How Real Estate Investors Can Do Fewer Deals With Bigger Spreads

Alex Capozzolo (00:00)
Yeah, and I’d say inheritance and just going back off of that, ⁓ that thread that we were just riffing on inheritance. ⁓ This kind of spawned from when we did rank on Google organically the past couple of years, some of our best deals were families that came to us and they’re like, hey, just inherited this house. I already own a house. I can’t pay two mortgages or like, hey, I inherited the house.

My dad had so much stuff and it’s just like he owned it since 1977. I don’t have the money to fix it up. I don’t want to fix it. It’s like those kinds of situations where ⁓ they really do need help.

Scott Bursey (02:15)
Welcome back to the Real Estate Pros Podcast powered by Investor Fuel. I’m your host Scott Bursey. And today we are dropping anchor in the city of brotherly love to tap into some high octane wisdom. Our guest is Alex Capozzolo, co-founder of Brotherly Love Real Estate. Alex and his team are absolutely crushing it when it comes to direct to seller strategies, proving that knowing your niche is the ultimate competitive advantage. This man brings the fuel.

of hyper local market mastery and cutting edge acquisition tactics. Alex, welcome to the show.

Alex Capozzolo (02:51)
Thanks for having me, Scott. Pleasure to be here.

Scott Bursey (02:53)
It’s wonderful having you here. It most certainly is. And if you could tell our listeners, how did your career begin and what is your main focus now?

Alex Capozzolo (03:03)
Yeah, it’s been, it’s taken on lots of forms. began 2017, bought my first rental with my childhood best friend in Philly. ⁓ Was a triplex, bought it on the market. That’s when deals and cashflow were still like pretty decent buying off the MLS. So found our deal there that got our foot in the door of just, you know, passive income, holding real estate long-term, investing. And then from there, we were kind of hooked. That was definitely the.

The moment we got bit by the bug, not that it was, you know, looking back, it’s actually one of our best rentals still, funny enough, ⁓ cashflow wise. But from there, we were pretty hooked. And then we just tried to figure out how can we do this again? Deal started to dry up on the MLS a little more. Then we looked into, how do we connect with people outside of that? And that’s kind of what started our journey with ⁓ just marketing.

directly to sellers to try to find more deals for us to buy as rentals. Ended up finding lots of deals that, maybe we didn’t want to hold those rentals, got into flipping and it kind of just grew naturally from there. We were doing a part-time for from like 2017 to 2020. 2020 hit, I was working full-time in travel, W2 job, that lots of travel things ceased to exist after 2020.

⁓ So that was, you know, it got furloughed, which was a blessing in disguise, went full-time brotherly love. And yeah, we’ve been growing it ever since. We had our best year last year, which is cool. We did about 35 flips, bought two rentals. We’ve kind of slowed down the buying of rentals portion of it, but ⁓ that is in a nutshell, the whole shebang.

Scott Bursey (04:47)
Awesome, what an incredible journey, that’s so cool. And you have a business partner, I understand?

Alex Capozzolo (04:54)
I do, yep, ⁓ we go way back since kindergarten, so five years old.

He was the best man at my wedding. I was the best man at his wedding. We’re like, you know, it’s a true bromance. ⁓ Sounds cheesy, but like it totally is. And yeah, he’s our boots on the ground. So don’t even live in Philly. I live in San Diego on the West Coast. He’s our boots on the ground, lives right there in the city. So for my role, I’ll do a lot of acquisitions on the phone with people. So I’ll get up, you know, three hours early because.

East Coast is three hours earlier than where I’m at now. Talking to people early on the phone in Philly, setting appointments for him, locking deals up on the phone sometimes. I do a lot of the marketing and the tech for our business as well, operations type of stuff. And he’s our belly to belly guy.

Scott Bursey (06:29)
Cool, are you guys concentrating primarily on Philly?

Alex Capozzolo (06:35)
Pretty much, yeah, we’ve done some national stuff. We were doing warehouse industrial things the past two years, but we actually stopped that because it’s just a really long cash conversion cycle. It’s not like a single family where you can just talk to the lead and you close 21 days later. It’s six months, sometimes longer. So we did some national stuff right now, at least for the residential and current present business. We’re just Philadelphia County, surrounding counties, little bit of Jersey.

Scott Bursey (07:04)
And on that note, what would be the ⁓ maybe the longer term plan as far as your markets?

Alex Capozzolo (07:12)
Hmm. Yeah, I mean, that’s a good question. Like rental wise, we don’t love owning rentals in Philly. It’s really hard. It’s a really ⁓ squatter friendly city is, I guess, a way to say it. It’s just tough. It’s really tough. There’s not a lot of support from the city. The city is kind of like underwater financially. So anyway, rental wise, I don’t know if we’d want to keep stacking, at least in the city, maybe the surrounding counties. It’s a little just like.

you feel more supported and it’s a little easier. And then flip wise, yeah, my partner lives in Philly, but I don’t know if he wants to live there long-term either. He’s just not a city guy. He likes the woods, wants to be roaming around in the mountains. Can’t blame him. So we’ve always kind of had that in the back of our mind and forward-looking. We’d love to set up some kind of structure in our business where if we’re doing flips,

if we can just do less of them, but have them be bigger spreads. So that’s like why we’ve shifted up our marketing a lot the past year, tried different strategies. Cause then in that case, if we’re doing, you know, bigger spreads, less deals, he doesn’t maybe need to be, you know, meeting all these sellers all over town. ⁓ Maybe at all. Maybe we can just do a lot of it virtually or get someone in Philly to go on the meetings for us if it’s just a few and still have it work.

Scott Bursey (08:39)
I appreciate you highlighting that and let me ask you this I know our listeners are gonna be curious What one daily habit gives Brotherly Love real estate its biggest competitive edge?

Alex Capozzolo (08:54)
Communication for sure. Yeah, John and I, my partner, have known each other, you know, like I said, way, back. We go back since five years old. Thankfully, you know, since we’re so close, we’re just on the same page a lot. Sometimes though, if we’re initially right off the bat on the same page about something, we just communicate about it. ⁓ You know, there’s no egos, there’s no ulterior motives. There’s, and oftentimes we’re

both wanting to steer the ship in the same direction. And to find that out, you also need to communicate about your goals and your wants, your needs, your desires, your day to day. Are you happy? Are you fulfilled? Are you depressed? You know, where are you at? So we’re always just like communicating about everything, including our emotions. And I’d say that as a daily thing just allows us to be like, okay, we both know what we’re doing, what we’re supposed to be doing. We’re happy about it. We’re fulfilled and we’re working toward the same thing. And then, you know.

talking with leads and stuff like that and just like all the complications that come with running a business, adding new things, marketing strategies, we’re just on the same page a lot. And if we’re not, we communicate about it openly. And that’s really been huge. You we’ve never really gotten into

a major fight or anything like that. So it’s been, it has been ups and downs, but we’ve always supported each other. And that’s been a huge superpower, say within our business.

Scott Bursey (10:52)
And that’s the bromance that you were alluding to. Awesome. I love it. Thank you for sharing that. If someone’s listening to this and they’re thinking, Hey, this is somebody that I really like and would like to explore the opportunity of perhaps partnering with. What would you like them to know about your business first?

Alex Capozzolo (10:55)
The brotherly love bromance.

⁓ man, I mean, we’re really easy to work with. We’ve been doing it in Philly for almost 10 years. So Philly is really complicated. If it’s a, there’s like so many just code violation things and complicated city stuff, probating, probating estates. We’ve done all sorts of complicated things like that. So off the bat, we come with ease and knowledge, those two things. and yeah, really just here, like if we, if we do partner with people, which we do sometimes it’s, we’re always really want to do, you know, make it a win-win.

So it’s like we’re not looking to one up anyone or make more than the next guy or the next gal. If it can be a win-win and it’s easy, ⁓ we’re here to kind of add that to whatever is going on.

Scott Bursey (11:59)
Absolutely and Philly can be kind of a tough market. What do you feel is one of the biggest opportunities in that tough market?

Alex Capozzolo (12:10)
Yeah, I mean the saying of like most, you know, amazing things in life aren’t necessarily easy to like, to make happen. I’d say that. it’s like where there’s complications or obstacles with deals, oftentimes there’s, you know, something worthwhile to pursue. So for us, that’s kind of what we’re looking at right now is just

more complicated deals. It’s funny. So in years past, the way that we connected with sellers, generated leads was just organically on Google through SEO. So it wasn’t even the paid spots. It was the organic spots that you just show Google just has algorithm and ranks you. We showed up there for a good long while, probably like five years on and off, generated tons of leads. It was great. A great spot to be since then algorithm update happened last year. Our website rankings took a major

Dunbarowski. And, you know, we’ve been just trying to figure out what to do from this point or from that point. And ⁓ we we don’t necessarily want to be the company that has an office, a bunch of employees churning and burning, spending, you know, 50K a month on marketing and then, you know, just working through so many deals. We’d rather do quality over quantity for sure. So that kind of led us to the strategy. It’s called curative title. People call it that messy title, tangle title. I don’t know.

But just kind of like to answer your question, circle back, Scott. think it’s, you know, there’s complications and things that make doing real estate in Philly very difficult. ⁓ But a lot of the time, if you can just figure out what that niche is, it can be worthwhile to just figure it out. Everything’s figure outable. You know, you didn’t know English until you knew English. So it’s just like that. You don’t know a certain strategy until you do the zoning’s this that the ⁓ specifics within a city.

But once you figure it out, then you can just, if it works, test it, try it, and then double, triple down on it. And that’s kind what we’re trying to do now.

Scott Bursey (14:16)
100 % and Alex we’re curious about this what is the hardest part about maintaining deal flow in a tight inventory market?

Alex Capozzolo (14:30)
Yeah, maintaining the deal flow, would say, is just really knowing that you’re, and having confidence in the money that you spend, and knowing you’re spending it on the right stuff. Because we’ve tried all sorts of different marketing strategies, most of them, really. And some, I’d say all of them have worked at some point for someone, that’s why they exist, and that’s why they’re like well-known-ish. Not all of them will work for you, your style, your lifestyle.

You know, but I’d say, yes, since we’ve switched up our marketing and since Philly is a hard market and then the real estate market in general feels maybe harder right now, less demand from buyers, just more tightness financially for a lot of folks. I’d say having confidence, knowing what you’re spending your money on is the right place for that dollar to be spent, because it all it matters now more now than ever, you know, that you’re going to see that return and that you’re not spending 20 K.

on the direct mail campaign and it’s like the wrong list. And then you’re like, wow, well those, we talked to lot of people and they all just said, you know, bugger off and didn’t see anything from us. So yeah, we’ve, or from them. So we’ve, we’ve experienced that too on all sides of it. So we really tried to be intentional about the dollars that we spend.

Scott Bursey (16:30)
Are you finding that the cold calling is your best avenue right now?

Alex Capozzolo (16:36)
Cold calling, we don’t actually do like a big, big operation of cold calling. We do like very, I’d call it like sniper cold calling, I guess. That it goes along with at least the curative title strategy that we’re doing. That’s like one of the three strategies that we’re doing right now, our marketing channels, we do PPC. So now we pay to be on Google, we do direct mail, and then we do cold calling, but more of a sniper. But the sniper stuff we do, ⁓

It’s exactly from that curative title strategy. we pull lists. We built this tool that we’re using internally now that we’re like hiring this dude who’s going to like really build it out. But it basically does a lot of the research in the background. It’s kind of like list stacking, but even further. And it takes data from the internet that I can find on people through Google and stuff to really just

try to find the people you want to be talking to way faster. So the list that we’re calling, it’s like honestly one by one, I’m not even using a dialer or anything. And I’m doing the calls and it’s people that we are pretty confident that they, you know, that we just know the pain points already from this tool that we’re using and all the pre-data that we kind of mined. So yeah, I’d say it’s not the most successful yet, because we just started this about.

five or six months ago, but it’s really getting legs. The tool has helped because we were doing a lot of this manually before. It’s got like a web scraper built in. It pulls different like inheritance data, tax, code violations, this, that. ⁓ So we’re excited about it. And I could see it becoming what we dream that it can become this whole thing. So fingers crossed.

Scott Bursey (18:22)
If you can only focus on one new marketing channel for the next year, what would that be?

Alex Capozzolo (18:30)
Yeah, and I’d say inheritance and just going back off of that, ⁓ that thread that we were just riffing on inheritance. ⁓ This kind of spawned from when we did rank on Google organically the past couple of years, some of our best deals were families that came to us and they’re like, hey, just inherited this house. I already own a house. I can’t pay two mortgages or like, hey, I inherited the house.

My dad had so much stuff and it’s just like he owned it since 1977. I don’t have the money to fix it up. I don’t want to fix it. It’s like those kinds of situations where ⁓ they really do need help.

And it feels really good to help them out with that because it’s an emotional thing. Of course, you know, losing someone is so hard and it might be the house they grew up in or, whatever. So it feels really good. It feels like you’re really helping out. ⁓ And, you know, they they just

want help with dealing with this problem. So that has been some of our best deals too, because there’s a lot that goes along with it. even past the condition and maybe the stuff in it that needs to be cleaned out, it could be a huge family tree. So it could be inherited by the children and there’s seven of them. But then two of those children passed away and those children each had

two kids of their own. So there’s four grandkids in Pennsylvania and it’s different per state. ⁓ You know, the interest gets passed down to the grandkid from the kid, depending on when people passed away and timing and stuff. So ⁓ those seem super complicated at first and they kind of are because at least in Pennsylvania, probate state, you have to get the estate probated. Then you have to kind of get everyone to sign off to on it who has interest in the property.

So yeah, and families don’t always get along either. So it’s like, you’re just working so many different complications, but those can be some of the best ones. And that’s kind of the tool that we built that we’re just using internally right now. ⁓ We might, I don’t know what we’re gonna do with this tool, but if it really becomes a thing, we might put it out to the masses, we’ll see. But ⁓ it helps map out all that stuff with like a click of a button. It’s really wild.

Scott Bursey (20:48)
Let’s shift gears here just a little bit. Alex, what market factor, interest rates, regulations, or competition are you keeping the most focused on in today’s climate?

Alex Capozzolo (21:00)
Hmm.

Yeah, I mean, thought interest rates would be a lot lower by now. So I’m just like kind of not caring about those as much. The buyers are exhausted. Sellers have sold who needed to. And now it’s just like when they need to, they will. Yeah, for us, we’re just looking at like more short term stuff. So if we come across an opportunity for a big flip, but we know we’re to have to hold on to it until Q3 of this year and we’re going to have to put plus 100K into it for the renovation.

Those are ones that we’re now second guessing if we should do. Just because if the market feels a little weak, economy is weird, people are tight financially, demand doesn’t feel as strong as it’s felt in past years and going into past summers. So it’s just uncertainty, not trying to have too much inventory stuck in the pike with a lot of overhead and risk.

Scott Bursey (22:00)
Thank you for sharing that with us. What, in your view, is the most underrated aspect of building a successful remote team for acquisitions?

Alex Capozzolo (22:15)
especially if they’re remote, which I technically am because I live in the West Coast in San Diego and markets Philly. I’d say just processes and making sure you’re doing the same stuff, especially with sales. People kind of go on their own path, do their own thing. And they’re like, well, this line works for me when I say it. ⁓ And maybe that is the better line to use when you’re talking on the seller for that particular situation. But your partner might not know. So I’d say just getting all that down.

not having an exact script that both, you the whole team uses on the phones every time, but starting with the script and then people can make it their own. But the base, the baseline for the whole thing is similar based on what you think are the best practices. So that’s, that’s huge. You me and my partner have gotten lazy in past years and we were like, I think we’re saying the same things and then we compare and we’re really not totally. So I’d say that that’s just like super important because that’ll dial in everything. And then

Once you do that, you can look back at, okay, why did we have 20 leads that we talked to on the phone this week, but only set three appointments? Maybe that’s lower than the industry standard. And once you compare those two data points, you don’t have to look at, okay, we’ve only closed one deal in the past two months. What’s our issue? You can look at every single data point. The call’s made, appointment set, offer’s made.

You know, all those things. Appointments kept versus appointments set. That’s a good one to look at, too. But anyway, just to kind of round it out for your question. Yeah, I’d say processes and just implementing those best practices, making sure everyone’s doing them 90 percent.

Scott Bursey (23:59)
What’s the best way to connect with somebody instantly?

Alex Capozzolo (24:04)
Call them. Yeah, call them or text them. Yeah, I’d say those two things is probably if we really need to get a hold of someone, that’s what we do.

Scott Bursey (24:14)
and just taking it a step further, billing the rapport with somebody when you do call them.

Alex Capozzolo (24:22)
Yeah, we don’t like to talk price until the end. If we even do talk about it on the phone at first on the first call, just be a human empathize. You know, if you’re digging into like their pain points, empathize, hear them out, but actually like truly relate to them if you can or just be like, man, that must have been really hard. You know, like actually feel the feelings and be a human on the call.

That’s a good way to build rapport because people feel the feed off energy and they know like okay this person’s authentic and authentic They’re a robot or they’re like, oh man. That was really a nice combo even though, you know, we’re talking business. Technically It was still a nice conversation. I’d say that and then have fun that that also just like you don’t have to overthink trying to build rapport if you’re having fun and just being you be yourself don’t try to fake trying to be someone else be yourself and

Yeah, just look for like one or two things maybe that like in terms of specifics, look for like one or two things, whether it’s like where they live, how long they live there, the weather, what they did today, whatever. And then like, see if you can expand on that a little bit. So if you call them on a Monday, how was your weekend? And then they’ll be like, it good. Sometimes that’s all the same, but, you know, you can be like, cool, nice. Like my weekend was pretty good, too. I just watched a movie with my wife.

Oh, They might not respond to that, but at least it’s like they know you’re a human. I feel like that still kind of helps.

Scott Bursey (25:51)
Nice.

Alex, that is pure fire and that’s why you’re operating at such an elite level right now. That is outstanding. Thank you for sharing that with us. Now it’s time for the money question. And this is where you bring the high octane fuel for our listeners. If a pro is listening right now and has $50,000 to invest in generating, let’s say off-market deals this quarter, should they pour that capital into direct mail?

cold culling or should they hire one high quality full time cold acquisition manager in your view?

Alex Capozzolo (26:33)
Yeah, that’s a good question. 50K of marketing spend, I would say cold calling, don’t, kind of goes back to like what we’re doing. It’s like, don’t dump it in just to like calling and pull a list that, you know, 90 other people pulled. So I’d say cold calling, because that would be the quickest way to connect with people. You’ll, you can call someone and set a point, send an appointment for today, lock it up today. And you know, you have a deal in the next 21, 30 days, whenever you close. So that’s like the most.

instantaneous versus direct mail or something else. It’s, you know, it’s today that you’re calling people and getting on getting on the phone with them. But yeah, I’d say put some of that money into ⁓ building your own list, whatever that is, it’s going to be different per county where you live. Some are public, some are not. Some are easy to pull. Some are hard to pull. Find some of those hard lists that you feel like are niche, the pain points of people that you think they’re, you know, pain points they’re dealing with. ⁓ It really starts with the list, no matter what outbound marketing that you do, direct mail, same thing.

But yeah, I would do cold calling just because it’s quicker, it’s faster. You can text, people respond to text. And just make sure your list is like super stacked and unique.

Scott Bursey (27:42)
And time is money. Thank you for sharing that. Alex, this has been pure gold. Certainly appreciate you. And for those that would like to reach out, collaborate with you. What is the best way for them to reach you?

Alex Capozzolo (27:56)
Yeah, can find us just if you punch into Google, brotherly love real estate. Everything comes up. Our socials. We have so many socials like Instagram, I guess, is one we use a lot, but you can just pull it up on Google or just our website. Honestly, we have a lot of resources on our website and we connect with a lot of other investors there. So if you’re looking to do some kind of JV deal or something, I would just punch into Google. You can find our website. ⁓ But yeah, the company’s brotherly love real estate. We were operating Philly around Philly.

And I’ve done a lot of stuff over the years and we love talking AI and new ways to optimize and systematize things better. So always happy to jam on like a call about creative ways to make another buck.

Scott Bursey (28:42)
Awesome, and you can come and jam with us anytime, Alex. This has been more than a pleasure. Thank you so much for being with us.

Alex Capozzolo (28:50)
Appreciate it Scott, likewise.

Scott Bursey (28:52)
And for our listeners, you got value from today’s episode, please subscribe. We appreciate each and every one of you. Until next time, keep your standards high and your vision clear. We’ll see you on the next episode, everyone.