Overcoming Setbacks and Growing 600+ Units with Dan Costantino

Dan Costantino (00:00)
We worked on a deal for six months to buy 305 units,

long story short, the financials that were given to us were inaccurate. About $50,000 a month light.

was 140 ish,

And ⁓ that puts stress on you financially. So we were paying preferred

That was the worst feeling of my whole career by, by far.

Quentin (01:54)
Hello, everyone. Hello, hello. Welcome to the Real Estate Pros podcast. I am your host Q Edmonds. And if you have been watching me, you probably know what I’m about to say next. I’m excited. I’m excited to be here today. Like, I really am every day to be able to do this, bring you guys this great content, bring you all incredible people who are doing incredible things in their space. It’s so exciting for me. I love meeting new people, connecting with people, and connecting them with you.

And today is no different. have someone that’s in this person and what they do, they are battle tested. ⁓ they are, they are great to do business with. And I know, you know, I can say all these things, but I’m telling you, they attract records speak for themselves. And I’m just excited for you to get to know them, for you to be able to see things from their perspective and from their experience. And so I’m so excited to introduce you all to Mr. Dan Costantino.

How are you doing today,

Dan Costantino (02:55)
doing great, Quinton. Thanks for having me. I really appreciate it. Good to meet you.

Quentin (02:58)
Good to meet you as well. Did I say that last name right, sir? Yeah, I think you kind of helped me out with that, but the audience will need to know about that. you kind of, you gave me a memorable. He gave me a memorable.

Dan Costantino (03:01)
Perfect, perfect.

Hey, listen,

listen, my wife introduces herself like that. So that that tells you something, right? no. Yeah, I’ve been called Constantinople, know, she’s like, no, you know, like I cost a lot of money.

Quentin (03:16)
⁓ Listen, no shame. She no shame. This is who I am. This is who you married. I love it.

You

I love it, man. Listen, listen, y’all, y’all,

you work hard, you get to play hard. You know what I’m saying? So, absolutely.

Dan Costantino (03:38)
You know that one

of my big lessons from someone he says, hey, if they’re if if your significant other is going to participate in the grind, they need to participate in the spoils. So that really hit me. I was I came from not much and I was pretty cheap even when we had money.

Quentin (03:49)
Big up!

Yeah. Yeah. Yeah.

No, man, I hear that. And that’s real, man. Like, you know, we work hard for a reason. And so why not enjoy the fruit of our labors? You know, within reason, but still, you know, we work hard. We work hard for the day we’ll be able to do. And so that’s beautiful, man. And so I love it, man. I love it. I just see this is going to be a great podcast for people.

is going to find very much value in what you have to say. so Mr. Dan, I’ll be honest, man, I just want to dive in. I want you to take people into your world. People may not be familiar with you. So tell us, man, take this like, tell us what your main focus is these days. And also, if you don’t mind, tell us what markets you’re operating in as well.

Dan Costantino (04:39)
Certainly. So I’m out of Pittsburgh, born and raised, ⁓ lifelong Steelers fan as we’ve talked about. ⁓ But… So I was a career salesman in the trucking and logistics world. So we did, ⁓ you know, over the road trucking, we did air freight, we did ocean freight. I kind of did all those things throughout my 15 years. And as a salesperson,

Quentin (04:45)
Women, we’re having technical difficulties. Now go ahead. I’m sorry. Go ahead.

Dan Costantino (05:55)
you never think they pay you enough, right? You know, I was a cocky I can admit that now. So at some point they started messing with my compensation and I’m like, I’m going to do something on the side. I tried trading stocks for a couple of years and I’m too emotional for that. So I was like, about real estate? So I went into real estate because I listened to Rich Dad Poor Dad as many careers were started. So I started flipping houses and then I had a couple of houses that

I didn’t think I would get a good return on flipping. So I kept them as rentals. And then when I got to about five units and I side hustled for about five years with my career, ⁓ when I got to about five units, I just modeled out the spreadsheet, ⁓ what I would have in 10 years. And I couldn’t believe the numbers. It was way better than flipping to me. So that’s kind of where the switch flipped. ⁓ In those first five years, I came up with about 30 units is where I built it to. And at that point, it just got too hard.

I was cheating on my job because I wasn’t, you know, I was really focused on real estate. And I was also what I would say, cheating on my passion, which was real estate, ⁓ by going to work every day and, trying to sneak out at lunch and make calls to subcontractors, go look at deals. so I just came to a breaking point at 2019 and quit my career and went full time.

Quentin (07:13)
Yeah, no, I love that. I’ve never quite heard that before, cheating on your passion. And that just paints a vivid picture of you knowing where your home is versus where the side thing is, right? Like, you know what you’re supposed to be married and tethered to. And I love that, man. I love that approach. I love that mindset. And I know, you you said you did the flipping for five years. I know it’s not always easy just to make the switch, right?

And so, it’s not even, even now that you date and switch, it’s not always easy in this climate. So what’s been the key to keeping that machine that you have on this move?

Dan Costantino (07:53)
It’s people for sure. When I quit, again, we had 30 units and I kind of ⁓ diverged there, but we have over 600 units now and we do hard money lending. We originate, we’re small. We originate about 6 million a year now, but we fund local projects that are committed to improving our communities. It makes us some money. ⁓ It makes our investors money. It’s a way for me to mentor people without… ⁓

you know, doing it just for a cup of coffee, right? We’re getting paid a little hard money rates, but I get to mix it up with my bars. have great relationships with my bars. But at the end of the day, it all comes down to people. know a lot of people preach systems, everything else, but it’s people. My first employee was my lead carpenter and he’s been with me since 2019. you know, over six years now or right around six years, there was a little time where we

Quentin (08:24)
Yeah. Yeah.

Dan Costantino (08:50)
floated into it, but he emailed me one time, said opportunity of a lifetime. I love that subject line for him. He was one of my contractors I subcontracted out to and he offered to come work for me full time because he could see we were headed. And I don’t even think I saw that we would have over 600 units at this point and almost 30 team members. It’s pretty, pretty special. It’s pretty fun to think back on.

Quentin (09:15)
Absolutely. And so I hear you. know a lot of people talk about systems and I think we can agree to some degree we understand that systems. But to me, you got you have a system and at the top of that system is people like that’s that’s where it all starts. And I think with that in mind, I think that’s why you keep being successful because you have your you have your your your system, your television. No one’s like, no, the main thing I’m gonna make sure I do is connect, serve, partner with people.

And so that I hear it loud and clear. I hear your system coming through loud and clear,

Dan Costantino (09:48)
We have an intranet site, have pretty playbooks, we have all that stuff. You could have the best ⁓ SOP in the world. Most people don’t open up that book or click on that file, right? That’s just the reality of it. So at the end of the day, you have to have that framework documented. And we do, we have more looms and Google Docs and they call it Google Sheet Empire, ⁓ then you can shake a stick at, we have that.

Quentin (10:12)
Yeah.

Yeah.

Dan Costantino (10:17)
But ultimately,

you have to have people that execute on a daily basis.

Quentin (10:57)
Absolutely. No, I hear you loud and clear, my friend. Let me ask you this, Mr. Dan. Now, I know every operator, they have a moment when things get real, right? Maybe a deal goes sideways, a time we had to pivot fast. Mr. Dan, you mind sharing a story with our viewers a time like that,

Dan Costantino (11:17)
Yep, I’ve got a lot. I’ve got a lot of story. ⁓ You know, we’ve had some failures on flips. You know, we’ve lost some money on some flips, but the biggest thing that really tested the organization and myself, I’m talking months, if not a year of like sleep with my stress, like serious stress ⁓ was we bought, you we just crossed over a hundred units in 2021.

Quentin (11:18)
Yeah.

Mmm.

Dan Costantino (11:47)
We worked on a deal for six months to buy 305 units,

which is pretty crazy to go from 100 units to just crossing over 100 units. Went from 80 units to 417 by the end of the year. Pretty wild ride, right? And

Quentin (12:00)
Yeah. ⁓

Dan Costantino (12:03)
long story short, the financials that were given to us were inaccurate. About $50,000 a month light.

So we started off, we thought we were gonna be doing around 195 a month.

was 140 ish,

I think it was 140.

And ⁓ that puts stress on you financially. So we were paying preferred

We syndicated that deal. I had to pause preferred returns.

That was the worst feeling of my whole career by, by far.

Like there was nothing worse than because, you know, they, they invested in you. Yes, they invested in real estate, but they invested in you. So I was not a popular person for a little while. And like I said,

Like I always say, you find out who people are in the tough times, not the good times. So a couple of people I thought were with me were not with me. A couple of people that I hope would be with me really backed me and gave me the support that was needed. And I had to also dig in, right? So we bought another deal. It was such a good deal. We bought 258 units for 18,000 a unit. you can’t find those deals, right?

So it was enough that I could put a very substantial acquisition fee on that deal, only raise the unit price less than $5,000 a unit. I used that to be liquid. I sold assets and I put the money, I didn’t do a capital call on my investors. I put the money in and I said, that money’s not mine. That money is like, the money in the bank doesn’t make me feel good. I got to get this back.

⁓ It was hard. I had to hire different people. I hired a great operator who was one of my mentors in my whole career and and he came in and we’ve just really kicked butt over the last couple years and so we initially started out at like 140 a month. We’re doing over 260,000 a month on that those same 305 units and the other deal that we bought for $18,000 a unit we went from 80 grand the first month of collections. We’re doing

We’re clipping right around 200,000 a month right now. So we’ve performed, but it was with a lot of sleepless nights and hard conversations, quite frankly. ⁓ We had to demand, a lot of people come in and work hard, right? But do you produce results? And there is a difference and not everyone ⁓ is for that, right? Nick Saban says it best. ⁓

average performers do not like high performers and high performers do not like average performers. So, and we had to work through that and sometimes, you know, that wasn’t always fun.

Quentin (14:43)
Mm, mm.

Yeah, yeah. Now, man, I appreciate you. Like, again, I hear, again, your system is coming through about people, right? Because, like you said, you had to have lot of hard conversations. And so you didn’t shy away from the conversations.

You didn’t go and try to falsify more, you know, more paperwork or falsify more things. So you’re like, like, we’re going to face this. We’re going to talk about it. I’m going be honest with you. Either you with me or not.

And if you’re not with me, I can respect that too. But those that with me, we’re going to see our way through. And it sounds like, again, it’s showing me how much you value people. It’s to be honest with them and to say, hey, I’m going take this, look this right in the eye, and we’re going to power through and get to the end. And so again, man, I hear your systems coming loud and clear. I hear them coming through. People, people, people, people. That’s what I hear, man. That’s what I hear, man. Yeah, yeah.

Dan Costantino (16:23)
That’s it. Yeah. I mean,

I can do almost every function in the company, we would have failed if I tried to do everything.

Quentin (16:27)
Yeah, yeah.

Absolutely,

absolutely, man. So I thank you, man. And to me, that lets me know that you’re going to be what you just said, it separates people from what people that dabble and people who stay in it the long term. That’s and I see it, you know? And so I thank you. So let me ask you this. What are you most focused on solving or scaling next? Like, what’s the next real goal for you, Mr. Dan?

Dan Costantino (16:58)
Right now, it’s an interesting time. We’re repositioning. So we are exiting assets so that we can take the equity built and it’s substantial equity and we can get some of our investors paid. And then also we can take our equity, know, achieve capital partners equity and position that reposition that into both our lending product, but also buying

newer assets, right? We have built our equity through like Class C assets. So ⁓ that is the space where you can really make hay and create that equity. But also it’s a hard, it’s harder to manage. There’s just no doubt about it. They’re older assets. The residents are different. We have some higher class like Class B plus ⁓ assets now.

Quentin (17:32)
Yeah.

Dan Costantino (17:55)
their night and day like they’re so easy, renew assets. So we’re looking at building to rent, know, 25 to 50 townhouse communities. But I’ll also, we just bought a nine unit in our core area. I wouldn’t usually buy that small, but we bought it in our core area where we have a hundred units already. And we bought it for seven 50 or seven 80. I’m sorry. And we put roughly two 50 into it.

We just pre-leased two of the last units and we will have taken that asset from 5,000 a month, which is, know, what 60,000 a year to 15,000 a month. So 180,000. I really truly believe that this asset is now worth $2 million. And we’ve done that in a year. We know how to operate, right? But I want to do it in that class of asset versus the class C, the class C stuff. It served its purpose. It’s great to build equity.

that will always be there. is affordable housing. $1,000 rent is about our average rent. That is affordable housing. We have invested, I forget how many millions, millions of dollars into these assets. It needed it. And ⁓ I’m proud of that, but we wanna reposition a little bit. That’s what we’re working on right

Quentin (19:14)
Absolutely. And that’s big, man. I hear you. I hear you repositioning. You got it lined out clearly. mean, clearly you all already built something that’s sustainable now, but it’s like, want to go to the next level. We want to do things differently. We want to buy new assets. And so get invest the page. Like this is all big. And I know, you know, the next move, either compound things or create total chaos depending on how you play it. Right. But there’s beauty in the chaos, right. Within the chaos.

You pull out the beauty and you show people like, can manage this chaos and making it to something very functional, something that’s going to just be totally incredible. And that’s what I hear you guys are doing. That’s what I see you guys are doing. And so again, man, I love it. I appreciate you sharing. And again, your through line has been people. That’s people, people, people, right? So I want to ask you this, you know, there’s a lot of people listening that either early in their journey or looking to level up.

And I think they are benefit hearing this when it comes to building relationships and growing your network. What’s made the biggest difference for you, Mr. Dan?

Dan Costantino (20:23)
I think the biggest difference for me ⁓ is not being afraid of hard work, number one, but access to capital. Like to really do what you need to do, you have to get access to capital. ⁓ I wrote a book called Keys to the Vault. It’s on my website on Amazon, but ⁓ it teaches 13 ways that I have specifically done deals, ⁓ 13 different ways to basically get access to capital so you can do real estate deals. could not amass.

you know, $50 million in assets without access to capital. I just didn’t start with that. I started with a, you know, a home equity line of credit. You know what I mean? I had like, you know, I had a better start than most. I probably had 30, 40 grand to start, but that is not enough to do what we’ve done. We’ve created wealth out of nothing using the Burr method, but access to capital is everything. You really will stall your projects out if you don’t have ample capital.

Quentin (21:21)
Love it. Listen, I thank you again. I thank you for your perspective. I thank you for your lens. I thank you for sharing with us. Even some of the hard times you had to go through. mean, opening up about that story, I know it wasn’t easy. Like you said, sleep is nice. And hopefully, you know, I ain’t brought up no relive trauma. But again, man, I thank you for sharing. This has been good, man. And I want to ask you, before we wrap, if someone wanted to reach out to you, connect with you, or maybe collaborate with you.

What’s the best way for them to reach out to you? And then also, after you answer that or before, either way, if you’ve got any final words, maybe you want the listeners to know any kind of inspiration, encouragement. Feel free to share that as well.

Dan Costantino (22:04)
I think a big thing, something I like to tell people is you pay attention to the macro. A lot of people get caught up in that noise though, right? We pay attention to the macro, but we operate in the micro. The Pittsburgh market is not the national market. So I don’t really care what’s going on in Miami, right? I don’t care what’s going on in Florida with prices plummeting. Pittsburgh is a very stable market. A lot of these Midwest cities,

are very stable markets. So yes, you can chase some appreciation plays. A lot of that is might be smart money. A lot of that is you’re just chasing appreciation. And with that rapid appreciation, you can also fall back. anyway, pay attention to the macro. Operate the micro is really big advice that I tell people because you can get caught up in the noise. There’s a million ways to make money in real estate.

Quentin (22:55)
Absolutely. Now tell them man, tell them where they can find you man if they want to reach out to you, collaborate with you. Please man, let them know how to get in contact with you.

Dan Costantino (23:04)
Sure. I’m ⁓ on Facebook, Instagram, and LinkedIn. The best way to find my handles is go to my website, 412AH.com. So 412AH.com. ⁓

Quentin (23:17)
Absolutely. Everybody there is Mr. Costantino. Like, why am I messing up now when I get to the end? Look, what you told me, it brought me back. It sent it to me. But listen, man, I thank you so much, man. I thank you so much for being here. Thank you for your perspective, for your story, for your time, man. I’m sure people are going to get great, great value from this conversation. So again, sir, thank you so much for being with us, man. I appreciate you.

Dan Costantino (23:25)
you

I got you.

Thank you, Quent. Nice to meet you,

Quentin (23:48)
Absolutely. And so everyone else, listen, you have tuned in, you have heard, I know you got value from this conversation. So my question is, why are you not subscribed? Those that are subscribed, thank you. For the rest of you, why are you not subscribed? You gotta make sure you’re subscribed because you do not want to miss, see, Mr. Dan, look, CT and his son, man, come on. He know, and we want you to know, you do not want to miss out on these amazing conversations because I promise we’re just going to keep bringing them to you.

Mr. Dan, thank you so much. And I promise you, we have people coming up just as great as Mr. Dan. It’s going to keep giving you valuable contribution. So thank you for coming out. Thank you for tuning in, and we’ll see you one the next time.