx and/or leasing. We’re really staying away from retail deals right now, just based on the prices, and that sort of thing. So 2-4 families is the sweet spot, and then for flipping, we’re really just looking at ones and twos, cause those are the easiest to turn.
Ash Patel: Have you considered retail, industrial, warehouse?
Dom Santaniello: We have, but just at this time, we have a good mission system going and we’re building out our resources there. So when we started, it was just my partner, Luke, and I, and then now we have three acquisitions people, some part-time bookkeepers, admins, all that sort of stuff… So we’re building teams and systems now and fine-tuning the skillset on the 2-4s, and then when the market changes and we’re more flush with cash, we’re going to be going into some different, maybe mixed-use or larger out-of-state properties. But for now, we’re just sharpening the tools, if you will.
Ash Patel: Dom, what’s an example of a deal you lost money on, and what was a hard lesson that you learned from that?
Dom Santaniello: Right now, we haven’t lost any money on deals. We have had a close call on an acquisition. And what we did really is we were just sticking to our word. So we had a situation where we made a promise that we would purchase a property – and side note from this, a big thing with us is pride and integrity, and a lot of time with these motivated sellers, they’re in a less than ideal situation. And wholesaling-wise, we do wholesale, but we never would lock up a deal that we don’t plan on closing.
So just pivoting off of that statement, we had a situation where we ran numbers kind of quick, we made an offer on a property, and the woman came back to us, maybe six months later, and said, “Is this offer still good?” Essentially putting our word on the line, because we had mentioned if things change, we would purchase it. So when we ran numbers again, we had found a couple other factors and decided it would be tight, but we still closed on the deal, just to uphold our reputation and our word. And we did ended up sneaking out of the deal, making a little bit of money and not being harmed. But that lesson learned is to be more careful with the numbers, but it was the right thing to do, and we could have easily backed out and not taken the chance.
Ash Patel: What were those other factors?
Dom Santaniello: When we had walked through the property, we didn’t get a good look in the basement at some of the mechanicals; there’s solar panels on the roof, which had some other damage on the roof, and things like that. And then one of the decks, originally, in the snow, when we looked at it, it looked fine, but ended up being pretty rotted out.
Ash Patel: So where do you see yourself in 3-5 years?
Dom Santaniello: Three to five years, we’re looking to really just build up and automate our businesses. Our real estate brokerage in the last 12 months has scaled from, pretty much, three agents to 18 as of yesterday. That business is essentially automated at this point. So we would like to build the brokerage up a little bit more, and make it a little more lucrative, and then really just continue building our fix and flip business, getting capital and rolling it into buy-and-hold properties… And hopefully, doing the same thing with a bigger team, bigger territory and more delegating.
Ash Patel: What was your biggest bottleneck as you were scaling your company?
Dom Santaniello: That’s happening real-time [unintelligible [00:16:59].19] working through just things happening quickly. So a number of factors – just getting the right people on the team, figuring out how to pay them, all those sorts of things. So before, when it was just my partner Luke and I doing everything, we would just split everything 50/50. So now we’re trying to figure out how to get more people involved, how to delegate workload, and then how to be efficient and attack all areas that are important in the business.
Ash Patel: Dom, what is your best real estate investing advice ever?
Dom Santaniello: Personally, given my journey, it took me a long time to gain the courage and stop doing both and really fully commit. My best advice, I would say, is reverse-engineer the plan for wherever you want to go, set strict deadlines, take action and be consistent. This is definitely not a get-rich-quick business, and everything now—this has been a 3-4 year journey of every single day being obsessed. And if you think that one buy-and-hold or one flip or one mailer is going to change your trajectory, that’s not the case, given the market and the competition.
Ash Patel: Great advice. Dom, are you ready for the Best Ever lightning round?
Dom Santaniello: Sure.
Ash Patel: Dom, what’s the best ever book you’ve recently read?
Dom Santaniello: Never Split the Difference by Chris Voss.
Ash Patel: And what was your big takeaway from that?
Dom Santaniello: I’ve heard a million people on this podcast say it, so I finally had to figure out what the deal was… And real estate, no matter what side you’re on, as an agent, investor, a mixture of both, you’re always negotiating, whether you like it or not. So globally, just the negotiating techniques and little things I do on a daily basis without even realizing it.
I don’t know if there’s any one key takeaway other than “don’t split the difference,” but there’s just a lot of amazing tactics and psychology that’s laid out in the book, and a couple of one-liners that could save you tens of thousands of dollars if you know when and how to apply them.
So I have already paid for the book 10 times over I feel, and definitely recommend it to anyone in sales, or it’s really good book to just read and do in life. If you’re buying a car, you could use it. So it’s a great read.
Ash Patel: Dom, what’s the best ever way you like to give back?
Dom Santaniello: Right now, we’re giving back a lot to the younger agents in our brokerage. So we’ve actually combined it, real estate sales and investing, and that’s been an interesting niche for us. Recruiting a lot of young like-minded agents that pretty much were me three years ago, hungry to get out of the corporate world, hungry to get into multi-families and their first flip… And Luke and I, have pretty much set up an unofficial mentor program for giving advice and time to younger guys and girls who are trying to get in the space. So that’s really what we’re doing, we’re trying to give back the best we know how, and that’s in real estate.
Ash Patel: And that’s got to help your reputation a lot when other potential realtors or existing realtors find out that this is what you guys are doing… It’s a game-changer and it separates you from your competition that just turns and burns realtors. That’s a great program.
Dom, how can the Best Ever listeners reach out to you?
Dom Santaniello: Email or any social media handle. My email is dom@naples-group.com or if you look up Naples Home Buyers, Facebook, Instagram, LinkedIn – all the funnels will lead to me.
Ash Patel: And Dom, is there a particular area that you’re focused on, geographic area?
Dom Santaniello: Yeah, we’re in Western Mass and Northern Connecticut right now. So probably an hour radius from Springfield, Mass, is ideal.
Ash Patel: Got it. Well, Dom, thank you so much for being on our show today and sharing your journey, from being an engineer, and I’m sure applying a lot of what you learned – the numbers, the statistics – into your real estate journey. So we thank you again for being on the show today.
Dom Santaniello: Yeah, thanks so much for having me. It’s definitely an honor.
Ash Patel: Best Ever listeners, thank you for joining us, and have a best ever day.
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