JF1680: Natural Entrepreneur Combines Corporate World & Love For Real Estate Investing with Dino Pierce
Dino was raised by entrepreneurs, but took a little different path at first, going to and graduating from college before entering the corporate world. Once he was there, he wanted more, and to scratch that entrepreneurial itch! He started a few small ventures, before falling in love with real estate, specifically multifamily syndications. Hear how he jumped into the multifamily syndication business, and is teaming with others to grow the business. If you enjoyed today’s episode remember to subscribe in iTunes and leave us a review!
Best Ever Tweet:
“You can bring a deal to a team that is already experienced, chances are they’ll do it and add you to the GP side of the deal” – Dino Pierce
Dino Pierce Real Estate Background:
- CEO of Edified Equity and an Active Multifamily Investor
- In 2018 Edified Equity and partners syndicated 4 apartment communities consisting of 254 doors, across 4 markets, valued at $9.3M
- Based in Denver, CO
- Say hi to him at https://www.edifiedequity.com/
- Best Ever Book: How to Win Friends and Influence People
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Joe Fairless: Best Ever listeners, how are you doing? Welcome to the best real estate investing advice ever show. I’m Joe Fairless, and this is the world’s longest-running daily real estate investing podcast. We only talk about the best advice ever, we don’t get into any of that fluffy stuff. With us today, Dino Pierce. How are you doing, Dino?
Dino Pierce: I am doing good, thanks for having me. I’m excited, and I appreciate the opportunity.
Joe Fairless: Yeah, my pleasure, and looking forward to our conversation. A little bit about Dino – he is the CEO of Edified Equity and an active multifamily investor. In 2018 Edified Equity and partners syndicated four apartment communities consisting of 254 doors, across four markets, valued at 9.3 million dollars. Based in Denver, Colorado. With that being said, Dino, do you wanna give the Best Ever listeners a little bit more about your background and your current focus?
Dino Pierce: Yes, certainly. Thanks again so much. My background – I have a little bit of a different background than most people, because I was raised by entrepreneurs. So literally it wasn’t just my mom and my dad, it was their parents, it was their brothers and sister… I almost didn’t know anyone who woke up and went to work for a company; they all woke up and ran their own business, and managed their own employees… So I didn’t realize just being in that environment that it was something unique until I graduated college, or kind of got out in a different environment, let’s put it that way.
So I always have had an entrepreneurial spirit, and it’s almost all that I’ve ever known, from day one… I took a little bit of a different path, where I did go to college. When I talk about entrepreneurs, I’m talking about people who didn’t even go to college. They were finishing high school and going right into business. I know that’s kind of catchy and trendy today, and you hear a lot of people saying “Why are you gonna go waste this time in college? Just start now. If you’re not gonna be a surgeon, you don’t need to go to school.” And I’m taking that to the extreme… But anyway, I did go to college, and got out into the corporate world, but there was that entrepreneurial spirit that couldn’t be crushed.
So about four-and-a-half years ago, just jumping forward to real estate, by-passing all the little landscaping businesses and things that I did entrepreneurial along my path, about four-and-a-half years ago I got involved in real estate investing, when I relocated to the Denver Metro Area.
I started off – typical path, I was going direct to seller with marketing, getting distressed properties under contract, and I was taking it to a residential redeveloper, and I was either wholesaling it for a very small, quick, but heavily taxed profit, or I was saying “I’m not gonna wholesale this to you. I have the goods right here, we’re gonna partner. You’re gonna do the work, because I don’t know how to do that, but I’m gonna lend you $20,000 to $25,000, no points – this isn’t hard money; just straight interest – and we’ll settle up everything on the back-end.”
I did that for a good two years. I had a friend – still is my friend – COO for an apartment acquisition company, and he kept telling me “First of all, you have to be getting killed with taxes”, which was true, and he said “Second of all, our market is so tight…” and this was like four years ago; it’s even crazier now. But he’s like “I know it’s hard to find deals. Once you guys do a flip, you have to find another one. That’s another job for you. You have the business mindset and the wherewithall; you should really learn how to syndicate apartment communities and be on the GP side.” And I tell people all the time – I don’t think it was one of those things where I woke up and I was having a really tough day, but it was just him constantly dripping on me for those two years – “You’re getting killed with taxes. You really should learn this business. Here’s why – cashflow, tax shelter, tax deferment, profit refinance, tax-free, then big profit on the back-end…”
So I woke up one day and I was like “I should learn how to syndicate apartments.” And that’s how I got to where I have been for the past two years, with working in the multifamily only. I don’t do anything single-family, I don’t lend my private money unless it’s in my own deals, and that’s kind of fast-forward to where we are today, where I’m focusing only on multifamily.
Joe Fairless: Well, I wanna spend the majority of our time talking about what you’re currently focused on, but I am curious about the other ventures you did prior to getting into real estate. You mentioned landscaping… What else did you partake in?
Dino Pierce: It was a landscaping business; a friend and I had a trailer, we had some lawn mowers, some wheat eaters, and we had some elbow grease… We would drive around – we had a routing – and we would cut yards; this is during the summertime. I’m originally from Louisiana; we’re doing this call right now — I’m in New Orleans, Louisiana. I was on a business trip and I’m about to visit with some family… So that was number one.
I also got into personal training, which was another entrepreneurial — but everything was time for money, time for money, time for money. Even with the flipping, time for money… And I realized, especially with personal training, “Wow, it’s only me. The only way to scale this is to get many other trainers and me be the architect of the business.” And then again, you’ve got that heavily taxes, because you’re running your own business, you have your own job – you’re not in the right tax bracket.
Let me think if there’s anything else I can think of… I had some experience in the family business, which helped me learn how to run businesses, but one of the things that–
Joe Fairless: What’s the family business?
Dino Pierce: My grandfather — I’ll be quick, but it’s a great story; again, I’m from Louisiana. My grandfather went to school, to kindergarten, not even speaking English; he only spoke Cajun French. That man – his name is Nolte – literally was forced to quit school in the fifth grade to help his father put food on the table. He went on to become a self-made millionaire.
Joe Fairless: Wow.
Dino Pierce: So the family business – he started a tugboat company, he developed self-storage from the ground-up, he had single family as well as some mobile homes… He had a small motel – I think it was about 20 rooms – he owned an icehouse, a marina, a Laundromat, storage for sports fishermen that would come from New Orleans, leave their boats on the Gulf Coast, because that’s where I’m from… He did a little bit of everything. But the best thing about working for Nolte as his grandson was that I got to work the hardest and the longest, and I got to get paid the least… Because that’s what he passed on. He passed on “Nobody gave me anything. I quit school in the fifth grade and found my way. If one can do it, so can another, and I’m not gonna treat you any differently. As a matter of fact, I’m gonna be harder on you.”
So that’s the family business. And also – I didn’t mention – they owned gas stations, and things like that as well, in South Louisiana.
Joe Fairless: So the main takeaway I got from the ventures that you did – well, there are two takeaways. One, your grandfather was one heck of a person; but then two, the time for money thing – trading time for money, time for money, time for money. Landscaping business, personal training. That makes a lot of sense now, as you’re focused on syndication apartments, and the different benefits there… So let’s talk about the deals that you did last year.
When I read your bio, it said you did four apartment communities consisting of 254 doors, across four markets. First question is how did you come across the opportunities in four different markets?
Dino Pierce: Okay, so 100% transparency, still to this day – I guess it still has to do with the business mindset – I operate a medical device business in Colorado. I have three small kids – and congratulations; I understand you are a father now…
Joe Fairless: Yup, thank you.
Dino Pierce: Yes, you’re welcome. I have three small kids, so that’s a full-time job. My oldest is nine, my youngest is three, and in addition to that, I’m on a syndication team; the keyword I’m gonna use there is “team”. So I don’t do this alone. I actually have a partner who is really good at networking with brokers, getting off-market deal flow or word of mouth from property management companies. We might be looking at something that maybe zero eyeballs are on except us, or three to five groups, but it’s definitely not something that’s going out to an entire broker’s A-list, or LoopNet.
So the deals came – they were pocket listings or off-market, from relationships that my partner had. Of those four deals, I actually don’t take credit for identifying and finding them initially.
Joe Fairless: Okay. Who’s your partner?
Dino Pierce: Three of the deals have been with the same partner, his name is Kyle. He lives right outside of Houston. And then I have done one deal with Kevin Dowling, and Pili and Jason Yarusi.
Joe Fairless: Okay.
Dino Pierce: So other than that, the other three have been with Kyle.
Joe Fairless: Very cool. Okay. And your role in these syndications it sounds like is not on the front-end, find the opportunities. I’m guessing it’s gonna be bringing some equity to the deals and bringing value to the deal that way. Is that correct?
Dino Pierce: That is 100% correct. And there’s other roles too, where we’ll underwrite behind each other, market evaluation, market research, making sure that we can all together collectively find enough data to say that “This is an emerging market.” And it might not be national news, which is good, because we wanna be there so that — and again, we don’t underwrite any of the appreciation, or maybe like a 2%, just go with the market, [unintelligible [00:11:13].07] kind of thing… But we’re not banking on the poised boom, if you wanna put it that way. The deal works even if that doesn’t happen. But if we can identify an area and be there when it does, everybody’s gonna be really happy. Because if you like the returns that we’re showing you, you’re gonna love us if we’re able to cash in on some of that appreciation as well.
But you’re right, what I did — and I’ll be upfront with you, you motivated me. I read an article, and I’ve even posted that blog on Bigger Pockets, I reposted the link to that article… You have a good article out there, and I think you recently updated it, about thought leadership. That’s exactly how I started. Because when I got involved, I learned the business of syndication, how to underwrite deals, and network, and talk to investors… But when people ask me, they say “What’s the easiest way to get my foot in the door?”, you can do one of two things – you can bring a real deal to a team that’s already experienced, and add value to them that way. Chances are they’ll do it and they’ll write you in on the general partnership side, and you’ll get started there. Or you can bring your network’s money to the table and add value that way. I think those are two of the easiest and quickest ways to get started.
That thought leadership article that you write – I just jumped in… And I started blogging, I started podcasting, I started my own closed, purely educational Facebook group; I’m not pitching deals or anything there. Writing articles on LinkedIn, now I just got on Instagram, I also have a YouTube channel… Taking one piece of content and modifying it slightly to fit those – I don’t know, I’ve probably just named about five different channels. You motivated me to do that, and start to just position myself as a thought leader, and start drawing attention as a credible source in the industry… And even – rewind back to before I had even done my first deal, “How are you credible?” Well, I’m credible because I’m leveraging the experience of my partners. It’s just like if you and I did a deal together, you have 500 million in assets under management, and even if I’ve never done a deal, but I’m bringing $500,000 from my network to your deal, now I can automatically leverage you; so when they say “Well, how many deals have you done?” “Zero, but let me tell you about my partner here, Joe, and what he’s done.” And right there, it’s instant.
Joe Fairless: It completely makes sense, and that is the approach that I certainly recommend, and I’m glad you got a lot of value from that article. And when I say “the approach I recommend”, when you don’t have the qualifications or the experience, the best way to learn is by networking while you learn; that’s what you’re doing on Bigger Pockets and at the events.
So how did you structure the deals on the GP side?
Dino Pierce: The way we structured all except one was a straight split. Anywhere from 70/30 to 80/20 split… That meaning, Best Ever listeners, 70% to 80% of the cashflow, tax benefits, profits are going to the limited partners and the general partnership team for identifying, underwriting, qualifying for the loan – the whole nine yards; bringing all the other money to the table from the equity partners you didn’t have to meet and build trust with… There’s a lot involved, as you know.
Joe Fairless: Right.
Dino Pierce: We’re keeping 20% to 30%, and we do a straight split for everything – cashflow, equity across the board. That’s how they were structured. Is that what you were asking?
Joe Fairless: No, I was asking about the GP side. Okay, so you do 70/30 or 80/20 split – cool. But on the GP side, for you bringing what you brought – what did you get in compensation for that?
Dino Pierce: We have a certain percentage carved out for everyone’s role, and usually — of course, it’s more than equity, like we talked about before, but… We usually have roughly 20% to 30% of the GP. So if you take a 70/30 or an 80/20, that 20 now become the GP’s 100%; we’ll take about 30% of that and carve it out for the capital raise or the investor relations team, however you wanna call it.
Joe Fairless: Cool. And how much equity did you bring in total, across those four deals?
Dino Pierce: I haven’t put the pencil to the tee, but north of a million, last year, collectively.
Joe Fairless: Cool, so around a million.
Dino Pierce: Yeah, a little over a million.
Joe Fairless: A little over a million dollars… And of that amount, which investor – I’m obviously not asking you to name names, but just thinking about that investor, how did you meet him/her? The investor who invested the most; I didn’t add the important part of the question – the investor who invested the most, how did you meet him/her?
Dino Pierce: Yeah, I’m so glad you said that, because I crunched the numbers, and I don’t have them memorized, but it was enough math for me to know just the direction you need to go in. So it was something like 65% of the people who invested with me I had met online, over the phone, that kind of thing. However, when I put the pencil to it, it was almost 90% or more of the people that actually invest money with me – even though we met that way, we ultimately met up one-one-one, face-to-face, at a coffee, a lunch, or at a meetup.
So the person I’m thinking of – we actually met at a meetup, that ended up about two weeks later to a coffee, and then to the investment… Because there’s the levels of trust that you have to climb; they have to like the asset class, then they have to have trust in the team, and then the team has to show them the right deal. But what I’m trying to say is, even though I have all these methods of thought leadership, the reason I created a meetup group this year – I failed to mention that when we talked about my avenues of thought leadership… But the reason I created a meetup group this year is, again, because when I put the pencil to it, the people who actually put money into the deal, over 90% had actually met me face to face later on.
Joe Fairless: What meetup did you meet this person at?
Dino Pierce: The first time I met this person it was at the Denver Apartment Network meetup group.
Joe Fairless: Okay. And then that person you met at a meetup, an apartment networking group – you met up with him a couple weeks later, had coffee, and then they ended up investing… Have they invested in multiple deals?
Dino Pierce: Not yet, but they invested a nice chunk in this one, and we are meeting — actually, we’re gonna have dinner before your Best Ever event coming up; and my partner is also attending, so we’re gonna go to kind of like a one-off one-on-one dinner and talk about future opportunities, because we have a few other deals in the pipeline… And we realized that there’s more money, and this person also has a network, and if we can bring him to the GP side, he would be willing to open that up as well.
I’m in for the long game, and I will go off of good quality volume, and I have no problem giving up a percentage so that we can get a good deal done and offer a great investment opportunity to more limited partners.
Joe Fairless: When you were bringing equity and other things – you have other responsibilities in those deals; one responsibility was to bring some equity… When you were bringing equity to those deals, what was something that was surprisingly challenging to you?
Dino Pierce: I think surprisingly challenging was – initially, when I started out and I was letting people know what I was doing, I had a sample deal package, it was upfront… This is not a real deal, but this is where I’m transitioning from single-family to multifamily; “When a real opportunity like this comes around, are you interested in it?”, it was almost overwhelmingly yes. But then when we had a real deal, it was very difficult to get people to wire money, subscribe into the deal. And the only thing that changed was that it was real now. And it was like “Oh, wait, I’m really gonna wire $50,000 or $100,000 into this opportunity…”
That was a little bit surprising, because initially I thought “Wow! I know it’s gonna be work, but this is very doable.” And then it turned into “No, you need to have some wherewithal, and you need to have a last man standing, long-game mindset”, because when the rubber meets the road… I’ve even had investors subscribe and not wire. They go dark after subscribing. And again, probably one of the trust levels hadn’t been met yet, and that’s fine. It might take me putting five, ten, fifteen deals in front of someone before they say yes.
So we don’t burn bridges or anything, but I think that was a little bit of a surprise, how difficult it actually was to get people to do what they said they were gonna do.
Joe Fairless: There’s a video and a speech that Jim Rohn gives, and the name of it is “The sower and the seed.” He talks about how when you plan seeds, not all of them blossom, and sometimes the birds get some; that’s just what happens in life. There are certain things we can do to optimize the performance of the seeds that we sow, but ultimately they’re not all gonna blossom, so I get that… And it’s a really good speech too, for any Best Ever listener. Jim Rohn, “The sower and the seed.”
What is your best real estate investing advice ever?
Dino Pierce: Related to this business, my best real ever real estate advice would be to take action, and don’t get caught in analysis paralysis. Now, admittedly, I am the 1% who will tap into really good podcasts, and go to great events, go to meetups, and I’ll put the pieces of the puzzle together and run with it… To where there’s other people who need not one mentor, they have to have three different people hold their hands through the first deal; that’s fine too, if that’s what you need and that’s how you learn. But for me, I’m like “Fail forward.”
The only thing I wasn’t willing to fail forward with is someone’s investment… Because I am the type of person – if you and I invested into a deal, we both put $100,000, same deal, and it went south, and let’s say I was a GP and you were an LP, I’m the type of person who says “Tough lesson. I will make it back. There’s no use crying and dwelling over this. Let me take the lessons learned from it and don’t let that happen again, if at all possible.” But it would be your $100,000 that would literally create ulcers in my stomach and keep me up at night. So I wasn’t willing to let people invest into a deal I was involved with without having–
Joe Fairless: Would you pay it back?
Dino Pierce: Would I pay it back to you?
Joe Fairless: Yeah.
Dino Pierce: Yeah, by all means possible, because — that was a scary story, it almost happened; I owed someone $25,000, and that was what I was thinking, “Okay, how do I get him his $25,000 back?” Well, come to find out he never wired… Because we were like “We’re missing person X’s wire. We can’t find person X’s money.” We verified over the phone the routing number; he has a disclaimer in his e-mail saying “Never wire to a routing number that was sent via e-mail”, so I’m like “Oh my goodness, it’s this guy, and we can’t find his money.” So I’m like “Okay, I owe him $25,000.”
So the answer is yes. Now, if I’m not liquid, we would have to sit down and talk and work something out, but I would do my best to make things right.
That’s the only thing I wasn’t willing to do. But you know what – if you’re a broker and I’m learning to speak the lingo, and I’ve been studying, and I know the terminology, yeah, I might have some nerves… But the phone’s not a cactus; I’ll pick it up and call you, introduce myself, tell you about my team, “Here’s what we’re looking for. I saw this deal on LoopNet. Do you have anything bigger?” And I will start meeting with investors too, because there’s gonna be a first time. You just have to do it, and get good at it… Because I actually learned more, because I went through a course to learn about syndication, but I learned more doing my deals —
Joe Fairless: Which course?
Dino Pierce: I learned — I don’t wanna say everything, but initially everything multifamily through Michael Blank.
Joe Fairless: Cool.
Dino Pierce: And from there, I learned more actually doing the deals, being active.
Joe Fairless: We’re gonna do a lightning round. Are you ready for the Best Ever Lightning Round?
Dino Pierce: I’m ready.
Joe Fairless: Alright, let’s do it. First, a quick word from our Best Ever partners.
Joe Fairless: Best ever book you’ve recently read?
Dino Pierce: I know it’s kind of cliché, but it’s “How to win friends and influence people.” It’s a classic, and I reference it regularly.
Joe Fairless: Best ever deal you’ve done?
Dino Pierce: Best ever deal was actually not for tax reasons; this is back when we were doing the flipping. I actually found the lead, it was free, from Craigslist, for sale by owner; father passed, the daughter didn’t want anything to do with his investment portfolio. I made an offer, they said “No. We’d rather have an open house and take the highest bidder.” But me being me, I followed up after the open house; I just sent a text message and said “How did it go?” and she wrote back and she said “It sold.” I was like, “Okay, good for her.” Then about five seconds later she says “…to you.” I was like, “Okay… Now I see where we’re going here.”
Long story short, I was tied up, really busy at that time… She was happy with the purchase price, the residential redeveloper was happy with the purchase price, and me being in the middle experienced a $45,000 heavily-taxed profit from scouring Craigslist for a deal.
Joe Fairless: What’s a mistake you’ve made on a transaction, real quick?
Dino Pierce: Real quick, a mistake I made on a transaction… The only transactional mistake I made was not knowing what was gonna happen with the market, and I ended up paying two mortgages… Because I was transitioning state to state. And I paid two mortgages for a year. That was my personal worst transaction.
Joe Fairless: Best ever way you like to give back?
Dino Pierce: Give back – of course, through the thought leadership. I do complementary mentor calls with people who are just getting started; I don’t charge anything… Just giving them advice, letting them know they can do it. Constantly donating to good — Joe, my kids have more than they’ll ever need for toys. I told my son, I’m like “Do you want a birthday present? Then you have to take five toys, and you’re going with me to Goodwill and we are giving this.” So we donate to Goodwill, Salvation Army… That’s how I like to give back.
Joe Fairless: And how can the Best Ever listeners learn more about what you’ve got going on?
Dino Pierce: It’s easy to get a hold of me. I’m very active on social media, so you can look me up on Facebook, Dino Pierce. Go to EdifiedEquity.com and you can contact me there as well… But I’m easy to get a hold of.
Joe Fairless: Dino, thank you so much for being on the show, talking about your entrepreneurial family and background. The ventures that you started with – the landscaping business, personal training, and it was time for money, time for money; spend time, get money. But ultimately we run out of time, and we’ve gotta scale that. You went to real estate, doing wholesaling, heavily taxed profit; you then focused on apartment investing and syndication. You took a course, learned, and then started doing it. You are now in four deals, worth almost ten million dollars.
Thanks for being on the show. I hope you have a best ever day, and we’ll talk to you soon.
Dino Pierce: Yes, sir. Thanks for the opportunity. I really appreciate it.