JF2015: Networking Made Me Money With Jacob Busani
Jacob is a real estate broker based in New York City and he also focuses on raising money for multi-family syndications and has recently completed his first hotel deal. In this episode, he shares how he has been able to build a business through networking by attending events, LinkedIn, and reaching out to others on Facebook.
Jacob Busani Real Estate Background:
- Real estate broker and syndicator
- Has been involved in over $157M of real estate closings
- Based in NYC, NY
- Say hi to him at Jacobbusani.com
Best Ever Tweet:
“The deal I didn’t do is the one I lost the most money on. ” – Jacob Busani
Theo Hicks: Hello, Best Ever listeners. Welcome to the best real estate investing advice ever show. I’m Theo Hicks, I’ll be hosting today’s show. Today we’ll be speaking with Jacob Busani. Jacob, how are you doing today?
Jacob Busani: I am doing wonderful, thank you very much for having me.
Theo Hicks: Absolutely. Thanks for stopping by and talking with the Best Ever listeners today. Looking forward to our conversation. A little bit about Jacob – he is a real estate broker and syndicator, has been involved in over 157 million dollars’ worth of real estate closings. He’s based out of New York City, and you can say hi to him at JacobBusani.com.
Jacob, before we get started, can you tell us a little bit more about your background and what you’re focused on now?
Jacob Busani: Sure. My background has been in real estate over the last four years. I did a nice amount of closings and was involved in a bunch more. In the last year I kind of focused gears more on the syndicating end of things, and doing a lot of coaching and speaking. So that’s really where I have been focusing most of my time now, is growing my speaking and training career, and still playing around with a lot of syndications.
Theo Hicks: Let’s talk about your syndication business – what’s the number of units you’ve syndicated so far?
Jacob Busani: I raised money for deals. I raised money for Brooklyn deals, I raised money for Manhattan hotel development deals… That’s really what I do, I just raise money for the deals, and then I get a cut out of that.
Theo Hicks: So you said you raised money for hotel development deals… Is it mostly non-multifamily commercial deals, or is it all types of commercial deals you’re raising money for?
Jacob Busani: No. Where I’m most comfortable is multifamily. The hotel deal was purely accident. I just came across it and it happened to be a really good deal, so I put a bunch of people together for it. But really it’s mostly just multifamily, that’s what I focus on.
Theo Hicks: How did you get hooked up with the people that you’re raising money for?
Jacob Busani: I think it’s all in the network. I’m part of the CCIM. I sit on the board of CCIM in New York City… And I think it’s really just all the network, and it’s really just the people you know and how often you nurture those relationships and connections.
Theo Hicks: So these deals – you met these people through your CCIM?
Jacob Busani: I met those people through CCIM, through LinkedIn, through networking events… But primarily, they all came through the CCIM path at some point, whether at a networking event or they were on a phone call of some sort.
Theo Hicks: How does that conversation go? So you’re attending these events… Are people out there saying “Hey, I’ve got this really great deal and I’m looking for money?” or are you proactively going up to these people and asking them “Hey, I’ve got a network of high net worth individuals, I can raise money for it. Do you have any opportunities”?
Jacob Busani: It’s more of the second one. I tell them exactly what I do, this is what my investors are looking for, and just send me your deals. They’ll send me deals for a couple months, until there’s one deal that I like, and then we’ll take it to the next step.
Theo Hicks: How are you analyzing these deals that are coming across your inbox?
Jacob Busani: CCIM, that’s what we’re known for. We’re a commercial real estate education organization, and they teach us how to analyze the deals, from user base analysis, to investor base, to market analysis… So all of that together and my secular real estate education, and sometimes with some of the investors that I bring on board – that’s how we analyze our deals. We don’t have an in-house underwriter, or something.
Theo Hicks: Okay. So are you actually underwriting the deals yourself, or are you looking at other high-level factors to determine if it’s a good deal?
Jacob Busani: It’s more of I underwrite the deals myself.
Theo Hicks: Okay. You’re using your own cashflow calculator you got through CCIM?
Jacob Busani: Yup.
Theo Hicks: Okay. And then you mentioned that when you are proactively reaching out to these people, you tell them what your investors are looking for, so you underwrite your deal… What are the metrics that need to be spit out in order for you to present that to your investors?
Jacob Busani: Everything has to make sense. The leases have to be in order, all the building work has to be in order, permits, approvals… For example, in Manhattan, whether there’s heir rights; now it’s a little bit more trickier than it was six months ago… Everything has to make sense before I present it. I can’t have one thing where I’m not clear about it… Because if I’m not clear about it, I’m not confident enough to go and present it to my investors, which would make me look not good.
Theo Hicks: Is there a particular return number or return threshold that’s kind of a go or a no-go?
Jacob Busani: Everyone’s different. My database is a little bit vast, so I have people who all they care about is the cap. They’ll just look at 5, 6 caps in Manhattan. Then I have the people who are more on the cash-on-cash. They’re looking for their high teens, mid-twenties… And then if we’re going out of the boroughs, they’re looking at a little bit of a longer play… Everybody’s different. There’s not one specific… It’s more of a “Just send me the deals.” As long as I have not seen it, I’ll take it to the next step… And that’s when I start analyzing.
Theo Hicks: Are most of these multifamily deals existing properties, or are they developments?
Jacob Busani: I’d say 70% of them are existing. The development is a little bit longer-term, and that’s really where it is. So it’s more of a 25% to 35% development.
Theo Hicks: If you don’t mind, can we dive into that hotel deal that kind of just randomly happened? Do you wanna walk us through how you found that opportunity?
Jacob Busani: Sure. I met one of my father’s friends one day, and he told me that he has a guy and he’s actively looking for hotels. I told them I have a deal, but it’s partial development. They have the existing hotel, but you’re gonna need to develop it a little bit further. He said “Cool. Send me over the deal.” I told him I don’t have all the information yet. I go, I reach out to my guy who’s actually in Texas, he sends me all the stuff, and I send it back to him.
He gets back to me two months, he’s like “We’ll take it.” I come back, it’s still available… It was a nice deal. A very nice deal, actually. And we just went back and forth. It took us about a year and two months to close on it, but we finally did it, and that’s just how it happened. It was literally one guy wanted this, the other guy had that… And I made the connection between them.
Theo Hicks: And then did you raise money for that deal as well?
Jacob Busani: I raised just a small amount. I raised 2% as down payment, and that was it.
Theo Hicks: So how did you have to present this hotel deal differently to your investors, compared to the typical multifamily deal that you’re presenting to them?
Jacob Busani: Surprisingly enough, the team who had the acquisition firm that had the deal – they really knew what they were doing; they had somebody in the CCIM, or some CCIM crafted it, because everything was my language, the way it was presented… So it was really just a few modifications on my language of presenting the deal, and then just forwarding it on to my clients.
Theo Hicks: Okay, so since the team knew what they were doing, did you have to do much underwriting yourself?
Jacob Busani: I did not need to do much underwriting myself. Everything was practically done, and I just needed to do a couple of tweaks.
Theo Hicks: Okay. Alright, Jacob, what is your best real estate investing advice ever?
Jacob Busani: Relationships. I think that relationships can get you so far. So many people are too busy cold-calling; they don’t realize that the biggest opportunities are right in their backyard, the people that they already know. They just need to ask them, to introduce them to more people. That’s literally how I got started and how I got to where I am today.
Theo Hicks: Is there anything specific you do on an everyday basis, like “Alright, this morning I’m gonna get up and I’m gonna do A, B, C, D” in order to cultivate more relationships? Or is it just something that comes naturally to you and you just do it over the course of your everyday life?
Jacob Busani: Yes, every day I try to have at least a few new introductory meetings from people that I meet on LinkedIn. So whether they’ll be at coffee, or whether they will be just online… I attend a networking event once to twice a week, and I follow up with whoever I feel that I have some good synergy with… And it’s mostly just asking those people to introduce me to other people, and then just having the [unintelligible [00:08:51].22]
On every given day I’m speaking to anywhere between 5 to 20 new people, and then just having my assistant following up with them and just cultivating the relationship and having them in the pipeline.
Theo Hicks: Alright, Jacob, are you ready for the Best Ever Lightning Round?
Jacob Busani: Sure.
Theo Hicks: Alright. First, a quick word from our sponsor.
Theo Hicks: Okay, what is the best ever book you’ve recently read?
Jacob Busani: Five Dysfunctions of the Team, by Patrick Lencioni.
Theo Hicks: If your business were to collapse today, what would you do next?
Jacob Busani: Start a new one.
Theo Hicks: And what would that business be?
Jacob Busani: Exactly what I’m doing right now, just different.
Theo Hicks: What deal did you lose the most money on?
Jacob Busani: The deal that I didn’t do.
Theo Hicks: Besides your first deal and your last deal, what’s the best ever deal you’ve done?
Jacob Busani: The hotel deal.
Theo Hicks: You don’t have to answer this question, but how much money did you make on that deal?
Jacob Busani: I got a nice chunk of equity in the deal.
Theo Hicks: What is the best ever way you like to give back?
Jacob Busani: I like to empower the youth in my community and beyond.
Theo Hicks: And then lastly, what is the best ever place to reach you.
Jacob Busani: LinkedIn, Jacob Busani.
Theo Hicks: Alright, Jacob, thanks for joining us today and telling us about your syndication expertise. Just a quick summary of what we talked about – you raise money for mostly multifamily deals. How you find the money for these deals is through your current network, people you meet on LinkedIn, and essentially just networking with as many people as possible.
You mentioned that you’re pretty proactive about it, so when you meet someone new, you explain to them what you do, what your investor is looking for, and ask them to send you deals. Whenever they send you a deal, you use your CCIM expertise to underwrite those deals yourselves. You also look at other things, making sure the leases are in order, building permits are in order, that everything is completely clear and makes sense to you before presenting that out to your investors.
You also mentioned that you have a vast diversity of investors. Some care about cap rates, other care about cash-on-cash return, some people want short-term investments… So you present your deals to your investors based on what the outcome of that deal is going to be. Then the majority of the deal that you do are existing multifamily homes.
We went over your hotel development deal, which was your best ever deal, and how you kind of just found that through, again, networking. So the theme of this seems to be networking, which was your best ever advice, which is to focus on relationships. To do that, just ask people that you have in your current network to introduce you to people that they know, that might be a good fit for you.
More specifically, what you do is that you’ll meet people for coffee on a daily basis, through LinkedIn or different network events you go to. You’ll attend different network events at least once a week, and whenever you meet someone, again, you ask them ot introduce you to other people to start that chain. Overall, you speak to about 5 to 20 new people every day.
Jacob, thanks again for coming on. Best Ever listeners, if you want to learn more about Jacob, again, his website is JacobBusani.com. A link to that will be in the show notes. Have a best ever day, and we’ll talk to you tomorrow.
Jacob Busani: Thank you.