Don’t Chase the Dollar: How to Build a Profitable Real Estate Investing Team

Jennifer Cotsonas (00:00)
I’m not a big advocate for self-management. Now, over time, after you figure out all the ins and outs, but I would always encourage someone who’s just getting in, build your team, build your resources. Don’t chase the dollar, chase the future. And I believe the best way you do that is by finding the right resources.

Dylan Silver (01:49)
Hey folks, welcome back to the show. Today we’re joined by Jennifer Cotsonas, an Arizona-based realtor, investor-friendly agent, and member of the leadership team at NetWorth Realty Phoenix West. Jennifer, thanks for taking the time today.

Jennifer Cotsonas (02:03)
Thanks for the invite. I appreciate being here.

Dylan Silver (02:05)
Now, these days, what types of properties and what marketing channels, acquisitions channels are you finding most fruitful when looking for properties that are ideal for investors?

Jennifer Cotsonas (02:18)
So the— the Phoenix market is where our real bread and butter is— Maricopa specifically. And with all the growth and development and the companies that are coming into this area, it’s really… it’s just a really marketable demographic right now. What I’m finding personally is even first-time homebuyers, they’re not really looking for those, “Let me buy something and I’ll change the paint later, I’ll change this later.” They really want that turnkey property so that they can spend more time with their family, spend more time with their friends.

So anything from quick cosmetic to, “Let’s tear it down and build something new,” it’s all here in that metropolitan— in the Phoenix metro area. Making… I wish I could give you one item and say this is where the most… this has been the most fruitful, but we’ve been working everything from, you know, scraping million-dollar homes and building three-million-dollar mansions, to, “Let’s pull this trailer off and build a nice single-family residence,” kind of thing. So it’s kind of all over the board.

Dylan Silver (03:17)
Now, when we talk about those higher price point acquisitions, this is an area where, you know, potentially there’s limited buyers when you compare it to maybe properties at, you know, two to five hundred thousand dollar acquisitions point. So when you’re acquiring these higher dollar value properties, do you really have to have an end buyer in mind at that point? Or can you go into it saying, “Hey, this looks like a good deal on paper. We’ll find the buyer once we close on this deal”?

Jennifer Cotsonas (03:45)
Really interesting, again, about the Phoenix market… those high-dollar, you know, those 1% opportunities, they actually still stay very competitive out here, like, year-round. When the economy is taking a dip, our high-end properties are not dipping the way the middle of the line, so to speak, are. It’s— it’s actually… I can’t explain Arizona better than just saying it’s a big, huge melting pot, and we constantly have people wanting to move in.

Sure, I’m sure some people move out— why, I don’t know— but we constantly have businesses and entrepreneurs and, you know, workers, like the whole gamut. So we don’t really get hit very hard when we’re doing those higher-end. Now, obviously, yes, you’re gonna hold on to those a little longer than you would something that’s going to be more cost-friendly, but it’s not an extended period of time. The most holding time is your permitting and your building and all that kind… you know, the— the work behind it, more so than, “I’m sitting on this for a long period of time because of the price point.”

Dylan Silver (04:46)
Now when you’re looking at those higher price point deals, are— are those still direct-to-seller or how are those deals coming about? Is there a broker relationship where you know there could be high days on market? What do those deals look like?

Jennifer Cotsonas (04:59)
Dylan, you name it, that’s how it’s coming to us. We have… NetWorth as a whole is very relational. We’re not transactional, we’re relational. So we have relationships with other agents, wholesalers that are out there, relationships with divorce attorneys, bankruptcy attorneys, even our neighbors. And yeah, we do— we go knock doors and— and we see if we can help be a solution to someone in their situation. Probate attorneys… like a… it’s— it’s all about the relationships is how we find these deals.

Dylan Silver (06:18)
Now when we talk about probate, which you mentioned, sometimes I feel like as someone who’s done this myself, it— it— it becomes almost like you’re a family triage coordinator when families can’t necessarily come to the same page on what’s gonna happen with a property and they may be unsure of it. We have to wear multiple hats. So we’re coming in as investors, but then we’re also coming in thinking, “Well, how do we get everyone on the same page together here, right?”

Jennifer Cotsonas (06:44)
Right. Very, very, very true. It’s a— it’s definitely an adventure. And one of the things that I love is I— I am a compassionate person and— and I just love the opportunity to help people, which is what I love about this aspect of real estate. You’re actually helping a multitude of people. You’re… whether it’s the probate situation, whether it’s someone who’s been binge-watching HGTV and now they want to get into investing, or whether it’s someone that, “This is my bread and butter, this is what I do all the time, but I don’t have time to find the property.” So you get to help a multitude of people. A lot of times in the probate situations, I might not be working directly with the heirs in the family, but I’m working with the agent. And it’s like everything else in life— it’s all about patience and understanding and just kind of knowing that it’s gonna take a hot minute before everyone gets on the same page.

Dylan Silver (07:35)
Yeah, for sure. And I think those expectations sometimes are— are the— the most important part of communication, whether you’re dealing with a probate situation or you’re a flipper dealing with your contractors and subcontractors, which brings me to, you know, another conversation point here. When you’re working with investors, especially newer investors, are there any common mistakes that you see from— from your standpoint as someone bringing deals to them?

Jennifer Cotsonas (08:02)
The common mistakes for someone doing a deal, or the common mistake of actually working a deal?

Dylan Silver (08:07)
Th— those investors are making— yeah, th— that the investors are making.

Jennifer Cotsonas (08:11)
I would say emotions, which is… we all have emotions, right? But the biggest mistake is when you have your emotions involved in the design plan and what you need to do to the home, and forgetting that this might not be conforming to the neighborhood. You’re probably overdoing the rehab— let’s dial it back a little bit, right? That— that is, I think, the biggest. And the beauty part is, it usually only takes one time that you go through that.

And a lot of times, like, they’re talking to me and like, “You know what? I should have done this, and I should have… I should have… I appreciate you recommended this. I probably should have followed that— that line of pursuit,” kind of thing. But I would say the biggest thing is just becoming emotionally involved in it and thinking that you’re the one moving into it, and not focusing on: what does the neighborhood demand?

Dylan Silver (08:57)
Yeah, you don’t want to be the one setting the comps, right? And then everyone’s looking at you saying, “Well, this property sold for this.” You want to have comparable properties to go off of where you’re not going to be setting the market, right? One of the things that we’ve seen like spread like wildfire throughout the Sun Belt as a whole over the last couple of years is new construction, to the point where flippers even have to look at, “Well, is my flip going to be an option for someone who might be considering new construction?” Which if you look back more than five years ago, that was never a thing. Well, now it is. You have in places like Texas, where I’m licensed, you have sometimes new construction going for two hundred thousand dollars. Well, if my flip is right around there or more, it makes it competitive. What’s new construction look like in your market these days?

Jennifer Cotsonas (09:47)
A really great question. We do have a lot of new construction going on still, especially out like the Surprise area— some areas that once were considered the outskirts, that now are not so much the outskirts. It’s a lot closer. So yeah, when you’re going up against new construction, you definitely want to keep that in mind, and you have to come price yourself competitively, mostly because new construction, as I’m sure you know, can offer bonuses and this, that, and the other thing that your home doesn’t necessarily offer.

So when in those situations, we talk about like, you— you gotta rehab yourself to be best on block. You gotta make yourself look phenomenal, but keep in mind, you’ve got to now price yourself competitively. You’re not out there to set the new ARV, because you’re competing against… what you’re really competing against is programs and— and opportunities the new builders offer— it’s not necessarily the construction. And making yourself a little bit unique. Like out here, it’s just cookie-cutters. When you’re dealing with new construction, you’re just cookie-cutter homes, and not everyone wants that. Some people want their house to look not like the next-door neighbor. So just kind of positioning yourself, focusing on curb appeal. New construction doesn’t typically come with landscaping, so focus on your landscaping, focus on curb appeal, focusing on the things that in the new construction realm, you’re going to just… your price point is now going to go up, up, up, up, up. But let me make this competitively priced and give you the extras that you’d have to pay for on new construction. I— I’m hope that makes sense.

Dylan Silver (11:54)
Yes. No, yeah, and especially when you— you look at things like, you know, year build. If someone can get two homes that are comparable, but one is, you know, fifty years old, right, and the other one is brand new, you know, it’s— it could sway people towards the new build, so you do have to be cognizant of that. Pivoting here— here though, Jennifer, when we look at Phoenix as— as a whole currently, are you seeing STR, short-term rentals, or midterm rentals, or, you know, long-term buy and hold, fix and flip? Are you seeing any one strategy where there’s more investor interest, or is it an even spread across the board?

Jennifer Cotsonas (12:30)
So the short-term rentals have really slowed down. There’s a lot of… and— and I think that that noise is even quieted a little bit, too. A lot of the— the room rentals. So we… when I’m dealing with an investor who’s not in the, call it, traditional realm of, “I’m gonna go in here and flip it and either hold it as a rental or put it back on the market,” I would see some of the more unique things people are looking at is like sober living, assisted living, or just renting out by the room kind of stuff. But I— I would say ninety percent of our business is just more traditional type, “Let’s go ahead, get me something at a discount, let’s fix it up and either put it on the market or hold it for a rental.”

Dylan Silver (13:14)
When we talk about finding buyers and dispositions as a whole, right? One of the tricky things that comes up is, you know, you have to be constantly nurturing this buyer pool. And then once you have a deal, you have to find people that are champing at the bit and ready to transact, to the point where, you know, if we look back more than five years ago, you could almost buy a deal wrong and you would still have buyers because there were so many. That’s since changed, and now brand and credibility and your track record seem to matter as much, if not more so, than the deal. What’s your approach to dispositions and to those— those buyer and buyer relationships?

Jennifer Cotsonas (13:53)
So we hold ourselves pretty accountable to the investors we team up with when we’re selling them deals. We actually create a… we call it a… so our price opinion we call the NetWorth Price Opinion, more commonly known as an NPO. We provide our investors a sheet each year that shows them… because when we’re providing you a property, an opportunity, we give you the comps included with it— the comps we’re looking at, why we feel these are comparable. We give you the CMA so you can kind of see, you know, how long a property’s sitting on market, as well as, you know, the tax rolls on the subject property so you can fact check us what we’re telling you about the property— just a very informative packet.

In regards to the NPO, we actually every year create an NPO sheet. And that sheet, if I told you something was going… once you fix it up and put it on the market, it’s gonna be worth 400,000, we’re gonna track that property and we’re gonna see where you end up selling it. And we provide an annual sheet letting you know what our statistics are. Typically here in Arizona, we’ve been averaging around 3%— the investors are selling 3% higher than what we told them they would sell for. And that was even during that whole 2022 to like… 2022 prices were great, right? Then we hit 2024, and what we thought they were gonna be, they weren’t. So even that 2024, 2025, we were still… I think we were around 98% of what we told them they would sell.

So I— I guess what I’m saying is, what we provide— and not only when we’re acquiring properties, but when we’re selling properties— what we provide is strong integrity. We very much believe in what we do and believe in the opportunity that we’re offering. The fact that we get to make a living out of it is just a blessing. And we’re just a very strongly integrity-based company. And I think… I know that’s what’s kept us so successful. NetWorth started back in 2008 out of Texas, and we’ve grown strong and continue to grow two to three offices a year, with repetitive business coming back to us. So I— I think that kind of speaks for itself as far as how we build.

Dylan Silver (16:38)
Love that idea, by the way. It’s effectively, “Hey, here’s our scorecard, here’s our report card, take a look at our winners and our losers, and you can be the— the judge. And we’ve got, you know, ninety-eight percent win rate, so that speaks for itself.” But it’s— it’s interesting because sometimes you’ll go to an investor-friendly broker, or— or someone who may be doing, say, solely like off-market assignable contracts and asking them for, “Hey, show me your track record,” they might not even be tracking their deals, right?

Jennifer Cotsonas (17:09)
I don’t know anyone else who does that.

Dylan Silver (17:13)
Does that, yeah. I was gonna say the same thing. And so as someone who— who’s done this myself, I mean, that speaks volumes because it’s like, “Okay, well, this may be a new relationship, and— and I may be, you know, buying my first NetWorth deal, but let me take a look at your past deals.” Here they are. Okay, now I have something to— to look at. When that relationship then matriculates and I then— I close one deal, now I feel like, “Okay, this is gonna be my forever source of deals, because they found this one deal, here’s their track record.” You know, Jennifer, go find me five more deals just like that.

Jennifer Cotsonas (17:46)
And it works well and we do it, and it’s fun.

Dylan Silver (17:49)
You know, when people talk about these investor relationships, but then also investors managing their properties and then, you know, avoiding becoming the dreaded tired landlord, right? As someone who works with investors and who sees distress from all sides— from probate to divorce and death, to tired landlords… do you think self-managing is— is always a smart way to go if you’re starting out, or can that in and of itself become a— a point of distress for folks if they become the tired landlords?

Jennifer Cotsonas (18:20)
I’m not a big self-management… I— I actually in another life actually worked property management, and I think that there’s a lot to be said for removing yourself from the— from being the landlord, especially with your tenants. I’m not a big advocate for self-management. Now, over time, after you figure out all the ins and outs… but I would always encourage someone who’s just getting in: build your team, build your resources. Don’t chase the dollar, chase the future. And I believe the best way you do that is by finding the right resources.

We help you out with that as well. As if you can imagine doing this yourself, you come across a lot of people— a lot of people, whether it’s trades workers, whether it’s property managers, you know, landscapers, whatever the case may be. What my client is looking for, I more than likely can point them in the right direction of someone who works on what we like to refer to as investor-friendly pricing, because they know that this is something you’re getting into and, “I’m gonna get additional business from you, so let’s go ahead and— and let’s start building this relationship together.”

Dylan Silver (19:22)
Yeah, I— I think, you know, especially being able to have those guidance and that— that referrals in place where, “Hey, I need a property manager. Hey, I need someone who’s gonna help me manage changeovers of an STR, right?” These are things where if I have to go find it all on my own, that— that could become difficult and challenging, having to connect all those dots while still potentially having a W-2 job, right? It’s nice to be able to really have a one-stop shopping, if you will. We are coming up on time here, though, Jennifer. Anything you’d like to mention directly to our audience?

Jennifer Cotsonas (19:55)
I mean, you’re more than welcome to reach out if you’re looking for… like I said, we’re in multiple states, so feel free to reach out. If you’re someone who’s investing or looking to sell your property, I’d love to be able to see what we can do to help you out. My Instagram is very simple: @jmcotsonas. Email, [email protected]. Whatever you want to do, feel free to reach out. I— I love helping people, I love this realm of real estate that we work in. Real estate is very broad, as I’m sure you know, but this niche, it’s fun, it helps a lot of people, and I have a good time doing it.

Dylan Silver (20:31)
Jennifer, thank you so much for joining us here today. Thank you for your time.

Jennifer Cotsonas (20:34)
Dylan, I appreciate your time. Thank you.