5 Key Lessons from Robert Costomiris on Real Estate Investing Mistakes

Dylan Silver (00:01.123)
Hey folks, welcome back to another episode of the Real Estate Pros podcast. I’m your host, Dylan Silver. And today on the show, we have Robert Costomiris , who is the president of Myome Equities, a private equity firm helping investors passively invest in real estate with projects nationwide. Robert, welcome to the show.

Robert Costomiris (00:22.31)
Thank you for having me. Appreciate it.

Dylan Silver (00:24.385)
Absolutely. At the top of the show, I always like to ask folks about their background, but also their entry point into the real estate space because a lot of folks, it’s not in their blood and it may seem like, how do I even get in? I’m a teacher or, you know, I work in government or, you know, I have a business and a sales career, but I’m not in real estate. How do I partake in this? So how did you get in?

Robert Costomiris (00:49.623)
So I have a funny, my wife won’t think it’s so funny, but an interesting way that I got in, I was on Wall Street at the time and my business partner was like, there’s a house by me that’s for sale. I think we should buy it. We’ll rent it out and we’ll have an income producing asset. So I’m like, let’s go. It was back in 2006. So we went in and I had to bid it up.

It was no money down on the mortgage. And we know what happened in 2007, 2008. We got done after we put in about a hundred thousand into the house. had a realtor come in. was like, I was like, before we finish, let’s have a realtor come in. I want to know what we can get for rent and how fast they could rent it out what that looks like. Our mortgage at the time was $4,500. She says, I could rent it out for you for $2,000. That math does not math.

Dylan Silver (01:40.264)
Hmm.

Dylan Silver (01:45.995)
No, not at all.

Robert Costomiris (01:45.995)
I was a little upset about that. And I said to my partner, said, hey, this house is by you. You didn’t like do any research or anything to figure this out. And he’s like, well, you just went with it. I was like, well, you knew what you were doing. So I didn’t think to question it. Long story short, after a long time, we lost a lot of money, finally got out of it almost 12 years after that. that is my first foray into real estate. But.

I never went to college or anything and I told my wife the money that we wasted on that project was an expensive one, but it was my lesson into real estate. And it wasn’t until years later that I finally got into real estate, but I did learn a very hard lesson in that property. And I carry through to today’s, it’s something that, you when they asked me to bypass inspection, I’ll never bypass it. There’s certain things that I just won’t do.

Dylan Silver (02:40.286)
won’t do and after that deal was there a growing phase was there a lot of interest in real estate but from a distance or or were you active in other ways

Robert Costomiris (02:51.666)
No.

No, well, personally, I had bought and sold almost three or four houses to live in. know, with just buying and selling those, I got to learn a little bit more. But I was on Wall Street until twenty twenty one. And it was at that point that I had met. Well, I I know I knew him for about 10 years before that, but I met my current partner and he said he wanted me to come work for him. I told him he couldn’t afford me.

Dylan Silver (03:15.812)
you

Robert Costomiris (03:22.933)
And then finally we got together and I learned his business was a lot bigger than what I thought it had been. And here we are now and we’re a growing firm. We’re not doing a lot of deals, but we’re getting to that point where we are starting to break out mode where we’re starting to do more and more deals. And this year we should probably do a lot more than we’ve ever done.

Dylan Silver (03:23.62)
you

Dylan Silver (03:45.375)
And we could probably spend a whole show talking about just capital raising and we’ll definitely touch on that here. But to go a little bit deeper in into the background and to fill in the gaps here. What was the time period between that that deal when it was it wasn’t it wasn’t the easiest. It was a maybe a learning experience. And when you became

Robert Costomiris (04:04.21)
Yeah.

Dylan Silver (04:12.802)
part of the my own equities.

Robert Costomiris (04:15.272)
So that closed out in about 2015, so I lied it wasn’t 12 years, it was what, nine years? And I didn’t start here until the end of 21 to 22.

Dylan Silver (04:25.932)
Okay, okay. you know, there was some years in there, you know, did you know in the back of your mind that you would end up in real estate in the future?

Robert Costomiris (04:27.528)
There’s a good amount of time.

Robert Costomiris (04:34.555)
Nope, I had no clue. I thought my whole life was going to be on Wall Street and working as a financial advisor or running a firm or something along those lines. when this came about is when I knew I always had it. I was always interested in real estate. And when I bought the house that I live in now, my realtor was getting so mad at me because I wouldn’t chase houses. And she’s like, you have to bid up. You have to get this for over, you know, asking you live in it. You’re looking to buy in a prominent area.

I’m not doing it, I’m not doing it, I’m not doing it. That was one thing that I learned on that first house and don’t chase it. And we got our house right before COVID, this house that we’re in now, right before COVID and we’re up substantially in it, whatever, as far as Zillow says, I don’t consider we’re making any money. But the value’s going up and it is what I’m trying to say.

Dylan Silver (05:07.051)
Yeah.

Dylan Silver (05:23.596)
Bye.

Dylan Silver (05:27.459)
Yeah, I the equity, know, I’m, God willing, gonna gonna be a licensed realtor here at mid April, I’m sitting for my license here in a couple days Monday. But before that, I was in the wholesale space and kind of the trajectory of a real estate investor is you’re on the sidelines, you know, in my case, I was working in the automotive space, I was working for Nissan, as in the sales floor. And I knew like, I want to get into real estate, but I don’t know how.

Robert Costomiris (05:36.998)
Mm-hmm.

Dylan Silver (05:54.226)
Nobody in my family invest in real estate other than the home that they have. No one’s interested in you know, doing this with me. My friends are ridiculing me because they’re like, you know, the last thing in their mind is investing in real estate. And it seemed like impossible, like how are you possibly going to do that? And then the things that I was reading, you know, get into real estate cash for keys, no money down there like that’s not possible. You can’t do that.

Robert Costomiris (06:00.301)
Yeah, uh-huh, yep, yep, yep.

Dylan Silver (06:22.892)
But ultimately, I learned about assignable contracts, and I learned about real estate wholesale. And that’s, that’s how I got in, you know, and so I like to hear people’s stories, because for folks on the outside, it can seem like how do I get in if I don’t know anybody if I’m not, you know, it’s not in my blood. But I also want to go ahead.

Robert Costomiris (06:40.715)
Yeah, it’s definitely a lot easier than what people think it is. It’s not, you know, I’m in a little bit more of a structured business, but it’s not rocket science to get into it. I mean, look at some of the people that are in real estate. You have some of the, you know, grittiest people. And I mean, that was sincerity, meaning that they’re hard workers. They just know what they want. They go after it. They know real estate is a secure thing. And then you have some of the smartest people who, you know, look at spreadsheets and they could break down a deal within, you know, 20 minutes and tell you if it’s worth it or not.

Dylan Silver (07:10.077)
100 % and I always tell folks who are on the outside getting in is you just have to fanatically network like you have to gorilla network be a networking junkie and it’s hard because it’s unnatural, especially if you’re in a line of work where you’re not encouraged to be a self promoter. It can seem a little strange but going back to the Zillow estimates for the home so realtors especially will say

you can’t trust the Zillow estimate on your home. But as a wholesaler, we would look at the Zillow estimates and when we were calculating ARV, especially here in DFW, I’d be like, these are remarkably accurate. know, Zillow is doing a good job.

Robert Costomiris (07:49.515)
And they’re not, listen, should you sell your house based off of it? Maybe not, but you definitely want to get other estimates or whatever you want to call it. I’ve looked at plenty of houses and I use that as a gauge when I first, just when I base level look at something. when I put it into systems and then it comes out, it doesn’t come too far off from there. There’s times it doesn’t, but.

Dylan Silver (08:16.949)
think it’s pretty darn good. I always tell people who are really anti-zilla, like, well, you know, I’ve done a lot of but anyhow.

Robert Costomiris (08:18.334)
Yeah!

Robert Costomiris (08:28.192)
You’re dead on about that. It’s definitely not far off and it is a lot more reliable than real estate is.

Dylan Silver (08:34.591)
Yeah, yeah. Talk to us a little bit broad strokes about the capital raising process, maybe even on a lower level for folks who are potentially just looking to get in and then broad strokes again on a higher level, someone like yourself operating my own equities, what it is that y’all do.

Robert Costomiris (08:44.481)
Yeah.

Robert Costomiris (08:56.747)
So when we buy a deal, we’ll buy it through a combination of debt and equity. We use lending institutions that will provide us a majority of the acquisition price, all of rehab, and then we’ll go out and get what we call the capital stack. And the capital stack is essentially the small, like the cash to close. It’s down payment, closing costs, legal fees, and carrying costs that the debt may incur. And, you know, as somebody who’s getting into a property, that’s, you know, basically what you need to close on a property when you buy it.

On a high level, we provide that money for them providing us that money. We pay a nice little return. We’ll go out and look for credit investors across the country to assist us in purchasing these properties.

Dylan Silver (09:40.361)
Now, if folks are trying to sell a deal to a hedge fund, would that be you guys or is that something totally different?

Robert Costomiris (09:49.342)
No, we sold to hedge funds. We don’t actively go after it. We go, we market it to the retail. We don’t have portfolios per se. do have, listen, we have multiple properties in multiple cities, but we’re not that big where we’re putting portfolios together and selling it off. Plus when you sell a portfolio, the properties you’re usually selling at a discount anyway. So, you know, each property will be five or 10 % discount each because they’re taking multiple properties off your hands.

Dylan Silver (09:55.648)
Mm-hmm.

Dylan Silver (10:12.489)
would

Dylan Silver (10:18.289)
Would you guys be buying properties from, let’s say, yeah.

Robert Costomiris (10:22.368)
yeah, yeah, I’m sorry. I’m sorry. I misheard that. Yes. Yes. Yes. Yes. Yes. We just looked at we looked at a hundred and some properties in Louisiana just recently.

Dylan Silver (10:26.898)
Okay, so

Dylan Silver (10:32.361)
Do you go all over the country? I’m in Texas. Are you guys out in Texas too?

Robert Costomiris (10:35.209)
We do. We’re actually doing a project in Dallas, Texas on Melba Street, 200 Melba Street, in the Bishop Arts section where it’s a development project.

Dylan Silver (10:40.329)
I’m gonna look that up.

Dylan Silver (10:44.51)
Yeah, that’s cool. That rings a bell. I’ve been here for a couple months or more than that since September. So I’m still getting the lay of the land. DFW is huge. typically speaking, think fix and flippers and wholesalers have ordinarily gone after investors that they know they’re kind of warm network when they’re looking for someone to buy a deal.

Robert Costomiris (10:51.741)
Yeah. Yeah, yeah.

Robert Costomiris (11:09.214)
Mm-hmm.

Dylan Silver (11:09.408)
And you have Facebook groups, you have lots of opportunities to find an end buyer. But what I’ve been seeing a lot more of is this idea, we call it like wholesaling to a hedge fund. I’ve actually heard that that’s someone’s motto in a group that I’m a part of. And this idea of being able to find an institutional grade buyer when you’re…

not necessarily in that space, I think is becoming more and more common. Are you seeing any of that? Are you seeing fix and flippers and folks in that space approach you more or is that not something that you’re seeing a lot of?

Robert Costomiris (11:51.614)
So we had somebody, we have properties in Pittsburgh and we had somebody approach us about our portfolio there. They just wanted it at such a steep discount, it didn’t work out. because the market where it is, because the inventory where it is, even though we buy it such a steep discount, there’s such slim margins on our properties that we can’t, we can, but you know, for us to sell it at a major discount on each property, just, you know, it doesn’t make sense for us. So we go to the market, we could sit on it for a little bit longer.

Dylan Silver (11:59.988)
Right.

Robert Costomiris (12:21.319)
We’re not worried about that.

Dylan Silver (12:22.942)
Pivoting a little bit here, Robert, when your co-founder approached you to launch this project, My Own Equities, was it an instant, hey, this is a great idea? It sounded like there was a little bit of a process there. How did that relationship come about?

Robert Costomiris (12:42.788)
No, there was more of a process because I really didn’t think he could afford me. I thought he was doing one or two houses here and there. like, how could this guy make enough money? And then to come to realize he had almost 27 houses in process at the time. you know, he was, we’re still, we haven’t gotten the multifamily off the ground yet, but just because everybody wants $4 million for a two family house or whatever it is. But, yeah, it was, it was, it there was an excitement there for me and I have, I have, you know, I’ve been here three and a half years now and

Dylan Silver (13:01.469)
Yeah.

Robert Costomiris (13:12.655)
You we’re at a real point where we’re starting to take off, you know, not extra mentally where we’re going to a couple hundred million dollars, but we’re really doing well and we’re seeing a lot of deals and we’re raising capital like crazy. so things are going well for us and I could see the future getting even brighter and I’m going off on a tangent. I forgot where I was going with that one, but it’s an excitement. It’s an excitement that I’ve had since, you know, from the beginning to the middle of my, career on wall street that I haven’t had in a long time.

Dylan Silver (13:31.545)
No, no, that’s okay.

Dylan Silver (13:42.334)
And for folks who may not be familiar with exactly what it is inside life of private equity in the real estate space, there’s correct me if I’m wrong, there’s two sides of this, there’s raising the capital, and then there’s finding the deals. And so you have to be able to do both and neither one are straightforward, you know, this is probably a learning process for everybody who’s involved when you’re just getting into it. So do you handle both sides of that is the roles delegated there? How does that work?

Robert Costomiris (14:12.282)
So we have a proprietary technology that we use to find properties, but we also have a team of analysts that’s literally sitting right outside my door. There’s five of them. Some are doing land, some are doing REO, some are doing foreclosures, some are doing off market stuff. But we have a team of analysts that are doing all that. That being said, we generally don’t work in this Westchester where we’re located area here in New York, because it’s a little more expensive. But I’ve been with my network and the relationships that I’ve built, I’ve been getting a lot of deals.

And so I’ve been given the go ahead just recently, not recently, it’s been building up, but to kind of find something in this local area that’s outside of our realm of our buy box, because generally we would buy $800,000 and down. So now we’re looking in the million dollar range. And I had a deal the other day that I got outbid on, we were very, almost contracts being drawn up and we got outbid at the last minute.

Dylan Silver (15:01.086)
Do you you do you feel like in order to be in this space is there a specific skill set that allows people to succeed you’re the first person in private equity that I’ve spoken with on this podcast and

Robert Costomiris (15:09.898)
And that was a $1.3 million house. then, so yes, I am doing both. So sorry, long winded answer. Yes, I am doing both. Sorry about that.

Dylan Silver (15:30.641)
You know, it’s a hot term, but I think it’s almost behind a veil and shield, if you will, because a lot of folks who are on the outside looking in, even in the real estate space, might think, yeah, well, how am I gonna get into that? how is it being in that space and how did you grow? Was it a lot of pains or was it like, hey, I had mentors, I had this, I’ve already done this on Wall Street in a way, so I’m familiar with.

Robert Costomiris (15:58.476)
Well, so coming from Wall Street, I always had a capital raising background because you’re always looking for money and you always need money and you always have to be growing. So I was never somebody who was afraid to get on the phones and call people, cold call, meet people, whatever, whatever I had to do. I’ve done it pretty much all marketing wise on Wall Street. Seminars, cold calling, going out to chamber of commerce, meeting people, networking, whatever I had to do to get out and get business, I would.

So then coming here, it’s definitely a lot more creative and having an open mind is a very good thing. And that’s what I love about the real estate thing. One other thing I really love about real estate is on Wall Street, you have to pull teeth to get people to give you information, especially when it’s about doing deals and what people have done in the past and what mistakes they’ve learned. It’s the complete opposite in real estate where people, most people are willing to help, I feel.

Dylan Silver (16:49.084)
Hmm.

I have experienced that too. And I was mentioning before we hopped on that, know, kind of the avatar of our listeners, someone who’s doing 50 plus deals, but we’re going to have some newcomers on here as well. And it is somewhat shocking that people are more or less, not all the time, but more or less an open book in the real estate space. Yet, you know, you might have some instances where people can quite literally charge tens of thousands of dollars for a day worth of their time.

But you also have lots of instances where you’ll go to a meetup and it’s borderline free and they’ll be giving you all the game unsolicited right there and you’re like, wow, I should be paying you for this.

Robert Costomiris (17:31.753)
Yeah, yeah, yeah, yeah. I think people want other people to succeed because the more success people have, more the real estate market keeps going. So that’s just the way I feel. And I think it’s very open. And I appreciate that. do. Because on Wall Street, I go up to somebody that I see, this guy raised $2 million on a certain deal. And I’d be the kid to get, hey, you you might help me out. What did you do for that deal? Don’t worry about it, kid. Get back on the phones and you’ll figure it out. That was literally it.

Dylan Silver (17:56.282)
So talk a little bit about the partner in Myome Equities. Was this someone that you had known for a while? How did he approach you?

Robert Costomiris (18:04.711)
I known him for 10 years and I was in a position where I had sent out a text to 20 different people and I said, hey, my, you know, contracts up in December. I’m not very happy here. I’m thinking about making some sort of change. Don’t even know what that change is. But if you know anybody who could use my service, the exact text I sent, if you know anybody who could use my services or you think I might be a good fit for it, be open to having conversations with literally anybody and everybody. And, he called me as soon as I hit send, he called me and I just picked up.

And he’s like, I want you. I’m like, wait, what? I’m like, no, it’s, I’m like, you can’t afford me. So I had known him for, this was 2020. Yeah, no, so it was 10 years at the time I’d known him. And he’s like, he’s like, he’s like, I don’t think you understand. He’s like, I have something going, I have something big. I need somebody like you to run it, this and that. And I’m like, I don’t know, man. I don’t know real estate. He’s like, I don’t know capital raising. He goes, you teach me capital raising. I’ll teach you real estate.

Dylan Silver (18:36.959)
you

Robert Costomiris (19:04.051)
So I said, all right, let’s, know, this was over, you know, several meetings and several months, but finally we came to an agreement and then, you know, I started here.

Dylan Silver (19:14.352)
Now, without giving away all the game, we’re not trying to make competitors in your direct area. How can folks who are trying to raise capital, maybe even on a small level,

What’s some broad strokes guidance you can give folks in the real estate space who are trying to raise capital, maybe even just for a deal to take down a deal.

Robert Costomiris (19:34.098)
Don’t be afraid to ask and go to people you know. Just tell them what you do. The best thing is tell people what you’re doing. Tell people exactly what you’re Tell everybody what you’re doing. Literally, the more people you tell about what you’re doing, you never know what they’re looking for. And they may even say to you, you know what, you’re looking for something. You need money for that house that you’re going to buy. I’ll give you the money for it. You never know. never know. So tell everybody and anybody.

Dylan Silver (19:59.42)
So if I have a deal, right, and I’m gonna assign it because I don’t have the money to take it down, but I have I’ve been telling all of my buddies and everybody else that I run into that what I’m doing, maybe I might pitch it to them before just looking at it as strictly a wholesale because I might be able to take it down myself with others.

Robert Costomiris (20:00.944)
It’s true.

Robert Costomiris (20:20.689)
So two things happen with that, whether your buddies are dead flat broke or whatever, pitch it to them first. they’re the, are your friends the ones that are gonna tell you when you’re fucking up, when you’re telling it? Pardon my French, sorry about that. They’re the ones that are gonna tell it to you, right? They’re gonna tell it to you straight, number one. Number two, you’re gonna refine your pitch so much by telling it to them. Number three, you never know when they’re like, hey, let’s get five of us, we’ll put, you know, 2,500, 5,000, 10,000, whatever, each into this so that you could.

Dylan Silver (20:35.449)
Yeah.

Robert Costomiris (20:48.411)
do it and then you put some money into it too and then you take it down that way. So, and then if it doesn’t work out with them, your pitch is so refined or you’re used to telling it so much, you go out and tell bigger people or people that you’re not that close to. I bet it’s a great way to do it. That’s how I started out doing it. So.

Dylan Silver (21:02.746)
Mmm.

Dylan Silver (21:06.82)
This is probably going to inspire me to look into this because I have not spoken with anyone like you. So I just kind of figured, you know, capital raising is not something that I’m to be doing anytime soon. But now I’m thinking in the back of my head, how can I? Yeah, I just I figured I don’t know anybody doing it. There’s no courses that I saw.

Robert Costomiris (21:13.496)
Yeah.

Robert Costomiris (21:20.336)
Yeah, but why not? But why not?

Robert Costomiris (21:25.526)
You don’t need to. You don’t need to. Figure out how much you need for it, how much everything will be all in, and then just go out and start asking people for it. If you don’t ask, the answer’s always gonna be no, number one. Number two, if you don’t fail, how can you succeed? You have to go out there and F it all up big What did I just tell you about my first deal? It was probably the worst thing I could have ever done, and I learned so much from it.

Dylan Silver (21:34.798)
Go

No.

Dylan Silver (21:41.784)
You can’t.

Dylan Silver (21:46.286)
Yeah.

Dylan Silver (21:50.682)
That’s especially true with how I got into real estate in general. was just talking to everybody that was in the real estate space. And in this instance, it’s not just the real estate space. It’s just talk to everybody. Because in order to invest in a deal, you don’t really have to know the ins and outs of real estate contracts, Texas promulgated forms. But you might just be able to have some interest in it. now you can partake in a deal. So it’s a win-win.

Robert Costomiris (22:18.339)
Right, exactly. I talked to, I actually learned that from a guy that used to work for me who’s gone on to be very successful when I was on Wall Street. And he would go out and tell everybody what he’s doing. I’m like, yo, dude, what are you doing? Stop just blabbering about everything to everybody. Lo and behold, he got a couple people to give him some money and he’s making money hand over fist, so.

Dylan Silver (22:20.537)
Now,

Dylan Silver (22:41.367)
That’s how it happens. Talk a little bit about Business Made Social. I see also that you’re the co-founder of Business Made Social, a community of professionals connecting through unique relationship-driven events.

Robert Costomiris (22:54.126)
It’s a networking group. We belong to a larger networking group and we just wanted to do something ourselves to kind of give people a way to get together where it’s not just where you’re handing out business cards or it’s not like, you know, people just, you know, trying to, hey, give me a call sometime. Hey, this is where you’re getting together. You’re building relationships. You’re getting together with the same, not the same people, but, you know, similar people over time and you’re getting to actually know them and, you know, get closer to them.

We try to do different events. Like we had a game night dinner in January where we had different meats like elk, duck. We had a bunch of different things. In April, we have a NFL draft party coming up that we’re having at a barbecue joint. So we’re just trying to do different things without any pressure of networking. It’s just getting together and just.

Dylan Silver (23:36.782)
Nice.

Robert Costomiris (23:45.837)
building relationships.

Dylan Silver (23:45.909)
Any possibility for expansion outside of that area?

Robert Costomiris (23:51.115)
I always say you never know, but we’re not that big yet. We’re still struggling to keep it together here. Not struggling. We do fine, but it’s not like something that’s like, you know, streamlined just yet. Yeah, yeah, yeah, yeah. I do have to come out to Dallas, Texas when we break ground on that project. So who knows? And I love Texas.

Dylan Silver (24:00.174)
I’ll have to come back to that area. I’ll have to be visiting my family and I’ll drop in on you.

Dylan Silver (24:11.053)
this is honestly, you know, I tell folks, if you’re going to be anywhere in the Lone Star State, I really do feel like DFW is the spot to be for real estate. I really, really do feel that way. I was in God.

Robert Costomiris (24:23.369)
Well, outside of Austin, it’s one of the biggest growing, it’s the fastest growing areas. Although, because you have an established city, there’s no boundary to the city. It just keeps growing.

Dylan Silver (24:28.825)
Yeah.

Dylan Silver (24:35.395)
The thing that I like and dislike about Austin is Austin is feels like filled to max capacity in the areas outside of Austin have more or less more or less been filled up as well. And there’s all these towns that are springing up along the way from Austin to San Antonio. It’s like one straight shot in DFW. You’ve got Dallas, Fort Worth. You’ve got North DFW. You know, you’ve got Frisco and then you’ve got all this.

open space between here and Oklahoma. And it’s almost like becoming a corridor in and of itself that we call the 35 corridor. so investors who are looking for opportunity have the ability to buy properties from DFW proper where it’s going to be at a higher price point all the way up to Oklahoma, you know, where it’s a completely different ballgame. And so it’s a really great opportunity for real estate investors out here.

Robert Costomiris (25:25.352)
Yeah.

Dylan Silver (25:30.25)
But we are coming up on time here. Robert, how can folks get a hold of you?

Robert Costomiris (25:34.89)
You could just reach out directly to me on LinkedIn Robert costa mirrors or on Instagram. It’s at our OB B underscore costa mirrors

Dylan Silver (25:46.008)
Well, folks, that wraps up another episode of the Real Estate Pros podcast brought to you by Investor Fuel, the nation’s premier real estate mastermind. I’m your host, Dylan Silver. And until next time, thanks for listening.