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Show Summary
In this episode of the Real Estate Pros podcast, host Micah Johnson interviews Dennis Cisterna III, a seasoned professional in the commercial real estate sector. Dennis shares his journey from being a housing market analyst to founding his own private real estate company, Sentinel Net Lease, in 2019. He discusses the challenges and rewards of entrepreneurship, emphasizing the importance of building a strong support system and focusing on one’s strengths. Dennis highlights the unique aspects of net lease assets, explaining how they provide consistent returns while shifting responsibilities to tenants, making them an attractive option for investors.
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Dennis Cisterna III (00:00)
I think that’s a huge point that a lot of people miss too, is that yes, you might be able to do some of those tasks that you don’t want to do, but what it really does is it drains the energy out of you for the things that you’re best at. So not only is it taking away your time, it starts to erode at your passion. And if you’re passionate about what you do, man, you never want to let that go because that really is the driver to scalability and success.Micah Johnson (01:55)
Hey, everyone. Welcome to the Real Estate Pros podcast. I’m your host, Micah Johnson. And today I’m speaking with Dennis, who’s been making some serious moves in the commercial real estate space for quite some time now. Dennis, welcome in, man. Glad to have you.Dennis Cisterna III (02:07)
Thanks, Micah. I appreciate it.Micah Johnson (02:09)
Absolutely, man. I’m excited for our talk today. I think our listeners are really going to take something away from one, your journey through real estate and the expertise that you have now that you’ve moved into the current place that you’re in. So let’s dive in on that for the folks that may not know you yet. What’s your main focus right now and what markets do you operate in?Dennis Cisterna III (02:28)
Yeah, so ⁓ I started a private real estate company called Sentinel Net Lease. That was in late 2019. And our primary focus is net lease assets in office, industrial, and retail, and only single tenants. ⁓ And our portfolio right now is about 25 properties across 16 different states.Micah Johnson (02:49)
Okay, awesome man. So y’all are expanding out there. So let’s take a quick step back. So you said you opened up your own firm in 2019. What led to that firm getting opened up?Dennis Cisterna III (03:01)
⁓ Well, I am a career ⁓ real estate investment and development professional. So I started my career as a housing market analyst, marked my way up the corporate ladder for 20 years. My goal was always to be a CEO of a big real estate investment firm. ⁓ I did that and I realized it kind of sucked. ⁓ You’re not really still the boss. ⁓ Even though you have the title, you have a board of directors, you have shareholders, you have a lot of people that will constrain your decision making.⁓ And I really thought that was the end goal. And once I was there, I was like, this is not the mountaintop I’m supposed to be on. And so ⁓ in 2018, I launched a different investment firm focused on the build for rent sector, ⁓ had a successful exit there. And, you know, it’s probably a lot of your listeners know you get that entrepreneurial bug, you kind of can’t stop. So I launched this other platform like a year and a half after the other one. ⁓ And ⁓ and it’s been great ever since. I, you know, I love it.
Micah Johnson (03:51)
it.The CEO was let loose. That’s what happened. That guy that was always wanting out, he found that clean air and boom, he’s running.
Dennis Cisterna III (04:08)
That’s it.is amazing for those people that struggle in their workplace at times, ⁓ but know that they’re a high quality individual. They really have that room to run once you become an entrepreneur. It’s risky, but it’s so much more rewarding if it goes right.
Micah Johnson (04:27)
And what I like about your story, it’s not the most common one, right? We were talking about a little bit pre-recording. A lot of folks kind of stumbled their way into a real estate investment company where yours was designed in a way where, okay, I’m going to go into something that’s already happening. It’s already, you know, I don’t need to reinvent the wheel. Let me join. Let me climb, climb, climb. And you made it, right? You got to that top part to realize, okay, this isn’t what I want.However, that 20 years of experience had allowed you this, you were already running with the train to jump on. Like you didn’t have to get up to speed. just jump tracks and now we’re off and running. How was that? What was the value in that when you got into these new ventures?
Dennis Cisterna III (05:57)
So it really was a tale of two stories. So I had my peers in the space when I told them I was thinking about going and doing my own thing, like, well, buddy, you should have done that five years ago. You know what you’re doing. ⁓ And then once I did it, I was like, okay, great. I really understand my investment thesis. I know how to raise money. I know how to speak to different investors. Where I realized that I had a weak spot was my whole career. I had other employees filling those gaps ofof talent that I didn’t have. So accounting, HR, compliance, legal, I always had this support system around me. And all of a sudden I realized everything’s on my shoulders and I’m wearing a bunch of different hats. And man, it was a steep learning curve on that front because I think for lot of investor or a lot of entrepreneurs, you feel that burden and you try to take it all on yourself. And for me, within probably 90 days, I was like, oh,
I am my own worst enemy here. Like I would never hire myself as an accountant. ⁓ So why am I doing this, right? So I really made a hard pivot ⁓ to bring in a support group of third party vendors and even bringing in some employees to really help me with the back office and infrastructure so I could do what I do best. Like I’m an investment guy, I’m an acquisitions guy, I’m a capital markets guy. Don’t let me run.
Micah Johnson (06:57)
Hmm.Dennis Cisterna III (07:24)
our legal department, you I’m not our risk management department. So getting those other, those other people in there to provide the right infrastructure allowed me to grow the firm a lot quicker. And I think that’s something a lot of entrepreneurs will struggle with, especially if they’re on a shoestring budget initially. But I can tell you, you know, from my own experience, it pays to spend a little bit extra to have the right people around you.Micah Johnson (07:48)
I couldn’t agree more, man, because you’re positioning yourself to do your strength activity more, which is your moneymaker. How often, how many hours per day can your focus be on the things that create that bottom line revenue versus the part that you feel like you got to struggle through? Because I think you’re right. A lot of folks, they misinterpret the word entrepreneur and solopreneur. You can do it all by yourself, but there are very specific style of businesses that you do all by yourself. It’s a unique personality type and you’re stillhire in BAs and things like that. So it’s not completely solopreneur versus that entrepreneur. You’re building something bigger. actually, one thing I noticed really about high level entrepreneurs, you have the CEO mentality. You are a visionary. That is what you do. You are going to build and lead something. People are part of your problem solving and you like that.
Dennis Cisterna III (08:21)
Yeah.Micah Johnson (08:41)
it does something for you that’s part of your personality type and to those folks that are out there listening, make sure that about yourself. And if you’re that one that knows, I like to lead people, I don’t mind hiring, I understand my own weaknesses, get off the sidelines, hire people, bring them into your business because you’re setting yourself up for success and you start fueling that other fire. There’s something about people like yourself where other people are involved too.Once there’s folks under you and you have that team, it gets you going a little bit harder and a little bit harder because you’re leader. It’s what you do.
Dennis Cisterna III (09:13)
I think that’s a huge point that a lot of people miss too, is that yes, you might be able to do some of those tasks that you don’t want to do, but what it really does is it drains the energy out of you for the things that you’re best at. So not only is it taking away your time, it starts to erode at your passion. And if you’re passionate about what you do, man, you never want to let that go because that really is the driver to scalability and success. So spot on.Micah Johnson (09:37)
Please agree, man. It’s got to pay that emotional paycheck. If it’s only paying the finances, it’s great. It’s like, that’s awesome to make a lot of money, but I know a lot of folks that aren’t happy and don’t like their lives who have plenty of money. Money’s not their problem. And it’s something I tried to pay attention to my own life. Like, okay, if you can still get there and feel that way, then how do I not take that path? How do I make sure I’m lining myself up with a life I actually want to live? Knowing my own strengths and weaknesses, knowing, okay, I don’t particularly like that part. I’m going to go over here and make sure I do this part.Dennis Cisterna III (09:49)
That’s right.Micah Johnson (10:07)
Because it’s a lot of entrepreneurs get into the space and build themselves a trap. They never actually find that freedom that they were hoping to find by doing something on their own.Dennis Cisterna III (10:16)
That’s right.Micah Johnson (10:53)
So take us into what you have more today. So you leveraged a background now into this commercial business, ⁓ Sentinel Net Lease. What’s it structured like now? What do y’all target? And what are you excited about for this year?Dennis Cisterna III (11:07)
Yeah, so when we started the company, we were doing deals one by one. Me and my partner would put in the majority of the equity. We’d go syndicate the rest from accredited investors. ⁓ And it’s an interesting business. For a lot of folks that have exposure to just multifamily or just single-family housing, ⁓ commercial real estate can be intimidating. It can be daunting. ⁓ Net lease is a nice entry.into commercial real estate because it puts the responsibilities on that of the tenant. So property insurance, property taxes, repairs and maintenance, capital expenditures, a lot of things that are ⁓ tough for an operator in multifamily, you really shift that to the tenant. And so ⁓ it’s a good way to have very consistent returns over a long period of time. ⁓
And now we like to do single tenants, ⁓ single tenant deals, because we feel that building has high utility. I don’t have to worry about 20 % of my building moving out every three or four years and managing that leasing. we really try to focus on long-term, heavy duration leases where it’s just really predictable cashflow. And we know that building is important to the tenant. So, ⁓ so that recipe works pretty well. Now the risky part is when you buy
a building with only one tenant if they leave, now you got a much bigger issue than a couple of tenants leaving every few years. So it’s important to have diversification in your portfolio. You’re not gonna buy every single tenant building in one market. You’re not gonna buy just fitness facilities or ⁓ just grocery stores or whatever it is. You want that diversification not only from asset type, but also from tenant type and geography as well. So when you put together,
a big portfolio of single-family properties like that, the diversification is great and the likelihood of all of your tenants deciding to leave is pretty low. So it really operates like a much more well-constructed balanced portfolio as long as you have enough assets in there.
Micah Johnson (13:14)
When is when do you think that enough asset mark turns over if someone’s interested in this thinking about this path at what point did y’all find or are you finding okay here’s that consistency we needed we’re now getting up to enough units where this is doing it.Dennis Cisterna III (13:15)
What doIt’s an
Yeah, I think if you’re in that eight to 10 building range, you’re pretty safe. look, even if you are the strongest underwriter out there when it comes to these properties or these assets, you don’t know what a tenant’s going to do in five years from now or 10 years from now. And that’s something that we learned over time where we would have this great interview with the tenant when we were buying the building. And they’re like, you know, we’re great. We’re going to consolidate into this building from two other ones.
but this is our forever headquarters. And you’re just talking to some real estate employee at that company. He doesn’t know the vision of the company for the next decade. And so we bought a property with United Healthcare in 2022, where we got sold that line by their corporate real estate team. And within 18 months, they started shrinking their real estate portfolio all over the country. And we’re like, uh-oh. And on that one, it was a shorter term lease.
So we really had a gun against our head. Now, luckily we bought it at a very attractive basis, ⁓ but they decided they wanted to shrink their footprint from the whole building to 25%. That’s a nightmare for a net lease operator because now you’ve got to go make a bespoke space for them in a portion of your building and then still go rent out the rest. So in that scenario, we said, look, no thank you. ⁓
Micah Johnson (14:48)
Right.Dennis Cisterna III (14:52)
Either you’re in for the whole building, you’re in for none of it. And they were taken back a little bit because most people that own real estate, they don’t really want to kick their tenants out. But in that scenario, it was better for us to sell the building in a desirable market to an owner user than to try to redeploy ⁓ the rest of that space into a soft market. So you just got to be very thoughtful about the utility of that building and really understand what the worst case scenario looks like.Micah Johnson (16:01)
what I really just heard too is stick to your guns. If the math is the math, be willing to tell that big player, no, like, hey, sorry, can’t do it today. And they’re not used to being told that, right? But that’s where in this business, you are there for your interests and your investors’ interests. What makes the most sense to do at any given time and having that kind of out and then taking it, man, that’s it. That’s how to capitalize. So what kind of, tell me about the price ranges that you look for, because y’all found a unique soft spot in the market to startfinding some good deals where you’re, you were telling me some cap rates earlier that you don’t even start until that’s, until it’s at that number.
Dennis Cisterna III (16:39)
Yeah. So when we started the firm, ⁓ we didn’t have this larger platform in mind. It was just to put out some personal money. And so ⁓ when we started looking at net lease assets, what you first think of, or most people think of if they know about net lease assets, they think of small retail, ⁓ a Starbucks, a McDonald’s, a Car Wash, maybe a Walgreens. And that land is kind of, I would call it unsophisticated investors, generally people.generally speaking, or people that are much more interested in tax efficiency than actual returns. And so I was not a fan of the return profile of those opportunities. And so I started looking upwards. And what we found was that in that middle market range of 5 million to 25 or 30 million, it was an area that was previously dominated by a lot of institutions. But as the institutions got bigger and bigger,
and their fund sizes went from 500 million to 5 billion or 10 billion, they had to deploy capital in a much more meaningful way. so that asset or those dollars per asset had to grow. And what that meant was you were competing against a lot less buyers in that space and it was a lot less commoditized. So brokers could not efficiently or consistently price those assets to the risk appropriately.
And so we said, well, there’s some arbitrage opportunities here where, you know, you’re getting a high quality fortune 500 tenant for a long period of time, but because it’s in, ⁓ you know, Lexington, ⁓ Kentucky, they’re not quite sure how to price it. ⁓ and so that’s where we saw an opportunity. And, and one of the benefits we have, and the reason we’re in 16 states is because we have these net lease assets, right? We’re not.
We don’t have to actively manage these properties. Now there are property managers on some of these, but they are paid for by the tenant. And we will coordinate with them on things just to make sure things are, are going the way they’re supposed to. But you can have a much lighter, uh, internal staffing model and grow to where the opportunity is instead of saying like, you know, I’m going to be the king of, of St. Louis.
You know, that’s okay. I’m sure there are guys out there that do that. They concentrate and it works really well. But for this model in net lease land, you can really be selective about where you go. And that has led us to where, you know, if I’m buying an industrial property, ⁓ the cap rate needs to start near an eight. If it’s a retail property, it’s eight and a half. If it’s an office property, it’s typically 10 cap plus. And so those are cap rates. Most people are not even familiar with. They usually think you’re just buying
you know, some rusted piece of ⁓ corrugated metal that’s being held up with, with glue. And in reality, that is just where that market trades at depending on the asset. And it’s not an easy thing because when you’re buying a single tenant deal, you really need to underwrite the credit quality of that tenant. And so that is something that a lot of non-institutional real estate folks don’t really have experience in. So you’ve got to be under, you’ve got to really understand how to
how to analyze the balance sheet of a company, understand its debt obligations. ⁓ And that’s just really one part of the puzzle, obviously, when you’re buying real estate, but all of that factors in. And if you can do that well, the end result is you’re able to buy these assets at cap rates and yields that are much better than what you see across the average in general.
Micah Johnson (20:14)
And I find that so fascinating and it makes complete sense though, especially how it kind of keeps your riffraff buyers out. They’re, not going to venture into the numbers when you start getting 5 million and up. makes people a little bit nervous. And then you got this other group that just got too big to play there anymore, spending 5 million bucks. Ain’t going to do anybody any good in a $5 billion hedge fund. That is a lot of money to deploy. And so finding that space to where one, again, it goes back to your expertise. And this is something I really love about real estate is weDennis Cisterna III (20:34)
That’s right.Micah Johnson (20:44)
y’all can find our place in it. There’s that place where your unique background and experience just leverages right into there, where you can find a market, lets you dominate in exactly how you want to, right? Y’all are particularly keeping a lean staff to be able to pivot and move around the nation easy.And when you can play nationwide, that changes things. Nationwide investing is a lot of fun. I got to do it some in single family world. But once you feel like you’re playing with the whole US, you’re just like, all right, what do we got here? I’m no longer, nobody’s got me boxed in. You feel like you can find a deal every day almost.
Dennis Cisterna III (21:21)
Yeah, well, you know, it helps you get on enough broker. I get like 350 emails a day. So I mean, the first hour of my morning is basically just sifting through that flow about what looks interesting. And, know, we have some crazy numbers. I think last year we looked at like 13,000 different deals, right? That is, and we bought four. So it’s, it’s kind of crazy when you think about like,Micah Johnson (21:39)
Wow.Dennis Cisterna III (21:46)
We really are trying to be a needle in a haystack buyer, but when your haystack is the whole US, man, it is exciting because not only do you get to play in a bunch of different sandboxes geographically, but you’re also getting market information and intel that can help drive decisions across what you’re doing. So even if you don’t win a deal in one market, you’re gonna know what that property traded for and you have that information nugget for the next one.Micah Johnson (22:12)
Right, it’s all data. That’s the, I view real estate as every day, today’s just practice for tomorrow. Every day is just practice for the next day, because there’s always a deal coming. There’s always gonna be one as long as you’re positioning yourself to get in front of that opportunity. That’s what I like to tell people, go get in the way of it. Where is it happening? And just place yourself in its path. And eventually it’s gonna hit you and you’re gonna be able to take advantage.Dennis Cisterna III (22:22)
Yeah.Micah, that’s awesome advice actually, because I think one thing that ⁓ kind of first time entrepreneurs or investors that wanna take that next step, they are so eager to get that done and kind of prove they’re ready for that next level, that sometimes they fall in love with the deal that they shouldn’t have. my first boss, one of the best quotes he ever told me was, fall in love with a stripper or a spreadsheet. it is sage advice.
on both fronts, I can attest to you. And so the problem is, sometimes you wanna force these deals ⁓ because the ego, because you think it’s the right thing to do for the business, but ultimately every deal has to stand on its own. And saying no to a bad deal is much more profitable in the long run than saying yes ⁓ to it.
Micah Johnson (23:28)
I couldn’t agree more, man. we all entrepreneurs get that bug, especially in the commercial world, specifically multifamily. I knew some guys not buying for a couple of years, like just sit and sit and sit. And it’s to me, it’s a great discipline. Good job. The ones that could pull it off because one of my favorite quotes in real estate is we are deal finders, not deal manufacturers. The more you have to need this to go right to need this to go right to need this to get this big payoff. You are just inviting massive amounts of disaster in your life.more things that can go wrong, the exponential probability they’re going wrong. And that’s in those markets or not knowing it’s a friend of mine, calls it, don’t name the puppy, the idea of fall in love with the deal, just don’t. It is a deal or it’s not a deal. And if you don’t know what a deal looks like, that’s your work. Go learn what one looks like, because then it’s just seeing, okay, it is and it isn’t. And that’s where real estate has two rules, in my opinion.
There’s the game, like the paper game and the numbers, and then there’s the conversations that you gotta have. There’s the people part. And the better you are at the game and the rules, the easier all those conversations get. You can just be straight up with people. And that’s what I find is the best thing to do in real estate. Just tell them exactly what’s happening. This is what’s happening. I don’t need to fluff it up. This is just the way it is. It is or it isn’t. What do you wanna do?
Dennis Cisterna III (24:50)
Yeah, and I think that discipline is really important too when it comes to understanding the best use of your own time. Because when you’re really starting off or you don’t have a clear thesis on what you’re doing, you’ll take calls with anybody. You’ll explore deals you have absolutely no business talking about. Right. And I got guilty of this because my backgrounds in commercial real estate, I my whole career in investment and development. I really have done just about everything.But should I be looking at a ground up hotel deal in Mexico? Probably not. But it sounds pretty damn sexy when you’re talking to somebody about it. And you know what, when I’m like 70 and that’s like my final song swan or a swan song of deals, maybe I’ll take some crazy swing at that, but like, that’s not your core business, man. Just stick to, stick to, sticking to your guns is just so much more beneficial to not only your long-term success.
but it’s the proper use of your time as you scale your business.
Micah Johnson (25:48)
I couldn’t agree more. And it’s, you said it earlier about saying, no, I tell folks this too. Being an entrepreneur requires you to do learn two things. First, how to say yes. And once you learn how to say yes, you gotta learn how to say no real fast because there’s endless opportunity. I was listening to a Warren Buffett speech a while back where he’s just talking about that. Like, I see good ideas. I can’t tell you how many good ideas I see every day. It’s not about, is it a good idea or not? Does it fit what I’m trying to do?And so if you’re in that early space of your entrepreneurial career, don’t negate how much education is the first step. If you’re not sure, take time to figure out the kinds you enjoy doing. You don’t have to pull the trigger on a deal to kick it off. Actually take that time to learn. That’s where meeting with someone about a Mexico hotel makes sense. Not because you’re actually gonna do it. You’re just exploring what does this actually mean? Does it line up with me? And once you do that, there’s a group of men, we call it the case method.
It’s collect data, analyze the data, then strategize and execute. It becomes glaringly obvious when to strategize and execute, but entrepreneurs, that’s our favorite part. Oh, it’s a good idea. Let’s build a strategy and get that stuff going where you don’t collect data and analyze long enough for it to become obvious. Hey, don’t do this.
Dennis Cisterna III (27:00)
Right.Micah Johnson (27:03)
or do this and this has got me in trouble more than I care to admit because it’s just like this is a great idea and I can see you doing this and this is happening and then all of sudden there’s an LLC created like stuffs in motion you’re like damn it I did it again.Dennis Cisterna III (27:17)
The reverse engineering is very dangerous for the entrepreneur. They’re like, I have a solution. Now let me figure out the problem to get there. Totally agree. And I think on that same token too for LP investors, accredited investors, they need to go through that as well because I think, especially in the last five years with the continued ⁓ expansion of social media as a marketing tool for real estate investors,Micah Johnson (27:21)
ThanksExactly.
Dennis Cisterna III (27:44)
Man, there are a lot of shady characters in our industry. There is, you know, the benefit to getting into real estate is there’s a low bar to entry. ⁓ The downside to real estate is there’s a low bar to entry. So you are dealing, you know, as an LP investor, you don’t know who to trust, who you’re looking to for, to, you know, are there track, is the track record real? Is the strategy sound? To your point where I look at other people’s pitch decks, the biggest thing, the biggest glaring error I see is exactly what you talked about.Micah Johnson (27:55)
Right.Dennis Cisterna III (28:13)
these people must need to be a part of a circus because the financial gymnastics in some of these pro formas for them to hit their targets are absolutely nuts. And when that gets passed on to an LP investor who doesn’t know how to analyze the deal properly or assess the risks or even understand the variables at place, all they’re seeing, they’re seeing the headline IRR and they’re just, you know, they’ve fallen in love. It’s the puppy. ⁓And so I think it’s dangerous on both fronts, both for the operator that wants to grow the business, as well as their LP investor who’s trying to outperform the market.
Micah Johnson (28:51)
Yeah, because I mean, that LP investor, you’re selling them hope and hope is not a strategy if at all, right? And that’s completely true because to the secondary person and this is where you were talking about your shifting now into where you’re going to look for some more money and it’s requiring you to change the conversations that you have.And that’s really the sign of a true master of their craft is you can talk about the same thing 20 different ways. It just needs, it’s designed to who needs to hear it. What part’s important to you, what actually matters. And there’s a version for your GPs. There’s a version for your LPs where they’re understanding, Hey, this is the reality of it. This ain’t just, yeah, it’s going to do good. You need to see this. And those are what generate those long-term relationships in real estate, which is what we’re all after. Cause this is a relationship business.
But before we dive out, I want to dig in a little bit. What’s that biggest thing you’ve noticed in that transition up in funds we were talking about? Because you’re starting to look for funds kind of like that in the institutionals. You’re growing a little bit. You need a little more money to deploy. What’s that been like?
Dennis Cisterna III (29:55)
Yeah, it’s been really interesting. And I would tell you the last year in our understanding of raising capital with larger investors has been the most, I’d probably learned more in the last 12 months than I have at any point in the last decade. ⁓ And it’s been really interesting. Our focal point now is we’re finishing our first fund in the next six months in terms of capital raising. And most of that money has come in from…individual investors, some small family offices, a few wealth managers like we’re on Schwab. Getting our fund on Schwab was a learning curve in and of itself. And something that once you do it, it’s such a great calling card to go to people with because you’re like, look, I am right alongside next to Blackstone and Apollo, even though my balance sheet is missing several zeros from theirs. ⁓
Micah Johnson (30:44)
Right?Dennis Cisterna III (30:49)
So that part’s been great, but now as we’re looking at fund two, we’re saying, okay, well, how do we get pension funds and endowments and foundations involved? And boy, I’ll tell you, that is just a totally different universe, not only in terms of how you present yourself and your information, but the process overall. There’s just a lot of gatekeeping in that space. So every pension fund that is out there hires an outside consultant to manage that process.of investor selection and potential portfolio allocation. So you can’t just go call the firefighters pension fund and say, here’s my strategy. Well, you can, but they’re not going to return your call. So save your time. What they’re going to do if they reply at all, we’ll say, well, you need to talk to ⁓ our consultant who will then put you into the queue and then we’ll analyze if you’re the right type of fit for us. ⁓ And so getting in through the…
Micah Johnson (31:34)
YouDennis Cisterna III (31:48)
to those consultants is a difficult process because you are competing against hundreds of other operators or fund managers out there. And as you might imagine, if those groups come from institutional pedigrees, they already know what these folks are looking for. And so when you go in there and you’re like, you put the same pitch deck you have for a doctor or a dentist in front of one of these consultants or pension fund advisors, they’re not looking for the same thing.Micah Johnson (32:06)
Right.Dennis Cisterna III (32:18)
So you really need to tell your story in a different way. It has to be much more quantitative. It still needs that qualitative narrative about why this is a good idea, but it really has to have so much more meat on the bone from a data perspective and understanding not only how am I going to make money, but how am I going to mitigate risk if things don’t go as planned? And that’s really the biggest thing that I think I’ve learned over this process is speaking to that differentaudience of LP investors and understanding what’s important to them. Because at the end of the day, even when I like to think I’m this hot shot investment manager, I am ultimately a service provider. And so the service you’re providing, you can explain it as much as you want to, but you need to explain why that service has value to that type of investor. And explaining that value to different audiences, it seems simple.
at the surface, but when you don’t actually know what that person or that group is looking for, it really requires you to go in and dig deep and create a much more robust series of answers to the same question.
Micah Johnson (33:32)
It completely makes sense, man. You’re dealing in the, that’s like high ticket sales. You’re not talking to decision makers right out of the gate. You are being, you have to follow this process, which is tedious. Once you learn it though, and get good at it, it has its benefits where now you’re, it is less emotional. It is less other things that, which kind of makes it handy in a way, especially for some folks that don’t like that part of the conversation, butIt’s just understanding the arena that you’re playing in and how it’s growing and how it’s leveling up. And one thing I like that you said, how you’re still learning. That is real estate in a nutshell. It’s you’re going to keep learning. And if you stop learning, you’re not playing the game anymore. And it’s what, in my opinion, leads to a lot of what you’re talking about earlier, just a lot of noise in the space from social media marketing.
A lot of folks who are in serious trouble, actually, if you were to go look at their business, they started selling you coaching because their investments are failing and they’re trying to recover from something else. Or they did one deal, realized it was hard and said, coaching is way easier to sell. I’ll just say, did this deal. And that’s not real estate that is changing all the time. Like it’s an active participation in it, which is really why one person can’t do every asset class. It’s impossible.
Dennis Cisterna III (34:22)
Yes.Micah Johnson (34:46)
You have to start niching down because if you don’t, your clients don’t take you seriously. You’re not going to find good deals. It requires you to have that focus.Dennis Cisterna III (34:56)
Yeah, absolutely. And when you do see groups that start to do multiple asset classes, it’s because to your point, they’ve thought like an entrepreneur and they’ve brought in specialists to run verticals across the board, right? So you see that with large institutions that are running different strategies, they really have point people over industrial and one over multifamily. it is that true team concept, how you get to that scalability across asset types. asas an emerging manager or an entrepreneur, like you really have to be very focused on what competitive advantage you bring to the market and be able to present that in, ⁓ I think, a sophisticated manner where people understand, ⁓ okay, this is why he’s doing what he’s doing. And the coaching thing, man, I couldn’t agree with you more. If you ever see me coaching anything, Mike, I give you permission to kick my ass, because that is the farthest, ⁓
thing away from the best use of my time. if I looked at the most thousand profitable coaches in the world versus the thousand most successful real estate guys, it’s not even fricking close, right? In terms of your ability to create wealth. So I agree. And I think, look, there’s forums like this where you have guys that are sophisticated, that are doing things well, guys that started from nothing and built something, guys that came from Wall Street and are doing well.
There is so many great examples of a playbook for people that you can follow where we’re not charging anything, right? We just want to help. We want to help the community in general. At least that’s a big part of my mission. I think a part of yours in doing this podcast is like, look, the whole market benefits by having smarter participants in it. So let’s drag that out. Let’s pull that average up, not drag it down.
Micah Johnson (36:29)
Right?Exactly. The better we all are at this, the better everything gets. It benefits you to get good at what you’re doing. ⁓ I always tell people you want to a good human being, get good at being human. It’s a skill set. Learn how to do it. You have all this capacity at your hands if you will just train yourself on how to use it. And back to your point about staying focused before we wrap this up. One of my favorite things I like to point out and remind myself.
Dennis Cisterna III (37:00)
Yeah.Micah Johnson (37:15)
Amazon only sold us books for nine years. Only sold us books. Now they sell us everything. The benefit of that focus upfront to just absolutely own what you’re in creates that ability to do these other things where you’re not risking everything to do it. You are actually building and scaling responsibly using economies of scale and not just, want to grow big as fast as I can. Cause that’s where, that’s where we run into some issues.But Dennis, so man, I loved your story today. Thank you for being with us. For folks that do want to follow along with you and learn more about how you’re doing this, where can they find you at? What’s the easiest way to reach out to you?
Dennis Cisterna III (37:56)
So I would say follow me on LinkedIn that I post a couple times a week and a lot of it is very although I will give market commentary a lot of it is really about systems building infrastructure practical investment decision-making and utilizing the right technology and systems to grow your business I also highlight a ton of mistakes I’ve made throughout my career because let me tell you I’ve been doing this for for 25 plus years andI’ve either seen or most likely done just about everything wrong that you could do over that period of time. I am more open to share what not to do in a lot of scenarios. And I think for anyone that’s an owner, operator, entrepreneur, hopefully I give a lot of valuable advice there. And then if you’re an accredited investor and you’re looking for unique investment opportunities, you can learn more about our fund by just going to…
⁓ Sentinelnetlease.com where you can download our fund investment summary, learn about our strategy, our portfolio, our team. ⁓ And you know, we’d love to have a conversation with you. And if not, that’s okay too. I will tell you one of the best things about when you start scaling your company and hopefully you have this strategy early on, it’s okay if people don’t want to invest with you. It’s okay if people want to do something else. You know, you just gotta keep discipline and doing what you’re doing. And ultimately those results pay off in the long run.
⁓ But you I’m probably the worst salesman for my fund that’s around because I don’t really care if anyone invests or not. I just hope they can at least understand why I’m doing what I’m doing.
Micah Johnson (39:30)
And that’s where your vibe attracts your tribe, man. Some will, some won’t, so what next? That is my sales philosophy. It’s not about me. And when you have something that you believe in, then you become the gatekeeper of your own company. That’s what you’re truly doing. You’re seeking fit, not just funds. Because once you have the fit, then you got repeat funds. Then you got people working with you for a long time, which that’s what grows business over the long haul. And Dennis, again, man, thanks so much for being with us. I really appreciate your expertise.the information that you shared. For those of you listening out there, please check out the show notes, find Dennis’s links, follow along with him. Learn from somebody who’s actually doing it. That is my, the best advice I could give. The folks that are doing it, they’re typically happy to share with you what’s going on. Follow along, take advantage of that. If you’re an accredited investor and wants to learn more, touch base with them. Be a part of something that I think has been pretty cool to talk about so far. Again, Dennis, thank you.
Everyone, you got value out of today’s episode, like this episode, share it with someone else you think could get value. As always, please don’t forget to subscribe. We appreciate every single one of you that’s following along with us out there. We’ve got more conversations coming up with operators just like Dennis out there building something real, changing their own lives and the lives of those they’re working with. Thanks again, Dennis. We’ll see everybody on the next episode.
