JF2461: Building The Systems For A Successful Business with Pili Yarusi
Pili is a real estate syndicator and a coach. As a full-time mom herself, she is an advocate for moms in real estate, encouraging them and helping them go through the challenges of navigating the world of real estate investment.
Pili and her husband have over $75mil in their portfolio. They focus on acquisition of large multifamily assets, and lately they’ve been building a system in order to simplify parts of their business. In this interview, Pili shares her process of collecting and transferring data from Google Sheets to the new system she uses.
Pili Yarusi Real Estate Background:
- Full-time Mom, Real Estate Syndicator, Coach, and advocate for Mom’s in real estate
- 7 years of real estate experience
- Portfolio consists of 10 buildings totaling 900 units
- Based in Murfreesboro, TN
- Say hi to her at: www.yarusiholdings.com
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Best Ever Tweet:
“Once you have the systems in place, it feels so good” – Pili Yarusi.
Joe Fairless: Best Ever listeners, how are you doing? Welcome to the best Real Estate Investing Advice Ever Show. I’m Joe Fairless. This is the world’s longest-running daily Real Estate Investing podcast where we only talk about the best advice ever. We don’t get into any of the fluffy stuff. With us today, Pili Yarusi. How are you doing Pili?
Pili Yarusi: So good, Joe. Thank you so much for having me on.
Joe Fairless: Well, it’s my pleasure, and looking forward to our conversation. Pili is a real estate syndicator, a coach, she is a full-time mom, and an advocate for moms in real estate. She’s got seven years of real estate experience. Her portfolio consists of 10 buildings totaling 900 units, based in… I want to make sure I’m pronouncing it correctly, I should have asked you beforehand…
Pili Yarusi: Murfreesboro.
Joe Fairless: Murfreesboro, Tennessee.
Pili Yarusi: It’s right outside of Nashville.
Joe Fairless: I know that’s where Middle Tennessee State is right?
Pili Yarusi: Yes.
Joe Fairless: I knew the University, they are the Blue Raiders, right?
Pili Yarusi: Mm-hm.
Joe Fairless: So I know about your school and I know you lived in Jersey for a while, so you might not be claiming that area quite yet. But I know all about the school, I just trip over how to pronounce it. Welcome to the show. Would you mind telling the listeners a little bit more about your background and your current focus, and we’ll go from there?
Pili Yarusi: Hi there. My name is Pili Yarusi. My husband Jason and I have about 75 million in our portfolio. We are real estate syndicators. We focus on the acquisition of large multifamily assets, primarily in the Tennessee, Nashville area and Louisville, Kentucky area. We are just so excited to be in this space, and I’m excited to be talking to you today.
Joe Fairless: Why do you live in Tennessee now?
Pili Yarusi: Jason and I were thinking about moving for some time now. With everything that’s happening with COVID, that kind of sped the process up a little bit. We used to live in Westfield, New Jersey, which is an amazing, amazing town. That’s where Jason grew up, and it’s kind of like a suburb of the city. We decided this would be a perfect time to sell the home, because home prices in Westfield did skyrocket a few months ago. We were watching the market there and we put this house on the market. This was actually one of our last flips, and we couldn’t sell it for the life of us about a year and a half ago, so we just decided to move into it. Now I put it back on market a few months ago and it sold in seven days; in and out of attorney review, set in stone, it’s going to get sold, and it closed within 30 days of being under contract, and here we are. Tennessee offers us more land and more value.
Joe Fairless: How’d you pick the city that you’re in? Murfreesboro.
Pili Yarusi: We were actually looking at a couple of other towns that we have friends in. Murfreesboro, we actually just closed on a 93 unit here. We weren’t planning on moving here, but Jason actually, for kind of giggles, looked at the rental market and found a home in a cul de sac in a nice area, and we actually rented it sight unseen. We just jumped in, we knew the area was great, school systems are really great, even though I’m homeschooling, but we like to be in an area that has good school systems. So we just kind of threw the tac onto the map and it landed here.
Joe Fairless: What’s your role versus Jason’s role in the business?
Pili Yarusi: My role is primarily — I am all about keeping up with the investors and our tenants. I make sure that all of our communications go out on time. I also facilitate the money-raising aspect. I actually don’t like to say that, or capital raising, I like to say providing opportunity aspect. So I make sure that it’s all systematized; once we get all of our investors together, I make sure that all the communications go out on time. We actually just bought in a third-party sort of system to manage all of our investor distributions and communications; it is called InvestNext. They’ve actually been a really, really good program to use. So that’s my primary focus when it comes to our multifamily business.
Joe Fairless: What other systems did you use prior to going with InvestNext?
Pili Yarusi: Google Sheets.
Joe Fairless: Yeah, I was thinking of the question, but I didn’t say it right… What other systems did you look at prior to going with InvestNext?
Pili Yarusi: We decided to go with InvestNext because it seemed to give us all the flexibility we needed and it had all the systems that we needed. We really wanted to go with a system that had a good distribution system. They’re relatively new, so we’re able to talk with the providers and ask them, “Okay, these are the things that we need. Are those things something that you can put in?” We did test out a few others; I hate to say bad things about other systems, because these are systems that other people have used… But it’s not that they were bad, they just didn’t work out for us with what we needed. We actually wanted to work with a system that was relatively new, so we could actually get them to tailor-make a system for us. Whereas, if we had gone with a system that has been around for even a few years now, they’re already set in their ways more, and they weren’t able to give us what we needed.
Joe Fairless: So before you were using Google Sheets, and now you’ve got this system in place, what was the experience like importing all of your investors from previous deals into the system?
Pili Yarusi: Like anything, it takes a little bit of time. It’s like with anything, when you go from just doing it all yourself to actually putting in the systems, there’s a bit of a pain factor that happens. But it’s like ripping off a band-aid. Once those band-aid is ripped off, it’s like smooth sailing almost. Just having the systems in place, like any real estate systems, like any systems in general, once you have those things in place and your systems are running, it feels so good. The actual data entry, it took a little bit of time. We had to go back into all of our buildings and input all of our people. Not really one at a time, but we gave the spreadsheets to the operators of InvestNext and they helped us input all the information that was needed.
Then we have to go through all of our investors one by one, just to make sure all the information was correct. We’re talking wiring information, we’re talking about addresses, maybe their addresses were changed… But the thing is, Jason and I are really good about communications with our investors… It was actually good for the investors, because it allowed us to give them one more touch and to let them know, “Hey guys, we’re actually going to jump onto this amazing system that’s going to actually help us to systematize all of our communications and to help you keep track of your investments much better.”
Joe Fairless: Let’s pretend I’m a beginning multifamily syndicator, I do not own a property yet but I’m about to put one under contract, and I ask you “Should I have a system, like InvestNext or like any other system, Groundbreaker, or other systems like that now, or should I wait till I get a couple of deals under my belt?
Pili Yarusi: I would say get your first deal under your belt. I know there might be people out there, my people at InvestNext are probably like “No, no, tell them now.” I would say get your first one under your belt first. It’s good to have the systems in place, and have your own systems in place, and to know what you’re doing. Because I know when we first jumped into our – first ever for anything, but your first multifamily syndication, there are so many moving parts. I would hate for somebody to jump in have one more moving part, and say InvestNext isn’t the perfect thing for them… They’re going to have to revise everything with the next deal.
So have a good spreadsheet, and the thing is, a good mentor can give you all the information that you’re going to need to get from your investors. Have that spreadsheet down, and chances are you’re going to have, depending on the deal, anywhere from four to maybe 25. I really wouldn’t go more than that many investors. But that’s still manageable for you. Once you start getting into two, three,10 – Joe, I don’t know where you’re at right now, but it starts to get unmanageable as you get into the large numbers. That’s when you bring in third-party management.
It’s kind of like getting your first rental. When you get that first rental unit, even if it’s like a duplex or a fourplex, do you hire a property manager right off the bat? Probably not. You learn how to do it yourself. That way you know exactly what you need when you bring in this third-party management.
Joe Fairless: Let’s switch gears a little bit and let’s talk about investor relations and having conversations with investors when you have a live deal, and you’re speaking to them about the opportunity. What are some challenging questions that you have gotten from investors during that period of time?
Pili Yarusi: Well, especially with what we’re going through right now, I know we want to keep this as timely as possible, but right now we’re going through COVID. It’s just what we are going through, and it’s something that we’re going to be handling for the next few years. So a lot of the investors wanted to know how we were basically underwriting for it. And we’re just being extra cautious, and the thing is our investors know, we’re always ultra-cautious when it comes to underwriting. So we send them all the information and we tell them “This is our underwriting, this is what we’re expecting to go through. Please, please, please, don’t just go by what we’re saying. You are going to need to bring in your CPA, you’re going to need to bring in your attorney to help you go through all of this information.”
Because as much as I want to tell you – and if any of your listeners know me, I’m like all bubbly up, “You can do it. It’s all aloha and love”, but when it comes down to it, the numbers have to work. So number one, you have to trust your operators, you have to trust the people that are bringing you the deal. And number two, the deal needs to work. But you need to have and do your own due diligence on the deal.
Joe Fairless: What sort of system do you have in place with investors in order to ask questions? Like when you have a new deal, can you talk about the process that you employ?
Pili Yarusi: Right now, I think we’re still relatively small, although we’re at 75 million. At that number, if an investor wants to call me, they have my number, and they have Jason’s number. The best thing that they do is usually email us. So it’s either email, text, or call. But now with InvestNext, they can actually go through the system, see the investments, say something pops up that they have a question about, they can actually highlight that and say “Pili, I have a question about XYZ. It’s over here”. I’ll look at that and I’ll be like, “Okay, this is the answer for that.” We’re super open about everything. If one of our investors wants to see all the books, we talk to give us a little bit of moment’s notice and then we’ll walk through it with them if they need it.
Joe Fairless: When you take a look at the evolution of your business and your area of focus, one thing I mentioned at the beginning of the show in your bio is –and this I believe came from you, because it was in the bio– advocate for moms in real estate. Can you talk a little bit about why that’s in your bio?
Pili Yarusi: I would love to. It’s because it’s part of my Why. When I started my real estate journey, I was pregnant with my first child. I took the Real Estate exam in my first trimester, and any mama or papa, you all know that first trimester is hard. Your mom is throwing up, she is feeling all these new feelings and hormones… But I was determined to do this for my family. And I’ve had so many questions from mothers since then on “How do you get into it having children? How do you get into it when I’m pregnant? How do you get into it, having all these things that you have to do as a mama?”
So, I decided well, why not answer it from the “I know motherhood.” And motherhood is an ever-growing process, it’s an ever-growing thing. It’s definitely my why, so why not come from that aspect? I actually run two programs called Mothers of Multifamily and Moms of Real Estate. Moms of Multifamily is a part of our podcast; I talked directly to mothers who are excelling in multifamily, and some actually that have just started, because I believe that on any side of the coin, we all have something to teach and we all have something to learn. I’ve learned so much from my moms who are just getting in, from moms who have been doing it for years, decades even.
Moms of Real Estate came out of COVID. It was a bunch of moms in real estate that I had had been in a mastermind with years ago. I was like, “You know what ladies? I miss you guys. Let’s put together a live show.” We obviously have so much time as moms. We used to go live on Facebook every single Thursday. All the content is still there. We’re actually revising the show and we’re going to come out with something new and amazing for 2021. But I’m really just so excited to talk to women and to mothers in real estate, because they come from a different viewpoint, if that makes sense.
Joe Fairless: Help me understand, since I’m not a mom… I’m a dad, but I’m not a mom. Help me understand what are some topics that would come up on a Moms of Multifamily forum, podcasts, or whatever, that wouldn’t come up necessarily on say a podcast like mine?
Pili Yarusi: For instance, with Moms of Multifamily, especially one of my mom’s, her daughter must have been three months old, and she was like, “You know what Pili? I’m sorry. She won’t go down.” I was like, “You know what? You do what you need to do. Let’s still tape, if you don’t mind.” So she breastfed while we were taping. I don’t think that’s going to come on your show very well.
Joe Fairless: No, that won’t come very often on my show. It hasn’t yet in 2,300 episodes, not that I’m aware of.
Pili Yarusi: [laughs] The thing is, that’s what moms have to do all the time. I can’t tell you how many times I’ve gotten on calls, not necessarily podcasts, but on business calls, when my kids were younger, and it’d be like the only way I can be on this business call is to breastfeed my child, keep the camera focused on my face, and just have the call. This is stuff that mamas do to make sure their children are taken care of. But they’re buying that time so that they can still run their businesses.
One question I asked all of my Moms of Multifamily is how do you do it? And yes, this could be a question that you could ask any real estate professional. But I especially want to know from moms, how do they do it? How are they able to run these multimillion-dollar businesses?
Some of them are SCC attorneys, some of them are just getting into it, some of them have multiple businesses. I ask them, how do they do it? How do they excel in their businesses? Some of the answers that I’ve gotten have blown me away. A lot of moms tell me “I don’t. I don’t do it by myself.” I think the one answer that I get the most is “I don’t do it all on my own.” It’s all about leveraging and knowing how far you can go. Talking to moms is like a breath of fresh air, because none of them have ever put up a front to me, as in “Yes, I have 75 million dollars in my portfolio, and everything’s hunky-dory and sunshine and rainbows.” A lot of them are like “This is what I’ve gone through. I’ve had to use systems. There are times that I’ve cried on my pillow at night, and I picked myself up the next day and I’m just like, this is what I have to do to create the generational wealth for my family. This is how I’m going to get more into self-care.” There’s a lot of self-care involved. “This is how I’m going to run my business and my family. And I’m going to excel at it.”
Joe Fairless: It’s really interesting to me, a couple of things… One, when you said that moms generally say “I don’t do it on my own.” You said that, right? It’s a group effort. I’ve noticed throughout my years of interviewing podcast guests, and you actually were another example of this when you talk about your background… Generally, if I’m interviewing a man, then he’ll say “my portfolio,” but if I’m interviewing a woman, she’ll say “our portfolio.” It’s just interesting that generally, the women will bring along their partner into the conversation, whereas the man will just conveniently omit that there’s someone right there helping him every step of the way… Whether it’s directly on the business or otherwise. I am guilty of that myself, I’ll be the first to put myself in the man category for not always recognizing it’s a “we” thing versus a “me” thing. That’s just an observation, but maybe interesting, I don’t know. But it’s an observation.
The second thing that is more applicable to anyone listening to this episode… What you are doing with the Moms of Multifamily is you’re connecting a group of individuals, that happen to be moms, around two things. One is something personal and the other is something professional. What that does is it allows your group, in this case moms, to have the typical barriers and walls that people have up in group settings to be broken down, because you’re talking about something personal that you all are going through. That creates more meaningful relationships, more substantive conversations, and probably greater business results.
My observation with this is that, anyone listening, if you’re not a mom, you don’t have to be a mom to do something like what Pili is doing. Simply have some sort of common element among a group that is more personal, and then use that as a way to really get to know each other in the group and revolve the conversation around real estate, but also have the personal component to it so that it accomplishes the same objective, which is people get more real with each other, you support each other more, and you ultimately get to know each other better, and you drive more business results.
Pili Yarusi: Yes, it’s all about finding that common ground. That’s why I say, anybody can watch Moms of Multifamily and get amazing information from these moms, not only because they’re moms, but because we have found that common ground. For anyone who’s listening that’s not a mom, like you said, this is for — especially when you’re raising capital, find that common ground with people, because people like to invest in deals, yes, but when it comes down to it, people invest in people.
Joe Fairless: Taking a step back, what’s your best real estate investing advice ever?
Pili Yarusi: Just that actually. I’m going to take a step back to what I just said, invest in people. That’s my best advice. When you’re looking at investments, invest in the people. Yes, the numbers have to work out, but I’ve actually made deals, and made deals happen, and jumped into other people’s deals because I like the person before I like the deal.
Joe Fairless: Yep, that’s the same exact way I approach investing personally on the LP side, is know the operator first. If you feel good about the operator, then you’ll know how they approach the business. Certainly, deals have to meet certain parameters, whatever those are for you – risk threshold, return threshold, and maybe asset class… But ultimately, it’s about the operator, because anyone can be a spreadsheet millionaire. It’s all about how you execute and the integrity of the operator. We’re going to do a lightning round. Are you ready for the Best Ever lightning round?
Pili Yarusi: I am ready.
Joe Fairless: Alright, let’s do it. First, a quick word for our Best Ever partners.
Joe Fairless: Best Ever way you like to give back to the community.
Pili Yarusi: I am actually part of a program called Imagine. It’s a group that gives support to children and parents who have lost either siblings or children, just giving them support. So I support that group. I’m also supporting the Hawaii Food Bank, because that’s tried and true to my heart. I’m originally from Hawaii. There’s a couple of other philanthropic groups that we’re looking into for 2021. I don’t want to say too much yet, because we haven’t pressed the button, but we’re going to get into that.
Joe Fairless: How can the Best Ever listeners learn more about what you’re doing?
Pili Yarusi: Please go to www.yarusiholdings.com
Joe Fairless: I thoroughly enjoyed our conversation, Pili. Thank you for being on the show. I hope you have a Best Ever day and talk to you again soon.
Pili Yarusi: Thank you.
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