Now Is Your Time to Buy: Todd Nepola on Timing the Market, Holding Forever, and Winning in Real Estate

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Show Summary

In this episode of the Real Estate Pros Podcast, Todd Nepola, president and founder of Current Capital Group, shares insights into the real estate market, his investment strategies, and the importance of tenant relationships. He discusses the buy and hold strategy, the resilience required in real estate investing, and the significance of continuous improvement in property management. Todd emphasizes the need for a growth mindset and offers practical advice for aspiring real estate investors.

Resources and Links from this show:

• • • Investor Fuel Real Estate Mastermind
    • Investor Machine Real Estate Lead Generation
    • Mike on Facebook
    • Mike on Instagram
    • Mike on LinkedIn
    • Todd Nepola’s Website
    • Todd Nepola on Instagram
    • Todd Nepola on Tiktok
    • Todd Nepola on Youtube

  Listen to the Audio Version of this Episode

  Investor Fuel Show Transcript:

  Todd (00:00)
  If I could offer everybody anything is just get started and buy one property. And I’m not a broker that sells properties. There’s nothing in it for me, but just buy one property because here’s the deal. If you’re right and it works, it’s gonna be a home run and change your life. And if you’re a hundred percent wrong and you hate it and you don’t like it and it’s a loser, you’re not gonna lose that much. Don’t go out and buy a multimillion dollar property.

  Kristen (01:53)
  Welcome back to the Real Estate Pros Podcast. I’m Kristen and I’m here with Todd Nepola, who is the president and founder of Current Capital Group. He’s responsible for the company’s vision and long-term strategic plans. So I’m excited to get into it. Thanks for being here, Todd. I’d love for you to give a little overview of what Current Capital does and what makes you guys unique.

  Todd (02:07)
  Thank you for having me, Kristen.

  Absolutely. So Current Capital is a South Florida based property management company. We operate and own mostly our own properties, but do third party management and leasing service as well. And 95 % of our portfolio was Class B and C retail properties. And the remainder is mixed between basically a multi-fac… excuse me, between industrial and office. And we’ve been doing that now for almost 30 years here down in South Florida. We’ve seen the landscape change quite a bit over the decades and the years.

  And we love it down here. We’re long-term holders. We do not sell property. So the very first property I purchased was in 1998, and I still own that property today and don’t intend to sell.

  Kristen (02:52)
  Yeah, South Florida is a pretty hot market right now, isn’t it?

  Todd (02:57)
  You know, it’s been a hot market and every time there’s a bubble or something happens throughout the country, South Florida seems to come back, at least since I’ve been down here, it seems to come back a little faster, whether it’s the real estate crisis in 08, 09 or it’s COVID, South Florida seems to snap back. And I think that has a lot to do with the weather and the taxes and things down here is a lot of tourism. So we’ve really been very lucky and blessed to be in South Florida.

  Kristen (03:18)
  Definitely. Well, I love, you your strategy of buy and hold. How did you kind of come up or how did you get to that strategy? How did you start out and how did you get to that’s, you know, how you wanted to invest?

  Todd (03:31)
  Great question. I’m glad you actually asked it because a lot of people don’t ask why I started, but I actually started as a stockbroker in the 1990s after college and the stock market was great. And I tell people I was not a great stockbroker. I had great timing because everything went straight up. And I was smart enough to figure out that the only way to make money then was to actually be in your office and do a trade. So I started looking for other ways to invest my money that I had saved up over the years. And I looked at everything from franchise opportunities. I almost bought a chain of pay phones.

  But I came across real estate, and this was the 1990s, and nobody wanted to touch real estate after the savings and loan crisis in the late 80s and early 90s. So there’s properties for sale, and I saw one for sale, and I said, I buy this property, and I collect these rents, and I keep this place full, and I pay these bills, I should make some money, and this thing will be good, it’ll pay itself off. So without a business plan, without financial savvy advice, I just decided to give it a shot, every penny I had into the property, and it worked.

  And luckily it did because I started buying more and more and more and then stock market dot com bubble burst in 2000, 2001. And I went full time into real estate from there. So I kind of wound up in real estate on accident.

  Kristen (04:34)
  Okay.

  Yeah, absolutely, probably better than the payphone business now.

  Todd (04:43)
  Yeah, would look at that now and

  say, boy, thank goodness I didn’t go in that direction.

  Kristen (04:47)
  And so since you kind of have, you have experience in all different asset classes, what makes real estate such a great investment over maybe the stock market?

  Todd (05:45)
  You know, for me, I preach and teach and tell everybody there’s no better asset class than real estate and I can give you nine million reasons why. But the bottom line is, it’s one of the best ways to grow wealth. It’s one of the best ways to invest with a smaller amount of capital because generally you’re put 25 to 35 % down on a property. You’re gonna get leverage. It’s easy to get bank loans if you have some money to put down and it’s patient money.

  So I know like when I’m in stocks, I can’t help myself, but if I buy Amazon today, I got to know where it closed at tonight. And I got to know where it opens at tomorrow morning. So you could get a stomach ache watching it. There’s no way of knowing what real estate’s doing day to day. So they say the market goes up, but I don’t know the value of the property day by day. So it allows it to be a slower grower. In addition to that, you get much better tax benefits between depreciation. And right now there’s some great ones with cost segregation. So I’m getting the tax benefits.

  I’m getting the appreciation of the property. I have the ability to borrow against the property tax free. So that gives me another loophole, which if I want to borrow money out of a property and go buy a boat, can, I don’t, and they don’t recommend that, but you could. But the greatest thing about real estate is it’s a business that you can hand off to your kids. So if you just give your kids a stock portfolio, that’s great. But if they’ve watched you nurture these tenants, it’s really something more. It’s real business, so.

  I could go on and on and on for hours about real estate, but I think he’d be hard pressed to find anyone that count wealth that he ought to win and say real estate’s one of the best asset classes there is.

  Kristen (07:13)
  Absolutely, and I’m sure you’ve seen a lot of ups and downs

  in the market and you still consider it to be a somewhat, you know, long-term stable investment. Where are you kind of seeing the market at now? Where do you see it in the future? I think there’s a lot of people confused if it’s a good time to get in.

  Todd (07:30)
  You know, another great question, and I get that all the time because I teach a lot of people real estate and I try work with lot of people and they say, well, is now a good time or it was a better time then? I say, well, the only problem you have is now is your time. So whether it’s a good time to buy real estate or not, now is the time that you have to buy it. So you got to go in and you got to make good decisions, but nobody, and I mean, nobody could time any market, whether it’s the stock market, the bond market, the treasury, you can’t time. So the only thing you could do is look for buying a good quality asset

  And if you buy it and it goes down a little bit after you purchased it, that’s just fine. I know it sounds stupid, but that’s just fine as long as you’re not gonna sell it. And if it goes up, don’t sell it either. So, so long as you have the mindset that I’m buying a piece of property and tend to hold it for decades and give it to my grandkids one day, you don’t have to worry about the day-to-day trades. But now is your time, so now is the right time to buy real estate.

  Kristen (08:22)
  Definitely, I think it’s good advice. And so you were building your portfolio and how did you kind of come to building current capital group? What hole did you see in the market that you thought you could fill?

  Todd (08:33)
  Well, once again, that happened kind of on accident too, which is the greatest lesson for all investors and young people out there to learn is that the greatest paths come from just waking up and making progress. So when the stock market imploded from the dot-com bubble, I was paying people more to help me manage my properties than I was even earning anymore. So I said, well, I’m a hot shot young guy now. I have all this real estate. I’ll do what they told me to do and I’ll manage and own my own properties and retire. And I was in my late 20s and I said, this seems like a great idea. And I started living off the cashflow.

  And that was great until the next cycle hit, which was in 08, 09, or 07, 08, 09, when the market imploded for real estate and none of my properties were ever at risk. I never thought I would lose a property. I didn’t have too much debt. I did wonder if I’d be able to refi it and how long the cycle would last. But ultimately what happened was the tenant who would pay me 5,000 could only pay four. The one who could pay four could only pay three and so on and so forth. So my income was getting decimated. So I started using a lot of my savings. Now,

  One side says this is terrible, but then the other side says so many people that had commercial properties now had problems that they needed my help. So when they needed my help, they started coming to me and said, how come your properties are fully occupied? And I said, because I wake up every day and do this and you’re a dentist and you’re an architect. So they asked me to help. And we started growing the business more and more and more. And that’s when current capital really got huge and we grew up the company, but we took on every asset class. We didn’t turn any business down and the company grew on steroids.

  because so many people were struggling. Banks were giving us properties to manage, investors were us properties. It was great. So we took that opportunity and from that point forward, I always said, I’ll never use my real estate money ever again for recurring expenses. I’ll only use it to buy more properties. So from the real estate tsunami, what happened to us, it turned out to be the greatest thing that happened to me once again. And from there, we’ve been full steam ahead.

  Kristen (11:00)
  It’s amazing and how do you kind of ride that line between making your investors happy and making your tenants happy?

  Todd (11:08)
  Well, my investors generally, my properties and the tenants are my partners. So they are the most valuable people. If my tenants are not happy in a property, then that’s a complete failure for me. So my job and my team’s job is not just to manage and lease a property for saying to make sure the grass is cut. It’s our job to drive sales. So if you think about your mall, malls right now and your big multi-billion dollar centers like that at malls,

  They’re have Santa Claus there and reindeers there and they’re gonna have Christmas music and decorations. They’re doing that at their expense to drive sales because they know that psychology says if you’re in a Christmassy spirit, you’re gonna spend more money. They have to help their tenants drive sales. So we take the same approach into retail strip centers, whether they’re 20,000 feet or 220,000 feet, we’re constantly doing things to help our tenants, whether it’s put events together, do group networking where they all work together.

  bring the politicians into town, bring the news out there to do some sort of a charity drive for kids back to school backpacks. Anything we can do at all of our centers to drive business for them is the most important.

  Kristen (12:12)
  Wow, I mean, that’s a great analogy with the Christmas decorations. So it seems like your team is kind of a mix of creativity and probably a lot of data-driven people as well. How did you go about building this team and hiring the right people and creating culture within your business?

  Todd (12:30)
  Well, they’re probably more creative than me, but I would say when it comes to these kind of things, it’s less creativity and it’s more common sense. So we all know what we look for when we go to a place. So if you walk into a restaurant right now, you know what’s going to turn you on and what’s going to turn you off. So what happens is some of these tenants become blinded because it’s their business and they don’t see it. So we just try and give them good advice from other locations. So if I see something working over here, I’m going to share with my tenant over here and explain to them why it works.

  So the team that we built goes from property to property, so nobody has just one location, so they share all that data. The way you build a team is obviously through trial and error. You got to hire people. I know a lot of people say be slow to hire and quick to fire, and we do it the opposite way. We go without gut. If somebody comes in, even if they don’t have a lot of experience, but they’re passionate about real estate, I believe the day-to-day, as far as the operation side from the field.

  It’s pure common sense and I can take anybody who’s really driven to make things better and make them a great manager in weeks. It’s a different approach for accounting and marketing, because that’s a different skill set, but to manage a property, it’s really common sense.

  Kristen (13:38)
  Yeah, absolutely. I think that’s a good distinction. And a part of what you guys do is you continue to redevelop and re-tenant your properties to get the maximum value. What are kind of your tips around that?

  Todd (13:51)
  You know, some of the biggest loopholes that people miss out on is the fact that they, you know, I guess it’s kind of no different than buying a house. I attribute it to that. If someone goes out and buys a new house, you find that when they move in, they go right to Home Depot, they want to paint, they want to put new floors, they want to do a new kitchen, they want to move in, so on and so forth. And then they do nothing for the next 20 years. But someone will move into the house next door and do the same thing. Commercial property owners are no different than that. They’ll buy a property, it’ll be perfect, they’ll do everything they want, they’ll paint it, they’ll clean it, they’ll make it great. And then they kind of set it and forget it and forget about it.

  and that’s the worst thing you could do. If you’re not making minor improvements every couple of months, you’re falling behind. So you gotta be growing or you’re dying, there’s no two ways about it, and there’s a lot of very large businesses out there that existed 20, 30, 40, 50 years ago that don’t exist. And in the retail arena, I love to attribute it to Kmart. It was the biggest retail on earth, and there’s no more Kmarts. So if you don’t stay on top of your game and you’re not constantly being innovative, you’re out.

  Kristen (14:46)
  Yeah, absolutely. And as you, you know, redevelop these properties, so I imagine property management for commercial and property manage for residential comes with its own set of problems. I don’t know that one is worse than the other, but different subsets. What are some things that you think commercial investors should be aware of, look out for, all of that?

  Todd (15:52)
  I tell people all the time, it doesn’t matter what asset class you buy in real estate, they’re all gonna work, they’re all fantastic. So if you like multifamily, go multifamily. If you like retail, go retail. know, office, industrial, every asset class will work if you buy a good property. But don’t buy an asset class because you think it’s gonna make you a lot of money. Because if you do not like multifamily, and I do not, it’s personal, just, for me, I don’t like to have to evict human beings that are in their homes. It’s, don’t like to evict anyone as it is, but.

  For me to have to have a conversation with the business owner that your business isn’t working and have a better day and move on is one thing. But for me to have to evict him, God forbid I have to evict someone right now at Christmas time. I couldn’t do it. So it’s not for me. So multifamily, even if it’s easier to get into, if that’s not for you, don’t go there. So start with the property types that you like. I love retail, I love that kind of an arena and it worked out great for us. I love industrial too.

  but I can’t get into industrial because the market’s gotten so tough to buy property, so I’ve kind of got knocked out. So I own a lot, but we haven’t bought a lot. But find the asset class that you truly enjoy working with. My aunt is the total opposite. She owns a lot of apartments up in Connecticut, and she loves it. And she brings her tenants flowers and gift baskets to the Easter, and she loves it. And when I tell a retail, she would never do it. So you gotta find the one that works for you. They’re all gonna be right.

  Kristen (17:08)
  Definitely. And can you talk a little bit more about, you know, as you’re growing your portfolio, that persistence that you need and, you know, the pitfalls that happen and how you get over those?

  Todd (17:19)
  You need a lot of persistence. You need to be resilient as hell to buy real estate because it’s especially the first couple of deals you’re gonna buy. It’s very scary because everyone’s trying to figure out is it the right time? And that’s why I’m telling you it’s your time. So it doesn’t matter if it’s the right time. Just don’t be over leveraged. But you gotta just keep going. And you know, things are gonna happen. And I’ve learned from 30 years in this business whether it was the real estate crisis, whether it was, you know, 9-11, whether it was, you know, COVID.

  You hit these crises and everybody gets into a massive panic, but you just got to keep chugging forward and just keep working. Don’t die. Don’t hand the keys back. And anybody I know that bought a property in Florida in 05 or 06 at the absolute peak of the market, if they didn’t lose the property or sell the property and they still own it today, it’s worth substantially more than it was in 06 and 07. But 08 and 09, it tanked. It was worth much less. So you have to have the willpower to hang on.

  No different than stocks, I guess. the last stocks may be a little bit different, but you can’t sell, you can’t go with you got you got to hang on.

  Kristen (18:21)
  Absolutely, and it seems like you definitely

  have a growth type of mindset where you believe that you’re able to do all of these things and build this portfolio. What would be some maybe mindset tips for people who don’t naturally have that?

  Todd (18:35)
  Well, nobody naturally has it. The truth is, nobody has not been, it’s all learned. So a lot of people will ask me saying, well, how do you know how you’re confident? Because I’ve been doing it for 30 years. And if you ask me to do something I’ve never done before, like maybe, I don’t know, something I haven’t done, fly a helicopter, I’ve never done it. I’m not gonna be good at it. But if a helicopter pilot, it’s natural reaction. So you gotta get in the game. The key is to get in the game, you gotta look at people who’ve done it for a long time.

  And if you look at the feedback from people who’ve owned real estate for years and decades, some even many, many decades, you’re gonna be hard pressed to find anyone who says, boy, that was a horrible mistake. They’re gonna say, I should have started sooner, I should have bought more, should. So that’s good feedback to know that you’re on the right track. But it’s gonna be hard, you’re not gonna walk in with confidence and swagger buying your first property, who the hell would? I mean, just like riding a bike, if you never rode a bike the first time, you’re gonna be embarrassed and scared, but you get good at it quickly. So the best way to get it,

  good at it is to start doing it.

  Kristen (19:34)
  Yeah, I think that’s really good advice. Absolutely. It just comes with experience. Well, you’ve given so many good inspiration tips and insights to kind of wrap this up. What would be a piece of advice that you wish you learned earlier in your real estate career that you can share with us?

  Todd (19:52)
  I tell people don’t worry so much. I don’t worry so much. Truth or I figure it’s not a problem until it’s actually a problem. Avoid the news because the news is not there to help you buy real estate or buy any investments. It’s there to scare you day to day. So go with your gut. Don’t over-leverage your property. know, that’s, don’t try, know, do what you gotta do to get into the first one, but don’t over-leverage where you’re at risk of losing it. But I would say, yeah.

  The greatest piece of advice I’ve learned in all this time. mean, there’s just so many things, but If I could offer everybody anything is just get started and buy one property. And I’m not a broker that sells properties. There’s nothing in it for me, but just buy one property because here’s the deal. If you’re right and it works, it’s gonna be a home run and change your life. And if you’re a hundred percent wrong and you hate it and you don’t like it and it’s a loser, you’re not gonna lose that much. Don’t go out and buy a multimillion dollar property. So.

  It’s better to lose a little money and know for sure that this isn’t gonna work than not doing it at all. So give it a shot because like I said, you’re hard pressed to find anyone who’s bought properties that regrets it today.

  Kristen (20:53)
  Amazing. think that’s a great note to end on. Tell everyone where to find you and how to work with you.

  Todd (21:00)
  Well, the first thing I’ll tell you is if you’re in real estate and you’re getting started, I highly recommend you buy my book, Keeping It Real on Commercial Real Estate by Todd Nepola. I wrote this book to my interns and I like to shamelessly plug it because so you know, I give 100 % of the proceeds to charity, I don’t keep a dime, but this is my thoughts on where people should invest in real estate and they should buy properties, invest in partnerships, buy stocks. It gives you all the basics and I wrote this as if I was writing, like I said, to a 20-year college intern. So that’s a great place to get started.

  You can find me on obviously social media. on TikTok, Instagram, and YouTube. And you can see I give a lot of real estate tips from there. And I do a lot of podcasts like the ones you’re offering today, which I think are great that people like you give your time and energy to do this because people need to get a little push sometimes. So you’re giving them the push. So thank you for doing that. you for having me.

  Kristen (21:48)
  Yes, awesome. Well, thank you so much for being here, Todd.

  Thank you everyone for listening. I hope you got a lot of great tips for your own business, some inspiration. Definitely check out Todd’s book. It seems like there’s a lot of great information in there and we will see you back next time.