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Master Investor
market at any time. “We are fully market-agnostic,” Santarelli said, explaining that this means Norada is not “married to any market, any property manager, lender, inspector or title company. We are completely unbiased.” He described this philosophy as an enormous benefit to both himself and his clients because as soon as the numbers fail to “make sense” in his proprietary “grader” for markets and deals, the company already has the next “green light” market in its sights and is moving on solid investment purchases in the area. “Never handcuff yourself to a particular market just because you are familiar with it or you live there. Pick the markets that offer the best opportunities and put your investment capital to work in the best way possible,” he advised. BORING, ‘IN A LOVINGWAY’ While any real estate investor will tell you that a cash-flow generating, value-building property can never be a truly boring addition to a portfolio, Santarelli happily described his “favor- ite” markets as “boring markets” with absolutely “no sexy or sizzle” at all. Norada is looking for jobs, logistical hubs, diverse economies and a broad economic sector when the team is in evaluation mode, not places where “you pay $1 million for a tiny condo,” he said. “Now would I live in those markets? Probably not,” Santarelli admitted. “Live where you want, but invest where it makes sense. I like the ocean, the weather and the greenery where I live, but I just can’t justify investing here at this time,” he said. Furthermore, by truly living the market-agnostic approach, he pointed out, an investor can usually afford to live anywhere he or she wishes. The Norada team looks at “favorite” markets as moving targets. “They can and should change over time,” Santarelli said. He cited Dallas, still a hot housing market by any standard, as a market in poten- tial transition. In 2012 and 2013, “there were tons of deals,” he said, noting that
SANTARELLI’S RULES FOR REAL ESTATE
When a company not only weathers a huge economic disaster like the housing crash but does it in style, the founder and president tends to learn a few things. Marco Santarelli is not unique in that regard but, in his own signature style, he took the things he learned and refined them down to a road map for his company and his real estate investors to follow. “We have a well-defined, written process. It’s quite literally a checklist,” he said. “Whether an investor is a multimillionaire or a complete newbie, we walk through that list to find them the deals that are right for them, and we use the same successful process every single time.” While Santarelli’s road map is, not surprisingly, extensive, here are a few of the overarching principles that govern it: KNOWLEDGE IS CURRENCY Educate yourself. Whether you use that education to actively handle your own deals or to accurately vet your investment providers, “knowledge is the key to providing a passive stream of income for you and your family,” Santarelli said. NEVER SPECULATE Norada’s numbers must make sense, and the company refuses to “chase after appreciation” or speculate on short-term gains. “You usually find out a market has peaked six to nine months after the fact, and that’s too
late,” Santarelli believes.
INVEST FOR CASH-FLOW One of Norada’s main mottos is “Cash flow is the glue that keeps a real estate investment together.” The team picks markets and deals based on how cash flow from transactions will help investors meet specific goals and emphasizes the importance of using geographic diversification to shore up cash-flow reliability. WORK WITH PROFESSIONAL, AND BE PROFESSIONAL Santarelli strongly recommends against managing your own properties unless you are a professional property manager, but that doesn’t mean you should step away from your investments entirely. “Property management is a thankless job that requires a solid understanding of tenant-landlord laws, good marketing skills and solid people skills,” he said. “Your time is valuable and should be spent on your family, your career and building your financial future.” However, he said, this does not mean you leave “the game” entirely. “Be a direct investor and maintain control of your investments,” he advised, noting that truly great investors are always informed about their money. These principles are part of Marco Santarelli’s “10 Rules of Successful Real Estate Investing,” a key component of the Norada Real Estate Investments road map for investing success.
Santarelli uses every opportunity to educate himself.
far away as Australia, the United King- dom and Canada. “I remember when the lightbulb went off,” he recalled. “In 2003, I attended a real estate investing boot camp that involved traveling to multiple cities and buying a lot of properties. By the end of 2004, I owned 82 rental units, and I’d met a lot of people.” What intrigued Santarelli as much as his own personal wealth-building potential in real estate was the number of would-be investors who were also attending the same train- ings as he was—but never “pulling the trigger.” He described as a “lightbulb moment” his realization of just how many attendees would never invest. “It’s like going to a restaurant and ordering from a menu,” he said. “You really just want food you enjoy so you can eat and keep going with the rest of your day. So many investors want to invest but don’t want to be active real estate investors.
They do not have the time, and of- ten they do not have a true interest. I realized that if I picked the markets, picked the properties, picked the teams and assembled it all in a package that I could present on a silver platter, I could help these people change their lives.”
WHEN MARCO SANTARELLI, found- er of Norada Real Estate Investments, bought his first property at the age of 18, his gut told him the transaction held the key to his eventual financial freedom. What he did not realize at the time was just howmany other investors would find financial freedom thanks to his initial purchase as well. “I have always had an interest in real es- tate, but I knew that the real first step for me was not buying properties, but acquir- ing knowledge,” Santarelli said. He added, “The most important place to invest is in your mind and in yourself. At Norada, we are constantly sharing information and knowledge as we guide investors toward their financial freedom.” Santarelli is an effective guide. Today, instead of handling just his own portfo- lio, he handles portfolios for investors with as many as 2,000 properties under their control and works with clients as
BOOMING THROUGH THE BUST
Santarelli’s personal motto, “educate yourself,” has never varied from his earliest days in real estate, and he calls it the first of his “10 rules for successful real estate investing”—whether an inves- tor plans to invest actively or passively. Today, as he sits in his office surrounded by nearly 1,000 books, looking out over lush greenery, he recalls how this motto enabled him not only to weather the housing crash in the mid-2000s but even thrive—and take his clients with him.
manage our business effectively,” but even then, the Norada teamwas learning, eval- uating and adding to the vast reservoir of knowledge that enabled it to eventually establish an effective “litmus test” for any
“We never forgot about cash flow. It’s the glue that holds everything together,” he said. During the worst of the crisis, Santarelli said, his company, like most, “scaled back and cut costs in order to
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