Scaling Real Estate Like a Pro: How to Expand Your Portfolio

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In this conversation, Aaron Fragnito shares his journey in the real estate industry, discussing his experiences, strategies for success, and the importance of relationships and consistency in business. He emphasizes the current opportunities in the real estate market, the significance of personal development, and maintaining a work-life balance while scaling his business.

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Aaron (00:00)
yeah, I mean, absolutely. I mean, I’ve lost 55 pounds in the last two years. I try to exercise. Yeah, man. Try to exercise, you know, three days a week. What works for me is intermittent fasting and keto. Although I got to say around the holidays, the keto can sometimes go out the door. But you know, I’m pretty good at trying to stay to that program, not during the holidays. And

So, you know, just really focus on my body, a healthy body equals a healthy mind. In addition to that, I have faith. I’m a Christian man. You know, I’m very involved in my church. I teach Sunday school. I love my church communities and I think it’s important to have a higher power. You need to have a higher power to guide you.

If you don’t know what your higher power is, then it’s probably money, sex, or drugs. Something really bad. So you might as well look into a higher power that’s positive and good and has a positive influence on your life.

Quentin (02:28)
Hello everybody. Welcome to the real estate pros podcast. I am your host, Q Edmonds. I’m so happy to be in front of you today. We have another guest that we’re going to pick through their lens. We’re going to see things from their perspective. They’re going to let us know what it is that they do in real estate. so I listen, he is a market expert. And so I cannot wait for this gentleman to tell you exactly what he does and

I’m just going to let him dive in. So what I’m going to do is introduce you guys to Mr. Aaron Fragnito. How did I do with that last name? Fragnito?

Aaron (03:06)
Nailed it, bro. He nailed it. Yeah.

Quentin (03:08)
Perfect, perfect. So Mr. Aaron, how are you feeling today,

Aaron (03:13)
Doing well, Quentin. Doing well. We had our holiday lunch here with the staff. Very nice time celebrating another successful year here at PCG and some new additional members of the team. And we’re buying an $18 million building in Newark, so I’m juggling multiple balls while riding a unicycle ride.

Quentin (03:35)
I hear you man. That’s a great description that lets me know that you got your hands full. So I hear you right clearly man. So listen, I want to dive in. I want you to tell people what your main focus is these days. If you want to give us a little bit of an origin story of how you got into real estate, we love origin stories. And also man, I think you may have mentioned it, but if not, tell us what markets you’re operating in as well.

Aaron (04:04)
Sure. So ⁓ as far as the origin story, well, you know, I read a book called Rich Dad Poor Dad, graduating college 2009. ⁓

Actually, 2009. man, it was a dismal economy, dismal economy. And I said, you know, want to get into real estate, but I didn’t know anything about it. I was broke college kids. So I got a degree in entrepreneurship at Rowan University. Actually, I recently went back and wrote a course called Real Estate Entrepreneurship there wrote and taught that that was interesting.

At the time, know, is not a lot of opportunities. So I actually moved out to Steamboat Springs, Colorado for six months. I talked kids out of skiing. I read more real estate books and I learned all about real estate investing. And I made a list. I said at the top of the list in 10 years, I want to have a net worth of $1 million and the passive income of $100,000. Kind of work my way down from that goal. So I need to learn the industry, save money, make connections. And I said, okay, I’ll get started as a realtor.

So I moved back to New Jersey and became a realtor made about $500. My first six months, like you would list a home. No one would call it was a dismal market. So I was forced to learn short sales and REOs, bank owned properties. Right. So I started to learn short sales. I teamed up with a short sale negotiating company and started figuring out how to get short sale listings. A lot of realtors didn’t know how to do it at the time. And I had figured out how to do it. And I would go to real estate networking groups and I would meet buyers, investors, and I’d say, Hey, I have these short sale deals.

I’m going to list the property at like a pretty attractive price. You come in, you write up an offer and we’ll submit it to the bank and the bank’s going to appraise the property except about 90 % of that appraisal value.

⁓ they either accept your offer or they’re going to counter it or, know, what, and if you don’t accept, well, at least we know what number the bank wants. It takes like six months and I could bring in another buyer from the open market. So these investors would get great deals through me. I’d be able to eliminate the debt that the seller had to the bank and let them move out. I, we would get move out funds for the seller. So it was a win-win for everyone and the bank insured these loans because they knew they were crap loans and got paid big insurance payouts. Anyway, that’s a whole different podcast. was a win-win for everyone.

my six percent commission because I represented the buyer and the seller. So I started making money selling these properties. I was learning short sales. I was meeting investors. I started speaking at different real estate networking groups and then I met my business partner Seth Martinez and we both had similar goals in real estate but we had different skill sets. Seth had sold a medical billing company. He was very liquid.

I was a struggling realtor, but I had deal flow. I had good deals coming in and I loved public speaking, marketing, branding and sales. And I was pretty good at raising money and making relationships with people. Part of raising capital is the know, like and trust. And I was good at working with people. And Seth was very good at operations, managing the analytical side of the business, making sure the trains run on time, as we say, the projects are done on time and so on and managing the people within the business.

Um, our skills complemented one another. Uh, I really had no interest in operations and he had no interest in getting on stage and raising money. So, uh, we teamed up, uh, we put a telephone on a telephone pole. put a, we buy houses sign. I would staple these to telephone poles and the hot sun and they say, we buy houses. So you used to work really well. And, uh, we bought a six family, for $220,000, put about $60,000 into it, refinance dollar money back out and the life

Bob went off and said, hey, we can buy renovate lease up and refinance these buildings. Also, it was the burr strategy. Now there’s a cool acronym for it. Right. ⁓ You don’t need to do it. could just do it. ⁓ So, you know, but then we bought a number of properties and start running out of money. We’re like, if we want to really do a lot of these, we actually need to raise capital. So then started the New Jersey Real Estate Networking Group.

Quentin (08:43)
you

Aaron (08:54)
hired and fired a few management companies realized we really need to bring property management in-house to effectively reposition these assets. We did that around 50 units.

And that was tough. That was a lot of work. We’re still always improving our management systems today. And it just kind of grew from there. Now we have 113 investors, about an 83 % reinvestment rate. Seth and I have completed about 300 transactions in New Jersey. The in-house property management company employs a number of people. And we’re buying an $18.5 million building in Newark right now. We have about 33 investors signed up for that one so far.

Quentin (09:31)
Man. So man, like I said, give me the backstory. mean, you didn’t really tell me how you know, I’m just messing around. That was incredible. I’m just messing.

Aaron (09:40)
fast forward through the middle part. was a lot of that I didn’t know.

Quentin (09:44)
No, no, I’m messing. That was incredible. I love stories. And as you were telling, I mean, just pictures was going off in my mind. incredible story. Thank you for showing us, walking us through your beginning to where you are now, to how you met your business partner, Steph Martinez. I really enjoyed you just walking us down, you know, and walking us up to what you do.

I want to pick your brain, a little bit about strategies, not strategies. Yeah, strategies. I said that word, right?

I want to ask a question I would love you to answer it two ways. What are some core business strategies that you have? What are also some core personal strategies that you’ve put in place that have helped you be successful? You know, know some people do cold plunges. Some people do, you know, hiking. Like, so are there personal core personal strategies and core business strategies that has really helped you succeed in life?

Aaron (11:12)
Sure, sure. You know, I started reading the book Atomic Habits, very popular one. ⁓

Quentin (11:17)
That’s my book, bro!

I mention that book every podcast, man. Yeah, yeah, yeah.

Aaron (11:24)
building a habit on top of habit, know.

yeah, I mean, absolutely. I mean, I’ve lost 55 pounds in the last two years. I try to exercise. Yeah, man. Try to exercise, you know, three days a week. What works for me is intermittent fasting and keto. Although I got to say around the holidays, the keto can sometimes go out the door. But you know, I’m pretty good at trying to stay to that program, not during the holidays. And

So, you know, just really focus on my body, a healthy body equals a healthy mind. In addition to that, I have faith. I’m a Christian man. You know, I’m very involved in my church. I teach Sunday school. I love my church communities and I think it’s important to have a higher power. You need to have a higher power to guide you.

If you don’t know what your higher power is, then it’s probably money, sex, or drugs. Something really bad. So you might as well look into a higher power that’s positive and good and has a positive influence on your life.

In addition to that, I really try to have a work-life balance. I’d say when I was younger, I didn’t have that, but I have a four-year-old son. My main priority is being a great father.

⁓ And to be a good father you need to provide and be a successful businessman But also be relevant at make time for your family make time to have those moments My son’s not gonna be four years old forever, you know, and I don’t want to work 24 7 and miss these moments with him. So having that balance is important And being able to focus on your business when it’s business time and focus on your family

or your church community or whatever the time is, focus on that at that moment. And when you have that balance, then when Monday morning comes, you’re ready to crush, know, because you’ve had that time with your family, because you’ve had that time with your church, because you’ve had that time with your higher power, your spouse, that now you’re refreshed and ready to rock. Otherwise, man, you’re just burning on E all the time and no one wants to deal with someone on E.

Quentin (13:24)
Mm-hmm. No, man. That’s one of my favorite questions to ask because I always, you know, it’s a privilege to get the peek through the lens of people of like what grounds them, right? Like, you know, we’re in the grind, we’re doing business, but apart from that, what really grounds you? And Atomic Habits is one of my favorite books. I’m probably on my third read now. I am focusing on just being 1 % better every day, know, habit stacking.

Like you my birthday was Tuesday started back in the gym. I’ve lost Not now. I’m make sure I say this right during the course of my life I’ve lost over 100 pounds twice and so like I’m now yeah, I know right but you know mindset like you know, would lose you know lose the weight and go back to a bad mindset these the way they go back to a bad mindset and like now I’m in that that great mindset once again

You know, I’m losing weight. you know, when you say you lost 55 pounds, that’s incredible. And also when you say faith, man, that’s, know, that’s big part of my life. And I always say, you know, when I do my self care, when I really focusing on myself, I like to keep it holy, healthy, and honest. If there’s anything that I am seeing that’s going to benefit me, it got to fall into the line of being holy, healthy, and honest. And, know, I know some people are holy. That’s a big word, but

It doesn’t mean sacred, right? It got to be set apart. It got to be special. It got to be set apart. It got to be healthy and it got to be honest. And so, so many of the things that you said just really resonated with me. And that’s kind like why I went on that rant because I want to let you know that

what you said really stuck. It really was a punch when you said it like, yeah, I really understand what he means. Yeah.

Aaron (15:47)
Thanks, Quentin. Absolutely. And if you put God first, mean, everything kind of flows down from that. Then you start really caring about your body and what you’re putting in your body and how you’re exercising and working this temple that God gave us, how you treat others, what you do behind closed doors. And it all trickles down from putting God first, that you’re in relationship with your spouse, with your children.

You really have to prioritize that. And then I found that I’ve really grown in my faith in the last two years, especially. I’d say I was kind of like a lukewarm Christian for many years, you know, and then really have leaned into it more recently. it God’s been working in my life in tremendous ways. So, you know, it’s holy is it’s not a big word. We’re all holy on the inside. We just have to tap into that, you know, and and and and.

kind of go back to our maker, you know, and realize, hey, you we were created wholly. He does know every hair on our head and ⁓ just accept that love. And if you can, then you do start living a different life. It’s not perfect. No one’s perfect, right? But it’s kind of a, it’s a different man. It changes you. really does.

Quentin (16:54)
Yes, sir. I couldn’t agree anymore, man. Very, very well said. So let me ask you, what is the next real goal for you? Are you looking to scale or solve something? Like, what’s the next goal for you?

Aaron (17:09)
Well, yeah, absolutely. We’re always going to scale. ⁓ Right now, we’re kind of on the precipice of, I think, hitting the big. ⁓ We are in talks with different institutional groups that are considering $25 million allocations. A lot of them are saying, hey, buy your next big Class A building, come back to us, and we’ll allocate that $25 million. We want to see you execute on a larger scale with properties. We also are in touch with different broker dealers, equity placement companies, family offices. ⁓

that have access to large scale investments as well and no other very wealthy family offices they can introduce us to. Also, so we’re starting to work with them and operate with integrity with their capital. And then some of those doors are really going to open to additional very ultra high net worth relationships that will expand our capital raising capabilities tremendously. You know, and then additionally, we’re starting to hire more people on the management side, buy bigger properties, ⁓ source great deals that were

finding in this interesting markets right now. So I think we’re our goals to really always double every year, you know, the size of the properties we’re buying, the amount of real estate, we’re acquiring amount of capital raising and kind of maintain that 50 % growth every year. And so far we have been able to do that, you know, but it has been hard ⁓ this year because they’re really that a lot of the deals were closed, but just didn’t work out.

And now it looks like this one we’re moving on is going to work out. It’ll close beginning of 26, but you know, it’ll be a big one for us. It’ll be great.

Quentin (18:47)
Gotcha, gotcha. Now I wish you the best and there’s no doubt you’re gonna hit your goals. Cause I believe you have all the things in place to do it. So that doubling every year, you said you’ve been able to do it. You’re gonna continue to do it. Now I do want to pick your brain a little bit about relationships. Cause I heard you mentioned the word. I know you mentioned your partner, Seth Martinez. Listen, you’re a Sunday school teacher. So you got to talk to people, right? So I just want to know what’s your perspective on relationship building? Has it impacted you in a positive way?

Do you feel like it’s important to have these relationships, business relationships? Like give me your perspective on relationship building.

Aaron (19:25)
I mean, relationships are literally everything in this world. You know, think about whatever you have accomplished in business. Like it didn’t come from AI. didn’t come from, you know, some whatever, some material item. came from a person, you know, that big investor who wrote that one and a half million dollar check. That relationship came from a person. Maybe that person invited you to an event where you met that family office. For me, for example,

You know, we hired a coach and he said, Hey, go to this event. We sponsored this event and we met this investor and got a huge investment. So that all came from a person. Right. Or whether it’s a, you’re hiring someone, right? You’re, you’re, look, you’re talking to people. These people can help leverage your time. ⁓ you know, even like my underwriter who’s super sharp, he was referred to me by another realtor. know. So it’s all about who, you know,

you know, what you know helps, but really it’s about who you know. And people want to do business with who they know, like, and trust. And if you can build that rapport and build that, those relationships with people and be consistent with them, have kind of a consistent brand message, not constantly jumping around, I’m doing this now, I’m doing that now. But be like, Hey, this is the guy that buys apartment buildings in New Jersey. And like, he’s got the whole infrastructure in place. been doing it over a decade and they keep seeing you. They keep seeing it. We have people that,

get been on our email list for four or five years and they’ve never invested once. And now they’re investing $1.8 million, you know, out of nowhere. Like my client relations manager has called him and like he’s like, yeah, I got one point. I’m coming in and we’re like, what? This guy’s never invested before with us, but he’s been following us and opening those emails, you know, for four or five years. And, ⁓

So it just goes to show like all those people that are kind of just like following what you do, keep creating that content, keep putting out quality marketing materials, quality deals, consistency in your brand. And then people are gonna react to it over time, but they have to be in the right place too. They have to be liquid or ready to buy or whatever the scenario is.

Quentin (21:30)
Yeah, yeah. So, so, so well said. Listen, Ms. Erin, is there anything that you want to say that we haven’t said? Any kind of inspiration, education, motivation, anything that’s on your heart or your brain that you feel like the listeners would benefit from?

Aaron (21:49)
Boy, ⁓ we covered a lot here very quickly, Quentin. We went from faith to business to brand consistency, right? A lot of things here, ⁓ family and everything else. I would say…

you know, business speaking, I consistency is key, you know, and just to harp on that, like it really is important. I think today we are all guilty of the shiny object syndrome, especially entrepreneurs. with today, Instagram, whatever, you know, all the social media, man, you, can get dragged in a million places. I get people writing to me on LinkedIn with a new opportunity every six hours. You know, you’ve got to focus on what you’re doing and have those blinders up, you know, obviously be open to pivoting at certain

times, but like, don’t just jump on every bandwagon, right? I’ve been, I can’t tell you the amount of times I’ve been told that I need to open up to different markets because New Jersey doesn’t have any opportunity or don’t you know about the Carolinas or Phoenix or Dallas Fort Worth? I’m like, yeah, bro, I know everyone else does those markets. I get it. You know, that’s not what we do. We have a brand. We’re consistent. People like the fact that, you know, by the North Jersey, New York area, higher earners here, they can come out to the properties.

They see what’s happening in downtown Newark, Jersey City, Bayonne. They get it. They understand these markets. want to, they can go out and see and touch the properties. They can come to our office and meet us. There’s a lot of value to that. ⁓ And so stick, stay the course, have a consistent brand. Don’t just go the way that everyone else is going. And in time, you know, people will understand your brand and be attracted to it because it’s consistent. And we, if we look at the best brands,

Coca-Cola, they’ve been doing the polar bear in the snow for 80 years, And we all know what a Coca-Cola is. We’ve all had one before. And it’s terrible for you. But man, they’re in every single restaurant you can order a Coca-Cola. And that’s consistent brand. And that’s why it’s a good brand. So be consistent and buy Coke.

Quentin (23:56)
And we are not sponsored by coke however coke you want but not but not so right right coke zero on my side I need a coke zero so Absolutely, so eloquently said man, thank you consistency beats intensity any day consistency beats intensity any day

Aaron (24:10)
That’s my favorite, yeah.

Quentin (24:24)
And bro, like you just said, you had people that have been in your email for five years and it’s because you was consistent. You ain’t hit them over the head. Yeah, you had systems in place, but it was the consistency that got them to buy again. So I think that’s a great message that you preached about consistency. So listen, Mr. Aaron, if someone wanted to reach out to you, connect with you, collaborate with you, learn more about what you’re doing, how can they reach out to you,

Aaron (24:49)
Sure, so our website is peoplescapitalgroup.com and there we have ebooks and white papers and webinars. You can also put us into YouTube, People’s Capital Group. I also have a podcast called the Passive Cash Flow Podcast. So we have about almost 200 episodes there on the podcast. So we’re on Spotify, iTunes, all major platforms. That’s the Passive Cash Flow Podcast. But our website’s great. You can go through our track record there,

are all the educational material we have. We don’t sell education, everything’s free. We have blogs and webinars and videos and so on there. We have a return calculator, that’s peoplescapitalgroup.com.

Quentin (25:34)
But there he is, Mr. Aaron, sir. I thank you so much for your time. Thank you for your story. You are an incredible storyteller. I told, I absolutely love stories. So I like the way you deliver your content and definitely thank you for your perspective. Thank you for the way you think. I think you have sprinkled enough nuggets that maybe what caused might have a mind shift around something that they’re facing today. And so ⁓ again, I thank you so much for being here today.

Aaron (25:57)
Thanks, Quentin. Appreciate it, my friend. Have a good one.

Quentin (26:00)
Well, listen, y’all

heard Mr. Aaron, you got the content. I keep telling you we’re going to bring up, keep bringing up incredible people. So please make sure you are subscribed. That way you can continue to get this incredible content. Thank you, Mr. Aaron and everyone else. We will see you on the next time.

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Scaling Real Estate Like a Pro: How to Expand Your Portfolio

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