Tony Moceri’s Buy & Hold Cash Flow Strategy

Tony Moceri (00:00)
And I am not saying be reckless. I think that you can have a conservative approach to it. But being educated, being patient, but being able to move at lightning speed is really valuable. lot of the best deals I have had, it wasn’t because it was some…

off the market, hidden property. I wasn’t sending a bunch of letters or anything like that. It was really my offer. It hit the market. It was a good deal. And my offer was better than the next person’s. And better doesn’t always mean more money. It means high likelihood to

Michelle Kesil (02:06)
Hey everybody, welcome to the Real Estate Pros podcast. I’m your host, Michelle Kesil Today I’m joined by someone I’m looking forward to chatting with, Tony Moceri who is a real estate investor focusing on buy and hold single family and light industrial properties in the Bellingham, Washington area. So excited to have you here today, Tony.

Tony Moceri (02:29)
Yeah, thanks for having me, Michelle.

Michelle Kesil (02:30)
Awesome, so let’s dive in. First off, for those not familiar with you and your work yet, can you share what your main focus is?

Tony Moceri (02:39)
Yeah, I’ve done a variety of things, but primarily I’ve been a buy and hold real estate investor for a couple of decades now, in addition to having a, I used to have a custom home construction business as well, which I don’t have anymore.

And so yeah, a lot of buy and holds I’ve done fix and flips and that sort of thing also but generally what I’ve always done is try to get enough cash so that I can get another buy and hold property and do that through variety of different businesses and You know the fix and flips and those sorts of things for generating Income also to be able to create another buy and hold opportunity. I’m I’m a cash flow investor, I guess is for the

most part.

Michelle Kesil (03:27)
Awesome. And how did you get started in investing?

Tony Moceri (03:31)
Yeah, you know, it’s one of those things where I’ve always kind of been a bit of a financial nerd, I guess, kind of unknowingly. You know, I was really into Monopoly and that sort of thing. And I just kind of was like, man, you can just buy houses and then you get.

income that way and I didn’t call it income at the time and then when I was, I don’t know, must have been when I was graduating high school or maybe I was about 20 or something and my dad was in the construction world also and he said, we don’t know anything except for houses, you better buy one. And that was, must have been about 2001, 2002 and they were.

giving loans out like candy back then. Often that eventually led to the financial crisis. But I was making $8 an hour working at the Boys and Girls Club while I was going to college and found a house to buy and the, so I would have been 21 I think. And the.

bank let me use the income from the existing tenants, so the rents that were already in place on that house to justify my loan. And I was kind of off and running at that point. It became a bit of a deal junkie actually. Just loved the transaction.

Michelle Kesil (05:33)
Yeah, amazing. Did you get any like resources or education in real estate or you just kind of started investing and went from there? What did that process look like?

Tony Moceri (05:46)
Yeah, so it’s kind of funny. There wasn’t as much information out there as there is now. I had never read Rich Dad Poor Dad. Podcasts weren’t a thing. It was one of those situations where my…

My ignorance was maybe even a benefit. see a lot of people, I do some real estate and investing coaching now. I see a lot of people that have analysis paralysis. There’s so much information out there that you can get scared, you know, get scared off from taking the plunge where I didn’t have anything to lose and I didn’t even really.

think about that piece, you know? And so I just went for it. I did after that first one that I bought.

I did end up going to real estate school and I thought I wanted to be a realtor after I kind of went through it. I realized that I didn’t want to do that. Being a realtor is not an easy job. It’s not for the faint of heart. You spend a lot of time talking to people and a lot of unpaid hours and then I eventually started seeing the realtors as my partners in this process. And so I did get educated, learned to speak the language.

Learned a lot of the rules for writing up contracts and those sorts of things, but I never activated my license. then most of my education has really been hands-on doing it. I’ve been studying my market and some broader markets for, you know.

for 20 years now seeing every house that comes on the market kind of in my window. And so a lot of my education was just very hands-on. Made a lot of mistakes. You know, I met with people that I didn’t see that maybe they wouldn’t be good tenants. And when I say not good tenants,

I’ve had trashed houses, I’ve had, you know, missed rent payments, all sorts of things. could probably, I’m a writer, I could probably write a book on all the things that I’ve learned through the process. But most of my education was very hands-on. You get one loan and realize that that wasn’t a good product. You buy a house and you do a bad lease or whatever the case may be and slowly but surely you get better at it.

Michelle Kesil (08:05)
Yeah, absolutely. What do you feel are some of the main keys that made the biggest difference in allowing your business to be able to grow and run smoothly?

Tony Moceri (08:15)
I smoothly is all relative, but for me, it’s probably the relationships. I have very good relationships with my tenants. I value them. They value me. And so often my tenants stay for a long time, both on the light industrial side and on the residential side. So what that means for me is sometimes you can get a little bit behind on your…

rental rates if you’re not having as much turnover, but my maintenance costs are down as a result of that. I don’t have vacant months very often. I don’t have people not paying the rent. I’m not chasing rents because I have these people that I’ve built relationships with. So that’s probably my biggest strength and building relationships both with the tenants and then also real estate agents that have helped me identify a lot of properties. And I’ve found properties in all sorts of different ways.

but realtors have definitely been a key part of that. And so I think those relationships is the biggest thing. I treat it like a customer service business and I’ll have tenants that I rent to and then their friends will call me looking for places and I often have a list of people that want to rent from me, kind of a backlog. So when places open up, I often have quality tenants that want to move in.

Michelle Kesil (10:14)
Yeah, amazing. And so why specifically do you do a buy and hold?

Tony Moceri (10:18)
Well, primarily for me it’s the cash flow play.

I have a podcast called Drip Trickle Flow Flood and it’s all about income streams. And that’s what I’m all about is I try to hit singles. I’m not trying to hit home runs. Every once in a while you get a hold of a ball and you might hit a double, triple or even a home run. But I’m trying to hit singles, get something that cash flows so that I can create income that I can live off of. Obviously I do factor in appreciation as part of what I’m buying.

part of the…

the reason to do the investment, but the appreciation for me has led more towards borrowing power and being able to buy more real estate than it has as far as like selling and cashing out. So really my whole design is to create cash flow off of the income streams. And not that I haven’t done the fix and flips and why, and haven’t done some of those. I have when those opportunities have arisen,

what I feel like is a pretty fiscally conservative approach. I know which properties work, I know what they’re gonna rent for, I know houses very well, so I generally can look at them pretty quickly and understand what the maintenance is gonna be in those pieces. I have taken what could be seen as kind of a scary endeavor to get into buying a house and…

I don’t feel like it’s that way. And so that just from the knowledge and the experience and going in kind of in these windows. And I’ve expanded what I buy over the years, but I’ve done it very slowly and I’ll dip my toe in kind of a new type of property. And so that’s why I was at age, I don’t know.

20, it right when I was graduating college, so maybe 24 or something. was in a lender’s office and I was getting a loan. It was kind of a unique property. was a zoned light industrial, but it had a residential house on it and then it had a shop and it was tricky to finance. So ended up having to get a commercial loan on it and I was sitting there talking to the commercial lender and he said, well, what do you want to be when you grow up? I’m like, well, I want to be a real estate investor.

laughed at me and a super nice guy, really really nice guy but he kind of chuckled like well that’s not real life and you know kind of in that moment I said well I’m gonna prove it to this guy that that is real life and so I was pretty pretty determined from that that moment on to to find good deals and create cash flow for you know as a significant source of our our family’s income.

Michelle Kesil (13:02)
Yeah, amazing. And so what is like the process look like for more of the industrial side of investing?

Tony Moceri (13:09)
Yeah, and so most of my industrial properties, they’re condominiumized units. So someone will build anywhere from 30 to maybe a couple hundred of these units. And so they’re all 12 to 1500 square feet. And…

It was a little bit of, I’m a firm believer in sometimes it’s better to be lucky than good. And I did get a little lucky. was talking to somebody about, just talking about real estate and they were like, yeah, there’s these light industrial shops in this older woman. I think she was in her 80s at the time or maybe she’s in her 80s now, had like a hundred of these shops or something. And they were kind of telling me about renting them out. I go, well, that’s…

That’s interesting. And so I called up one of the realtors that I had built a relationship with and I go, you know anything about these? And she goes, well, I happen to know another realtor in my office whose dad is selling one of those. Do you want to go take a look at it? And I go, yeah, I’ll go do that. So I took a look at it and kind of, and I had been in this complex before about…

maybe seven years before I bought my unit and they were kind of brand new and I couldn’t believe someone was gonna pay, I think at the time they were listed for $80,000 or something, I go, who’s gonna pay $80,000 for this? It’s just some two by fours in concrete. And it didn’t make any sense to me and so I didn’t buy it and now I’m back in this same complex seven years later and the unit is selling for $125,000 and I go, man, I should have bought this

and it was $80,000 and it wasn’t the exact same unit but in the same complex. And so that was the first one that I bought and I had my construction business. I actually ended up renting it out to a competitor. They were kind of transitioning between offices and needed some shop space and.

The cap rate on it was, I don’t know if people know what a cap rate is, but the capitalization rate was really, really good on it compared to a residential unit.

I think the jury is still out on what happens when the economy, if it really gets hit hard on these units, because everybody needs a house, not everybody necessarily needs a shop. But I have had a lot of success and really loyal people that have stayed for years and years and years, you know, operating their businesses out of them. Some of them are just using it for storage. So that’s how I entered into the light industrial area. And it’s become about half of my portfolio.

Michelle Kesil (16:28)
Yeah, amazing. Are there any challenges that you feel that area presents?

Tony Moceri (16:36)
Yeah, I do. Again, the fact that not everybody necessarily needs a shop. I think that if the economy were to get hit really hard, I could end up with either having to reduce my rental rates or vacancy. I haven’t seen that yet and they actually have appreciated better than I expected. So that’s been positive, although they’ve been fairly flat or modest increase the last couple of years, but that’s kind of real estate in general a little bit.

The other thing is they’re all in HOAs, which it poses some challenges. Not all HOAs are created equally. It can take time and you maybe don’t have, know, maybe your neighbors aren’t keeping up their space or whatever. So there is definitely some challenges to the HOAs at times. The flip side is, is,

you can be kind of as involved or uninvolved as you want in those HOAs. And they are limited a little bit. Parking is a big limitation at the units that I have. It limits the type of tenant. I’ve had a lot of gyms that wanna come in and there just isn’t really the parking for someone to be doing workout classes and that sort of thing. So it is a bit of a niche.

place to invest. However, where I live, there is less light industrial land compared to like what they’re allowing for residential construction. They’re doing a lot of infill for residential, a lot of multifamily. And so the fact that there is less land available, I don’t see this market getting too saturated compared to what housing could, although there’s a giant housing demand still currently.

Michelle Kesil (18:29)
Yeah, that’s awesome. And what are you most focused on solving or scaling to next?

Tony Moceri (18:35)
A big part of where I’m at right now is trying to create time for myself. And so I self manage everything. And so that takes a lot of time. And so for me, it’s maybe changing my portfolio a little bit in order to.

know, keep the properties that take less of my time versus having properties that are more labor intensive, maybe have higher turnovers, that sort of thing. I am… ⁓

I think there is opportunities coming, both in the residential and potentially in the light industrial area. And so I’m keeping track of that and looking for opportunities to pounce. I’m also looking at maybe some out of state investing as well.

maybe partially if I wanna travel more in the future and have some of those areas. I’m contemplating maybe a duplex where one side of it is a vacation rental. We do have a vacation rental now that we own and manage. So I am looking at different opportunities and I think that the market is unsettled.

currently and not every single market, overall I think the real estate market is a little unsettled right now and often that means there’s gonna be opportunity. So I’m keeping track of those things.

Michelle Kesil (19:58)
Yeah, absolutely. It’s a good time to take on a new opportunity or exciting challenge.

And so what advice would you give to an investor that’s maybe just starting or early in their journey?

Tony Moceri (20:12)
Well, I touched on a little bit. think, I mean, I’m all about getting educated, but I also am wary of the analysis paralysis. I do think it’s important to get started. There are so much information out there, right? There’s podcasts. My podcast is a little more broad. We do talk about real estate, but we really are trying to normalize the…

the conversation around money and we talk about you know just different things going on in the economy and interview a lot of entrepreneurs. And I think that there’s just this big shortfall of financial education and financial literacy in the United States. And it’s kind of a taboo to talk about money. And I think overcoming those things, getting…

You know, having the conversations, getting educated, whether it’s listening to podcasts, reading books, all the things. And I know a lot of people point to our education system as part of the problem, but…

But the reality is teachers aren’t taught how to talk financial literacy. It’s not part of the curriculum. And so I know that there is some of that going on, but the reality is, is people need to go find their own education. Talk to your kids about money, talk to your friends about money, talk to your parents about money, all of these things. And so I think education is the biggest piece. When I do my real estate coaching, the first thing I tell people is identify the market you want to invest in,

the that you’re looking for. can always change, but pick what you’re gonna do. Maybe it’s two bedroom houses, you’re looking for young families that want to rent, and pick your market and have a realtor send you every single listing that pops up in those parameters. You set the price, set…

your location and then you can start really learning the market. And then the second thing, once you start educating yourself on that is go get your money set up. Whether you’re gonna, you know, kind of traditionally finance, you’re gonna put 20, 25 % down and buy the investment property or however you’re gonna do it, get set up so that when you go, when you see a good opportunity, you can jump on it be a strong buyer.

And there is so many people that I just see in action.

And I am not saying be reckless. I think that you can have a conservative approach to it. But being educated, being patient, but being able to move at lightning speed is really valuable. lot of the best deals I have had, it wasn’t because it was some…

off the market, hidden property. I wasn’t sending a bunch of letters or anything like that. It was really my offer. It hit the market. It was a good deal. And my offer was better than the next person’s. And better doesn’t always mean more money. It means high likelihood to close.

so that’s what I think is educate yourself, get your ducks in a row, and then don’t be afraid to take action.

Michelle Kesil (23:16)
Yeah, amazing. Thanks for sharing. Well, before we wrap up here, if someone wants to reach out, connect and learn more, where can people find you and connect with you?

Tony Moceri (23:26)
Yeah, I’m on social media at Tony Moceri. So Instagram, LinkedIn, that sort of thing. I have a website, TonyMoceri.com, and people explore that world. You see all the different things. I’m freelance writer and coach and all sorts of different things. And then I have the podcast, Drip Trickle Flow Flood, which is available on all the platforms where I share a lot of…

financial stuff and a lot of our guest share financial stuff and pretty open book. I’m a big proponent of people getting educated and I believe that everybody can improve their financial situation and create a financial world that allows them to live the life they want to live. And so big proponent of pushing that out there to the world.

Michelle Kesil (24:13)
Perfect. Well, appreciate your time and your story. Thanks for being here.

Tony Moceri (24:16)
Thanks for having me.

Michelle Kesil (24:17)
Of course and for the listeners tuning in. you got value, make sure you have subscribed. We’ve got more conversations with operators like Tony who are building real businesses. We’ll see you on our next episode.