She Lost Most of Her Real Estate Portfolio—Here’s How She Rebuilt It

Mary Pastore (00:00)
There’s been a lot of moments, Joseph. I’ve been in the industry a long time, thirty years. I you know, I think the the moment is very similar to what a lot of people experienced back in two thousand and six. I would say six, even though people a lot of people say two thousand and eight. you know, when that whole little market meltdown happened, I was, you know, our family, everybody was heavily invested in real estate. I actually left at the time, left IBM, my corporate job.

Joseph Crooms (01:58)
Hey everyone, welcome to Investor Fuel Real Estate Pros Podcast. I am your host, Joseph Crooms. today I’m joined by someone I’ve been looking forward to chatting with. Her name is Pastore. I’m going to Mary Pastore. Is that correct, Mary? that’s okay. So her first name is Mary, her last name is Pastore.

who’s been making some serious moves in the invested industry. especially she spoke to me about co housing because she thinks that’s a new niche. So Mary, glad to have you here. Please say hello.

Mary Pastore (02:35)
Thank you. Glad to be here.

Joseph Crooms (02:37)
Good. I think our listeners are going to take something away from how you’ve been approaching that industry that I just spoke about. And you are still an investor, you were a broker for over 30 something years for both. And but also now you’ve identified what the market is. So we’re going to talk about that. So let’s dive in. So first of all, for people who may not be familiar with your world.

Give us the short version. What’s your main focus is these days and what markets are you operating in?

Mary Pastore (03:12)
So my main focus is really in buy and holds and but you know generating income through the co-living style of investments. And the market that I’m targeting is really Arizona and potentially other places like Ohio and Texas. right now Arizona is the closest proximity, so I’m you know shooting for that first.

Joseph Crooms (03:37)
How has this affected your your revenue? what is what is changing in your revenue by going after this new project?

Mary Pastore (03:47)
Well, so it it has increased my you know, monthly revenue quite a bit because in you know, traditionally we’ve invested in California and California is more of an appreciating market. It’s very difficult to cash flow, especially in places like San Diego, because the home prices are really high, even though the rent h is high, it doesn’t catch up to that, you know, home purchase price. And so we’ve kind of moved away from that appreciating.

focus, equity focus, and targeting more of the cash flow. So for example, if we purchased a property, let’s say in Arizona for about 500K, we could generate two grand from that purchase versus buying something in in San Diego that’s a million dollars and having a negative cash flow. So that we’re kind of looking for markets that actually give us income generation on a monthly basis.

Joseph Crooms (04:41)
So your prior markets, can you explain how your income would come in and and versus this new market?

Mary Pastore (05:36)
Yeah, so in in places like San Diego or you know Southern California, you’re really looking at appreciation. And so, you know, we’ve we how we previously invested, and because I also had a day job that supported my monthly expenses, right? It’s easy for me to do this where I can purchase a property, use the equity from that property, and then go and purchase something else.

and then use the tax benefits, depreciation, tax write-offs and such to offset any you know potential income I would get there. But the income re on a monthly basis was pretty low and sometimes negative if we have years where we have a lot of vacancies. But so so now as I’m getting older, I’m looking for a constant revenue stream. So I’m no longer playing in the field of just you know building equity because we already have that.

here in California, I want to make sure that, you know, by the time I retire, I’ve replaced any kind of revenue and income that I’ve generated from my day jobs. And I do say jobs, because I I have quite a few, but I want to replace it with the investments that I make and and the revenue generated from those investments.

Joseph Crooms (06:52)
How many of those day jobs are in real estate? Or do you sort of stay with that same niche?

Mary Pastore (06:58)
Yeah, so so I also have a property management company. we created that so that really initially it was so that it would manage our investments and you know allow us freedom to invest more because it’s really like if you if you don’t have something then you know when the tenants call and it’s your systems aren’t streamlined, it’s very stressful. You know, if I’m I’m working on something and then I’m getting a call and I don’t have that.

full process already defined. So we started a property management company to manage our investment. that’s one of those

Joseph Crooms (07:33)
I apologize. How many years was was your investment company in place for the how many how many years was it in place? Yes. How many years has it?

Mary Pastore (07:43)
The property management. We actually have been doing it for the past four years for other people, but we’ve been doing it for ourselves for the past, you know, twenty plus years.

Joseph Crooms (07:59)
Okay. And and what does that revenue look like? Ha that that sort of is it granting you the freedom so you can do other things now?

Mary Pastore (08:07)
Not quite yet, because we recently, like I said, we we were picking it up for our investor clients, but kind of doing it as a, hey, you know, we’re helping you buy the properties and now we’re gonna help you manage it. So we weren’t full on focused in developing that property management business. So right now I think, you know, it I wouldn’t say is my vehicle for freedom, but we plan on growing that, you know, doubling that by the end of the year.

And then and then after that, doubling that by the end of next the following year. And so that revenue definitely will, after two years, will give us the freedom. We’re targeting 200 doors by the end of next year. So right now we’re kind of boutique for our investors, but we plan to grow it to 200 doors and then ultimately 500 doors. That’s kind of where I want to cap it, just because there’s a lot of operational overhead.

with property management.

Joseph Crooms (09:03)
How much would that that be as far as revenue? how much would that at that top, at the peak, how much would that bring you in revenue?

Mary Pastore (09:11)
So about two million dollars a year. Okay. And that’s not with that’s not with auxiliary type investments. That’s just revenue that we would generate for the property management company.

Joseph Crooms (09:23)
Okay. So now versus your investment priest, how much revenue would you bring in about from there?

Mary Pastore (09:31)
So where are yeah, so the investments is a little bit different because we have the combination of the income generation and then also the the appreciation. So I don’t know, you know, in the last year alone the equity has grown by two million dollars for us, you know, just from the equity alone.

Joseph Crooms (10:28)
so what caught my attention, the way you’ve been handling both things. You’ve been juggling really a lot. So and that’s very important. I I can see that you’re innovative. It’s n that’s not easy, especially in this climate. What’s been the key to keeping your machine running smoothly? Both machines.

Mary Pastore (10:47)
Well, yes, so systems and AI. So my my background is in technology. I’m computer science by degree. And so I’ve taken what we learned from just my technical world, right? That’s my other day job that I left at the end of last year. But using the AI capabilities, we’ve started to systematize our property management company, right? So that we can

operationalize you know the layers the different layers and really automate as much as we can that made a big difference because honestly up until I started doing that there was there’s just a lot of moving parts when it comes to property management and a lot of you know high touch with people … so we’ve been able to systematize a lot of the operations using AI and then that’s that allows us to grow and that’s why we’re finally

you know, looking at growing the property management business into a real like, you know, viable business that can actually support all of our investments and our investors’ investments.

Joseph Crooms (11:55)
Mary if I may call you Mary, yes, give me example how you utilize AI to help you develop some systems. Just name a few that you did on the property management side that to give you this this outlook for the future.

Mary Pastore (12:07)
So we have implemented just automatic follow-up with tenants. So when when they have an issue, we have our AI automatically like troubleshoot with them and then escalate to us when there’s an actual like escalation that needs to be done. Otherwise it flows through just our regular workloads. we’ve also used AI to give us our daily briefs of what’s going on with the business. that’s actually my favorite because

nothing’s better than in the morning waking up, having a cup of coffee, and then just quickly reviewing what the numbers are, what your KPIs are looking like for that day, which you know in the past would require us to log into a bunch of systems, look at spreadsheets and that kind of stuff. So taking the time to implement that has really helped us to focus on business growth instead of trying to figure out what’s happening with the you know, with the business itself.

Joseph Crooms (13:00)
So what what type of KPIs do you have f in the property management? What kind of numbers do you look for?

Mary Pastore (13:06)
We’re looking well, it’s it’s all about revenue generation for us, but it’s basically vacancy rates, you know, upcoming like how quickly we can turn a property, and then the number of tenant calls, and then how quickly we address those costs. So, you know, making our tenants happy, right? Because they don’t want lingering maintenance type issues.

And then for our owners, we wanna know exactly what properties are vacant, you know, how long it takes, because we wanna reduce that as much as possible, because we wanna turn those properties and get it rented, you know, in less than 14 days. So that’s our goal.

Joseph Crooms (13:44)
on a percentage basis, how how since you started that system, how how fast have you seen your percentages of helping your investors and meeting those needs as far as outstanding work orders and things like nature? What percentage would you give it?

Mary Pastore (14:41)
Well, it w right now we’re at a hundred percent like KPIs because now our eyes are focused on the right things. So, you know, the we implemented it and started it actually at towards the end of last year. And since then, like I said, it’s it’s very easy to focus on the things that are important when those are the things that kind of bubble up to us.

Joseph Crooms (14:49)
Mm-hmm. So let’s talk about that on the investment side. How has AI helped in your investors and what type of revenue has it generated for you?

Mary Pastore (15:16)
So it’s yeah, I mean the AI has really helped to identify markets. So it does a lot of the research for us. and then, you know, just from our perspective, it also allows us to follow up with the investors a lot easier. and so it’s building, so I I have in the last six months spent a lot of time invested in building the systems so that we can ramp up the growth.

So number wise, number wise, honestly, the numbers haven’t grown because we’ve been focused on our systems. and so the the last six months have been put AI in place, put automation in place so that now we can go and really do the business development pieces. I like to, you know, make sure that all our ducks in order and our ducks are in order, the house is clean before we invite guests into it.

Joseph Crooms (16:11)
Makes sense. So now every operator I know has had a moment when things got real. maybe a deal that went sideways or a time that you had to pivot fast. do you mind sharing a a couple of those moments to us?

Mary Pastore (16:26)
There’s been a lot of moments, Joseph. I’ve been in the industry a long time, thirty years. I you know, I think the the moment is very similar to what a lot of people experienced back in two thousand and six. I would say six, even though people a lot of people say two thousand and eight. you know, when that whole little market meltdown happened, I was, you know, our family, everybody was heavily invested in real estate. I actually left at the time, left IBM, my corporate job.

to run a real estate investing firm. And, you know, I was there with multiple deals, some commercial deals in two thousand and six when NetiMac, I think was the first bank that, you know, all of a sudden our loans just like got killed. And, you know, they shut down, followed by many other companies that we were literally in the middle of deals and having bad, you know, all the deals

pretty much disappear overnight. And then which okay, so that happened, but and we had a lot of reserves put aside to deal with something like this. But what we didn’t realize was gonna happen was it’s it wasn’t a normal meltdown. I mean that meltdown lasted for years. So it pretty much ate up all our reserves. So we ended up having to sell a lot of our investments

as part of that and it felt like we were starting over, you know, so we we had built all these up and then just years of not being able to do deals. Like every single loan fell apart. None of our investors did even get loans. And so I think that was like the the hardest time in the 30 years that hit us and many other people, right? And so I’ve learned a lot from that, hence the cash flow focused.

Because in 2006 and before that, we were really focused on other people’s money. You know, OPM, the whole Rich Dad Poor Dad thing craze what’s going on. And we purchased a lot of properties with, you know, not zero percent now, but ten percent now, and no no cash flow. so we were banking on our six months and we actually had a year’s worth of reserve for every single property, and that didn’t sustain it.

And so now we really make a point to combine our strategies and diversify our investments to make sure that if one thing isn’t working, something else is working. And I do have clients that were very old school, 20% down, cash flow, I’m not buying another property unless this one is operating. And those people were untouched, literally untouched. Their investment grew from there.

And they’re still my clients now, but that was a lesson that I learned from, you know, a nice old Vietnamese man, first generation, who was extremely conservative. So there’s there’s a place for different strategies.

Joseph Crooms (19:20)
Thank you for sharing it, Mary. Mary, so let me ask another AI question. So with all that happen, and I guess AI, how long has AI really you’ve been in the tech field, so it’s it’s sort of been very current to you. How would you know I am being successful for what I’m doing? what is w what what kind of revenue number will pick will come out at you and how long do you think it will take?

Mary Pastore (19:49)
So I think this is a very personal question in the sense like for for everybody is a little bit different, right? So in my in my twenties my numbers were part of it different versus now, I’m getting close well, I should say that because I was gonna say I’m getting close to thinking about retirement. So for me, my number would be a number that would allow me to live pretty freely. And

So, you know, that’s what I would encourage people to do is not look at other people’s numbers and go, hey, I need to make, you know, a million dollars a year, which is great. But for me, I only need half of that to live very comfortably. And so for me, my goal is to make like half of that per you know per year net and then have

my systems in place and my business in place that runs all of that so that I don’t have to worry about any of that. And then I’m free to go off gallivanting around the world, traveling, enjoying time with my family. To me that’s freedom is when my time freedom is freed up. I hope that answers this.

Joseph Crooms (21:01)
Yeah, no no. you gave some dollar amounts and and you gave but you also gave some real life experience. So, let me just that’s the kind of stuff people don’t really talk about what you just spoke about. You know, what’s what’s relevant to you? And honestly it what separates the folks who are just dabbling from the ones who stay in the long term same meaning that you have a plan. Let me ask you this. What are you focusing on solving or scaling next? What’s your next

Real golden.

Mary Pastore (21:31)
My next real goal is really the solving the issue of affordable housing. And that’s why I had mentioned earlier about the co-living, because I know my kids struggle. they’re actually you know both finished college and they were they’re scared. I mean one of them moved to Arizona, hence my target in Arizona, because the affordability is so bad in California.

now that being said, even Arizona, the prices of homes have gone up significantly in the last couple of years and that’s you know, nationwide in in a lot of areas. And so I really believe because I’ve been operating this, you know, the co living style since before it got popular. and it has really helped people be able to find a place to live that’s affordable for them in a nice place

where they don’t, you know, have to get five different strangers to come together on a lease. We allow them to do it very easily. And so to me, that is actually solving that you know, housing crunch and the affordability because I haven’t seen other ways that people have tried to do this be very effective.

Joseph Crooms (22:45)
So Mary, this this this new project I guess is s very innovative, what you think of c co-housing. What type of teams do you have in place and what d type of teams do you need in place to make this effective?

Mary Pastore (23:00)
Yeah, I think you know when it comes to co-living, you do need a property manager unless you know you have the time to manage it yourself. so because it is a little bit more intensive from a management perspective. Let’s say you have a a house, instead of renting out to one family, one lease, right, one set of people to deal with, you may be renting it out to eight different people. And so eight different leases, you know, eight different communication

channels and so you really need to make sure that you either have your management system down or you hire a property manager that knows how to do co-living. That’s definitely what you need. And then the other part of the team members is a contractor who can convert existing house into a co living house. ideally if you find the right property that you know

meets certain we like we have qualifications for properties it not every single property can be a co-living but when you do find the right property you do need somebody to come and help convert that properly into a co-living style house and that’s really it.

Joseph Crooms (24:06)
Okay. So that’s big, especially you know, the idea of the the co-living. The next move can either compound things or create chaos depending on how you play it. Now I know a lot of people listening are either early in their journey or looking to level up and I think that they’ll benefit from hearing this. When it comes to building those relationships and growing a network, what’s made the biggest difference for you? What have you done

to to to s solidify those relationships.

Mary Pastore (24:37)
Yeah, I so I do spend a lot of time networking. So I do go to investment group meetups. I’ve also you know I’m also very into education. So I go to I sign up for a lot of programs where there are people like me like who’s interested in the same thing where we can collaborate and collaboration is key because that’s really I tell my children this, you know, all opportunities

come from other people. So you really have to be able to connect with other people and collaborate and help them and then in return, you know, when they see something, they they be able to help you. And so really getting out there and meeting people and talking to them, and building those, you know, connections and and growing your network. you know, I I have a CRM, everybody I meet, I put their name in there and I try to remember

little personal things about them so that when we talk, you know, I can reference back and see, you know, hey, this person is interested, let’s say, in co-living or in RV parks. And so if you know it it triggers me so that if I see an opportunity, I can also provide value.

Joseph Crooms (25:48)
Mm-hmm. And and s so I see you really concentrate. How are you are you still very much concentrating on your investors properties also?

Mary Pastore (25:58)
Yeah, so so I will say in the past all I did was focus on my investors property. but luckily along the way I purchased properties for myself and that was the one thing that created freedom for me to quit my day, like my corporate job, you know, my high tech job. And so it was, you know, I do realize over the years that, you know, I I did

focus on a lot of my investors versus focus on me. So now I’m trying to do both. I’m trying to focus on making sure I hit my numbers that we talked about to give me my retirement plan, you know, to to come to fruition, as well as now putting those systems in place so that when I do bring opportunities to my investors, they know that they have, you know, someone who has systems in place to help manage their property. So they don’t have to stress about it.

Joseph Crooms (26:51)
Do you still invest personally also and you know, w what what where did you wh where did you leave off at? How many properties and

Mary Pastore (26:58)
So so at at one point I was up to eighteen. And yeah, this was all like part-time while working. now I am building again. So I that dropped down after the twenty two thousand and eight situation. So that dropped to about five properties. Five properties that I was so so I lost quite a bit of my portfolio in that process. And then now we’re building up to

I’m planning for the next year for to acquire another five properties and that should get me very close to where I want to be and then the following year another five properties. So one thing I will say to people is like to really put their plan in place. It doesn’t have to be like don’t listen to other people’s plans because you know if you go on YouTube or Instagram, people are throwing out these gigantic numbers and I have a lot of friends in engineering who’s like, heck no, it’s too stressful.

I don’t wanna deal with that, but that’s only because, you know, a lot of those people are doing this full time. If you have only part time, then you know, you look at your numbers and figure out what it takes to replace your salary. And then you slowly, you know, acquire that, make sure that’s running and acquire the next one. So for me, I’m I’m close, Joseph. I’m close to the number that I wanna be and I don’t need to be bigger than that. That’s what my my dad

held up a sign when he was like kinda on his deathbed but he had a sign that says, I have enough. I don’t need more and that’s kinda how I I feel too.

Joseph Crooms (28:30)
I guess you wanna leave a legacy also.

Mary Pastore (28:33)
I do, I do, and that’s part of the reason why I created the property management company. Because I don’t know where my children are gonna go. I don’t know what they wanna do. I don’t want to leave them a legacy that’s a burden, right? ‘Cause they may not enjoy property managing the investments. So I wanted to leave them with a mechanism to run the legacy.

Joseph Crooms (28:56)
And last question before we could we get very close is up. How how how far of a seesaw is your in property management company from your investment? A are they about eviling out w what would be like the how much would you say I they’re both bringing you right now?

Mary Pastore (29:13)
they my investments actually are bringing way more than my property management company. but I but I plan to even it out. I think you know ’cause property management you’re you’re collecting small amounts from a lot of people. and so it requires like active participation. So again, because I wasn’t focused on that, I was focused on more the property side of it. Now

Now that we have it systematized, I’m going to grow the property management side so that it can handle whatever investments that we make and our investors make. So I’m going to grow that so that it will be maybe not equivalent to my real estate investment. I don’t think it will catch up quite to that. But I think it will be a good portion of that, maybe 50%.

Joseph Crooms (30:02)
Say so for our listeners, g can you put that in translate to a a dollar amount? Where you are for both of Where and where would you what’s your hard stop? not f not for your your property manager, ’cause I can see that’s ongoing. But what’s your hard stop there?

Mary Pastore (30:17)
For my real estate investment portfolio.

Joseph Crooms (30:20)
Let’s do with this deal with the property manager first. What is your hostile?

Mary Pastore (30:24)
So hard stop for the real estate for the property management, I would say at two million dollars a year for revenue, that would be a hard stop for me because then it’s it would grow bigger than I want it.

Joseph Crooms (30:36)
And for your investors, how much how much how much will you need for

Mary Pastore (30:40)
And sorry, I really when I talk about numbers, it’s net, not gross. So I yeah. and then for the investments and investors, it’s kind of like sky’s the limit. as long as the property management company can handle the investments, then you know, we can keep going. There’s really not, you know, I I think I think when when it gets to a point where it takes

more time for me than I want to invest in it. That’s when I stop. But my number, I have a number that I’m going for. So I want to grow my personal portfolio to 20 million. And then after that, then it just then it becomes more of a hockey of, hey, what do I want to do that is not going to take up time for my family?

Joseph Crooms (31:28)
Wow. Mary, thank you for being here. you can’t fake relationships. Relationships are everything in this space, and thank you for sharing. All right, before we wrap up, if someone wanted to reach out to you and connect with you, maybe collaborate or learn more from about what you’re doing, what’s the best way to reach out to you?

Mary Pastore (31:46)
The best way to reach out to me is on Instagram. It’s gonna be the at sign, Mary N Pastore. So Mary N P A S T O R E. (@marynpastore) I’m growing that Instagram and that’s gonna that’s gonna be my mechanism for communicating.

Joseph Crooms (32:00)
Okay, say it one more time.

Mary Pastore (32:01)
It’s at Mary M-A-R-Y N like Nancy Pastore. P-A-S-T-O-R-E (@marynpastore).

Joseph Crooms (32:10)
Thank you very much. That was really good, Mary. So let me I I know that our audience is gonna get appreciate your time, your story, your perspective, your philosophy, and you know how you’re approaching the future for the legacy. We need more people in the space who are doing it the right way. Thanks again for being here. And for those of you tuning in, I know you got value from this. Make sure you subscribe to Investor Fuel

Real Estate Pros Podcast. We got more conversations coming from operators just like Mary Pastore and who are also building real businesses and she gave us a great idea. We’ll see you at the next episode. Mary say goodbye to everyone.

Mary Pastore (32:54)
Thank you. Thank you for having me, Joe, and thank you everybody for allowing me to share my story.

Joseph Crooms (32:59)
Guys, thank you for joining us at the best of Investor Fuel Real Estate Pros Podcast. We’ll see you at the next episode.