
Show Summary
In this conversation, Christian interviews Michael Saragusa, a seasoned real estate entrepreneur with over 40 years of experience. They discuss Michaelโs journey in real estate, the importance of relationships, identifying good deals, negotiation strategies, and the future of real estate investment. Michael emphasizes the need for education, learning from mistakes, and the significance of partnerships in the industry. He shares insights on commercial real estate and the importance of trust and knowledge in building successful partnerships. The conversation concludes with Michaelโs advice on continuous learning and hard work in achieving success in real estate.
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Investor Fuel Show Transcript:
Christian (00:01.87)
Hey everybody, welcome to the show where we interview the nationโs leading real estate entrepreneurs. I am here with Michael and today weโre going to talk about real estate, everything related as far as investing, commercial real estate. And he has a ton of other topics that I feel are going to be very, very valuable to all of you. Without further ado, before we kick that off though, at Investor Fuel, we help real estate investors, service providers, and real estate entrepreneurs, two to five X their businesses.
to allow them to build the businesses theyโve always wanted and to allow them to live the lives theyโve always dreamed of. Now letโs kick it off guys. Michael, welcome to the show. Iโm excited to talk about everything. You and I just spent about 10 minutes just speaking about your experience for over 40 years. And Iโm really, really interested to hear a lot about the stuff that you have experience on. So before we get started, how about you just share a little bit more about yourself and how you got here.
Michael Saragusa (01:01.982)
Sure. I was invited to go ahead and join the podcast. Iโve got over 40 years experience in finance, business development, operations, and investment. Everything from stock, bonds, market, to real estate. Currently, weโre working on several projects. Weโre in the process of purchasing 40 % of an international business.
Weโre developing four venues within the United States right now forโฆ with names that people would know. I canโt release information regarding that right now, but theyโre going to be entertainment venues. We own the rights to Game of Thrones, things such as that. And then we also have a major development down out of Phoenix.
thatโs gonna be a little over a billion dollars that includes a stadium for an MLS team that my partner currently purchased. Thatโs gonna be moved down there. So itโs gonna be a full economic development with everything from entertainment to housing to got about 500 acres down there that weโre gonna be developing. So thereโs a lot of things in the works. Worked with people from everything from single family all the way up through commercial.
The only market that Iโm a little confused on right now is really the office space area and really it comes down to cost in that particular case because the to me the only thing I can see a value is to have the office space in the area around it and develop a community around it and redevelop it into mixed use with housing as well as retail
Thereโs just not enough people going to be going back to offices. Same reason all your people are here now. They want to figure out a way to get out of the rat race, how to take care of themselves and their family and do better than what somebodyโs going to pay them.
Christian (03:03.31)
That is so true. I cannot agree anymore. So Michael, mean, thatโs incredible for all the accolades and everything that youโre currently doing right now, but Iโm really interested to know how did you even get started in this years ago? What got you in the door?
Michael Saragusa (03:18.265)
Well, at 19 years old, I started my own commercial finance company. And obviously at 19 years old, Iโm getting all the stuff that, which long before internet for everybody, Iโm sure most of your people are more familiar with that, where you went into phone books, you had to contact people, do all these types of things. So everything was built through relationships, which is the most important thing you can do.
I donโt care how youโre getting a lead is nothing more than a name and a phone number. What you do with it after that is based off your knowledge and how you develop the relationship with the person youโre dealing with. So, letโs start as commercial went into more of advisory from that because a lot of the people that youโre dealing with didnโt qualify for the financing they were looking for. So at 19 years old, I was going into on 60 year old business owners.
this is what they needed to do for their business in order to qualify for the lending. And then found that, you know, probably 70, 80 % of those situations actually created more profits for them that they didnโt even need what their initial loan was going to be for. We created that through profit for the business and then financed them for larger loans to grow the business after the fact. So, and then just it grew from that. mean,
You get opportunities for other people. I got in real estate through opportunities that other people are providing.
financing I could do this I could do the different things that were needed and then through my operations background they would want me to be involved in the project on a different level so once again everything is about relationship guys itโs not about the asset the asset is what you use to maximize profits to make money to do all those things but if every party is not being served then you donโt have a good deal
Christian (05:15.693)
So when you say a good deal, Michael, I mean, how can someone identify a good deal, right? Even a beginner.
Michael Saragusa (05:18.0)
Keep.
Michael Saragusa (05:22.703)
There has to be a benefit to every party involved. if Iโm going to, if Iโm wholesaling, I have to give my seller a good price for what it is that theyโre looking for. This solves whatever problem theyโre trying, whether itโs they inherited the property, they donโt want the expense, whether itโs I need to have a minimum amount to pay my loan off. Whatโs the reason? A motivated seller is not a motivated seller. Motivated seller is motivated seller at the right price.
whatโs the right price and why. And then I need to make something out of the deal, Iโm not gonna work for free. And then my buyer has to be satisfied with what he gets in the end.
So thereโs not a good deal unless all three parties are happy in the end. Doesnโt mean they have to be 100 % happy, but they all have to have a benefit from the transaction thatโs taking place. If youโre a middle guy, youโre a transaction coordinator. Thatโs what you do. And your job is to make sure that everybody on each side of the transaction is happy when the deal is done.
Christian (06:29.325)
I love that. I love that. So how can someone get good at negotiations? Right? How does someone build leverage and how does someone communicate that in a proper way?
Michael Saragusa (06:38.901)
Itโs not just about, well first of all, you have to explain to the person that youโre talking to that youโre trying to buy at. If youโre not buying at a discount, why are you buying at discount? What is it that you do? People are afraid to tell people what they do and how they get paid. Iโll tell people what Iโm gonna get paid. Iโm okay with that. Either Iโm worth it or Iโm not. So the real question is, can I help you with your problem? If I can help you with your problem,
then you shouldnโt care what I mean.
I solved your problem. I get paid for solving your problem.
Christian (07:14.125)
Itโs a win-win for both parties.
Michael Saragusa (07:16.107)
Right, so when you start, it has to start with you having enough knowledge to give them a reason to work with you. Once youโve given them the knowledge of what their situation is, how you can help them, what thatโs going to look like, now they can start negotiating. Because now they understand what the negotiation is about. Too many people want to just start negotiating. But youโre negotiating with an uneducated person thatโs never done what youโre asking them to do.
Christian (07:18.765)
Thank
Christian (07:23.085)
Mm.
Michael Saragusa (07:49.632)
How do you temper their expectations?
Christian (07:53.069)
Do you believe that what youโve learned in your experience so far, the active listening is the most crucial part in that?
Michael Saragusa (08:02.027)
It is, but asking the right questions is just as important. So it is, you ask the questions and you get the right answers. And when thereโs discrepancy and what they think and what the reality is, you have to be willing to step up and be direct about those things. Because otherwise, why are you gonna spend an hour on a phone with somebody on a deal thatโs never gonna happen?
Christian (08:04.341)
Right.
Christian (08:27.742)
Mm-hmm.
Michael Saragusa (08:29.439)
Hereโs the circumstances, this is what we can do. Is that acceptable to you? I ask people all the time, are you okay with that?
If theyโre not okay with it, then either I have to be willing to make a change in what my expectations are.
Michael Saragusa (08:47.077)
or I have to end the deal.
Michael Saragusa (08:53.459)
And then the second part of that is, whatโs the end result for each party when things are done?
Christian (08:59.725)
I love that Michael. mean that is that thatโs I couldnโt agree with that anymore Iโm interested to know you know, how did you learn all of these things? I mean throughout your experience Iโm sure you put in so much time and reps and You know made mistakes along the journey. I mean, thatโs obviously a given right, but how did you Know youโre fine, how did you how did you learn this? I mean, how did you how does someone get good at?
Michael Saragusa (09:17.822)
A lot of mistakes. The first mistake I made. Go ahead, Iโm sorry. Go ahead.
Christian (09:30.273)
How can someone do what youโve done? This is my question.
Michael Saragusa (09:32.81)
You start by, it really starts with, and this is the simple thing, people ignore the simple and make everything complicated and itโs all about results. If you do something of value, youโre going to get a result. Stop worrying about, I need to make, Iโm gonna make $30,000 from this deal. Now Iโm gonna put $30,000 into the deal, if something happens in the middle of it, Iโm gonna take it out of line because Iโm the transaction coordinator.
Iโll take less to get a deal done and just keep the deal moving. That way I donโt have either party on either side going, well, Iโm not going to do this anymore. And then itโs all about, once again, the people. Focus on the people that youโre dealing with. Focus on their problems, not what my problem is of making money. Focus on those things through what you do. And thatโs, Iโm justโฆ
Iโve been told Iโm extremely different. And I like that. Some people call me crazy. Iโm okay with that. Business is still about people. And everybodyโs trying to automate. Theyโre trying to get away from this. The further away you get from that, the less money youโre gonna make, I can promise you. Because automation gets you in front of people. That should be the purpose.
Christian (10:38.433)
wants to be normal, right?
Christian (10:52.545)
Why do you say that?
Michael Saragusa (10:59.281)
That should, it should also be a way of gaining knowledge and information. Itโs never going to take away the negotiating position that youโre going to need to be in, which is people and solving problems. If you solve problems, you make money. The more problems you solve, the more money you make. The bigger projects youโre involved that youโre solving a problem in, the more money you make. So learning to scale your business.
is just as important as building the business to begin with. But thatโs the other mistake that people make. They donโt really truly have a business. Theyโre trying to go out and get their first house. Do this. You need to understand where your goals are, what you need, and how to take advantage of the opportunities that are in front of you every day when you do what you do, regardless of what it is you do.
Christian (11:52.215)
So take an audit and take accountability on that is important as well, right? You always have to know where you are and where youโre going. And I think thatโs important to where a lot of people make that mistake where they donโt take that time to have that self-reflection. And it ends up costing you a lot more because youโre trying to rush and get into the game and build Rome in a day, right? And itโs, you have to have delayed gratification. Thatโs always been my belief as well, right? But itโs, but Iโm interested.
Michael Saragusa (12:19.974)
Oh absolutely and that is something everybody wants it yesterday they want it theyโre starting what theyโre doing and they think okay one just one deal is what I need no you need a business thatโs going to support you for your next deal and the deal after that one and then how are you going to do that how are you going to track what you do who who else do you need involved if Iโm going to buy and hold if Iโm going to flip all the different things that youโre looking at to build building your relationships with the right contractors how
How far can they expand with you if I buy one house, three houses, or five houses? Because if I buy five houses, I donโt want to sit on five houses. I donโt want to get them renovated one at a time. I got money out there that is costing me money to finish those homes up and getting people in there. I donโt start making money until theyโre done. Thereโs a timeline that you have to understand that takes place with every transaction that you do. You got to be accepting of
Christian (13:16.525)
Right. I love that. Michael, where do you see the real estate industry going right now? I mean, obviously thereโs so much talks about, you know, itโs not a good time to buy a home right now. Itโs not a good time to invest. Thereโs so much noise. What are your thoughts on that right now? Do you agree or disagree?
Michael Saragusa (13:36.564)
Itโs always a good time to invest and thereโs still more millionaires made from real estate than anything else out there. I mean, that part is always going to be true. The problem that youโre going to have on the low end of the market right now in single family, things like that, is just so saturated. Thereโs so many people trying to get involved, trying to do it, but theyโre not being educated properly to handle what theyโre doing. So theyโre mispricing what they do. They canโt resell what they do.
Christian (13:38.061)
Hmm.
Michael Saragusa (14:06.691)
Theyโre getting contracts. So you think once they have a contract, they finished what they need to do. You got to have two sides of the transaction for anybody to make money. So meeting the needs of the people on everybody that youโre doing. But once again, and a lot of times it comes down to what we talked about, having a business model to support what youโre doing.
So my honest opinion is you can still make a lot of money in it. You need to get your basic education. Thatโs where single family stuff comes in. So at least you start understanding markets. You start understanding how money flows through a real estate transaction. But the faster you expand what it is you do so that every person you talk to is an opportunity because
Youโve got a market out there right now where so many homes that should be able to be bought right now canโt be bought because theyโre being mispriced and thatโs gonna end. Itโs actually taking those homes out of market to where nobody can buy them because the expectation is unrealistic. Overall real estate is always going to be a good market. The problem is the only ones that are going to make money in it are going to be the people that
truly understand all the steps that are involved, get the education that they need in order to actually do what they need to do, and understand one way or another, youโre going to pay for your education. Youโre going to pay for it either in the money you put out to drive business to yourself, to set up the operations that you need in order to be able to scale that at a later date, or youโre going to pay for it in a lot of mistakes, or youโre going to pay for it in time.
Michael Saragusa (16:01.835)
But youโre going to pay something for the education you get. Everybodyโs going to get a different education. And the places where you gain that education and the people you can trust to give that to you is the most important part. Once again, it comes back to people.
Christian (16:18.401)
Right. People over everything, right? And the rest will come from that. Thatโs the foundation, essentially, right? Michael, you have a lot of experience too in commercial. You and I were talking about that as well. Can someone get involved in commercial before anything, right? Even if they didnโt have experience in residential.
Michael Saragusa (16:21.226)
Bye.
Michael Saragusa (16:24.85)
Absolutely.
Michael Saragusa (16:36.957)
absolutely. mean, if you
Michael Saragusa (16:42.504)
Yes, they are two different types of markets. You need to understand the type of property that youโre looking at. Thereโs a few different ways you can do it. You can either, if youโre going to buy yourself, you need to understand how to value those properties and theyโre different. And you also need to understand who the sellers are. Cause one of the big things in commercial thatโs starting to transition a little bit right now, but wasnโt there before.
is there were a lot of commercial properties available, but the owners of those properties were so deep into those properties that you couldnโt, they wanted retail prices, period. End of story. And these are people that, lot of these people were about ready to be foreclosed on. So you gotta be a little more strategic on the commercial side, butโฆ
If you get the right property at the right deal, I donโt care if itโs a hotel, if itโs a large apartment complex, apartment, high-rise, whatever, there are a lot of really good deals out there. Now, they will take a little longer to find the proper buyer or to get in the right network to be able to get those bought. Butโฆ
Theyโll be more available. The question is, can you get it at the right price under the right terms? Are you going to buy and hold it? People donโt understand. There are a lot more opportunities to buy and hold things right now than there is to wholesale, because thatโs where the money is. Because thereโs just not enough spreads in a lot of instances, especially the way people are pricing things right now.
Christian (18:32.429)
Mm.
Michael Saragusa (18:36.704)
And just always remember, how does money flow through a transaction? Thatโs how moneyโs made. And itโs not about what price can I get and who will buy at this, unless youโre only gonna wholesale them.
Michael Saragusa (18:53.711)
And then everything is all about pricing it properly. Getting the right buy price so that I can get a seller that will actually purchase. But then you gotta have a market for that. You gotta know who those people are. So if youโre gonna get into anything, I donโt care if itโs single family, commercial, land development, it doesnโt matter. Know who the players are in those markets and start developing your relationships.
before you invest time and money into doing those things so that you know who youโre going to contact and get a feel for what they were when I first started doing the commercial lending. I didnโt know anything really about it. I just, I reached out to some lenders and said, hey, Iโm kind of new to this. I know about finance. These are the things I do know. I was looking at the programs that you have. think I can do something with this. Will you work with me? And they knew I was green coming in. So when I asked questions, they didnโt treat me like I was stupid.
They answered my questions. then eventually, with three of the people that we had, they were doing, I was doing a lot of fleet leasing, things like that for companies. I went to them and said they were buying down to deep credits for these fleet deals. I said, why canโt we do this for individuals? Went to three of my people, worked together on program, figured out a way that would work, how to reduce risk.
and put together probably what was the first hard money lending or buy now pay here type thing, went to Rick Hendrick and he put it in his dealerships. We released it through them first. That was one in every corner. So I donโt know. mean, you just got to understand what youโre doing. Look where the opportunities are. Every person you talk to, thereโs something there. Either somebody else say no if you canโt come to terms with them, whatever.
Christian (20:41.495)
Mm.
Christian (20:45.858)
Yeah.
Michael Saragusa (20:50.724)
But people donโt know how to ask for referrals. Theyโre afraid to ask for referrals. Hey, you know, it doesnโt sound like weโre get together on what we need here. You know somebody else or do you have more? Simple questions. Do you have more properties?
Christian (20:55.917)
Mm.
Michael Saragusa (21:09.465)
You know, I mean, hey, somebodyโs buying properties. Hey, feel like partnering on something? I mean, what exactly are you looking for? Iโll go out and Iโll find. Target what youโre doing, specific. Everybodyโs doing something. Find out what theyโre doing. It doesnโt matter what Iโm doing, because guess what? Iโll do whatever I need to to satisfy somebody else. If thatโs a market I can make money in and itโs going to work. What are you doing? Tell me what you do.
Christian (21:30.669)
Thatโs right.
Michael Saragusa (21:38.7)
Donโt worry about it. I do whatever you need. Tell me what you need.
Christian (21:41.965)
Right, right. Itโs providing value and over delivering, right? And thatโs the thing. Itโs the biggest thing. Itโs like, youโll never know anything in life if you donโt ask the question, right? There is no dumb question. The dumbest thing you could do is not ask a question, right? I learned that from my father long time ago and it was a very humbling experience, but it definitely does set the foundation for building confidence to go speak to somebody that is a complete stranger. And next thing you know, thatโs your biggest asset.
is your relationships with the people that you have, right?
Michael Saragusa (22:13.344)
Yeah. Itโs always asked them, hey, what do you do? I donโt even start on the property when Iโm talking to somebody. I find out about that. You know, I mean, hey, whatโs situation? What are you looking at? Somebody comes to me with a property. Tell me a little bit about it. Tell me a little bit about what youโre thinking about it. And letโs see if we can make some, because a lot of times youโve got to change whatever the perception is.
Christian (22:17.634)
Right.
Christian (22:22.221)
Itโs a conversation, right?
Christian (22:29.792)
now.
Christian (22:39.084)
Mm-hmm.
Michael Saragusa (22:39.571)
Or maybe if you have enough experience, you can show them a better way of doing what theyโre trying to do. And maybe thereโs actually even more money in it for you and them.
Christian (22:48.013)
There you go. There you go. That is, Michael, that was so good. I wanted to ask you another question too, on, know you have a partner you mentioned as well, but do you feel like a lot of people need a partner in business when they first get started? And then also, what do you look for in a partner today? What makes you want to partner with somebody?
Michael Saragusa (23:10.442)
Well, whatโs, yeah, the partner that I have actually was a weird deal because we both were working with an ex-pro athlete. Now he actually owns a company that works exclusively with pro athletes. It helped them learn to invest, things like that. So we participate in a lot of different things. We have separate companies and then we also participate together a lot. We brought different things to the table.
He is, we have direct involvement with all four major sports leagues. He does a lot of those types of things. Iโm done traveling for a while. I didnโt all of that early in my career. Heโs significantly younger than me. But he was a physician for the San Francisco 49ers. He has a lot of things. He has the contacts. I have the business knowledge and the operations knowledge.
to evaluate deals to see if thereโs something we want to get involved in and then how to do it. So find people that do what you donโt. Thatโs how you make a good partnership. You bring value to what they do that helps everybody else and then they bring something that you donโt have or something that you maybe could build over time, but they have now. And then that expands everybodyโs.
Christian (24:18.541)
Mm.
Michael Saragusa (24:36.402)
realm of what theyโre able to do.
Christian (24:39.575)
I love that. So how do you build trust in that though? How do you build trust in a partnership? Is it through experience? Is it through?
Michael Saragusa (24:46.716)
No one what you need to know.
No, it starts with, if you donโt know something, tell people I donโt know, but Iโll find out. Donโt ever, because guess what? The other person on the other side of the line, when you tell them something, oh, you know, this is how it is, and they know better, you never get that trust back. So you answer questions you can. If you canโt answer them, you let them know you can. And you find experts who can help you answer the questions that you donโt But.
You have to have knowledge. Knowledge, itโs not about book knowledge. Itโs not about all the things that college brings or something like that because you have no practical knowledge at that point. And a lot of things are outdated that youโll learn. Itโs about how do you implement information into something that gives value back and accomplishes a goal. So, I mean, it takes time, you know.
Youโre not going to know everything starting out. Doesnโt mean you canโt make money while you learn. And you should be making money while you learn. And youโre going to pay some money out before you make money. Or youโre going to give up a lot of time and youโre going to learn slower. I mean, if I invest in it, itโs going to happen faster. But I also need to have some expectations for what Iโm getting for what I spend. Meaning, doesnโt mean that I make money for it, but I should gain knowledge.
Christian (26:13.613)
Mm.
Michael Saragusa (26:20.004)
or I should get money and I gotta seek the knowledge. But I gotta have a return on whatever it is that I give. So it takes time. People have no patience anymore. Everybody has very short attention spans. Itโs getting worse and worse, not better. Because weโre being served information from people that arenโt qualified to provide that information now, thereโs too much information available.
Christian (26:49.868)
much.
Michael Saragusa (26:49.901)
and only a small percentage of it is valuable. And you gotta have some knowledge of your own and you gotta be able to be honest with yourself that not everything is true.
Who am I getting my information from? How does that apply to either me or my projects or the people that Iโm dealing with? And less is more. You can overwhelm people with, donโt try to impress people with what you know. Apply what you know towards something thatโs gonna accomplish something and let them know thatโs what you know. I know how to apply this to make that change happen.
Christian (27:33.815)
could not agree more. That really is everything. Iโve added the less and more model to my life years ago because at first, before, I wanted things just almost instantaneously, right? I just wanted things so fast and I realized I already had everything I right in front of me, right? And I think if more people were just willing to receive that, it would just catapult their success almost immediately.
in every area of their life, right? Itโs just by doing that. So I couldnโt agree anymore. Right. Me too.
Michael Saragusa (28:07.95)
Yes, simplify things, donโt make them hard. I hate hard. Hard is hard. The same thing can be done sinceโฆ
Christian (28:14.882)
Right.
Christian (28:18.605)
But you can choose your horror too, Exactly.
Michael Saragusa (28:21.517)
Yeah, if youโre do something hard, better be, you better have a really big payout at the end of it. And you better have some sort of guarantees that itโs gonna happen. Because otherwise youโre just spending, I always coordinate what is my time worth? And where do I need to spend that time to get the value back for what Iโm gonna spend my time
Christian (28:26.381)
Yeah.
Right.
Christian (28:44.141)
Thatโs amazing. That is amazing. Michael, I wish we had an honestly an hour together, but unfortunately weโre running out of time. guys, thank you so much for joining us today. Michael, Iโm gonna pass this over to you now though. If anyone wants to learn more about you, currently what youโre working on, I know you have a lot of different things going on. You could spend some time to talk about that and then where can people find you as well?
Michael Saragusa (29:12.149)
Iโm going to just provide my old email. So I have a business one that once I develop business relationships with people or long-term relationships that theyโll go into, Iโm going to give an old business one that I had. If anybody wants to speak to me further, thatโs probably the best way to contact me. And thatโs going to be Synergy, S is in Sam, Y-N-E-R-G-Y.
C as in Charlie, D as in David, G as in George, at aol.com. And if that doesnโt age me, I donโt know what does. So, S-Y-N-E-R-G-Y-C-D-G at aol.com. I love to teach. Honestly, if there was any money in it, thatโs what I would have been, probably was a teacher. So I just utilize and take advantage of.
Christian (29:48.159)
Yeah.
Michael Saragusa (30:08.428)
Thatโs what I try to do through every transaction or through every interaction that I have with people is just either learn or educate.
Christian (30:17.389)
Well, I definitely felt that from you, Michael, from me.
Michael Saragusa (30:18.966)
then the money comes from what you create from that.
Christian (30:21.985)
Right, I definitely feel like I felt that from you and Iโm sure, no, I said, I definitely feel like I felt that from you and Iโm sure our audience is exactly gonna feel the same thing. I learned so much from you and I know theyโre gonna learn so much from you as well from this and I really, really enjoyed our conversation today, thoroughly. So, no, of course, awesome.
Michael Saragusa (30:24.652)
Iโm sorry.
Michael Saragusa (30:40.95)
Yeah, I appreciate it, Christian. Well, good luck to everybody. Hopefully it was useful. Thereโs a lot more. I mean, just continue your education. You never stop. I learned something new every day. Itโs not going to stop. And thereโs going to be bumps in the road. Be prepared for those and figure out how to remove those as quickly as possible. Anybody thinks that making a lot of money is easy?
is mistaken. So thereโs nobody with a lot of money that hasnโt worked hard to get what they have.
Christian (31:14.295)
There is no easy path.
Christian (31:19.757)
That so true. That is so true. Michael, I love it. Awesome, guys. Well, I hope everyone enjoyed todayโs show. And as always, weโll see you on the next episode. Take care, everybody.
Michael Saragusa (31:31.371)
Thanks Chris.