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Going from 1 to 100 rentals: how real estate investor Ron Zuccaro is scaling his portfolio

by Team Stessa, posted in Investor Stories

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The Stessa Investor Series is a monthly spotlight on real estate investors who are building and scaling their businesses. This month, real estate investor Ron Zuccaro explains how to generate enough passive income to stop working for someone else. According to Ron, thinking outside of the box, growing smart, and automation are three key ingredients.

For our first Investor Series profile, Stessa interviews successful real estate investor Ron Zuccaro, who currently holds 6 rental properties in the Kansas City area, with ambitious plans to scale up to 100 in the near future.

Ron explains how beginning investors can generate enough passive income to replace ordinary income from their day jobs and achieve financial success and security.

1. What made you get involved in real estate, how long have you been investing, and how does real estate fit into your life?

Answer: I’ve been interested in real estate from a very young age. As a child, I watched my grandfather own and manage a few single-family homes in the San Francisco Bay Area. My family has always been a source of inspiration and an example of success. My curiosity and their influence made me decide to pursue a degree in Business Administration with an emphasis in Real Estate and Finance.

That formal education was just the first step. My wife and I started investing in real estate right after we got married. When we purchased our primary home together, we converted her condominium into a rental unit. That first condo was the foundation of our long-term strategy to grow our real estate portfolio. We learned a lot about the business of real estate rentals and leveraged those lessons – and the equity from our first unit – to begin expanding our portfolio.

Long term, our goal is to build our real estate portfolio to generate enough passive income to replace our ordinary income. For the time being, real estate is a “side hustle” but we plan on it being much more than that in the not too distant future.

2. What does your portfolio look like now, and how do you see it growing?

Answer: We currently hold six single-family homes in the Kansas City market. It made sense to start investing in single-family homes because we were familiar with this asset class from self-managing a house in our home market. Our property in Kansas City

Our next step will be to acquire smaller 16- to 32-unit multi-family rentals. Over time we hope to build a portfolio of 50 doors, possibly going up to 100 doors or more.

3. How would you describe your investment strategy for this growth?

Answer: We’re using a conservative multi-step strategy to increase the number of doors we have under management. Simultaneously, we’re ensuring we obtain a solid baseline of cash flow as we grow.

To date we’ve built our portfolio by ourselves. Moving forward, we understand that to scale up we may be able to achieve our investment goals more quickly through partnerships. So, we’ll be looking at bringing on partners for future real estate investments.

4. Why did you start using Stessa?

Answer: I started using Stessa because the platform makes it very easy to scale up. It eliminates the bottlenecks that traditional spreadsheets create.

Spreadsheets might be effective for one or two properties. But, as you grow, it’s very difficult and time consuming to build a financial management system that is ‘anti-fragile’. By that I mean a system that both withstands shocks and actually improves because of them.

I was looking for a way to spend less time doing data entry and validation and more time doing in-depth analysis on our investments. Stessa offered what I was looking for: I was impressed with its capability to automate many of the routine tasks I had been doing manually using old-fashioned spreadsheets.

5. How do you use Stessa to track and manage your properties?

Answer: I’ve integrated Stessa into our entire real estate portfolio financial management system. The platform is incredibly useful in analyzing the monthly performance of my rental operations. I also use it to assist with higher order long-term investment performance analyses.

Stessa also continues to be enhanced regularly. The Stessa Team does an extraordinary job of incorporating feedback and building powerful and intuitive product enhancements, and is extremely responsive to questions.

6. Looking back what is the #1 thing you wish you’d known when you first began investing in real estate?

Answer: I wish I had stepped outside of the cozy confines of my comfort zone faster by investing outside of the market where I live.

I live in Southern California, and it can be extremely difficult for would-be real estate investors to get started because the market here isn’t that favorable for beginners. Getting to know a market where you don’t live does take a lot of work and time, but I’ve found that it is well worth the effort.

7. What would you say is the #1 highlight of your real estate investing so far?

Answer: That would definitely be stepping outside of the box and taking an initial scouting trip to Kansas City. It was exciting to meet with the real estate professionals there that I would build my core team with.

Shopping properties with my realtor and meeting with my property management team to discuss their approach and philosophy was important to make sure we were all on the same page. Once we’d established a positive working relationship, I had the comfort level needed to start acquiring properties outside of my home market.

8. What is the #1 mistake you’ve made that other investors can learn from?

Answer: My biggest mistake was not focusing on real estate investing sooner. It’s easy to follow the herd by investing in mutual funds and the 401(k)s and IRAs that a ‘day job’ offers. There’s nothing wrong with those types of investments. However, I have definitely learned that they aren’t the quickest and most direct path to financial independence and building an anti-fragile personal balance sheet. At least in my personal experience.

9. What is your favorite book on real estate investing?

Answer: There are quite a few, but here are a couple that immediately come to mind. In The Richest Man in Babylon, George S. Clason writes about putting your money to work for you and building a strong financial foundation. These are two truths that have withstood the test of time.

My other favorite book on real estate investing is Multi-Family Millions: How Anyone Can Reposition Apartments for Big Profits, by David Lindahl. He describes the blueprint I’m going to follow as I move into multi-family housing during the next wave of my real estate investing.

10. What is your favorite thing about Stessa?

Answer: There are actually two favorite things that I really like about Stessa. In the short run, I’ve been able to quickly move my accounting into the platform and integrate it with automated analysis for each property. I can’t tell you how extremely help that is. Next, the platform is continually evolving offering features that quite frankly I didn’t realize I needed. It’s exciting to see what comes next.

Going from 1 rental property to 100

Ron Zuccaro has developed a real estate investment game plan that anyone can follow. All it takes is the right focus and mindset, determination and education, and automating as much as possible using an online financial management system such as Stessa.

  • Start with a single property you’re familiar with, like a single-family home
  • Learn from that experience and leverage your equity to buy more property
  • Don’t be afraid to invest outside of your home market, but be sure to lay the groundwork first
  • Automate as much as possible as quickly as possible
  • Always be learning – with books, networking, and investment groups
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