Living an Intentional Life by Design

John Harcar (00:01.122)
All right, hey guys, welcome back to our show. I’m your host, John Harcar, and I’m here today with Tony Castronovo. And what we’re gonna talk about is living an intentional life by design. Remember guys, at Investor Fuel, we help real estate investors, service providers, I mean, all real estate entrepreneurs, two to five X their business by providing tools and resources to grow the business they wanna grow and live the life that they’ve always dreamed of. Tony, welcome to our show.

Tony Castronovo (00:27.466)
Thanks, John, and I gotta applaud you on the pronunciation of my last name.

John Harcar (00:32.77)
Good, was making sure I got it right. I said it a couple of times to make sure I got it right. So I’m super excited to talk about living a life by design, right? Being intentional. I think that’s one thing that a lot of folks when they get into real estate might not have in the forefront of their mind. But before we get into the weeds, before we talk about all that, tell our audience a little bit about you, kind of where you came from, how you got here, and what got you into real estate.

Tony Castronovo (00:37.065)
You got it.

Tony Castronovo (00:58.677)
You bet, you bet. I’ll try not to go too far back here. I’m old, so it’s a little bit of a journey. But I got into the real estate space in 2014. To be honest with you, that was probably about a 13-year sort of pause button, because I actually launched a real estate company back in 2001. And I was reading the books. And back then, there weren’t all these podcasts.

John Harcar (01:15.18)
Mmm.

Tony Castronovo (01:24.883)
You know, I was listening to Carlton Sheets CDs and maybe even the VHS back then. you know, I wanted to jump into real estate, but then life got in the way, had kids and so forth, busy job. But it came back to it. And in 2014, I purchased my first single family rental and I got hooked. And I tried my hand at flipping a little bit and just realized that’s not really the type of business I was looking for.

John Harcar (01:28.65)
Yeah, good old sheets. Yeah.

John Harcar (01:54.754)
Mm-hmm.

Tony Castronovo (01:55.061)
So I kind of stepped back into the rental space, built a small portfolio of rental properties, ran that for about four years. And then in 2018, I realized that this is great, but one unit at a time just wasn’t going to get there for me and the goals that I had. And so I pivoted into the multifamily space. Well, my first deal in 2018 had no idea what I was doing, but ran that deal by myself.

We went full cycle on it. It was a great opportunity to learn the ropes. But along the way, I learned about syndication. And so ever since 2019, I started syndicating multifamily deals and really picking my lane, picking my sweet spot on the role that was best suited for my personality and my background. But we can kind of unpack more of that later. But that’s kind of how I got to here.

John Harcar (02:26.286)
Mm-hmm.

John Harcar (02:49.006)
Okay, cool. So let’s go back to that 2001 when you started that business. What got you interested in real estate in the beginning? Did you have family that was doing it? Is there any influences in your life?

Tony Castronovo (03:00.86)
Yeah, so my my ex wife, her stepdad, he was he was kind of an entrepreneur, dabbled in some of the construction fields back in Ohio. And I remember we went on a visit and he said, hey, look, you know, we’re going to go to lunch today. But before we go to lunch, I’m going to take you out to one of my rental properties because I got to just do this one maintenance item. We went out to this property and I was like, this is fantastic. You’re

You’re generating cash flow. How’d you buy this? What did it cost? What’s it worth? I just started asking all these questions. And I had a background in construction as well. I worked construction in the late 80s. And so my original thought was this could be side income. This could be an interesting hobby that eventually, if I could add a few homes into my portfolio, would be a good nest egg for retirement.

John Harcar (03:40.843)
Okay

Tony Castronovo (03:58.053)
and didn’t realize I wanted that to be an entire career at the time, but it was something I was interested in.

John Harcar (04:04.942)
Got it. And then in 2001, you said that business you did closed down?

Tony Castronovo (04:09.588)
So I launched the LLC, I got educated, I got the funding. I did a whole lot of things to get prepared. But then right before I was about to start going through neighborhoods and knocking on doors, which is what they taught you, talk to the postman, talk to everybody in the neighborhood. Before I was ready to do that, my twins were born and I had just changed jobs and it was just…

John Harcar (04:28.214)
Right, yeah.

Mm-hmm.

Tony Castronovo (04:39.454)
too much stress. And so, you what happens, you put it on hold for a month and then a month becomes a year and so.

John Harcar (04:43.527)
yeah.

John Harcar (04:47.244)
I know it’s not real estate related, I have twins as well. I am a twin, so I’m a twin with twins. How did you like that growing up or having twins?

Tony Castronovo (04:53.512)
That’s cool.

You know, they were my first, so I didn’t know the difference. All right. So, I mean, I still remember in the very beginning, I had a lot of sleepless nights and I would I would wake one up, I would change them, feed them, wake the next one up. And then at some point I was like, that’s so inefficient. I got two hands, two mouths. We can do this.

John Harcar (05:00.782)
That me too.

John Harcar (05:18.71)
Right, right. Yeah, I just loved I mean, being a twin and then having twins is just being able to see that bond that they have and them always having their best friend. But that’s kind of cool. So back to real estate. So you were into single family and then you transitioned into multifamily. What were some of the challenges that you came across or ran into that, you know, are the difference between that single family, multifamily purchase, financing, all that stuff?

Tony Castronovo (05:47.465)
I think the one that stands out the most to me is in single family, they were always vacant. And so I got to go in, you know, execute my business plan, pick my tenants. And, you know, I really didn’t have too many headaches when it came to the operations. In multifamily, you inherit a lot. All right. And it takes a long time to turn that battleship and, you know, make the improvements you want in both the operations, the aesthetics.

and the community. It just takes longer and you have to learn to sort of build the ramp while traffic is still being diverted on the highway.

John Harcar (06:26.35)
Right. Okay. In the multifamily space, right? How are you funding these deals? How are you finding these deals?

Tony Castronovo (06:40.83)
So the very first one’s way different than all the rest because education. The very first one, I bought multifamily like I bought single family. So I was looking on websites, know, Loopnet and other places. I was talking to brokers, some wholesale stuff coming my way. But how I funded it, I opened my checkbook and I…

got a loan from a local bank. But finding it from your checkbook, well, that’s to get the deal, you know, in your portfolio. But then there’s the whole, how do I renovate this thing? And when I got the bank loan, I’m going back on some memory here, but I want to say that my construction budget was about a hundred K or so. This was a 20 unit deal. So a smaller deal. But

John Harcar (07:12.974)
Mm-hmm.

John Harcar (07:19.042)
Right.

John Harcar (07:22.67)
All right.

John Harcar (07:34.275)
Okay,

Tony Castronovo (07:36.373)
I spent over $350,000 renovating that. So it was one of those things that maybe I just estimated poorly or maybe that’s all I felt I could get from the bank. But we also uncovered a whole lot of things. Just things that you can’t even find on an inspection. Like we had a tenant that backed up into a post on a balcony. Well,

John Harcar (07:40.791)
Wow.

John Harcar (07:53.902)
I was gonna ask ya.

Tony Castronovo (08:03.068)
Okay, yes, you could fix all that, but what it uncovered was that all the framing for the balcony, and then there were many other balconies, it was all rotted out. It was just a problem waiting to surface. So we had to replace all the balconies, all the concrete, all the framing. These are just things that you can’t really predict.

John Harcar (08:14.126)
Ugh.

John Harcar (08:17.986)
Yeah.

John Harcar (08:26.062)
Yeah, I mean, I guess it’s a good thing that you found out then, right? Before something happened where someone was on the balcony and the balcony falls and then you have a lot worse situation. What do you think were some of the mistakes that you made or you see people making when getting into multifamily?

Tony Castronovo (08:45.78)
I think that’s what we just talked about is probably the biggest one, being undercapitalized, right? Not just from a renovation standpoint, because you can, if you’re a halfway decent project manager, you can manage the scope, manage how you utilize the funds. But I think a lot of it is, you know, your operations. You can underwrite all day long, but you’re probably most likely gonna uncover some challenge that’s gonna stress you financially.

John Harcar (08:48.91)
This is the one. Okay.

John Harcar (08:59.971)
No.

John Harcar (09:12.673)
Mm-hmm.

Tony Castronovo (09:13.298)
And so you’re always gonna need more money than you think you’re gonna need.

John Harcar (09:17.07)
Sure, okay. How does someone, or what’s the best way to predict that, right? If you’re going into a property, I mean, how do I know, know, okay, well, I need to put X, Y, Z amount away for incidentals, possible things that could happen. Like, how does someone figure that number out?

Tony Castronovo (09:36.319)
So every deal goes through underwriting. And I think a lot of times, maybe this is another gotcha here, is especially new syndicators, they look at it with rose colored glasses. And you can make any deal pencil out in Excel. right, we all have done it. It looks good on paper. Yeah. So I think you got to stress test it.

John Harcar (09:53.238)
Mm-hmm. We’ve all done that, right? Brought back memories real quick, sorry.

Tony Castronovo (10:06.804)
We like to run sensitivity analysis. What if this goes wrong? What if this goes wrong? What if this goes wrong? What if they all go wrong at the same time? So you have to really stress it. And in some cases, that may mean that you’ve got to negotiate better on the acquisition. And in some cases, maybe the deal doesn’t even work anymore. So there’s probably some metric. I’ve heard people use all different ones. like,

John Harcar (10:14.87)
Mm-hmm. Right.

John Harcar (10:27.384)
Yeah.

Tony Castronovo (10:34.184)
for every hundred deals you underwrite, expect to actually land one. You might put offers on 10 and eventually get to one. But I don’t know what the right metric is. All I’m saying is that you’ve really gotta just be conservative in your underwrite.

John Harcar (10:39.555)
Yeah.

John Harcar (10:52.152)
Do you think that’s lack of education? Do think it’s lack of experience?

Tony Castronovo (10:56.776)
Yeah, I think it’s both, The other part of it is the mindset we come in. We’re entrepreneurs. By design, we’re optimists. So it’s good. Here’s where going solo versus being on a team makes a little sense, is that if you’re solo, you’re going approach it the same way every time. If you have a team, they may challenge you and challenge the deal, challenge everything about it, right?

John Harcar (11:05.92)
Mm-hmm. Great.

John Harcar (11:23.958)
Right, right. Okay, and is that what you have in place now? Do you have a team that you have or do you solo? What does your business look like right now?

Tony Castronovo (11:32.917)
So what the business looks like now is multiple assets, multiple teams, some overlap in team members between them. So my company is me as far as staff employees go. And some people build a company and have multiple people on their team, and then they go out and pick up assets. The way I’ve gotten involved is I get usually pulled into being on a team.

And I am very selective in who I work with and what assets I participate in. mostly it’s geographic. And because of that, I have a network of people in the Houston, Texas area, San Antonio, a few other markets that I participate in. And so we go after deals together because that’s our buy box. It overlaps. We’ve worked together. We know kind of what roles we have strengths in and where we need somebody to complement that.

John Harcar (12:16.64)
Okay.

John Harcar (12:30.53)
Got it, okay, perfect. Yeah, I just wanna get an idea of where you’re at now. Now, before we start talking about our topic of living an intentional life by design, if someone wants to get into multifamily, what kind of advice would you give them? What first steps should they take? What things should they look out for? How could they be set up for success?

Tony Castronovo (12:53.204)
I think it’s a couple things. One is to think about what is the goal from a financial standpoint? Are you looking at this as an investment? And in other words, you want to put your capital to work, be a passive investor in somebody else’s deal? Or is this something that you want to take more risk and get more hands on and actually play a role on the general partnership team? Going down one of those two paths is going to look a little different.

And if you’re going to go down the general partner path, I’d say you really got to educate yourself. You definitely need to get educated on the limited partner side. You want to know what you’re getting into. But the general partner side, you’ve got to start thinking about what value do you bring to a team, AKA what role can you play or multiple roles on a deal, everywhere from bringing in risk capital, like earnest money, prepays, and so forth.

John Harcar (13:31.255)
Yeah, right.

Tony Castronovo (13:49.845)
finding deals and broker relationships and maybe even doing direct to seller campaigns or are you just an excellent asset manager? Can you raise capital? Do you have a strong balance sheet and you can sign on the loan? These are all different roles in the multifamily space and you’ve really got to identify what role or lane do you want to be in before you approach a team.

John Harcar (14:15.768)
Okay, so pick a lane, what else? What other advice you think you could give?

Tony Castronovo (14:21.774)
I would say think about your timeline as well. And if the goal is to build wealth, maybe not cash flow as much, it’s to build wealth. You put these assets on, I’ll call it your conveyor belt. You buy an asset, it’s sitting there, it’s got a timeline of say five years as a typical syndication timeline. What happens after five years? Are you looking to take that and spill it into

maybe two assets and put those back on your conveyor belt. And eventually when you’re ready to tap out, you know, in retirement, then you’ve got a lot of wealth that’s built up over time. That’s one way to think about it. But if you’re looking to exit a W-2 job, wealth is far too far down the road. You’re looking to replace cash flow, right? So that’s going to look a little bit different. You’re going to approach deals differently.

John Harcar (15:00.92)
Mm-hmm.

Okay.

John Harcar (15:10.382)
Yeah, he did now. Yeah, right.

Tony Castronovo (15:18.856)
Your role might be different. You’ve got to speed things up.

John Harcar (15:22.382)
Got it. Okay, well that’s great advice. And guys, I hope you took some notes on that. Now let’s talk about our topic, right? To living an intentional life by design. I know you’ve transitioned into, you’re doing some mentoring, some coaching and stuff. So to you, what is living an intentional life by design?

Tony Castronovo (15:39.349)
So in my coaching space, we do a lot of kind of visioning on what that looks like. Because let’s face it, the standard is you get good grades, you go to a good college, you get a good job, you work for 30 plus years, and then you retire and maybe have 10 good years, right? Entrepreneurs think differently. But sometimes the way we think isn’t how we execute.

John Harcar (16:00.174)
Great.

John Harcar (16:09.315)
bright.

Tony Castronovo (16:09.812)
So maybe you’re in a job and you’re saving money, you’re investing money, but you don’t have any time freedom. Maybe I have a client that he talks about location freedom. They love to travel, he and his wife, and they want to be able to work from anywhere. They don’t want to necessarily stop doing what they’re doing, okay, from the business side, but they just want to be able to do it from anywhere. They want to be able to sit on a beach in San Juan and run the business.

John Harcar (16:32.45)
Mm-hmm.

Good.

Tony Castronovo (16:39.73)
Right? So you got to kind of think about what does it mean to you to have time freedom, location freedom? We all know what financial freedom is, right? It’s basically having enough money coming in the door to cover all of your expenses. It’s not to replace your current income from your W-2 job. Because if that’s the definition, you’re constantly chasing your tail.

John Harcar (16:40.472)
Right.

John Harcar (16:49.55)
Mm-hmm.

John Harcar (16:59.501)
Right.

John Harcar (17:04.066)
Yeah. And I think too that, you know, it’s really a mindset thing, right? It’s really, you know, we all get bogged down, right? We get bogged down and we kind of fall off our course, but it’s a mindset thing of really getting in and keeping the course. So with your mentoring, so are you mentoring people to kind of build that life? Are you mentoring people and coaching them in the commercial space or multifamily space? What does that look like?

Tony Castronovo (17:29.458)
Yeah, it’s kind of all the above. So I really work with entrepreneurs and most of them happen to be in the real estate space, but not all. And even just kind of going back to what we’re talking about, intentional life by design, it’s trying to design what you see yourself doing and how you’re living, who you’re with, even down to all the five senses of, I remember going through this a few years ago myself.

and questions to say, what are you wearing? Like I literally, I’m not kidding you, John. I said I would be wearing flannel living in the mountains. OK, I relocated to Utah two years ago. Yeah, you see what I’m saying, right? I used to work, I didn’t share this with you earlier. I used to work in maisman consulting. I had a management consulting career for 25 years before I left the corporate world in 2021.

John Harcar (18:09.902)
Sounds good to me.

Yeah, can I come?

Tony Castronovo (18:28.628)
I thought when I started that career that it would be awesome to wear a suit and tie to work every day. I felt like if I did that, there’s some element of success and professionalism, and for a while that served me. But as I started going through what does life look like in my 50s and 60s and beyond, I just, I wanted to have a lifestyle where I was running and hiking and skiing and…

John Harcar (18:48.334)
Mm-hmm.

Tony Castronovo (18:56.916)
maybe not working 40 to 60 hours a week. I pick when I work. I work hard, but I pick when I work. It’s my schedule. So that’s how I designed it for myself. But I think as far as like who I work with, it’s a lot of real estate entrepreneurs. And we start by thinking about the finances, because most of them are still on a W-2. Maybe they’ve got a side business and they’re looking to get out of that.

John Harcar (19:00.59)
Bye.

John Harcar (19:20.398)
Mm.

Tony Castronovo (19:24.562)
because their real passion is their business. And so for a number of years, maybe there’s overlap, but that’s stressful. That leaves them no time freedom, right? Finding meals and putting offers in late at night after they put the kids to bed.

John Harcar (19:33.517)
Yeah.

John Harcar (19:38.294)
Yeah, yeah, that’s not time freedom. Yeah, we definitely get that. and I think you mentioned you also do some fractional CFO.

Tony Castronovo (19:47.251)
Yeah, that’s actually how I got to know Investor Fuel a little bit. I attended a few Investor Fuel events. Some of my clients actually are Investor Fuel students. And from the fractional CFO side, let me explain what that means, because not everybody may understand that. So CFO is basically financial services. And a lot of business owners

John Harcar (20:06.508)
there please. Thank you.

Tony Castronovo (20:14.996)
they’re in the mix of the operations. They know something about finance, making money and spending money, but they don’t think about how to really scale that and intentionally put money aside for profit. at Simple CFO, which is the firm that I work with, there’s a lot of talk about profit first. For anybody that’s never read the book, Profit First, it’s a game changer.

John Harcar (20:38.03)
Profit first, yeah. Great book.

Tony Castronovo (20:43.726)
And our CEO, David Richter, wrote the book, Profit First for Real Estate Investing, which brings a little bit more home for a lot of your listeners in real estate space. But we spend a lot of time on what I call financial clarity, which some of my clients have no idea what their numbers are. They’re just doing deals and they don’t know if they’re profitable or not, right?

John Harcar (21:03.406)
Gas pedal’s down, not looking at the numbers.

Tony Castronovo (21:09.33)
Yeah, yeah, and that’s that, you know, maybe that’s just not their core competency. But then once we understand the numbers and can start making decisions from those numbers, now we start working toward financial freedom and intentionally start putting money into profit accounts, making sure we’re paying the owners because there’s benefits of being an owner in business. And you’ve got working in the business because everybody does, at least at some point in their career.

owner compensation has to be there. Otherwise, you’re going to rob money from your accounts, your business accounts to go pay your personal bills anyway. So we’ve to create those allocations. You’ve got to be growing profits so that you’ve got equity that you’re building in the company. And you could take that as a distribution if you want to. And even so far as tax savings, nobody who’s making money in their business wants to get hit with a big tax liability at the end of the year.

John Harcar (21:45.793)
Right.

John Harcar (21:56.718)
Mm-hmm.

John Harcar (22:07.235)
Right.

Tony Castronovo (22:08.272)
If they do, let’s go ahead and set money aside so that it’s just a non-issue at the end of the year when we’re doing taxes.

John Harcar (22:15.662)
Okay, what’s the difference between a traditional CFO and a fractional CFO?

Tony Castronovo (22:20.724)
Good question. So, you know, a traditional CFO would probably run somebody 300k plus to have on staff. So they’d be a dedicated employee or even partner in the company. A fractional CFO is kind of like a part-time CFO. You can hire somebody at whatever amount you need to participate on your team and provide the same kind of services.

John Harcar (22:45.974)
Okay. And for any folks that maybe want to get into multifamily or, you know, they might want to become a fractional CFL. I mean, what type of resources are out there for people to be able to get into this or find out information about?

Tony Castronovo (23:00.212)
Well, on the multifamily side, there’s a lot of education out there. There’s a lot of free education. mean, YouTube videos, you name it. I mean, obviously, you guys have an education platform as well. So there’s a variety of different sources. Me personally, I’ve worked with a partner to launch something called the Multifamily Maestros, which is specifically in the multifamily space. It’s education. It’s mentoring.

We have both a passive or limited partner program. We also have a general partner syndicator program so that somebody can learn everything soup to nuts on how to find deals, how to build teams, how to come up with your buy box, how to underwrite, asset manage, raise capital, and so forth. So that’s all there. And I would just encourage anybody, whether it’s my program, your program, any of the programs out there, just do something to educate yourself.

John Harcar (23:47.64)
Awesome. OK.

John Harcar (23:57.826)
Yeah.

Tony Castronovo (23:58.613)
Somebody has made mistakes before you. You want to learn as much as you can from them and reduce the cost. Any cost of a program that you participate in is insignificant to the amount of cost it could be if you make a mistake like that.

John Harcar (24:15.822)
But yeah, exactly. Mistakes might cost you more in the long run. That’s for sure. Is your education in-person stuff? Is it videos and accounts? I mean, how does that look? What does that look like?

Tony Castronovo (24:31.304)
Yeah, it’s all online. We’ve chunked it out into a series of modules and sub lessons. So that works well for a lot of busy entrepreneurs because you can kind of take it at your own pace. And then, of course, supporting materials that go with that. The syndicator class, we actually do group calls so people can bring their agenda, bring their deals. We’ve helped them evaluate deals both on the limited partner side, the general partner side.

John Harcar (24:56.429)
Nice.

Tony Castronovo (24:59.73)
work through underwriting examples. So it’s very interactive.

John Harcar (25:05.322)
Awesome. Well, I mean, it sounds like a great platform. If anybody listening to this wants to get in touch with you and pick your brain about multifamily, pick your brain about CFO or fractional CFO, how will they get in touch with you?

Tony Castronovo (25:19.522)
man, we should put all this in the show notes. I’d say, you know, they can always reach out to me at tonyatmultifamilymaestros.com. That’s my real estate education business. And from there, if they’re interested in getting involved in deals, investing, of course I got my noble multifamily group business. If they’re interested in talking about CFO services.

John Harcar (25:21.74)
We will.

John Harcar (25:45.248)
Mm-hmm.

Tony Castronovo (25:49.156)
I have the Simple CFO business. If they’re looking for one-on-one coaching through my Grit to Growth coaching platform, that’s something we can talk about as well. So whichever angle they want to go, they can just get to me through my multifamily maestro’s account.

John Harcar (26:03.224)
Perfect. And then yes, we will put all this information in the show notes. So folks, anybody out there listening can get in touch with Tony and talk about whatever they want to learn more. Tony, thank you so much, man, for coming on and sharing all the information, guys. I hope you got some good nuggets in there. I mean, I know I sure did. And if you need to reach out to Tony, want to talk to him, like I all this stuff will be in the show notes. But I hope you guys all had a good show. And Tony, thank you again. Matt, thank you. We’ll see you guys on the next one.

Tony Castronovo (26:29.256)
course. Thanks, John.