From Bartender to Real Estate Mogul: Daniel Paloscio’s Inspiring Journey

Dylan Silver (00:01.153)
Hey folks, welcome back to the show. I’m your host, Dylan Silver. And today on the show I have lender, founder of SEP Capital Florida based private lending firm that provides short term asset backed financing to real estate investors, Daniel Paloscio. Daniel, welcome to the show.

Daniel Paloscio (00:21.45)
I appreciate you having me on, Dylan.

Dylan Silver (00:23.681)
I always like to start off at the top of the show by asking folks how they got into the real estate space.

Daniel Paloscio (00:30.014)
Okay. So I got into real estate back in 2013. Prior to that, was at that time, I was a bartender.

I found bigger pockets actually and kind of just first I read a couple different books and then I found bigger pockets and kind of dove into real estate. And then in 2013 I purchased my first fix and flip property in Largo which actually still to this day is the highest like

return on investment I’ve ever got on a fix and flip property. think we made like 58 % or 54 % net on that, which we have never seen again with also great timing, I think in 2013, a little harder to do now. But so I got started in fix and flip and I found out I learned pretty quickly on maybe the first rule ever is that you make all your money going into a deal not coming out. So I decided that I needed to go direct to seller and you know, learn about direct mail, PPC and all that stuff at that time, mainly it

was direct mail. And so I was marketing for deals, did more flips, fix and flips, fix and flips got a little difficult because you really have to be a good leader of teams, a good manager of people. There’s a lot of moving pieces. And I thought that a better transition would be to just kind of use my skills that I had developed over the course of a couple of years and, and market for really good deals and wholesale those deals to the other fix and flippers who had better operations, I think at the time than I did. And that

worked out pretty well. I cherry picked some of the great deals for myself, built out a small long-term rental portfolio.

Daniel Paloscio (02:12.494)
decided to give short-term rentals a try. I live in Tampa, Florida and so you’ve got the beaches are 20 minutes away and I Purchased my first short-term rental went really really well. I purchased another one. I was purchasing below market Rehab them refinance them and then made them short-term rentals I did that for a little while sold all my long-term rentals built out a portfolio then in 2016 I started Vacation rentals of Florida with a partner where we managed

my own rentals and then we managed for clients. 2019 I was still involved in real estate I founded DoubleClosed.com which is a niche lending product for wholesalers. We fund basically transactional funding nationwide.

And I still to that day I run that company and and then You know around 20 21 I’d saved up some money and decided, you know, hey I’ve been borrowing a lot of hard money to do my my burs and I thought you know, why don’t I

you know, do some of my own loans. And I lent my own money out, did a couple loans. I ran out of money pretty quickly. And at that point, I was trying to figure out how I can get liquid again. And I thought, why don’t I reach out to my old hard money lenders?

see if they would be willing to purchase notes for me that I was holding. They were all pretty excited because it was an opportunity for them to earn interest and not have to do any work, I think. And that’s how I got into hard money lending. And in 2024, I sold majority share of Vacation Rental Company to my partner. He’s running that. Now I still have a small piece of it. And I focused on SCP Capital full time. And since inception, we’ve done about

Dylan Silver (03:45.739)
Yep.

Daniel Paloscio (04:04.27)
150 loans. We have deployed about just under 50 million in loans and we currently have about 21 million in loans outstanding. But you more importantly between DoubleClose.com, between all the rentals that I have owned, all the wholesale deals that I’ve flipped and mainly through DoubleClose.com, I’ve been a party to over 600 transactions and I’ve never lost a

dollar of my own money and I’ve never lost a dollar of investor capital on any deal that we’ve done.

Dylan Silver (04:35.107)
Mmm.

Dylan Silver (04:40.589)
Well, congrats on all your success. I’ve actually seen DoubleClose.com. It’s funny because I remember, I don’t know when this was, was probably two years ago that I saw this. And I said, what a great name for, you know, double closing. I said, how did they even get this? Like, this is the one that I would go to. I don’t even think I searched. I just typed in like DoubleClose and then hit enter. It was like the first thing that came up. I said, wow, someone’s really…

Daniel Paloscio (04:43.33)
Thanks.

Dylan Silver (05:07.899)
on it and now meeting the guy. So you go from fix and flip the first deal you made over 50 percent do the wholesale and you’re doing a lot of transactions. I’ve actually seen now this kind of trajectory quite often not necessarily fix and flip first but wholesale to maybe fix and flip fix and flip to maybe short term midterm long term. And then I’ve seen real estate operators investors go from that to.

note buying to hard money lending and so you followed a similar trajectory Did you know that this was going to be the trajectory when you started out when you were doing that first deal when you were doing that wholesale?

Daniel Paloscio (05:50.926)
I had no idea. I had no idea I’d end up here. In fact, my idea was own 100 units, 200 units. But I think as I got into it, maybe it wasn’t the best timing. When I first got into real estate, was great timing. But as I developed and my skill and learned real estate, timing wasn’t that great. And I guess when I realized the amount of effort and work that it goes into, in real estate, it sometimes gets packaged up as passive.

And it’s really not passive. It’s pretty far from passive. It’s pretty active work. If you’ve got great managers and great team members, it can be passive. But so can any business if you’ve got great team members and great leaders, right? And so I think that as time went by, what really pushed me more into lending was COVID. So COVID happened. And even prior to that, all of the guys, the local guys that I know that are much smarter than me,

and been doing real estate for much longer than I have been, have all been sort of like, what’s chicken little? Like the sky’s gonna fall, the sky’s falling, the sky’s falling because we were just on a rocket ship since 2012 in Tampa market. And so everybody, and I was old enough to remember the crash in 08 and I saw my parents lose.

Dylan Silver (07:00.195)
Mmm.

Daniel Paloscio (07:12.494)
just about everything they had. that stuck with me. And then all these guys that know more about real estate than me, are keep telling me, can’t go up forever, it can’t go up forever. And in hindsight, if I would have just bought every property that I thought was 10 % too expensive along that ride, I wouldn’t even be lending money anymore. I’d be done, I’d be on maybe a yacht.

Dylan Silver (07:23.651)
you

Dylan Silver (07:33.621)
Interesting, okay.

Daniel Paloscio (07:35.542)
right, but I didn’t. so COVID happened. And I thought, okay, well, I better not put any money into any real estate right now. Let’s see what happens. And at the same time,

Florida was the only state open. so people were flooding here for vacation. And we were getting four times the rate on all of my rental properties and all the properties we manage. think at the time we managed close to 100 properties. And so in that business, we were just making so much money. And I just saw money sort of just kind of stacking up in my bank account. And then I was starting to get anxiety about inflation and what do I do with it? And then I thought at that point, well, well, why don’t I just invest in more

money loans. And so around around 2020, 2021, that’s when I just really started putting more money in hard money loans. And then I started to do our money loans as a colander agreement with with our investors. So now to this day, I keep anywhere from 10 to 20 % of my money in each loan. And I’m the largest investor in our portfolio. And, and for me, I just I realized it was it was a

a little it was a lot less.

a lot more passive than real estate investing, but for my capital investors, it’s entirely passive. And I like that. I like that model. It just kind of fits my lifestyle a little bit better. I like being in the office more than being in the field. but I do miss appreciation and I do miss the tax benefits and I miss the velocity of having, you know, portfolio growth in actual real estate. And so I hope to get into

Daniel Paloscio (09:18.96)
little bit more of that here in the future.

Dylan Silver (09:21.495)
I want to hit on that though. mean, hard money is not without risk, right? So mean, there’s the risk that the person who’s using the hard money, the borrower defaults. But at that point in time, because you have like a first position lien, then you own the property. So in essence, if the worst case scenario happens, well, now you have something that you’ve underwritten, which now has value that appreciates. That’s kind of the gist of it in my head, at least.

Daniel Paloscio (09:47.638)
That’s exactly what it is. they were at we’re called a hard money lenders. The reason that we get that name is because we’re lending on a hard asset. So we’re an asset based lender. And so for us, it’s very unlikely that we’ll end up having to take a property back because the idea is that you lend an amount that is, you know, safe enough where if the borrower defaults for some reason, it’ll sell at auction. And majority of the time, the bar

doesn’t want to default, they’re going to do everything they can because they may have hundreds of thousands, millions of dollars in equity. And it would be such a poor business decision to let that go, that people make it work out, right? But we try to look at our loans where, you know, we want we want to be in a loan at a safe number that you know, we can absorb any losses, or, you know, any market decline, or, you know, any issues that we run into with a client. And then we also try to make sure that, especially on the

real estate investment side, we try to work with good operators, know, good operators that know what they’re doing, that know how to manage their finances, they can get through a project and things happen sometimes, you know, and if something happens, we have a little bit of a correction or property sitting on the market longer than it should, like, you know, we can work with our guys as long, you know, as long as they’re willing to work with us. Foreclosure and default is like the nuke button. If that happens, you know, really

they either, you know, somebody brought that on themselves or something happened to them and they can’t finish. You know, maybe they got sick or something and that’s the only option.

Dylan Silver (11:23.639)
Now, when I think about the full cycle of hard money, mean, going back to what I said earlier about this idea of going from being maybe a wholesale to a fix and flipper than hard money, those skills are very much overlapping with being a hard money lender. Like, for instance, if I was someone outside of the real estate space, for me to jump into hard money is going to be very difficult because I’m having to underwrite deals. Right. But but in essence, if someone with capital and someone

with that’s a flipper, right? Partner together, they would be in many cases a decent or maybe even a great hard money team because you’ve got the guy with the capital or the guy or gal with the capital and you’ve got the person who is an experienced flipper and has experience. And so if they can just figure out how are we going to underwrite these deals? Well, now you’ve got a business where you’re not swinging a hammer and then you’ve got a business where it is going to do better than Wall Street, right? And so

To me, think we may, I don’t know if we will, but we may see a lot more people moving into hard money. And I think I certainly have as a podcast host, I’ve had lots of people.

Daniel Paloscio (12:32.91)
Mm-hmm.

Yeah, like you said, I think it’s the natural progression. You know, there’s, I feel like there’s a lot of leverage on time in this business. However, on the real estate side, there’s so much more money, but there’s also more effort to get that right. But there’s, there’s much more money. And so like to your point, a flipper would make a great hard money lender to other flippers because flipper understands flipping. A commercial guy is going

to be a great hard money lender to commercial guys because he understands commercial lending. A private credit guy is going to be a great private credit lender because that’s what he understands and so it does sort of follow with you with your niche. So and I’m really careful about only investing in assets that I understand and that that I know because you can get yourself in trouble by saying hey I’m a hard money lender and I’ll lend on any asset. Like if you don’t know anything about apartments and you’re trying to apply single family

rules to the apartment, you could lose because that’s not how they operate that you know, if you don’t understand cap rates, if you don’t understand where the market is on cap rates and what people are doing, you could you could find yourself in trouble. And I invest in assets that I know if I have to take back, I feel totally comfortable with managing the rehab, listing the asset for sale, determining the highest and best use for the property for in a down market, I feel I feel comfortable with turning it into a long term rental or short term rental if I need to.

finding a manager. And so we kind of have an approach that sort of encompasses all of that. And the people who know how to do all those things first, the next step is can you do you want to raise capital? Because that’s the other side. It’s, you know, in this business, you’re raising capital, you’re placing investor capital, and you’re finding good loans to place investment capital in. And if you enjoy doing those things, it’s a great opportunity for you.

Dylan Silver (14:30.103)
You mentioned Daniel that you you’re thinking well worst case scenario of nuke button goes off and I have to take this over I’m comfortable with it. I think this is a you know really the essence of being a hard money lender but I’m also curious to get your perspective on you know hard money lender without borders so to speak because I see a lot of hard money lenders they’ll be in New York they’ll say I loan everywhere but I’m thinking in my head it’s kind of difficult to do that I see I mean it’s possible but it is difficult to do that because what happens if the worst case scenario happens so.

I’m curious to get your take on that, kind of this idea that you can be a hard money lender and loan anywhere.

Daniel Paloscio (15:05.176)
So I would be, so I do know private lenders like myself that lend in multiple states, but they’re usually strategic. It’s really, I would be skeptical of a hard money lender that says, Hey, I lend in New York and in California and in Texas and also Oklahoma.

it, those more often than not, that’s a broker, that’s somebody who’s just placing capital with different investors. For people that are investing their own money or money that they directly control, it’s very difficult to know all of those markets. Now, I will say there are exceptions to the rule. I know that there are some lenders that will invest in almost any market, but they’re just going to be 40%, 50 % LTV tops. And doesn’t matter where the deal is, they’ll do it there. And that that mitigates a lot of the risk for them. But I, you’re not going to find a lot of private lenders.

that do that. You’ll find a lot of institutional lenders like know, you’ve got Kiyavi, Lima One, and all those lenders. And those owners are great to work with if you have a little bit of time, you’ve got good credit and experience. Those lenders are fantastic to work with. But every once in a while you need a lender that can move in 24 hours. Every week we get, you know, a client comes to us and says, hey, I was working with this lender and they’re not answering the phone or they changed the terms of the closing table or for whatever reason, and they need us to perform in 24 hours. And as long as clear title is done, we can do that because like I said, we know the streets.

the neighborhoods. I mean, I don’t know every single street in Florida and we primarily lend in Florida, but anywhere in Tampa Bay, I pretty much know the streets, you know, in Orlando, I know the streets. And even down as far as Miami and up to Jacksonville, like, people tend to buy in the same pockets. As you get rule, it’s a little different, but it’s very similar. And the lending laws are the same and they’re different state by state. And so at any rate, I think that’s a little bit of a different product when people say that that’s what they’re doing.

Dylan Silver (16:42.178)
Yeah.

Dylan Silver (16:52.971)
Now, you mentioned that you do co-lending and I want to touch on this. Does anybody that is a borrower ever come to you and get your advice or feedback on a deal or is that not something that you participate in?

Daniel Paloscio (17:08.012)
Yeah, all the time. And we will work with our clients to try to advise them as best as we can on opportunities. A lot of investors look at deals, and I’m guilty of this too, a lot of investors will look at a deal with sort of rose colored glasses because you want the deal to work. Maybe it doesn’t pencil out as great, but it’s still a big profit and you want to make that money. And so you kind of maybe overlook a few things here and there. And so when we’re looking at a deal, we’re sort of looking at it

from a different vantage point. And before we take anybody’s money to work on a deal with anybody though, the first thing we’re going to do when someone sends us a deal is I’m going to jump on MLS and I’m going to look at the deal myself and I’m going to look at comps and I’m going to look at the subject property. if I agree with that number, we’re going to move forward. If I don’t agree with it, I’m going to have a conversation with the client and I’m going to say, this is what I’m seeing for these reasons. Did you see this comp? Did you see that comp? And then they might say, Oh, well, you know, the wholesaler sent me these comps.

say, well, yeah, you this comps a year old, this comps a mile and a half away. When the appraiser does comps, if you’re trying to sell this or refinance that they’re going to take, you know, comps that are in a tighter area and are more similar to this property. And so for that reason, I think it’s worth this.

But every once in a while somebody will say, well, know, X, Y, and Z happened. And did you see this comp? And it’ll be a comp I didn’t see. Maybe it’s not on MLS. I don’t know. And I missed something. And so it’ll be a conversation. But more often than not, in that scenario, they’re like, hey, you know what? You’re right. I’m going to go back and ask for a discount. Or I’m going to get the property for this much. And then I say, yeah, if you do that, this is a home run. And that’s how every deal that we do works.

Dylan Silver (18:43.586)
Hmm.

You know, to me that’s regional and that’s what makes sense. know, because it’s a situation where your money’s at risk and then also their time and their money’s at risk. And so I want, if I’m taking out hard money loan, I do somewhat want it to be regional. I think that…

there’s a huge benefit to having someone who has a regional knowledge of the area that you’re in for all the reasons that you mentioned. do want to pivot a bit here, Daniel, and ask you about capital raising. So I’ve had people who are big-time capital raisers. They’ve gone from Wall Street to real estate. And some of their feedback to me has been really insightful. And it’s actually changed the way that I perceive just what I do in general. So…

I think a lot of people are bootstrapping when they get into real estate and they may bootstrap for a while and I’m one of those people. And I realized like, man, what I’m doing is actually intriguing to a lot of people and they might not have the bandwidth to do what I’m doing, but I don’t necessarily have all the capital in the world. What if I’m able to JV with them and use their capital in my deals and it’s a win-win if they trust me and I have enough faith in the process and in them as well.

we can get deals done. But people often times kick that can down the curb until they’re quote unquote big enough. So I’m curious to get your perspective on raising capital, how you’ve done it and how the business is scaled.

Daniel Paloscio (20:13.336)
So, you know, like I mentioned, raising capital for me in the beginning. So I borrowed a lot of hard money and I borrowed hard money from local guys too. I could have went with the Kiavis and they were cheaper, but then, you know, there were too many times where terms change and we got to the closing table. And for me, it was worth it for me to pay an extra few points and just know that like I could call my guy on a cell phone and I could say I’ve got closing on Friday and it’s Monday and he’s like, no problem. that relationship to me, that

that flexibility was important. so, but so to answer your question, my first lenders were those hard money lenders. What I used to do even when I was borrowing a lot of hard money is I would say if my payment was due on the first…

None of my hard money lenders got a payment after the 31st of the previous month. And so I made an effort to make sure that every payment got there early and that I was impeccable with my word. I did, I mean, because I was taking on other people’s money and I wanted other people to know how seriously I took that, how important it was for me to be a good steward of their capital, even though I was on the borrower side. And so what ended up happening is when I had an opportunity to bring those investors, those hard money lenders on as investors, they were all really receptive to work.

working with me because I had a track record of many years of always doing the right thing and always doing my best. And so my first investors were hard money lenders and then my second round of investors were their referrals actually. And then as people started to know, realize, like know what I was doing, I would post on social media. I would just talk to everybody about what I was doing. And my social media game is not good either. But I would just let people know what I’m doing.

Then it happened organically. People would ask me about investing. People would come to me and I would just sort of answer questions, lay out the opportunity. I don’t like selling. And that’s worked out really well for me. As we’ve grown and as I’ve brought on team members, that land that sort of is changing. For a while, it was easy for me to originate the amount of loans that I needed to place the capital that I had available. It just seemed to be aligned.

Daniel Paloscio (22:31.246)
brought on team members to help with originations, it seems like we’re sort of originating faster than the capital that I’ve raised. And so, you know, sort of for the first time since I’ve really done this, I have to start thinking holistically about working with new investors and bringing in new capital that’s sort of outside my first degree, second degree of influence. And so that’s been

Dylan Silver (22:50.499)
Yeah.

Daniel Paloscio (22:54.924)
I don’t want to say it’s been a challenge for me, it’s just that I don’t love that side of the business, you know? And so it’s been a learning experience for me in terms of sort of putting myself out there and getting to people, know, getting my message out to people and presenting our opportunities.

Dylan Silver (23:15.713)
You know, it’s an interesting thing to talk about because I’m a wholesaler, I’m a real estate agent, but in wholesale is what I’m passionate about right now. And you were a wholesaler, so you remember this, right? So you’re excited about the deals, but then you’ve got the deal and you’re like, I’ve got to sell this and I’ve got only a certain amount of days to sell this. And you’re like, this is a home run deal. This should sell like this. But then it gets closer and you’re like panicking and you’re like, this is not good now. So.

Daniel Paloscio (23:31.118)
you

Dylan Silver (23:43.115)
And now I’m a licensed realtor, so I have to do things to a different standard. You know, we have the public trust and our own realtor code of ethics and so on and so forth. So I’m disclosing everything now. And so now it’s even more so. So, you know, I think as you move to a different area and maybe you would say graduate to a different area within within real estate. Now it’s I’ve got the deals, I’ve got the deals to loan on. Well, now I need the capital. And then I’ve got the capital.

Daniel Paloscio (23:55.246)
Mm-hmm.

Dylan Silver (24:12.631)
These people are expecting returns. Now I’ve got to find the deals. And these skills are, you know, to me, different, but they’re also similar, right? So you’ve got to be able to, if you’re a wholesaler, find the deals. That acquisition feels like everything. But even when you don’t have any deals at all, when there’s no deals in the pipeline, if you’re starting out, you’ve got to somehow develop your buyer’s network as well. And you’ve got to have these people and their buy boxes locked in.

And I imagine, you know, raising capital is similar but different.

Daniel Paloscio (24:46.432)
Yeah. And it’s funny that you say that on a different note that you say that the businesses are similar. So when I learned that I could have my investors in the beginning purchase the notes for me, I actually assigned the note. And the reason that I had that idea was because I had assigned so many contracts as a wholesaler. I went to my attorney and I said, hey, look, as a wholesaler, I’ve assigned lots of contracts. Is there a way for me to

sign the mortgage that I wrote so that to give to an investor so that I could recapitalize. And he said, yeah, banks do it all the time. Super common. And so, you know, that my experience as a wholesaler led me to have that idea. So I thought that that was pretty cool. But you’re right. And it’s and so it’s it’s the chicken before the egg. Right. But what guides me on that is that just like the very first bit of information that resonated with me in real estate was you make all your money going into the deal, not coming out of it.

And so if you find good deals, if you get on good deals, everything else will happen for you. If you are contracting a deeply discounted property, if you have one buyer, that buyer is going to want to buy that property. And so the smaller your buyer’s list is, the deeper of a discount you need to be offering to them. And on the other side, if you look at the guys from Net Worth Realty or

Dylan Silver (25:58.837)
Yeah.

Daniel Paloscio (26:13.196)
you know, other some of those other large wholesalers, they can sort of command a premium for their properties because they have a master’s a massive buyers. Right? Yeah. So and it’s a it’s a fun game that we play. I’m really careful about not committing to opportunities that I know that I can’t perform on because

Dylan Silver (26:22.935)
network.

Daniel Paloscio (26:37.102)
The biggest complaint I get from my clients about other lenders is that, you know, the Kiabi changed the terms or didn’t perform. And so the one thing that I have to do, the one thing and all of my businesses on double close and SCP capital, I, the one thing I have to do is perform. That’s it. Like, that’s it. Like I say, I’m to be there and it’s, it’s, it’s important that I just do what I say that I’m going to do because other people’s businesses, their income, their livelihood depend on it. it is funny game that sometimes I play just like a wholesaler, not having a buyer.

Dylan Silver (27:01.89)
Yeah.

Daniel Paloscio (27:07.416)
saying, I’ll do this deal. And then it’s sometimes a mad dash to make sure that I’ve got the capital raised, get everything to the closing table. But it’s fun. I enjoy it and it pushes you. It pushes you. So the good thing about that is it’s good sometimes to put yourself in that situation because it pushes you to go the extra mile to do what you need to do to make sure you have a buyer for that contract. You put that deal under contract, you know that it’s a good deal and you don’t have a buyer and you also have a short timeline. It forces you

Dylan Silver (27:13.231)
I’m doing it.

Daniel Paloscio (27:37.046)
to think about what you need to do differently and it pushes you to do things that you wouldn’t have done before in order to find those new buyers and that’s growth. That’s growth.

Dylan Silver (27:45.859)
That’s 100 % right. That is 100 % right. Amen to that, Daniel. We are coming up on time here. Where can folks go to learn more about SEP Capital and to get a hold of you?

Daniel Paloscio (27:58.318)
Best way to reach me would just be by email at daniel at SEP capital comm you can also find more about us on our website at SEP capital and at double clothes comm as well

Dylan Silver (28:12.407)
Daniel, thank you so much for coming on the show here. Congrats on all your success and to your continued success.

Daniel Paloscio (28:18.67)
Likewise, you too Dylan, I appreciate you having me on, I had a good time.