Heroic Investing
Welcome! If this is your first time visiting Jason Hartman's website, please read this page to learn more about what we do here. You may also be interested in receiving updates from our blog via RSS or via email if you prefer. If you have any questions about first responder finance feel free to contact us anytime! Thanks!

From Military to Building Your Own Business with Phil Cefaratti

Episode:

Guest:

iTunes: Stream Episode

Gary Pinkerton hosts retired Navy Lieutenant Commander and founder of Potomac River Advisors, Phil Cefaratti. They discuss his experience owning his own brokerage business. He details his transition from the Navy into owning his own company. He encourages other servicemen to be confident about the opportunities that exist after their service and why they are equipped to be in business.

Announcer 0:04
Welcome to the heroic investing show. As first responders we risk our lives every day our financial security is under attack. Our pensions are in a state of emergency. A single on duty incident can alter or erase our earning potential instantly and forever. We are the heroes of society. We are self reliant and we need to take care of our own financial future. The heroic investing show is our toolkit of business and investing tactics on our mission to financial freedom.

Gary Pinkerton 0:39
This is heroic investing Episode 176. Today I interview Phil suffer rotti Phil served 14 years rising to the rank of Lieutenant Commander in the United States Navy. He served on surface ships the USS Austin lpd for during the first Gulf War in the early 90s. He also did a joint tour with the Defense Logistics Agency and that helped him springboard in some of the stuff that he has done after his time in the military. He’s sixth generation of individuals living in Washington, DC and Northern Virginia and he currently has a realty office there in Old Town, Alexandria, just south of Washington, DC on the Potomac Beautiful, beautiful area. His company specializes in commercial real estate office space, large multifamily, as well as you know, single family or smaller buildings used for both rentals and for people looking for their residences. So he’s a he’s an expert in the Washington, DC, Northern Virginia area. And he offers a lot of advice on how to make transitions from the military, how to be successful in real estate. And then also given that many members of our audience will travel through Washington, DC or Northern Virginia and during their tours, he offers his services to help you find a place either to live in or help rent that place after you move on to your next duty station. He previously worked as Director of Business Development for centaurea software and services provider in the wireless industry. And then, you know, has transitioned from there into working in real estate and he talks about during our interview, what he learned from his early times in business and then having transitioned into being a full time, realtor and commission only individual operating his own businesses. As president and principal broker of Potomac River realtors, he’s leading the charge, I should say, in the DC area as a real estate professional, best versed in contract knowledge negotiation skills, local market knowledge and in depth understanding of business modeling and finance. So please enjoy this interview with Navy Lieutenant Commander, retired Phil sefirat. Hello, everybody. Thank you. And welcome back to the heroic investing show, as I mentioned in the introduction, with a great call coming up here today with Phil, our naval officer, veteran, and somebody who’s got a lot of experience in real estate and business world. They’ll talk all about all of that in a second. And there’s a little bit in the bio. Phil, thank you so much for joining us and imparting a little bit of your experience and wisdom.

Phil Cefaratti 3:23
I really appreciate the opportunity to be here and help.

Gary Pinkerton 3:25
So Phil hails from the DC area. You had quite a naval career before launching into the private sector. So can you maybe just go back as far as you want. But tell us a little bit about your background and how you ended up where you are?

Phil Cefaratti 3:39
Well, I’ve ended up where I started. So I actually grew up in the district. I’m a sixth generation Washingtonian going way, way back, and actually Actually, that’s in the district, not the surrounding suburbs. So I live in the suburbs now went to join the Navy. A year out of college, I wasn’t smart enough to do ROTC or anything like that. And I was on active duty for seven years, served during Desert Storm. And I was in the Navy supply Corps. So I did a couple deployments on board my ship, the USS Austin did a short tour at defense contract management command, which sort of brought me into the defense contract world, obviously. And from there. I decided to stop to get out of the Navy. I stayed in the reserves for a couple years but felt like I was stealing from the government foolishly and decided to drop the reserves I should have stayed in and I’m, I regret that decision every day I got out of the Navy, hooked up with Lockheed Martin doing contracts for a short while, got my MBA from Georgetown, went into the high tech world for about 10 or 11 years, doing a mixture of things finance, consulting, business development things, contracts, and then just sort of decided I was done with the corporate world I hadn’t you know, it’s not like I’m a millionaire or anything at all, but decided to get into the real estate world and I got in at the the best time where time it was 2007. Right as the real estate market was crashing. And I learned very quickly that it’s very much a get your hands dirty kind of job getting out and about, it’s not really what you know, but it is who you know, and who knows you. And the more people you can meet, the better off you are. And I always knew at some point that I was going to start my own business. Even when I was in the Navy, I’ve been thinking about what sort of business would I want to start? I never thought it would be real estate back then. But certainly when I got into real estate, I knew that well, each agent is an individual business. I knew that I would want to start my own brokerage firm at some point. And so I started that at the beginning of 2014, and just celebrated Potomac River realtors just celebrated our fifth anniversary. And it’s just been a great experience, been in real estate now for 12 years. And it’s always something new. And there’s lots of opportunity.

Gary Pinkerton 5:51
So when you were in the high tech world, were you still in the DCR you’ve been basically there your whole life.

Phil Cefaratti 5:55
Well, I mean, the Navy, obviously, I was in various places, Norfolk and Dayton, Ohio, of all places. Now in high tech, I actually I went out to Silicon Valley for a couple years. And then with some family issues, I came back to DC but I actually was did a lot of commuting, I was going up to Boston for a while every week and I was when I was going into Manhattan every week doing various things cuz basically finance and business development type consulting jobs, got it. Okay.

Gary Pinkerton 6:21
So the transition to your own brokerage always want in your own brokerage in the real estate world. And for you personally, was that driven by just better economy of scale, or being able to kind of control your own destiny? What was the big driver there for that?

Phil Cefaratti 6:35
It’s really a couple things. Number one is, I feel I’m a strong leader. And I just always have a very independent streak and knew that, again, at some point that I wanted to start my own business. And the way it happened was, I had moved to run an office for one of the local firms. And it was just the commute was god awful. I had to wear a suit. And I have to tell you, what I tell all my clients, when I first meet them, I say I dress casually, it doesn’t affect what’s in my head and what I know. But I never know where I’m going to end up, I could end up in the nastiest basement in the entire world. And I don’t want to be wearing a, you know, a nice suit down there. So I generally wear jeans, jeans and a polo shirt. And I was having to get dressed up when I was going running the office out there. So I came back to my the office I had been in, in Old Town, Alexandria, and our broker left and they decided to pull somebody from the outside. And in the interim, they brought in the regional vice president who really wasn’t in touch with what’s going on in today’s world. And so everybody started coming back to me and asking me questions, and I wasn’t getting compensated for it. So I said, Well, you know, what, now’s the perfect time for me to leverage what I know. And to start off on my own.

Phil Cefaratti 7:51
That’s a very, I think, a very a story that will resonate with anyone out there listening, who’s in corporate world today, and really in the military, right? My wife used to say, why are you doing that job? Like, that’s not your job. And I said, I know. But in the military, when you do a good job, you get everybody else’s you have to sometimes, because in the end, the missions got to get done. Right. And I think it’s it’s similar to that probably in the corporate world. But it sounds like you ran into familiar territory for yourself there. When you were doing the brokerage.

Gary Pinkerton 8:17
You’re absolutely right. You know, it’s the military in the corporate world are very similar in the fact that you find the guy that’s gonna get the job done, and you ride that horse until he drops.

Phil Cefaratti 8:28
That’s a great phrase.

Gary Pinkerton 8:30
I think some of the listeners probably are not well versed in the real estate world with respective brokerages and the fact you can’t just start one, right? So you have to have some experience, can you just cover that real quick,

Phil Cefaratti 8:42
it’s very easy to get a license, it’s, it’s a very inexpensive way to start a business because you’re really becoming, you’re an independent contractor to a larger brokerage, you as the agent are there to market yourself to buyers and sellers and landlords and tenants and get clients, but the brokerage has the overarching liability and responsibility over you. They are ultimately responsible for everything. So everything has to flow through a larger brokerage, or, you know, somebody like me who’s a small brokerage, and you have to in the DC, Maryland, Virginia area, you have to work full time as an agent, and have performed and done X number of sales for three years prior to having the ability to even take a broker’s test. You’ve taken the salespersons test when you first get in the business. And then you go forward, take more classes, and you can take the broker’s test after three years. But I will tell you, I had done contracts for I’ve been doing contracts since the late 80s. When I first got in the Navy, whether it was shipboard, and then obviously after the fact, and I know a lot about contracts, but there are things that you run into in the real estate world that just don’t make any sense. And you just have to be it takes a couple of years of experience to understand, well, this might happen and this might happen and this might happen. And it’s not necessarily going to go but things are gonna happen. saralee gonna go by the letter of the contract and understanding how to handle that, as well as obviously managing the fiduciary responsibility you have for your client.

Gary Pinkerton 10:09
Yeah. So bottom line is it’s it’s a system that it has some barriers, you have to jump over and some experience you have to have. But it makes a lot of sense to do that.

Phil Cefaratti 10:17
It does. When I, when I first got in the business, I thought, why do I need all this? I’ve got all this experience. And as I was going through things over the first three to four years, I realized, wow, I had been on my on the get go, there would have been problems.

Gary Pinkerton 10:32
Yeah, and interesting. As far as starting your own business as a military veteran, or as you know, first responder that I lumped together with military members, service provider used to, you know, having a very rigorous and not so much, I don’t mean to say rigorous I mean more, very structured life, kind of set out there for you. Any challenges you saw, you kind of stayed in the corporate world, you didn’t go immediately to owning your own business. But any any lessons you’ve learned that you think would be helpful for the audience,

Phil Cefaratti 11:04
I think the biggest hurdle that you need to get through in your mind is that the job you have right now, if you’re still active, either as a first responder, or somebody who’s active in the military, there are things we do in the military and as first responders that very few people do. And we’re held to some pretty high standards of both personal propriety as well as our ability to do things. And God knows what our in God knows what plays and god knows what environment. So it’s getting yourself ready to say, I’ve done a whole bunch of stuff in this world, I can do pretty much whatever is thrown at me, in the private sector. And I can succeed because I have all this experience. And it’s just trusting yourself. And you know, when you’re starting your own business, you’re not getting a paycheck, whether it be every two weeks, or you know, on the first and the 15th. In real estate, I recently went six months without a paycheck, just read crazy, crazy stretch with no paycheck. And then the following six months, I did more in six months than I had done like any 12 month period. So there are it’s managing the ebbs and the flows of business, and recognizing that everything’s going to even out and you’re going to have sort of an average income and you start recognizing what that’s going to be. And again, it’s just trusting yourself and trusting your processes, which is really one of the most important things. Because you don’t have necessarily a set schedule, and you don’t have anybody really over you saying you need to do this, you need to this, it’s you telling yourself, I need to put processes and processes in place, about things I need to do in order to be successful.

Gary Pinkerton 12:44
Yeah. And one piece of advice that I’ve given to people is that I believe it’s a good idea to set some structure, even if you don’t really need it. Like my business, I started in immediately from home and have operated in a home office. But I learned some crazy things because I’d spent 30 years thinking that when I was at my house, it was my time. I mean, it wasn’t always true as a you know, as commanding officer of a submarine, I would get phone calls at home as you can imagine. But other than unless I’m on a phone or something, it was my time to do with what I wanted. And I had challenges with structure as crazy as that seems I would be out mowing the lawn when I was supposed to be preparing for a meeting. Just because I could get distracted. So I think had I to do it again, I might find an office somewhere else that and rent an office for a while to develop that structure that’s just not there on your own because you don’t need it. While you’re more in the service providing you know, active world. And your points there about you know, what’s needed for entrepreneurship to run your own business is the confidence to operate without a parachute, a financial parachute with respect to you know, paycheck and getting paid, and then the persistence to keep going when others are going to quit because that’s super important. When you start a new business. Would you agree with that assessment?

Phil Cefaratti 13:56
Absolutely. It’s very much it is you have to think positively. And I mean, attitude is so very important in real estate, because you could go to an appointment with a new customer that you want to sign on as a client. And if you don’t have a positive attitude, is that customer is not going to become a client. And it’s all about being confident in yourself confident what you know, confident what you’re doing. And we all have our ups and downs and it’s trying to also manage saying, I’m really not up today, maybe we shouldn’t change that appointment did tomorrow or some other time, or I’ve got to turn myself on to make sure that I’m up.

Gary Pinkerton 14:32
Yeah, that the 24 seven commitment that is an expectation in your industry is daunting. And I don’t think anybody should take that lightly.

Phil Cefaratti 14:40
It very much is a 24 seven. The great thing with today’s electronic world is I negotiated a contract when I was going overseas, and you can do a lot with email and phone calls. You can’t show houses when you’re overseas but you can conduct a lot of business and you know you you are still Effectively beholden to your clients, because they’re your, they’re your lifeblood, and they’re going to provide you with your business, your current business, as well as your referral and repeat business. But it very much is a 24 seven business,

Gary Pinkerton 15:11
and the social accountability is there for that and any other business, you know, I think Today I teach my kids that everything you do is being recorded. I mean, it may not actually be, it may not be something that’s going to get shown today, or even 20 years from now. But I think President Trump would would agree that, you know, things that are recorded a long time ago come back to haunt you sometimes. And so the world of social accountability, I think it’s not just about real estate, but it’s been in the realtor world for a really long time. I can remember 20 years ago, when I was my wife and I were to getting our home. Our agent was 24. Seven, and evaluations was her lifeblood. And so now the rest of world is just kind of coming around to that. But your industry has been there forever. Yeah, incredible. That’s a tough industry. But I think your I mean, your advice is, our listeners have heard this from numerous veterans who have been running their own businesses and, and so I’m starting to pull common threads together, and I see it my own business. And I really appreciate you reinforcing, you know, the confidence side, the fact that you bring a lot, even if it’s not specific industry knowledge, the fact that you get up and dust yourself off one more time than everybody else means a whole lot. And the fact that you are somebody that your boss or your customers can count on to be there, regardless of the conditions is a really valuable thing we’ve learned, regardless of what you did, the military or what branch you’re in.

Phil Cefaratti 16:28
That was really, yeah. In real estate, there really are many different types of real estate agents, there’s the number one, you have to be willing, I’m not, I’m sort of in the middle of the introvert extrovert spectrum. So there are times when I have to push myself to go out and meet new people and that sort of thing. But as long as you can communicate with somebody, you can do business, it’s basically boils down to, you can do as much business as you want. It’s a function of how you go about doing it. There are people out there who are the social butterflies, who may not know anything about contracts or real estate really, when push comes to shove. But they can connect with somebody and get them to believe in them. And they might hire an assistant to do all the back office work for them. And they’re going to do tons of business. There are people like me, I have a steady stream of business. I’m not out there glad handing everybody at every cocktail hour or anything like that, because that’s just not me. But I trust that the people that are going to affiliate with me are the people that trust my business sense and my knowledge and the fact that I’m available 24 seven, and I represent them, and I’m not out there just looking for the next client.

Gary Pinkerton 17:36
Yeah, that is really, really good advice, I think. And my bottom line is that the veterans from military or first responder world, whether you’re you consider yourself an introvert or an extrovert, I consider myself an introvert from the definition that if going to cocktail parties and glad handing as you, as you mentioned, drains you at the end of the night, as opposed to making you super wound up and you can’t sleep, that I’m an introvert because I get drained after going to an event like that I enjoy doing it. I really enjoy the stories that I get from people. I’m not that nervous at doing it. But it does drain me. So that makes me an introvert as far as I understand it. But whether you’re an introvert or an extrovert, you’re going to do well, confidence should not be the thing that prevents you from going out on your own or going for that really big job. We come out whatever your dream is, because you’re going to just kill it in my opinion.

Phil Cefaratti 18:24
I agree. I mean, again, again, you know, think about for all the veterans and first responders, think about we’ve done, think about the jobs you’ve done 99% of the people out there have not done anything close to that.

Gary Pinkerton 18:36
You can do it. Yeah. Awesome. Awesome advice. Phil. So you’ve do both commercial and residential. A little bit about your specific practice. A lot of the people who are listening to this show are in the DC area or travel through there on assignment, do you offer and I know that you show properties and you do business with people who are going to live in the property? And also investors? I think is that true?

Phil Cefaratti 18:56
Oh, sure. I pretty much do everything. I even have people who are going to live in a property for just one or two years. And then plan on like, especially I had a to Air Force officers separate separate couples come into town a little over a year ago. And they both plan on they’re going to be stationed here once in grad school ones at the Pentagon. And they’re going to be here for a couple years there. They’ve already asked me right away, say you do property management too, because we’re going to be out of here but we want to hold it as a rental property for either whether we come back or you know, for just financial gain long term. The answer to that was Yes. Oh, absolutely. Yeah. You know, I don’t take I don’t actively seek property management. But for you know, my personal clients that I help buy houses, I’ll absolutely do that for him.

Gary Pinkerton 19:42
What is the commercial world look like? Is it apartment space that you’re you in involved with? Or is it small, like strip malls are are a little bit of everything,

Phil Cefaratti 19:51
but primarily the commercial real estate that I’ve done is clients looking to buy or lease small places to start their own businesses and occasionally, I’ll lease small office space for people who are looking to lease their space. I’ve got a client right now I have two clients actually actively looking to do sort of small medium sized startup restaurants. So I’m in the process. Both of them are in DC, one looking in Georgetown, one looking in Cleveland Park. And so it’s just a function of finding the space that’s really going to fit their clientele as well as obviously their budget and working through those deals.

Gary Pinkerton 20:27
Those are exciting those some people who don’t have confidence problems when you’re going to start a restaurant in the DC area. That’s awesome. Exactly. Yeah. So tell how to how did the listeners find you and your website and any material that you think would be helpful?

Phil Cefaratti 20:42
Sure. Well, my website is become a river realtors calm and this is like the comic River. And then realtors are EA l to rs.com. They can Google my name, because I’ve done a whole bunch of stuff. I got a bunch of stuff on the web, fill separate ready CF AR a TTI, you’ll Google meaning you’ll find that I ran for political office twice and Alexandria never won. But that’s life. And we’ll never run again, politics is just a little too dirty and ugly for my taste. Yeah. And my cell phone, you know, I always list my office number, but my cell phone is the way to get me and that’s 703-371-7601. And I’ve got it on me 98% of the day. So I’m always available.

Gary Pinkerton 21:27
That’s awesome. Well, thanks, Phil, for your time with this audience. I have no doubt that you’ll hear from some of them. Because as I said, they’re always traveling through that area. I went there four times. So even in the Navy, finding DC wasn’t very hard. Thank you. Thank you, man. For all your inspiring words you given our audience and I look forward to personally staying connected much longer.

Phil Cefaratti 21:50
That sounds great. And Gary, the one thing I would I would also say is simply if somebody wants to talk, call me and just talk about, you know, going out on their own and starting their own business. I’m happy to do that too. Obviously.

Gary Pinkerton 22:00
There you go, guys and mentors waiting, ready to go. Thanks, Phil. Appreciate it, buddy.

Phil Cefaratti 22:05
Thank you, Gary, take care.

Announcer 22:08
Thank you so much for listening. Please be sure to subscribe so that you don’t miss any episodes. Be sure to check out the show’s specific website and our general website heart and Mediacom for appropriate disclaimers and Terms of Service. Remember that guest opinions are their own. And if you require specific legal or tax advice, or advice and any other specialized area, please consult an appropriate professional. And we also very much appreciate you reviewing the show. Please go to iTunes or Stitcher Radio or whatever platform you’re using and write a review for the show we would very much appreciate that. And be sure to make it official and subscribe so you do not miss any episodes. We look forward to seeing you on the next episode.