Josh Adamek ACRE of Pittsburgh

Mike: Welcome to the FlipNerd.com podcast. This is your host, Mike Hambright. And on this show, I will introduce you to VIPs in the real estate investing industry, as well as other interesting entrepreneurs whose stories and experiences can help you take your business to the next level. We have three new shows each week, which are available in the iTunes store or by visiting FlipNerd.com. So without further ado, let’s get started.
Hey, it’s Mike Hambright back with another FlipNerd VIP show. Today, I have with me Josh Adamek, who’s the president of Acre of Pittsburgh, which is a RIA club in Pittsburgh. He’s also an active real estate investor with Synergy Capital. And before we get started talking to Josh and learning more about everything he’s involved in, let’s take a moment to recognize our sponsors.

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Josh, welcome to the show.

Josh: Hi, Mike. Thanks for having me on today.

Mike: Good, good. Well, I wanted to learn a little bit more about you and your background as a real estate investor, and also, you’re the president of a good-sized RIA club in Pittsburgh there, the Acre club. And I wanted to learn a little bit more about that. So tell us a little more about you and your background, and how you got started in real estate investing.

Josh: Okay. I’ve been investing in real estate in Pittsburgh for about 10 years now. I did it part-time for about seven years. And then, about 3 1/2 years ago, I quit my job, and that’s when my partner and myself formed Synergy Capital. For the first seven, eight years, I was focused mainly on building my rental portfolio, and when I made the leap to quit my job, I began pretty heavily buying and selling. And we do a fair amount of wholesaling every year. We do a lot of renovation, flip-type properties, whatever you want to call them in your neck of the woods there.

Mike: Yeah.

Josh: We do… we’re working on some commercial projects, a few ground-up development deals. We have a couple of townhouse projects in the works right now. So we do a fair amount of stuff on the buy and sell end of the business.

Mike: Yeah. Yeah.

Josh: We typically use private investor funds to acquire the properties. Recently, over the last 24 months, we’ve been working with an SEC attorney. We’re now in compliance with the Security and Exchange Commission on a federal level, so we can publicly solicit and pool…

Mike: Okay. Okay.

Josh: …private finance from accredited investors.

Mike: Okay. Great. Great. Why don’t we talk about the RIA club that you’re the president of, the Acre Club. And I know it’s been around for a long time. Is that right?

Josh: Yeah. Yeah. Acre’s been around for over 30 years.

Mike: That’s awesome.

Josh: It’s… over the years, we’ve had over 2,500 active members. That’s… you know, membership comes and goes…

Mike: Right.

Josh: …like any organization. Right now, we have I think four to five… somewhere in the 400 to 500 range active members and vendor memberships. So, you know, still a pretty large organization. You know, we meet once a month. We have a formal monthly meeting.

Mike: Okay.

Josh: Where we have local… you know, local speakers. Sometimes we’ll have a national speaker come in. You know, provide some content. We have vendor speakers. You know, we do some Saturday classes that are geared more towards one aspect of the business. You know, what classes on lease options, classes on property management, classes on, you know, buy and sell, wholesaling, you know, just different… mostly local speakers…

Mike: Right.

Josh: …that are working in the Pittsburgh market that, you know, are willing to share some information on the business.

Mike: Yeah. Yeah. And you have a pretty vibrant kind of vendor membership, as well, in the club. You know, we have active vendors, anyone… everything from title companies to attorneys to property managers, Home Depot, you know, window suppliers and general contractors. Basically anything you may need access to, as far as, you know, in your real estate business.

Josh: Right. Right.

Mike: And so tell us a little about the club. I mean, how do you… you have a general meeting, and I assume you have a mixture of, you know, newer folks, newbies, that is, and veterans that have been around for a little while. Is your club… tell me a little about… I’m always intrigued to talk to folks that run real estate investing clubs, to understand the balance of, you know, trying to educate newer folks and trying to satisfy folks that have been around for a while, that don’t need the same level of education, maybe, that some of the newer folks have, and the balance of not being overly sales-y, but providing great value and content. And I know almost no RIA clubs make money, but they have to generate money somehow to continue the club. Just talk a little about how your club is structured in that regard.

Josh: Right. Well, we do have… like I said, we have a pretty large membership. You know, I think it’s, like, around 450 members. You know, we have a good mix. I mean, we have the newbies that, you know, have never bought a property other than the one they live in. We have, you know, we have folks that have been around for… you know, there’s a few people in our membership that have in excess of 500, 600 rental properties. You know, we have some folks that have bought hundreds and hundreds of buy and sell-
type properties, that have been in the business for 30 years. And we do… you know, we have a few members that have been members of the organization since it started, so… that have actually been around for close to 30 years.

Mike: Okay.

Josh: But…

Mike: What’s a membership? What does a membership run in your club?
What’s the cost?

Josh: Not enough. [laughs] For what they get. No, I think it’s around
$139 a year.

Mike: Okay.

Josh: So and that includes, you know, monthly meetings, all the stuff we have online, the digital newsletter, the electronic newsletters, you know, all the resources. You know, coming to the monthly meetings, you can talk to our local attorneys, you know, all the different contractors, vendors, experienced investors, so…

Mike: Right, right. And you guys are a member of National RIA as well, right?

Josh: Yes, we are. We are.

Mike: Okay.

Josh: Yeah. We are… Pittsburgh just hosted the National RIA event… I don’t know, I think it was maybe three, four months ago.

Mike: Okay.

Josh: So…

Mike: And there’s some benefits that your members get from your association with National RIA as well, right?

Josh: Yeah. We have the Home Depot rebate program, where you get… I think it’s a 2.5% kickback from what you spend over the course of the year.

Mike: Okay.

Josh: At Home Depot.

Mike: Okay. So what do you think the right… you said you had some other training classes on the weekends…

Josh: Yeah.

Mike: …and things like other opportunities where people come in and probably maybe charge a little bit to learn about… you have kind of a talk with somebody that is an expert in a certain area. They talk about, like you said, lease options, or property management, or other things like that?

Josh: Yeah. Yeah. As you know, I’m sure you remember of your local RIA, when you have, you know, a two hour meeting on a Tuesday evening, it’s hard to cover the basics, have the vendor introductions, and a quick teaching segment, and then have a speaker that can actually provide a fair amount of content with a teaching segment. So it’s all a balancing act there. So what we do is, you know, we have… like you said, we have a good mix of membership, whether it’s folks that are interested in being a landlord, or buying and selling…

Mike: Right.

Josh: …or lease options, or property management. So what we do is we have the occasional Saturday classes, which would be typically on a Saturday morning for four hours, and we’ll have just one specific topic, where the majority of times we’ll have a local speaker that’ll, you know, take the property management aspect of the business and just really dive into it for four hours.

Mike: Right.

Josh: And I, you know, I think we charge… it depends on the speaker and what room we’re in at the time, but I think we charge anywhere from $49 up to $99 for the Saturday class. And, you know, it’s typically a solid four hours of content.

Mike: Mm-hmm.

Josh: You know, we have the handouts, and the printouts, and you have the ability to buy the recordings of the classes and stuff after the fact.

Mike: Okay. Okay. And so talk a little bit about your role in Acre, when you took over as president, and some of the responsibilities that you have to make sure that the club, I guess, grows, and continues to improve content, and things like that.

Josh: Yeah. Well, I was… I’d actually started going to Acre about 12 years ago, before I bought my first property. And I’ve been an active member since. I’ve been on the board for maybe about five years now, maybe not quite that long. And I was recently, about six or eight months ago, I was voted in as the vice president of the organization. And a short time after that, our newest president, for various reasons, had to take a leave of absence from the group, step away from the group. So I was then voted in in the position of president.
But basically, my role as president is to… we have other folks on the board. We have, I believe, eight active board members. So we have our general meeting first Tuesday of the month, and then we have a board meeting following that, the second Tuesday of the month. But, you know, I host the board meeting at my office, and we basically plan for upcoming meetings and events.
And, you know, one of the things that I’m really trying to do to benefit the organization is grow the membership. And by that, it’s, you know, prior to the last nine or 12 months, we didn’t have very much of an internet presence. So we’re trying to grow the internet presence with the Facebook group and, you know, Meetup.com, and attract more of a membership.

Mike: Right.

Josh: Because there’s a lot of folks out there that are interested in, you know, learning how to invest in real estate that just don’t know where to go for help.

Mike: Right.

Josh: Like, you know, there’s organizations like Acre that are local in Pittsburgh, and for a minimal cost, you can come and learn from some local folks that are active investors, that are doing the business on a daily basis, rather than one of the infomercials on TV, when a guy flies in and holds a weekend event.

Mike: Right. Right. [laughs] And are there other active clubs in Pittsburgh as well?

Josh: Oh, yeah. There’s a ton of active clubs.

Mike: Okay.

Josh: I communicate… I associate with one of the other groups, Pittsburgh RIA, I believe it is. And they’re another active group. But I think, all in all, there’s probably about… oh, I mean, probably a dozen active organizations in Pittsburgh.

Mike: Okay.

Josh: I think… well, Acre’s been around the longest, and Acre is, as far as I know, the largest…

Mike: Mm-hmm.

Josh: …investor’s association in Pittsburgh.

Mike: Okay. Yeah, it’s always interesting to talk to folks in different markets, because some clubs don’t collaborate at all.

Josh: Yeah.

Mike: And some do. So it’s always interesting to kind of hear that dynamic that’s going on there.

Josh: Yeah.

Mike: I mean, everybody has the same journey… I mean, they have the same interests. They want to help educate and grow awareness of real estate investing, and things like that, in the market. But sometimes they’re, for one reason or another, just don’t collaborate a lot at that level.

Josh: Yeah. Yeah, it’s a balancing act.

Mike: Yeah.

Josh: But, you know, we meet on different nights of the week, or different nights of the month.

Mike: Yeah.

Josh: And we do share a lot of the same membership.

Mike: Yeah. I’m sure.

Josh: So a lot of folks in both of our… you know, belong to both of our organizations.

Mike: Yeah. Yeah.

Josh: You know, it’s no secret there’s more than one investors’
association in Pittsburgh.

Mike: Yeah. And most towns, other than smaller towns.

Josh: Yeah.

Mike: So talk a little bit about… so you have your monthly meetings, and you have some additional training on the weekends, and I know you have a couple of conferences a year, and you’ve got one coming up next month. Why don’t you tell us a little bit about the purpose of that conference, and then a little bit specifically about the details of this one that’s coming up?

Josh: Yeah. Well, we have… like you mentioned, we have two larger events per year. One is our fall convention, where it’s typically a one or two day event. We’ll have two to four speakers come in. And then our big event is actually coming up March 21st through the 23rd, and that’s typically a three, sometimes a four day event. This year, it’s a three day event, Friday through Sunday. And right now, we have eight national speakers scheduled to come in. And we… we’re very careful in picking our speakers. We get a lot of return speakers. You know, we get speakers that come back every couple of years that provide good content.

Mike: Mm-hmm.

Josh: And we like to have a mix of speakers. So we’ll have folks that speak on, you know, landlording, buy sell, private money, taxes, just, you know, general real estate investing. So we get a good mix, rather than focusing on one aspect of the business. And we do that for several reasons. One of the reasons is, you know, people that find us that are new to the business, they’re not quite sure what angle in real estate investing they want to take, so they come to our big convention, and they get to hear a little blurb on each aspect of the business and see which one interests them the most.
So this year in particular, we have… on Saturday, we have four speakers. We have Nick Siddode, who teaches on special… excuse me, special needs housing. We have Larry Goens, who is, you know, really good at marketing. His company and himself, you know, he’s teaching the buy and sell machine, and how to grow your real estate business.

Mike: Mm-hmm.

Josh: We have Donna Bauer teaching this year on buying discounted notes. And then we have Jack Bossch, who is… this should be an interesting one. He’s a land profit generator. He’s teaching on, you know, how to make money flipping land, like most of us flip houses.

Mike: Yeah.

Josh: So, and then on Sunday, we have another four speakers. We have Al Aiello, excuse me, talking on takes. Lou Brown is the 24/7 cash machine. Lou Brown has been around for a long time. He’s a good speaker, has a lot to offer, and we would always like having Lou back. Alan Calgill, he’s going to teach us about, you know, private money. How to utilize private investor funds to purchase your properties. And then Chris Bowser is coming back again this year. He was with us… he came and spoke a few years back. He actually teaches on how to buy and sell on eBay.

Mike: Hmm.

Josh: And not just real estate, but, you know, everything in general. When you buy that house that’s loaded full of junk, how do you… how to take that stuff and, you know, sell it for a profit on eBay.

Mike: That’s interesting. Yeah. Yeah. Okay. Awesome. Well, talk a little bit about your… I know you mentioned some things upfront. You’re an active real estate investor yourself.

Josh: Yes.

Mike: And I know you started at a pretty young age, which I think… I’ve never met a real estate investor that… other than folks that started early, that didn’t wish that they… they always wish they had started earlier. [laughs]

Josh: Yeah. Right. Right.

Mike: So let’s talk a little bit about how old were you when you bought you first house?

Josh: I was 21 years old when I bought my first duplex.

Mike: That’s awesome.

Josh: So, yeah.

Mike: And that was a rental property for you?

Josh: Yeah. Yeah, it was. I was fresh out of school. My girlfriend and I… my girlfriend at the time, my wife now.

Mike: Yeah.

Josh: We were living in my uncle’s apartment building. And, you know, we paid rent for a couple of months, and I quickly realized that I paid rent, and three other people paid rent, and I wanted to be the one collecting the rent, not paying it.

Mike: Yeah. There you go.

Josh: So do you still own that duplex?

Mike: I do. I do. Yeah. Yes.

Josh: Awesome. Everyone always remembers their first.

Mike: Yeah.

Josh: Yeah. So I started there. I bought my first duplex at 21. You know, then I did what most 21-year-olds would do. I goofed off for a while.
[laughs] And, you know, bought some toys, and didn’t really take the business serious. And then, you know, after about a year or two, I bought another property, and they slowly trickled in. You had mentioned, you know, people wish they had started younger. Well, I started young, but I tell people I wish I would have got serious younger. [laughs]

Mike: Yeah, there you go.

Josh: So I… you know, I bought my first property when I was 21, but probably from the time I was 21 till I was about, you know, maybe 24, 25, I bought a handful of properties. Right around that time is when I started… took what I would consider when I got serious and started building my rental portfolio. And then a short time after that, about 3 1/2 years ago, I quit my full-time job to invest in real estate.

Mike: Yeah. That’s great.

Josh: [inaudible 19:36]

Mike: That’s always a good, scary feeling.

Josh: Yeah. Right. Right.

Mike: So talk a little bit about… so in your business now, you’re doing several different exit strategies. Keeping some stuff as rentals, rehabing and reselling, wholesaling, all those things. How do you primarily find deals in your market there? Are you buying from other investors? Are you running an advertising model where you generate leads on your own?

Josh: Yeah. We do… a majority of the properties that we buy are non-
MLS deals.

Mike: Mm-hmm.

Josh: Off the market properties. We do buy some stuff, like everyone else, straight off the MLS. But, you know, tends to be more competition that way. So we do target the off the market deals. We do blanket advertising. We do some internet stuff. You know, we do some pay-per-click. We buy leads from other lead generation websites. We do bandit signs. We do some billboards, some print advertising. So we typically have seven or eight different, you know, lead generation sources going.

Mike: Yeah.

Josh: Another good one for us is direct mail campaigns.

Mike: Okay.

Josh: So…

Mike: Okay. And how’s the market for you? So as we sit here kind of in February 2014, how’s the market feeling for you there? I know a lot of markets… in a lot of markets across the country right now, it’s definitely been harder to buy, because the retail market’s been strong, and really kind of starting to bounce back here. So it’s trickling down to investors, and making… you know, there’s more competition, money is easier to get access to than it has been in years past. You’ve got a lot of, you know, new folks coming in to the investment space. You have hedge funds coming in. Just a lot of different competitive pressures. How are things feeling up in Pittsburgh?

Josh: We have… you know, it always seems like there’s more competition. But we have a fair share of deals going on. Right now, we target… we typically target, you know, a different type of property than a lot of other investors are chasing. You know, a lot of investors in the area that do, like, the flip type business that we’re in are targeting a slightly cheaper property than we go after. So we’re doing a little bit higher-end property than average. You know, we’re not afraid to take on the big renovations, the mega renovations. We are experiencing… you had mentioned the hedge funds.

Mike: Mm-hmm.

Josh: We do have a lot of hedge funds coming into town that are buying, you know, cash flowing rental type properties.

Mike: Mm-hmm.

Josh: But that doesn’t so much affect my aspect of the business, because we’re typically buying, you know, total gut job renovations.

Mike: Okay.

Josh: Or those type of properties. Hedge funds are buying the more, you know, turnkey rental type properties, depending on what their strategy is. You know, might be a little cheaper properties with higher cash flow or better appreciating properties. We do have a good mix of each in the area.

Mike: Right. Right. Awesome. And where do you see things going in Pittsburgh over the next few years? What’s… I always ask people that are active investors what, if you could get your crystal ball out, where do you think things are going in your market over the next couple of years?

Josh: Well, we have such a diverse market in Pittsburgh. You know, we have inner city properties. You know, we’ve got properties you can buy for
$5,000 and $10,000. We have trendy parts of the city where you buy those same type of properties for $500,000.

Mike: Right.

Josh: You know, we have areas just out in the suburbs where it’s a good mix, as well. You know, $150,000 neighborhoods up to, you know, million dollar-plus type neighborhoods.

Mike: Right.

Josh: So where I see Pittsburgh going… you know, we’re an old steel town. We never… you know, we’ve always… historically, we’ve had constant slow and steady appreciation.

Mike: Right.

Josh: We never really had the booms, or we never really had the busts. We do have some up and down fluctuations. But, you know, over the past few years, and in the foreseeable future, I actually… there’s a big rise on inner city living. So for a period of time there, a lot of folks were moving out of the city, because it was getting rough, and, you know, out to the suburbs. But recently, over the last couple of years, there’s been a lot going on to promote city living. We have our 10-year tax abatements. We have, you know, the public transportation, the bicycle lanes, the bicycle parking. You know, different means of transportation and different things that are attracting folks to live in the city.

Mike: Great. Great. Awesome. Well, tell everybody how they get a hold of you if they want to learn more about Acre or about you directly. How do you recommend folks to get a hold of you guys?

Josh: You know, on the internet. [laughs]

Mike: Yeah.

Josh: We have our website, we have… for Acre, our investors’
association, the website is AcrePGH.com. My website is SynergyPGH.com. Or, you know, you can always call my office at 412-837-2555.

Mike: Awesome. Awesome. We’ll put links to all that stuff down below the video here so our viewers can check it out.

Josh: Okay.

Mike: And, awesome. Hey, thanks so much for joining us on the show today.

Josh: All right. Thanks for having me.

Mike: I appreciate learning more about you, about Acre, and about what’s going on in the Pittsburgh market. So we’ll definitely add links for everything below the video, and if you have any interest, just go ahead and get a hold of Josh and learn more. So thanks Josh. Appreciate your time today.

Josh: All right. Thanks for having me.

Mike: All right. Take care.
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