$200MM In Six Years the CRE Success Story of Stony Stonebraker on 9×90™ (#20)
9×90 Episode 20
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About this episode
Discover the secrets this industry titan used to thrive in the commercial real estate world. This informative discussion explores the dynamic journey of one of Adi’s godfathers as he transitioned from tech executive to commercial real estate syndicator. This unique episode focuses on Stony Stonebraker’s unique approach to value-add opportunities in the multifamily asset class. Key insights include the role of trust and teamwork in building successful projects, strategies for identifying profitable investments, and crucial criteria for selecting reliable partners in real estate syndication. The conversation also delves into the importance of thorough research and understanding market cycles for realistic expectations in real estate investing.
The Transcript
Adi Soozin: Three, two, one. Here we go. Welcome to our show for high-net-worth individuals, politicians, and investors across more than 36 countries—and best friends! Today, we have a very special guest. One of my godfathers in the real estate world is joining us. You’re always curious about these behind-the-scenes movers and shakers who seem like ghosts, making huge changes in society. Well, one of those legends is here today! He’s a master in the commercial real estate (CRE) space. Please welcome Stony Stonebraker. Stony, thank you for being here!
Adi Soozin: For those who don’t know Stony, he’s a powerhouse in the multifamily space, specializing in value-add projects. In just six years, his team has amassed $200 million in assets. That’s incredible! But you didn’t start in real estate, right? You spent 28 years in technology. Tell us about that journey.
Stony Stonebraker: That’s right. I spent most of my career in the telecom industry, working with airlines, electric utilities, and starting companies in the telecom business. For example, we launched a radio tower leasing business and a regional fiber optics transmission company, which later sold for $1.6 billion. My background is in electrical engineering, and earlier in my career, I had some unique opportunities, such as working on Saturn V rockets for five Apollo missions and even building an electric car and driving it from Boston to St. Louis—as I like to say these days – before Elon Musk was born. Also during my telecom career, I invested in several residential real estate properties, but as a part-time effort while focused on telecom.
Adi Soozin: Wow! Your mind is clearly wired for problem-solving and finding opportunities. What made you transition from technology to commercial real estate?
Stony Stonebraker: I wanted to spend more time with my son as he was growing up, and so I retired early and we travelled and spent time at historical sites of some ancestors. Commercial real estate offered the flexibility to do that. From my earlier years, I was intrigued with real estate, but needed to know more about it. I interviewed people in the business, read books, and studied publications. Initially, it seemed like a black box, but as I learned more, I realized it’s really about analyzing financials and finding underperforming assets. I got my real estate license and earned a CCIM designation which were both very helpful. I enjoy solving problems with clear outcomes, and value-add properties fit that mindset perfectly.
Adi Soozin: It’s amazing how your analytical background aligns with commercial real estate. Can you talk more about the inefficiencies in the market and how you capitalize on them?
Stony Stonebraker: Commercial real estate is less efficient than residential. There’s no central marketplace with defined prices, so you can uncover diamonds in the rough even in challenging markets. Value-add properties, for example, are typically stabilized with good cash flow but underperform due to factors like absentee ownership, lack of capital or poor property management. By addressing these issues, we’ve been able to unlock significant value.
Adi Soozin: That’s a great strategy. With business acquisitions, when my husband and I look at is this a good business to buy, one of the things we look at is how poor is their marketing? Because if their marketing is atrocious, it’s a very easy value add. If they have onpoint marketing and the product is great, there’s no obvious value add here, so let’s pass. So, you’re doing the same thing with real estate, which is looking for obvious clear value add opportunities. Many new investors struggle with transitioning from single-family to commercial real estate. What advice would you give them?
Stony Stonebraker: Commercial real estate requires teamwork. Unlike single-family investing, where you do many things yourself, commercial deals involve many players. You need experts in financing, property management, legal compliance, and more. Building a trustworthy team is critical. I always do background checks and start small—working with a sponsor on a few deals before committing to a larger partnership. And have a constant need-to-learn attitude.
Adi Soozin: Speaking of teams, how do you vet potential partners and investors?
Stony Stonebraker: I like to think I’m thorough. I rely on referrals, conduct formal background checks, interview them on their investing style and observe how partners operate over time. I also analyze their track record—how many deals they’ve closed, their market knowledge, and how they handle challenges. Trust and experience are non-negotiable. In the age of the internet, there’s a lot of people who have conferences now on earning passive income or getting rich with real estate and you’ve got to be careful with them. There are many good people that attend these, too, and over the years I’ve met several people through those kinds of events and it’s vitally important to get to know them for a while before you invest with them.
Adi Soozin: Should we tell the Jorge story? So, I went to one of these local events and look at me, I’m a young blonde female, so people obviously think that’s synonymous with stupid. So I went to one of these prestigious real estate events in Orlando. and I met a gentleman there. He really wanted me involved in this $68 million real estate project. My grandfather, uncle, cousin, and brother are all commercial architects, so developing big projects like this where it’s mixed use, hotel, hospital, shopping center, things like that, that’s what I grew up going to those job sites with my dad.
Adi Soozin: So it’s usually a very safe and comfortable space for me. So what he was presenting to me, there were just certain things that didn’t make sense. And I was like, I grew up like spending nights and weekends in my dad’s office, going to architectural projects, building sites, board meetings, whatever, city planning meetings. I grew up going to all those with my dad. So I got to see a very unique side of those things starting at the age of eight. There were certain things that I had picked up over the years that just they didn’t make sense. So I told him, I want you to meet one of my mentors, and I just want him to double check this. And I actually had to meet several different people who all looked at the deal from different angles and ask different questions to all tell me, “No, I agree. this doesn’t make sense.” Then Stony met him and he said, “I agree with everyone else that met him there are a lot of key things missing. Your intuition and your questions were all valid.”
Adi Soozin: After Stony spoke with this man, Stony sent him this amazing email and I showed one of the family attorneys Stony’s email later and she remarked you have to keep Stony as one of your mentors for life because the way he worded this for both of you to gracefully exit, it’s a work of art.
Adi Soozin: Commercial real estate is like a marriage – it loss lasts longer than some marriages in this country. Another investor wanted to know about investing in our fund and we haven’t done any projects with this person at all. Stony advised we usually like to invest in one or two real estate syndicates with someone before we talk about forming a fund with them. Again he emphasized the importance of trust with partners.
Stony Stonebraker: There are a lot of details with commercial real estate investments and it is important to understand the red flags from the other details so that risks are mitigated.
Adi Soozin: That’s smart. Let’s switch gears a bit. When we first met, I immediately realized that Stony’s the same level of nerd as I am. There are very few people that are this nerdy where they love to read 15 different books to understand a problem from every angle so that they could fully move forward more with more information and understanding all the risks and variables. You’ve read a lot of books about real estate. Can you share some recommendations?
Stony Stonebraker: Sure! Some of my go-to books include:
– *Structuring and Raising Debt and Equity for Real Estate*
– *The Definitive Guide to Underwriting Multifamily Acquisitions*
– *How to Legally Raise Capital for Real Estate* by Kim Lisa Taylor
– *Emerging Real Estate Markets* by David Lindahl
– *The ABCs of Real Estate Investing* by Ken McElroy
– *Real Estate by the Numbers* by Frank Gallinelli
Each offers interesting insights into different aspects of real estate investing. Even more basic books offer nuggets which can help in analyzing properties. I’d also recommend getting a CCIM designation if you’re serious about the business. It is very valuable and is the gold standard for commercial real estate investment professionals.
Adi Soozin: This one (“How to Legally Raise Capital for Real Estate” by Kim Lisa Taylor) was a total eye opener for me. And it’s written by the attorney that you use? Do you want to just tell people a little bit about her and this and how you met her?
Stony Stonebraker: Sure. Kim Lisa Taylor is an SEC attorney and has been involved with the commercial real estate business for probably 30 years. She initially worked with really strong mentors and older legal attorneys who helped her get started in that business years ago. And what she does is she helps people put together deals including one of the popular legal structures that people use in this business for larger properties. A syndication has General Partners (GP) and Limited Partners (LP). A good analogy to explain a syndication is it’s like an airplane. You have the flight crew including pilots and flight attendants and those are the general partners (GP). Then you have the passengers who are the limited partners (LP). The passengers or limited partners invest their money and have no responsibilities or liabilities for the investment. The flight crew or general partners are the people that are the real estate professionals, the experts that know the market, are financial experts, have invested and operated real estate before and are responsible for getting the passengers safely to their destination.
Adi Soozin: I’ve learned so much from you already over the past year, even growing up in the family that I did thinking I knew so much and you’re like, “Come, young child. There’s so much left to learn.”
Stony Stonebraker: One of the areas where we have an advantage compared to most CRE investment teams I got from the CCIM educational curriculum. Most investment teams do not have the knowledge to conduct proper market analyses which includes analyzing market cycles, local economic bases, demographics and psychographics. And CCIM provides strong databases of detailed commercial real estate properties throughout the U.S. to help as we conduct our research and analyses.
Adi Soozin: So, for those of you who don’t know, I listen to somewhere between 40 and 100 real estate investment pitches per month with a break in August and sometimes a break in December. So I’m always looking for something that gives us a unique asymmetrical return that’s astronomical. I don’t just want a small value add like we’re going to paint the building and say it’s a value add. I want something that has people jaw dropping. And as many of you know, I’m from the startup space where we look for very very unique ways that startups can come in and grow quickly. So using my marketing background, human psychology, what I know about demographics and how they change and how cities change over time based on positioning key players in specific areas.
I’ve recently found a unique project which we call the K9 Multifamily Initiative. It’s focused on providing affordable housing for first responders. We’re targeting properties in the Southeast US and keeping this initiative under wraps until we’ve secured market share. What are your thoughts on this niche?
Stony Stonebraker: It’s an exciting concept with strong potential. Focusing on a niche like this creates a competitive advantage, and I think it’s a great strategy, but I hesitate to say more about it except that it is a proven strategy which we can use in a different market.
Adi Soozin: And for those of you wondering about my relationship with Stony and how I bring deals to him, I do not drag him to 100 pitches per month. Every couple of months I’ll hear a good one and then I run it by him and I say, “What do you think of this one? I think I found a winner.” So when I found this one, I immediately messaged him and I was like, “You’re going to be so proud of me. You’re going to love this. You’re going to die.” And so he was like, “Okay, what is it?”
And so I told him, I found out that people are doing this in this region of the US. They’re not doing it in this other region. We should quickly bring this to market, expand it as fast as possible. and he was like, let’s do it. I’m in. So, we put together a group. We’re still putting together the initial team and we’re still looking for specific buildings that meet specific criteria. So, if you are a broker in Florida, Georgia, or Tennessee and you’re in the multifamily space up to 30 units or so, you could reach out to us. We’re still looking for buildings. but I think that’s all that I would say on the public platform.
Adi Soozin: It was a pleasure speaking with all of you guys, sharing the story, sharing what we’re working on, getting to introduce you to someone that I consider a very amazing mentor and godfather. Thank you, Stony, for sharing your expertise and stories. And you guys can all connect with him on LinkedIn if they want to reach out, but you can also reach out to me if needed. Thanks again, and we’ll see you all next week!
This transcript was generated by AI & edited by Stony Stonebraker.
This interview was conducted by Adi Soozin of Molo9.com. If you enjoyed this interview and would like to see more like this: follow Adi on LinkedIn or drop your email in below to receive regular updates.
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