Turning Challenges into Triumphs with Jeff Tumbarello | Part 1 #884

Jeff Tumbarello is a Real Estate Broker. Originally from Stuart Florida, after an enlistment in the United States Marine Corps, he found his way to beautiful SWFL and married Cristina Tumbarello and it has been home ever since.

Jeff Tumbarello has performed market metrics and product modeling for the capital markets and several private equity firms. As well as materially participating in large bulk asset and distressed note sales. Jeff Tumbarello also was a Trainer/Speaker for the Florida Housing Coalition. Since 2009, He has brokered extensively in Commercial Real Estate. These projects have ranged from large office buildings in Cape Coral, distressed gulf access development sites in Naples, and numerous large warehouses from Sarasota in Fort Myers. Jeff Tumbarello is also very active in commercial leasing.

In 2003, Jeff Tumbarello and 3 other SWFL Real Estate Investors founded the South West Florida Real Estate Investment Assoc.

Jeff Tumbarello is a veteran of the USMC. He served in Desert Shield and Desert Storm as an Infantryman with First Battalion Third Marines.


In this episode:

• Get to know Jeff Tumbarello
• How did Jeff started in Real Estate
• Navigating through the 2008 crash
• Pivoting from Residential Sales to Distressed Notes
• Importance of paying attention to market trends and data
• Land Market in Southwest Florida

The Norris Group originates and services loans in California and Florida under California DRE License 01219911, Florida Mortgage Lender License 1577, and NMLS License 1623669.  For more information on hard money lending, go www.thenorrisgroup.com and click the Hard Money tab.


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Transcript

Narrator: 0:01

Welcome to The Norris Group real estate podcast, a show committed to bringing you insights from thought leaders shaping the real estate industry. In each episode, we'll dive into conversations with industry experts and local insiders, all aimed at helping you thrive in an ever-changing real estate market. continuing the legacy that Bruce Norris created, sharing valuable knowledge, and empowering you on your real estate journey. Whether you're a seasoned pro or a newcomer, this is your go-to source for insider tips, market trends and success strategies. Here's your host, Craig Evans.

Craig Evans: 0:45

Hello, everyone. We are excited today to be on with our podcast. Today we've got Jeff Tumbarello with us. Excited to introduce you. I know Jeff has done stuff with Bruce in the past, but I'm excited to introduce Jeff and bring him back into our viewers today. Jeff Tumbarello is a Real Estate Broker. Originally from Stuart Florida, after an enlistment in the United States Marine Corps, he found his way to beautiful SWFL and married Cristina Tumbarello and it has been home ever since. Jeff Tumbarello has performed market metrics and product modeling for the capital markets and several private equity firms. He has also materially participating in large bulk asset and distressed note sales, as well as working as a Trainer/Speaker for the Florida Housing Coalition. Since 2009, Jeff has brokered extensively in commercial real estate. These projects have ranged from large office buildings in Cape Coral, distressed gulf access development sites in Naples, and numerous large warehouses from Sarasota in Fort Myers. Jeff Tumbarello is also very active in commercial leasing. He has invested in real estate since 1997 and has materially participated in almost every type of real estate investment transaction that a person can be involved in. His works with the following media outlets as subject matter expert on NPR, Bloomberg, Huffington Post, Reuters, Wall Street Journal, NBC, ABC, wink, Fox, Fort, Myers News Press, Naples Daily News, Fort Myers Weekly, and Gulf Coast Business Journal. In 2003 Jeff Tumbarello and three other southwest Florida real estate investors founded the South West Florida Real Estate Investment Associaction. Jeff is also a veteran of the United States Marine Corps. He served in Desert Shield and Desert Storm as an infantryman with First Battalion, Third Marines. Jeff, Listen, man, it is great to have you. I want to welcome you to the show. So thank you for your time today, buddy. I really appreciate it.

Jeff Tumbarello: 2:54

It's raining. I wouldn't be on the...

Craig Evans: 2:55

Anyway. Well, hey, listen, you know, I know you've done stuff with Bruce. This is our first time. You know, we've done some stuff together in the past, you and I as well, but I want to really, kind of reintroduce you and bring you to the forefront with with our listeners. So what I'd like to do, if it's okay, I want to start by letting our audience learn a little about a bit about you, before we start diving into real estate. That sound? Okay?

Jeff Tumbarello: 3:19

Yeah, sure.

Craig Evans: 3:21

Perfect. Listen, all right, so your hometown, selfish capital of the world, right? I mean, you, you're from Stuart, Florida. What was it like growing up there?

Jeff Tumbarello: 3:33

It was pretty good life. Actually, my family owned one of the biggest restaurants in town, which was a blessing and a curse, because I was a busboy and a dishwasher and a parking lot cleaner. It taught me how to work, though, big time taught me how to work. But, yeah, growing up in Stuart, I mean, the water's amazing over there, you're catching keeper dolphin and some days, two miles offshore, uh, deep water offshore, you can surf, you know, it's the Atlantic Ocean. So we all grew up surfing. I laugh now, because everything's so developed on Hutchinson Island, but when I graduated in 1988 and we would in high school, we would go from beach to beach to beach partying, and then the cops would break it up, and then you'd run down the beach with all your beer so they didn't catch the underage guys with beer. And then they pick you up at the next beach, and then you go two beaches down. And I mean, it was kind of a Florida coastal small town life. It was, it was, it would definitely was a great place to grow up.

Craig Evans: 4:36

Well, so in that environment, growing up like that, what did you think you wanted to be growing up?

Jeff Tumbarello: 4:41

Initially wanted to be a heart surgeon, believe it or not, and then I just realized I didn't want to go to school. So I went from heart surgeon to, you know, kicking in doors with a machine gun in the Marine Corps. That was pretty much the big pivot in my life, was going to that.

Craig Evans: 4:59

So, tell me, when did you enlist? I mean, how old were you when you enlisted? What kind of drew you to that process? What did, did you feel a need to serve? Was it just trying to figure out what you wanted to be, what, what took you there?

Jeff Tumbarello: 5:11

Well, we can really blame it on two guys that I grew up with. Their dad was an old Vietnam salty dog, and him telling us about all the fun times he had on liberty in the Philippines had us all thinking the Marine Corps was a really good idea. I mean, a couple days into boot camp, we realized we maybe didn't think that through. But, you know, I just, you know, there's a whole group of us that all grew up together, played sports together, and we all joined the Marine Corps, about six of us. I think, I mean, when it's weird because we were running into each other in Okinawa, you know, I'm getting drunk with the guy that I grew up with and Stuart were, you know, being the same idiots. We were running around Martin County as we were Ken Okinawa. So, but, yeah, that's really what got me there, the whole group of us. I mean, my family was very army oriented. But you know that, listen to his dad talk about the Marine Corps. Definitely, I definitely don't regret it. It. It was pretty amazing experience. You know, you got your high, you got your really good days, you got your really bad days. So, but it, it's something I'll like. I'm about to host my units reunion here in North Fort, Myers. Everybody's coming here the 20th we're going to take them all to Gasparilla boats too. So we got a whole bunch of guys that I and some of them I haven't seen, like my squad leader I haven't seen since we got out. So I'm actually really looking to...

Craig Evans: 6:36

Really?

Jeff Tumbarello: 6:37

Yeah, I literally, we came back from the Middle East. He went to Camp Pendleton. We were stationed in Hawaii, and I haven't seen him since then. So looking forward to taking a country boy from Indiana to Gasparilla and put a cocktail in his hand.

Craig Evans: 6:53

Well, how long were you in the military? How many deployments were you on, all of that kind of stuff?

Jeff Tumbarello: 6:58

Uh, four years. Uh, initially did a year in Okinawa with the light armor and infantry. I did this mount of reconnaissance with them. And then I got stationed in Kaneohe Bay one three, and we were about to go back to Okinawa. And then the first sergeant pulled us all in a semicircle and let us know that Iraq had just invaded Kuwait. And honestly, none of us knew where Kuwait even was. We were standing in Saudi Arabia about 10 days later. So we all had a pretty good idea after that. And you know, we ended up in the Middle East for we got there in August. We didn't leave till mid April and so that. And then by the time I got back, I was too short to deploy with them again. So I mean, I spent a couple couple trips overseas. One of them was in a war zone. And, you know, desert storms kind of that Forgotten War too. You know, it was quick in and out. It was big victory. In hindsight, it was probably, probably just the perfect scenario just unfolded. And you know, it was Desert Storm. Was definitely an interesting conflict for America.

Craig Evans: 8:05

Yep, yep. Well, sorry, so you finished up Marines. What was your first job after Marines?

Jeff Tumbarello: 8:10

I was a form Carpenter, doing heavy construction, commercial construction. Ended up working in Dallas. Kind of the last couple jobs I was in Dallas, helping them build addition on the Dallas Convention Center halaport. Then from there, I went to go a float trip with my uncle in Missouri. Thought it'd be a good idea to stick around there because deer season was coming up, and ended up getting a job at, believe it or not, TGI Fridays, as a manager because of the family's restaurant background. And I manage restaurants for a few years, and then just ended up got into real estate. A guy told me, you know, you'd be great in the mortgage business. I was a restaurant manager, and I started making a lot more money as a mortgage guy than I was as a restaurant manager. Point where it's costing me money to go to work. So, and this was in '95 so, you know, point at which you got to make money.

Craig Evans: 9:09

Yeah, yeah. So, so your, your first real estate side of things in was coming into the mortgage side of it, versus an investing or selling or anything like that.

Jeff Tumbarello: 9:19

I was doing loans for one of the other guys. I founded the REIA for, Peter collar, and he was kind of one of the OG investors. Came over here from Miami. He's been doing it since the early 90s over here, but I was doing the mortgages for his end buyers, and a lot of them were simultaneous closings. And I'm looking at his side of the hut versus my side of the hut, and I'm like, I want to be him. So he wholesaled me five houses in one day that I took down with hard money. And then we just started rehabbing and flipping, and then we've just been doing it ever since.

Craig Evans: 9:53

Okay, alright, so you know, kind of transferring from starting that. Here, what all are you, I know you've got REIA, so what all are you doing? You know within that the real estate market now, then kind of give us a big view of what you've got.

Jeff Tumbarello: 10:09

Well, we've got the Southwest Florida REIA. I own a brokerage. Me and my wife own a brokerage called Steelbridge Realty. We have an investment company called Venture Investment Partners that we're right now doing a lot in Valdosta, Georgia. I got three rehabs going up there right now, because the cash flow numbers are great. I don't think you're going to get a lot of appreciation up there. But, you know, an adjusted basis in a rental at 45, 50,000 and it rents for 850, a month, and the taxes are decent. The insurance is like 425, you know, you know, you own some stuff, in my opinion, here, because at some point it's going to appreciate, because it's hard to get a lot of this stuff to cash flow, but the stuff up there is your cash flow. And then you describe some appreciation place to go across the gamut. But yeah, we do a lot of land. I've had some other companies before that. I think we sold you guys couple pieces of land.

Craig Evans: 11:06

Yep, yep...

Jeff Tumbarello: 11:10

Yeah, the land market's interesting right now. It's kind of all across the board.

Craig Evans: 11:18

Yeah. Well, let me do this before we jump on the land, because I want to get into land specifically with you on things. But let's go back. When did you first get into the mortgage side of things?

Jeff Tumbarello: 11:30

'95, '96 somewhere in there.

Craig Evans: 11:33

Alright. So, well, what did 2008 look like for you? Then, how did you navigate through that whole crash, and what was that process then?

Jeff Tumbarello: 11:49

Irony is, I knew in oh six that it was getting bad. Actually, my wife had me talked into we were going to move up north, sell everything, and move up north. And I went to, I actually took a job at a bank in Dublin, Ohio for a couple about a month until I woke up and realized I wasn't a Midwest banker. Columbus, a great town. It's a fun place.

Craig Evans: 12:10

Yep.

Jeff Tumbarello: 12:11

But I came back to Florida because I actually this is going to circle back to but the question, but I ended up dumping the data there. I paid a realtor 50 bucks to give me his codes for a day, and I dumped all their closed sales in Excel. And I came to the conclusion pretty quick that I didn't, I was hoping to just go to a different beach where there wasn't a tidal wave coming. And I realized all I did was get farther away from the tidal wave that it was going to hit this beach too. And I'll never forget the people in the bank, one that I work with, when I told them I'm like, this is going to crash like Florida. You just don't realize it yet. You're about 18 months out. About 18 months later, I'm getting emails with and I even sent them the data set. I sent them the spreadsheet. Here's where I got this tell me if I'm seeing something wrong, because I'm about to make a major decision based on this data work so, but that's initially I kind of tried to leave the area. I still had a mortgage company at the time called Network Funding Solutions up and running by mid Oh, seven, I sat with one of my mentors, and he told me, you're out of business. You just don't realize it yet, because something fundamentally changed where the banks, they needed the fees from originating the loans before that, all the money was in they would securitize the loans and sell them and get these big checks, and they never had to talk to the public. So, I mean, it's great, you know, it'd be like you're a builder, you don't actually deal with buyers and sellers for the most part. You know, it would be a very interesting, easier way to do it, for sure, but you have, the industry changed, and they basically told the brokers, we need those fees. And basically pushed the brokers. We were a correspondent lender, but they basically pushed the brokers out of the space. So I shut that down. My wife had a real estate license all along because we got tired of real estate agents not calling us back, and it just got to the point where initially, when we started buying and selling, we weren't licensed. I had her get her license, and she was pretty good at it, too. Just because it was easier, it wasn't even about the commission, it was just to get the information, to get the offer drawn up quickly, stuff like that. Well, then I kind of pivoted into the brokerage side. I seen what was coming, because we had, back then, all those media, uh, some guy from the hinterlands of North Fort, Myers, was the only one in town with a functioning foreclosure database. That was us. So as we're and and I could kind of see, not only there's going to be a ton of cheap properties to sell, which at some point, you know, I always tell guys at the REIA about this, that in oh six they stood in line for them $375,000 houses are rented for 1800 a month, and then they wouldn't buy it three years later, for 65 grand, and it rented for 750 a month. A much better investment. You know. But they just wouldn't buy. As I seen what was coming with that we ended up, believe it or not, getting tied into a company called Silver Leaf advisors. I was our analyst, and we were doing a lot of big note sales, like we did mid cape, McGarvey. We did the Schwab building. We did Tamiami square, which is a bunch of projects where we the principal of it, you know, raised a bunch of capital, and we went to the banks and we'd buy the notes, and then Mike would foreclose on them, and, you know, and figure out what we're going to do with it. Like, if you ever out on Pine Island, I'll never forget, there's the blue crab car wash out here. It's the one car wash on the island. It's like, my favorite listing ever that I've sold as a broker, and fifth, third through that in a package of notes, like the day before closing, and said, You're taking this too. So, you know, selling that in 2009 in Pine Island was wild. I was like, I always say there's 9000 people that lived on Pine Island, and I showed it to every one of them. But you know, so what we were doing, the distressed notes, there became a point of which the Blackrock and all those Starwood, all those they came in, and we just could not compete with their cost of capital. They outbid us on everything. So we kind of just got some of the fringy deals. But I mean, how I survived '08 was a pivot. I mean, yeah, and that's the key as this market. I mean, clearly some markets changing, and the ones that succeed and do well are the ones that pivot. Like you can look at so many real estate agents. They went from selling the first homes to everybody in 2005 and six to broker in the exact same homes they sold to a different investor as an REO two and a half years later, to just different people. So, you know, that's how we kind of made it through. You've got to pivot when the market changes.

Craig Evans: 16:57

You know, as I'm sitting here listening, you're talking about the pivot and and you're right. I mean, you know, successful people have pivoted so much. And you always hear about, you know, the great successes of people. But you know, to me, one of the things that I see in people is when they overcome adversity, it tells you more about a person, you know, about who they are, versus any of the successes they've had, right? So I guess the question would be that I'd want to ask you is, what do you think's the the hardest obstacle you've had to overcome since, let's say, '08 through the pivots, through everything that you've done in the real estate side of things? What do you think that hardest obstacle was? Well,

Jeff Tumbarello: 17:38

I mean, it was more of a personal thing. We had to, like everybody else, we took a step back financially, you know, everybody in this town, anybody that came out of this unscathed, won the genetic lottery, they're, you know, grandson of some rich person. So, you know, normal, anybody, you know, everybody took a step back. And we kind of had to reevaluate, you know, where are we going to live, what are we going to drive, what are we going to spend? And we got to build capital back up again. I'm back to the point where I'm in so much better of a position than I was when I thought I was rich back then. And but this time, I've got no debt. Own everything. I mean, I literally own everything, but an RV I bought after Hurricane Ian. I've got a note on that. I'm probably going to sell it because we don't use it enough. It's a great idea, right? But then you just don't use it. And especially in Florida, camping in Florida is a little dicey in July and August. I mean, I can sit in air conditioning at home, right? Exactly, but, yeah. I mean, I think, personally, the step back and the rebuild, and it's more of a mental thing. I mean, you know, the actual business side is just get to work and have some success, and then when you start winning, learn how to win and learn how to take a win. Because that's a huge thing that nobody talks about in business, is that everybody gears up, and there's all these talks about how to win. But more importantly, what do you do when you win? Because you see so many people that when they win, they kind of lose their mind. They start making really bad decisions, and they basically took that win and made a loss because they didn't keep the money.

Craig Evans: 19:12

Right. I deal with that so often when, when I'm working with people on scaling their business, and how to scale a business and how to grow. Jeff, you're right, man, I see that so often people have their one success, or, you know, they start to become a little successful in what they're doing, and then they don't know how to handle it. You're right. They just blow it. They just, they don't have a strategy for what to do next, you know. Well, so let me ask you, as you were moving into the real estate side, tell me about some of the mentors that you had early in your career?

Jeff Tumbarello: 19:44

Oh, my God, I've had so many. I mean, my grandfather was a restaurant guy, and just watching the moves he made, like he bought all the land around the restaurant because he wanted more parking, and eventually one of the. One piece of that became a furniture store, a national chain furniture store, you know, so but he always bought things for intrinsic use and held on to him and only sold them when it made just no sense not to sell it. You know, don't do marginal stuff. But I have a guy named Dana locally. I call him the damnedest guardian angel I've ever met. He's one of the most unique dudes I've ever met, and just wired differently than everybody else, and he's always been there for me. And the irony is, I'm kind of filling that role for some of the young Thundercats that he did for me, because his comment to me, I'm like, someday, I want to do something for you. Because he just poured so much knowledge into my head over coffee, and he goes, Well, you just owe three people. He goes, You know, if one person taught you, your job is to take three and teach them, because that's how we make the world a better place. You know, that's how we, you know, make good people better people. And you know, that's the key to...

Craig Evans: 20:59

That's right.

Jeff Tumbarello: 21:00

...opinion, surviving as a society. And, you know, growing and prospering is, you know, helping people become better people. They generally gotta be good people to start with. It's hard to fix the bad ones sometimes, but the well, it is. It's hard, but, you know, you still try. But yeah, that's, I mean, and then from there, just, I think the biggest mentor, besides, you know, those two I mentioned, was a spreadsheet. I mean, Excel is the most amazing thing. You dump data in it, and it'll tell you the real story as to what's really happening, because it's so easy get on Twitter right now and you're either convinced that the market's never been better, or it's all going to crash and everything's going to zero, and that's the two sides of the story. And I always go back and look prior performance. None of them were right before. There's one guy who's got a YouTube channel that probably makes a really good living off the views, and I always say he's called 18 of the last two crashes so you know. And there's a little bit of truth in everything with with, you know, and then there's, right, there's some negative stuff to look at, there's some positive stuff to look at. There's a lot of stuff to look at, but spreadsheets and numbers and metrics will tell you what you actually should act on.

Craig Evans: 22:15

That's so many people, you know, I was talking a couple months ago to a group and just talking about the aspect that so many people make their decisions based off what they hear on on Fox or MSNBC or CNBC or, you know, like you say, Twitter or Facebook, whatever, instead of actually looking at real data. And if they just really look at data, and...

Jeff Tumbarello: 22:40

You could have all the data in the world. I've got some amazing data sets built over the years. I can tell you how many low rise condos and Sanibel sold for cash last month, and what their average square foot is at a glance. That's the depth that we built this stuff. But ultimately, one thing I've really learned the last since the pandemic was make friends with what you don't know. So I mean, we started the land wholesaling thing in 2020 right as they shut the economy down, and I'll never forget it, because we started to scale this out, and we started to make money, and then they're shutting the country down. And I'm like, You know what? We got nothing else to do. Why not build a database and just start talking to people, because they're going to answer the phone, because they're all at home, you know, everybody was locked in. So I'm like, as long as they're not taking the banana bread out of the oven or waiting for the next Tiger King to load up, which is what about half the country did, ate fresh banana bread and watched Tiger King. It's what we did. So, but the, you know, that's so we scaled into that. And I basically said, I may waste $5,000 scaling this business up, but what if I'm wrong? Because I'd looked at the market in 2019 was kind of fluttering. Looks a lot like it does today. You know, we prices were actually prices are down slightly, a little more than then, but year over year, you were starting to see some declines. Inventory was coming up. There was a lot of things to point to, and it turned into the second biggest boom this market's ever seen. So, you know, make friends with what you don't know. And I really changed my life financially by in my mind, saying I'm okay with losing $5,000 paying all these people to get all these people on the phone and talk bill and and then, as the builders took off and everybody started, everything started happening. And we were in a position to, we already probably had 10,000 responded sellers in our database. So you know, when a builder would come to me and say, give me this lot in Cape, coral, man, I could get him that lot And sure, three phone calls.

Craig Evans: 24:44

Yep, yep, that's cool. Well, so listen, talking about land you know, you've been in the land game for a long time. What do you see out of the land market, now, are you personally in the land market? I mean, what are you what are your thoughts on that now?

Jeff Tumbarello: 24:58

Oh, yeah, we're buying. Land, land in Georgia, I still do land from basically North port to Naples. We've tried going out of the area Palm Bay and Palm Coast, Port St Lucie, kind of where I'm from. But those markets are so picked through. I mean, I laugh. I looked at a lot of wholesalers sent me yesterday that was in an area we used to ride three wheelers in as a kid, and now 120 grand is like wholesale, you know, on a quarter acre lot, Port St, Lucie, who would have seen that coming? But, you know, we're still doing land. I still think, because, you know, you've got the insurance issue, has changed real estate to where, you know, it like, I've friend of mine's nephew is about to buy a house, and I'm like, buy new. 100% buy new because your insurance is going to be so much better. They're more energy efficient. They're young, with a kid. I'm like, That way, you're, you're not, you're not replacing the AC or the hot water heater for a bit, you know, and then you can just go in and, you know, start doing whatever because they're HGTV people, they'll be doing lots of projects, but that way they don't, you know, at least they're not doing subfloor, you know, they're actually building an entertainment center that they want to to have. But yeah, the land game, I see land doing great, like the metrics right now, the cape year over year starting to slow down. Pricing is holding up at the sales counts are off. Lehigh acres, we have already sold more lots and Lehigh acres in July than we did last year. Last year was a pretty good year. You know, prices are coming up. You know, anything that's not flood zone X is kind of problematic right now because you just don't want to even three years ago, flood zone AE was just a little bump in price. And, you know, you're going to have to bring a little more filter, and in it wasn't as big of a deal. Flood Zone AE is a big deal now. So depending on the elevation in the area and all that so like, and that's another thing about, you know, being successful long term, is you got to pay attention to these trends.

Craig Evans: 27:01

All right, everybody that's going to do it for this week, for part one with Jeff Tumbarello in Southwest Florida REIA. Make sure to join us next week for part two. Okay, thanks. Have a great day.

Narrator: 27:10

For more information on hard money loans, trust deed investing, and upcoming events with The Norris group. Check out thenorrisgroup.com. For more information on passive investing through the DBL Capital Real Estate Investment Fund, please visit dblapital.com.

Joey Romero: 27:30

The Norris group originates and services loans in California and Florida under California DRE license 01219911. Florida mortgage lender license 1577 and NMLS license 1623669. For more information on hard money lending go to thenorrisgroup.com and click the hard money tab.