Curious about making your mark in the real estate world? What if you had an expert to guide you, someone with a knack for structuring deals and a proven track record?
In this episode, host Corwyn J. Melette sits down with the “Magic 8-Ball” of real estate, Joe Arnao, to uncover the secrets of successful property investment. Joe, a real estate veteran, shares his journey from a developer to a seasoned coach, revealing how he and his team got creative with financing and found win-win opportunities for everyone involved. He provides invaluable advice for both new and experienced investors, emphasizing the power of knowing your “buy box,” building a strong team, and avoiding common pitfalls.
Joe Arnao is a seasoned real estate professional and coach with over two decades of experience. He’s an expert at structuring complex deals and has a deep understanding of the real estate landscape, from development to traditional brokerage. A former brokerage owner in three different states, Joe has spent years in leadership, helping agents and investors navigate the industry.
Key Takeaways:
- 3:20 Joe’s start in real estate and lessons learned from early development projects.
- 6:55 Creative deal structuring: condo conversions, self-financing, and leveraging contracts.
- 11:48 Why win-win negotiations are the only real way to close deals.
- 13:00 Understanding your “buy box” and how to find the right investment opportunities.
- 15:06 How new investors can enter the market without large amounts of capital.
- 18:15 The risks and opportunities of flipping, holding, or short-term rentals—and why zoning matters.
- 20:12 Joe’s coaching approach: identifying strengths, weaknesses, and building the right team.
- 21:47 Joe’s “mic drop” advice: don’t sell too soon, and always ask questions.
Connect with Joe:
- Linkedin: https://www.linkedin.com/in/joearnao1
- Instagram: https://www.instagram.com/joearnao/
- Email Address: joe@4wstrategicconsulting.com
Connect with Corwyn:
- Contact Number: 843-619-3005
- Linkedin: https://www.linkedin.com/in/cmelette/
Shoutout to our Sponsor: Country Boy Homes
Do you remember your grandma’s front porch? You know that spot where stories were told, kisses were stolen, and sweet tea was always being sipped. Now imagine giving your family a place to make those same memories, but in a brand new, energy-efficient, and home that was built just for you. At Country Boy Homes, we help folks just like you find that forever feeling.
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JOE:
Find somebody that’s an expert in that marketplace and then find out what’s working. Ask them what’s selling now. If you’ve got to flip it, what’s selling? What does it need to look like? What’s the right price point that’s going to go quickly? Where’s the biggest need? And then target those properties. If you’re going to buy and hold it, you have to make sure that there’s going to be, it’s a healthy neighborhood where there’s people coming in or it’s stabilized and it’s not going to be emptying out anytime soon, whether they’re jobs. If you’re going to do short-term rental, which a lot of people like to do, there’s some risks in doing that. Right now, the law, you have to make sure the zoning is correct. Be aware that zoning might be changing at some point because there has been a lot of areas where short-term rentals have not been allowed.
CORWYN:
Good morning, good morning, and great morning, guys. Welcome to another fabulous episode of Exit Strategies Radio Show. Hey, I am your host, Corwyn J. Melette, broker and owner of Exit Realty Low Country Group in beautiful North Charleston, South Carolina. Hey, if this is your first time listening to this show, you sir or ma’am are in for a treat because our mission here is very simple. That is to empower our community through financial literacy and real estate education, guys. We’re legacy building. That’s what we do. Guys, look, we are set for an amazing show today. I cannot wait to get into it, but always got to give a shout out to you who listened to us faithfully from Hollywood, what you know no good, all the way up to the monkey’s corner. Y’all know my mama live out there, y’all. They’ll listen to us in the Charleston region, but those who tune in the PD and the Muddy Mullins and Marion County, guys, thank y’all so much for tuning in and listening to us there as well on WJAY. Please continue to give us feedback because this show is catered to you. Got to give a shout to Elder and Pastor Evans. If I don’t put that scene on that guy name, that dude would snatch me up and I love him for it. Guys, look, let’s get started today. Now, today we have someone who essentially is, it’s kind of like you got the magic eight ball. Y’all remember that, y’all? Some of y’all old enough. Y’all about to tell y’all age. Y’all remember that magic eight ball? You can kind of shake it up and you turn it over and this little thing will kind of roll inside of it in the water and the liquid or whatever, and it’ll pop up and give you an answer. We have that kind of guy with us today. None other than Joe Arno. Joe is like the guru, like the magic eight ball. He’s the guy that you go to because you got some questions about some real estate one way or another, whether you are in the industry or whether or not you’re on the other side. Joe is that guy. He is the magic eight ball and I love it. Joe, how are you doing today?
JOE:
I haven’t been called the eight ball cue ball. Yes, never an eight ball. I love it. I’m doing great. Thanks, Corwyn. Thanks for having me on.
CORWYN:
Well, look here, I appreciate you taking time out of your busy schedule, Joe, to be on with us. And just so you know, I’m always available for introductions. So if you need me, just call, just give me a call and I’ll promise you I’ll make it worth your while. So if you don’t mind, Joe, give our listeners kind of a high level overview, introduce yourself, who you are, what you do, and let’s have a conversation.
JOE:
Absolutely. Sure. So I’ve been in real estate since 2003, not much before you got into it. I started out with a developer and that was where I really got my introduction into how to put deals together, how to access money and how to be creative with not just the financing, the negotiations and putting projects together. So I opened up a brokerage with him and then I spun off. I had a couple other brokerages myself in three different states and then ended up getting into leadership and I’ve been in front of agents for a long time and helping agents. Now you say the cue ball, the eight ball, cue ball, the eight ball. And I think what I want to add on to that is I know enough to do stuff on my own. And I also know enough, if I don’t know it, I’m bringing the right person in.
CORWYN:
That right there is a mouthful, man. Look, cause we don’t know everything, but if we know enough people, then we can figure out anything. I love that. Now, Joe, if you don’t mind, what kind of got you, you talked about how you entered into this arena, into this space, if you will, but what was the bug that kind of drug you, if you will, over into this? And what I mean by that was what was the calling that said, Hey, you know what? I’m going to explore this particular industry and this particular arena.
JOE:
So it was a great opportunity at the time. I had a three-prong approach going into it. So the developer was on his own. He didn’t have his own broker. So I saw the opportunity to go in and sell his properties, create a brokerage within, and then market his properties. We all cut up the commission and have fun. The other side of it was he was paying people to go out and hunt for him and look for these projects. So I took that piece on too. And then the third piece was to do some traditional brokerage, some general brokerage buyers and sellers, do my own listings and add a third layer of income into the company. Reality is all the fun was in the development, the hunts, looking for properties. We had a very unique opportunity that we were going after, looking for, we were up in New England. I don’t know. I’m in North Carolina right now. You might be able to tell him not local. We were up in New England and his game was to buy these multi-unit properties. And then they were mostly seasonal on the ocean or near the ocean or on a lake or near a mountain. And they were seasonal cottages with a main home on it where the owners lived. We would buy these units and they range from six units up to 32, depending on the property. I think that was the highest we had was 32. And we would structure a deal where we would buy the property at some point during this. Sometimes it got creative, I like I was saying, and that’s where the fun starts, right? It’s how do you put these things together? So what would we do is we would put these deals together with the goal of changing the ownership from single property to condominium. We devised a plan. He came up with a plan to be able to convert the entirety of that structure because they’re all individual structures for the most part, cottages, be the condo. And then the infrastructure would be septic and water. So low costs on maintenance fees and HOA fees. And they got a home. A lot of people that wanted to be in those resort areas could finally get in there at a lower cost. They finally get that piece of Cape Cod or that lake house or whatever it is that they wanted where we were so that they could get into that and then start building wealth on top of that.
CORWYN:
So condo conversions, I love that. My early years in the industry, that was a lot of what took place because it was difficult, challenging, if not all but impossible to get permits for new construction because there was so much, so many people that were applying for permits for new subdivisions, et cetera, et cetera. So you guys crafted what I just heard you say is crafted this strategy on how to go in, take these over, and then work through them and provide opportunities. So once you guys figured that out, I’m assuming you guys did it for a while, but my next question, Joe, is what was next? What did you guys do after that?
JOE:
So the goal was to hold on to them, hold on and honor you on each project and continue to rent them out. There were seasonal rentals. So we created a property management company to handle the short-term rentals. And then we took on other clients, people who were buying the properties in that same development, we would handle their properties as well. We ended up having a good size property management firm on the short-term rentals. This is way before Airbnb and the automation and all that. So this is early on. I think we started to see, I can’t even think of the name of the company that was. It’s gone now. I think Airbnb bought it up and absorbed it. We were young in that and it was more hand-to-hand than app related. So that was the major piece of it. And I think where the value comes in this conversation is we didn’t have to have a lot of money to make this happen. There is money out there for people that want it. As long as there’s some kind of equity, some kind of collateral, not to be a lot, that’s to be enough to satisfy the lender. And now I understand you lend out as well. You lend out, correct? Let’s take a short break.
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CORWYN:
Yeah, so we’re definitely in that space now working with investors and helping investors. So that’s definitely an interesting place to be.
JOE:
It is. So that was one way we would structure these deals, where we would buy the property and then convert it. The most common that we tried to do, and often did successfully, was to structure a deal where the owner, the seller, would self-finance it. And we would pay them off as the property started to sell. That was a nice one. The third option, which I thought was, this can happen. Anybody can figure this out. If there’s an opportunity, it doesn’t have to be a multi-unit property. It can be a single family. It can be whatever it is. There are opportunities out there. So what we did is one of the most fun and most challenging of the processes we had was to go under agreement to purchase it, market the properties under that person’s name, and then in one or two days, close out. The last one we did, it was 32 units. We closed out 16 units in two days and then bought the property. So we ended up not using any of our own money. We took all the money from what came in, and then we just paid off the seller. And then everything else after that was not a profit, but it came to the company.
CORWYN:
That is awesome, man. So you talk about the ability to structure the deal and understanding that there’s more than one way to get something done. And oftentimes people approach this stuff, Joe, with tunnel vision. There’s only one way to get this done. But when you figure it out and understand there’s multiple ways, then you can figure out how to get the win-win for everybody. The seller has an agenda. They want to win. Buyer has an agenda. They want to win. And those people that create the win-win are the people that win. Whereas when there’s someone losing, everybody’s lost. That’s right. That’s fair.
JOE:
Yeah. Going and playing hardball is not a great way to get a deal done, besides the one.
CORWYN:
Very true. So development, you said that you found is more fun, is what I heard you say a little earlier. And by fun, you like the creativity, the ability, the quote-unquote, it’s chess versus checkers. Seemingly on the brokerage side, oftentimes there’s a lot more checkers than it is chess. Does that sound about right? Yes. So give us some insight into that in your experience for, let’s touch across, let’s touch on those folks who are looking to either be in that development space by being an investor or otherwise, those in a real estate space, but also the traditional mom and pop investor. What does this look like, if you will, across each genre?
JOE:
I think there’s one commonality is the investor needs to know what they want. They need to understand what they’re comfortable with, what price point, what type of property. And then once that’s defined, then you find your target market and you research and you find that people that own those properties and you go right at them. And that’s what we were doing. We were scouring, ended up in three different states, scouring all these different properties up and down in New Hampshire, Rhode Island, Maine, actually four states, Massachusetts. We would go after them, look for them, and then just approach it. And because we knew how to put the deal together, we had a track record, we had the right people with us, we were able to structure the deal properly and everybody won. And we listened to what the client, what the owner wanted to do. And I mentioned earlier, we had options. So we talked through which one was going to work with them. We start with one’s most favorable to us and then work towards what’s going to happen. There’s no loss in doing that. There’s anybody can pick up the phone or send a letter or knock on their door, if you’re that brave, and just ask. It’s that simple. And then if they say yes, and you’re all of a sudden you realize you don’t know exactly what to do, call somebody that knows what to do and bring them on. So here’s the deal. I’d much rather have half or 75% or 50% of something and then nothing of something.
CORWYN:
Exactly. The opportunity to joint venture partner or otherwise creates an opportunity, one, to get the deal done. Number two, to generate and make an income because the alternative is that neither one of those things happen. One, the deal doesn’t get done, or at least doesn’t get done by or through you. And then subsequently, there’s no revenue. You make no money, which ultimately if you’re planning on investing, that’s what you’re planning to do. People invest money to make money. Yes or no? That’s right. Okay. So Joe, give us, if you don’t mind, an example on that. And then let’s shift and talk about it from… Let’s get some other insights into it from other perspectives that you may have, but go ahead.
JOE:
So looking for a property, the simple one, I think an easy entry into this would be to go after, find investors who are not living in that property, their rental properties, and start asking them if they’re thinking about selling now or in the near future. You don’t have to do the deal right now. If you get that conversation started, it might not be today. It might not be six months from now. It might be a year from now. They’re not easy pickings because obviously if they’re cash flowing, they want to keep it. At some point, every investor is going to want to get rid of their property. Some people have a three-year or a five-year plan where they’re going to flip it. So speaking with other investors, joining investor groups, they’re all around in every city. There are investor groups, real estate investment groups that you could talk to and share ideas. When it comes to coming up with the funds, if you don’t have the money, maybe you have a talent. Maybe you know how to build. Maybe you can go in there and find somebody with the money and say, hey, I see this property. I can fix it up. I just need the money to get going. Trade your services for money if you can, once you find that property. Some people like duplexes. Again, easy entry, you get two doors instead of one. If one’s empty, it’s only 50%. You have a single family, you get one empty, it’s 100% not generating. So there’s different ways to look at it. Some people want a certain box, a certain type of home that’s going to be in a nice neighborhood. It’s going to be more money, yet there’s going to be more rent due on it. So it all depends on the money and mapping out, if you’re going to be renting this, how to make sure that you’re cash flowing.
CORWYN:
So what you just, I just heard you say the underline that you just said is the buy box. What is it that you’re looking for? And that kind of goes across all genres. If you’re an agent, who’s your ideal client, who you’re seeking to serve? If you are an investor, then what is your buy box? What type of properties, location, otherwise, are you into? If you’re a developer, again, the same thing. What’s your ultimate goal and product? So what are those parameters that you search within? From your experience, and you’ve done a number of things, Joe, again, you’re the magic eight ball. Where a new investor, what kind of things should they be targeting someone’s season or another in the spectrum? What kind of things should they have moved up to, if that makes any sense, from your perspective? What should be comfortable or what they need to be comfortable with that they should find what they’re comfortable with. But as a new investor, most have no idea. So what kind of things do you suggest or recommend as potential buy boxes?
JOE:
To start to figure it out? Yes. Yeah, that’s a really good question. If I were just getting into this, I would want to speak to somebody else that’s doing it locally. Okay. If you’re going to be investing locally, which you don’t have to do, I know agents that are in North Carolina and they’re investing in Indiana, doesn’t matter. Find somebody that’s an expert in that marketplace and then find out what’s working. Ask them what’s selling now. If you got to flip it, what’s selling? What does it need to look like? What’s the right price point that’s going to go quickly? Where’s the biggest need? And then target those properties. If you’re going to buy and hold it, you have to make sure it’s a healthy neighborhood where there’s people coming in or it’s stabilized and it’s not going to be emptying out anytime soon or their jobs. If you’re going to do short-term rental, which a lot of people like to do, there’s some risks in doing that. Right now, you have to make sure the zoning is correct. You also have to be aware that the zoning might be changing at some point because there has been a lot of areas where short-term rentals have not been allowed. So look at short-term rental. Okay, if short-term rentals go away, can I do mid-term rentals there? If mid-term rentals go away, can I do a long-term? If those don’t make sense, can I sell it and still make a profit? So all those things you got to take account of. To get to the nut of it, I would find somebody locally that is investing in themselves, speak to a really knowledgeable real estate agent who works with investors and find out what’s hot, what’s working. Don’t try to make it up on your own.
CORWYN:
So Joe, what I heard you say in all of that was this could require some work. Oftentimes people just, the least little thing I spoke, I was on a conference call actually this morning in regards to that, where I made a reference, following the reference of someone else in the industry some years ago, where so many people just go surface level and they try to go wide versus drilling down and going deep in a particular subject matter. If you’re going to work in this space and be in this space, then it’s probably more ideal to go into whatever area, arena, whatever it is. That way you’re knowledgeable about it and therefore you know how to, where the pinch points, where the pains are and able to get past them. So that makes perfect sense. Now Joe, you’re a coach, yes, no? Correct. All right. So how do you coach people? What insights do you give them to help them to kind of move through this particular space?
JOE:
It’s, well, my coaching is in the real estate world, not in the investment side. So I work with real estate agents and coaching them, making sure they uncover their real desires and where their weaknesses are, where their strengths are and build on that. And if I were to reply that to an investor, it would be very similar. What are your weak points? What do you think you know? And where’s the fact behind all that? Who do you know to help out? Who’s going to bring you in? Who are you going to bring in to build a team? And what’s going to keep you up at night? That’s the biggest thing when you get into investment. What’s going to keep you up at night? Are you going to be sweating over the little things? Because there are many. If something goes sideways, how are you going to be able to handle all that? And what is it, where’s your breaking point? That’s what I would try to figure out.
CORWYN:
Okay. Sounds good. Sounds good. So Joe, we’re quickly getting to the end of the day show, but I want to ask you this question. And I refer to it kind of as that mic drop question. I mean, you’ve been around for a while, over two decades. You have been in service and leadership in the industry. Thank you so much for what you do and what you’ve done. And then on top of that, you’re working with people that serve people in the spaces that we have spoken about otherwise. So if you had to, knowing what you know now, if you had the ability to go back and quote unquote do or otherwise be able to start over, what would you have done and what would you have done differently than that you believe would have you much further than where you are now?
JOE:
Yeah, I would have said don’t sell. Don’t sell. Hold on. I was in it during 2008, seven and had to go. I couldn’t, I was just that point. I was in all, everything was in real estate, my whole world. So I had to go. If I could have held on a little bit longer, I would have done really, really well with all, with that stuff. So yeah, don’t sell and ask questions, anything you don’t know, you got to admit that you don’t know anything. Always, always seek out the professionals, the experts and ask questions. Don’t try to figure out it on your own.
CORWYN:
Very true. That’s a great statement there because sometimes we do act as if we do know all when we know nothing. So I definitely can agree with you on that. So that dude said he wouldn’t sell and said, no, don’t sell. I love it. I love it. And that’s definitely a high insight. So Joe, we quickly come to the end of the day. So I really want to thank you for taking time out your business schedule to be on with us today. It really means a lot to me. Thank you for sharing the insights that you have.
JOE:
Yeah. Thanks for having me on.
CORWYN:
It was a pleasure. Awesome. Awesome. So for our listeners, guys, look, y’all know, y’all know, y’all know, but y’all going to get it anyhow. All right. Y’all know, let’s go right here. Y’all know how I feel. You know what I say? You always put the two of those things together and I give it to you this way, which is to tell you that I love you. I love you. And we going to see you guys out there in those streets.
