Johny Fernandez: New Jersey commercial real estate investor Bruce Cenicola. And
Daniel De Stefano had been friends since they were teenagers. Years later, they
became commercial real estate investors and partners
Daniel De Stefano: I come from a family of barbers. I was a barber. And I had
gotten a residential real estate license, then got VA with a partner who
is my accountant. And we tried to do a deal together and it fell through, I
didn't have any money, and then we borrowed some money. And we were able to
build our first building. And I did that in probably 1972, I was 22 years old,
and just came home from Vietnam. And probably some years later, maybe seven
or eight or ten. A couple of buildings later, then Bruce, who I've known since
I was 13. And, and our other partner, Al, I brought them in and they became
equal partners. And we just developed from there on out, I guess you can add
Bruce Cenicola: The first deal that Al and I were in with Danny turned out to
to that.
be it turned, it got turned down by the town where we wanted to build. And we
thought we made a big mistake. And we had invested a lot of money in lawyer
fees, and engineers and so forth. And so we were very disappointed. And as it
turned out, we'd sold the property for a profit. And it turned out to be a very
good deal. And as it turned out, it went on and we got involved in many more.
Johny Fernandez: The decision was life changing. The men have spent nearly the
last several decades building their business. Their piece of advice for
freshmen commercial investors is to do your homework first.
Bruce Cenicola: They need a little bit of an education to get started
Daniel De Stefano: You can't just you can't wing it like we did, right. And I
don't know that they want to replicate what we did, you can't go borrow a few
bucks and get a mortgage, and borrow a few more dollars and put together a deal
and then get another mortgage. And it's not quite that simple anymore. It just
takes so much money nowadays to get to get started
Johny Fernandez: Tnhe day we caught up with them. They showed us one of their
several spaces in New Jersey, walking us through the large renovated shopping
plaza, home to a variety of restaurants and businesses. How do you know if a
property or space is a good investment versus something that, you know, may
sound good, but may not be good?
Daniel De Stefano: I think some of those are just experience, experience and
experience. I mean, you know, gut feelings and and we both had research.
Oh, yeah, a lot of research. But I think we both had experiences where I've said,
Bruce, come and look at this, I think it's great. And he'd get out there and
say, are you kidding me? You want to buy this or and the same thing in reverse or
with one of the other partners? It just you know how it kind of catches you and
so forth. But I think it's you know, the kind of the gut feelings and the
research. A nice lot the building across the street, what's zone, what's around
those kinds of things. Like that's worked for us.
Johny Fernandez: Bruce and Danny shared with me their tips for how to make sure
freshmen investors should handle their finances. You guys have been doing this
for years. And for someone that's freshly starting out, what do you think
they should be on the lookout for when it comes to dealing with like a bank or
a lender? What advice would you give to them?
Daniel De Stefano: Shop around. You know, certainly because there's there's
major major variances in different deals and what banks will offer and what banks
won't offer.
Bruce Cenicola: And I think a good idea would be to develop a relationship
right? with a particular bank, somebody that you can pick up the phone and talk
to. Maybe, you know, maybe it's your personal bank, you know, maybe not, but
I think you need some kind of personal relationship, which you know, takes time
to do. But yeah, once you get started, right, it kind of snowballs. It'd be
nice if you had access to some capital, like family money, good friends with a
lot of money that are willing to invest. That that's probably the easiest way to
do it
Daniel De Stefano: is start small, maybe a couple of two family houses or, you
know, one or two stores, maybe you get into a situation with the seller will
take back a mortgage or something like that. Try to get started. Try not to
suck every dollar out of it. Slow mature. Now, again, I said a minute ago
about being conservative. I mean, slow maturing, is what we did and and I would
do that all over again. But the guy who came along and bought this and then that
we got mortgage on top mortgage on top of mortgage mortgage, probably made a
ton of money and made a ton of money As long as things were going good. Once
there's a hiccup, you know, now there's another issue. Well, I think that if I
was doing it over, I would do it just the way we did it now,
Johny Fernandez: the veteran investors say not everything that shines is a good
deal. And then one tip that has kept them afloat is to prepare for the
unexpected.
Bruce Cenicola: I think the main thing is prepare yourself for the downtime,
because there will there be doubt there will
Daniel De Stefano: There will absolutely be down times, I can tell you with 100%
certainty that the stock market does not go up every day all the time. And it
doesn't go down every day all the time. And the real estate market doesn't
always go up. And it doesn't always go down. There's ups and downs. I think
adding to what Bruce said a second ago, I think that not taken not trying to
suck the company dry. Don't take every penny out, because you're going to need
some next month or next year. And and I think that philosophy has paid very good
dividends for us. I mean, we've had a vacancy and whatever it is, we were
drawing, you know, we had money built up. So you know what we were able to
draw we you know, it stayed the same, and they wipe it down. But I mean, he
tried to keep it stable because we didn't take Maxi mortgages. It worked.
It worked good for us. If you suck every penny out of it. As soon as there's a
bad time, you know, you have four stores and one of them goes out of business.
Now, what do you do? You know, it's great when it's 100%. rented. Oh, my
goodness, I'm making 27%? Yeah, well, if you lose 25%, now you're only making 3%
or 2%.
Bruce Cenicola: So what he's saying is, don't lease the Mercedes yet.
Daniel De Stefano: Yes. That's right. That's exactly right. That is 1,000%.
Right.
Johny Fernandez: And when it comes to getting financing, the men shared with
me that they've all worked as a team,
Daniel De Stefano: I think it's much more difficult to get money now than it
was years ago. I mean, you know, years ago, you know, you knew somebody at the
bank, he had a little bit of a relationship with them, and so forth. I
think getting money was a lot easier. And I think years ago, we did a lot of
private money, where we would borrow literally borrow money from from people,
we go to you and if you had some money, you got $50,000. Well, if it's in the
bank giving you 2% we'll borrow it from you, it will give you four and a half
percent. And, and and do we do that dozens of times? I mean, not one or
three or five, a lot, a lot. And we've had situations where partners, some
people had more money than others, some of the partners had more money than
others. So everybody put up $20,000 and anybody who's got any more money,
they'll lend it to the company. And we've done those things. Our partner Al
did a lot of those a lot of those deals and figured out a lot of those deals. Al
was the most studious of all of us. Allen, Bruce and I went to high school
together, we know each other for 60 years. And I can still hear Al out
saying oh my god, you want to spend what? How much? and he used to go this
uncharted territory. Is that right? That's correct.
Bruce Cenicola: That's a true.
Daniel De Stefano: So I hope that answers your question, but study and be
conservative and do your homework.
Bruce Cenicola: That's it. In a nutshell.
Johny Fernandez: In New Jersey. I'm Johnny Fernandez with deBanked News.