Table of Contents - Really Dialing in Your Real Estate WHY with Steve Rozenberg
Dave Debeau [00:00:09] Well, hey, everyone, this Dave Debeau with another episode of the Property Profits Real Estate podcast today. It is my pleasure to be interviewing Steve Rosenberg all the way from Houston, Texas. How are you doing today, Steve?
Steve Rozenberg [00:00:22] I'm doing great. Thanks for having me on.
Dave Debeau [00:00:24] My pleasure. So if you haven't heard or seen one of Steve's numerous podcasts or seen them on stage or read one of his books, Steve is an interesting guy. He's a professional pilot by trade. 9/11 kind of shocked the world up, the world up for him as well. And he had to take a relook at things and he got into real estate investing. He's done a lot with real estate investing. He's done hundreds of transactions. He's done single families stand multifamily. He's done Flip's, done property management, written books, talked people, trained folks, you name it. Steve, you're a busy, busy guy and you're still flying planes. If I understand correctly,
Steve Rozenberg [00:01:05] I am I still am employed by an airline and I still fly, actually.
Dave Debeau [00:01:09] Very good. So, Steve, why don't you tell us take us back to pre 9/11 and then that whole disaster, that tragedy that happened and how that shook your world and how you got into real estate?
Steve Rozenberg [00:01:20] Absolutely. Yeah. So, you know, like everybody that wanted to do a job or career, I was a young kid growing up and I wanted to fly airplanes, got hired at a young age with an airline and was flying for them and had the best job in the world. In my mind, I was flying seven thirty sevens all over the US and South America, Asia, and up until September 10th, I thought I had the best job in the world, most safe, a secure job, an airline pilot. I'm good. I was hired at twenty five years old and then 9/11 hit obviously tragedy on multiple levels. But for me the biggest shock in all day was September 13th. And the reason I say that was September 13th was the day that I got delivered my furlough notice. So the safe, secure job that I thought I had on September 10th, within seventy two hours, basically dissolved. And it went from I've got the best job in the world to we don't even know if this industry is going to exist and really we don't even know if we need you anymore. So just in case, we're going to give you a 90 day furlough notice and we'll let you know if we're going to exercise that or not, because you're really not important to us, as you may think you are. Wow. So, you know, in other industries, when you see an industry changing even the tech industry with a bubble bursting, it's a lot slower than a seventy two hour ripping off of the Band-Aid for sure. And of course, all the other tragedy that was going on during that time frame of 9/11, this was I don't want to say inconsequential, but the world is going through a much tougher time. But it made me realize essentially was that safe, secure job that I thought I had was not safe and secure. It was anything but. And what it did is it made me realize essentially was that I need to I love flying. I would never give it up. I still fly for an airline and I love it. But I also realize that I cannot let someone else or something else be in charge of my destiny and not be in control of my own future and my finances. Just because I'm employed by someone doesn't mean that they're responsible to take care of me, which is a different way of thinking than I grew up. And so I had to learn and I learned about real estate because it just seemed like that's where everyone that had some form of wealth seemed to tie back to. And so I just I consumed as much as I could. I read books, I went to seminars. I really wanted to learn about this. And I was kind of under the gun, so to speak, because I had a potential furlough that was coming. And I needed to be able to support my family now. And so I started learning about wholesaling and flipping and kind of segued in through that kind of touching your toe in the water, so to speak. And so that's kind of how I got into real estate originally was doing wholesaling and flipping did very well at it. I learned how to negotiate. I took a lot of classes on communication and talking and learning how to negotiate contracts and such and ended up doing so well that I made enough money, joined into a partnership of an apartment complex. They didn't have syndications back then, but it was apartment complex and kind of hit the road from there and just kind of kept going.
Dave Debeau [00:04:27] Yeah. So let's let's take a look at that. So you got started with the the wholesaling, the creative type stuff. Then he got into multifamily properties. So let's take him from there. When it comes to real estate investing, what your main focus these days?
Steve Rozenberg [00:04:41] Well, we got out of the apartment complex. We sold it during right when the crash was happening and we started getting into single family buy and hold. And that was kind of our kryptonite, I guess you could say, because when you come off of owning an apartment complex, you think that you're the smartest guy in the world and nothing can go wrong because we just owned an apartment building and sold it very well. And so we started buying these single family homes. And these were low income properties, high cash flow. The low income part was right. High cash flow never seemed to materialize. And so basically we bought about 20 of them inside of a year and then we realized what it was like to have. Tenants calling them not paying the rent. Our average vacancy was about eight months, our average Macreadie cost was three times the amount because every time they would leave, they like to take a lot of parting gifts with them, like wiring and electrical and stuff like that. So we really I mean, we were in a bad way in about a year and a half, two years. So me and my business partner, like any two intelligent guys would do, we bought another 15 because we didn't have enough pain at 20. So we thought with try some more and we thought, well, we're halfway through the mountain, let's push through, we'll fix this. And it was literally like gasoline on a fire exploding in our faces. And we could not, for the life of us, understand why our plan wasn't working. And I tell this story, it's funny. My wife finally said, you suck at buying houses. You need to stop buying houses because you don't know what you're doing. And I thought if I get another more, I can fix this. I can I can fix the situation. She said, you buy another one. It better be nice because you're going to be living in it because you you do not know what you're doing and you need to stop it. And so finally, we did we stopped and we basically essentially realized it was a business, but we were not running it like a business. And so then we turned around and we basically plumbed the infrastructure of a management company purely for self preservation. That was nothing more than preservation of our own. They stabilized and never actually made us money, but we learned how to start running a business. The smartest thing we ever did was we got a business coach and basically hired a business coach to guide us. Business coach was with us for the full time that we had our company. We grew our management company at that time. We formed a company, started managing other people's assets, grew it to about a thousand properties in seven years all through organic growth, and learned the fundamentals of a business, sales, marketing, accounting, you name it, H.R., everything that goes along with running a company. And then we recently we took that company and we merged with a larger property management company called Mind Property Management. And so the the story keeps evolving as we go. So it's been a very wild ride. I've written books, authored a book. I get the opportunity to speak around the world on property management and investing, spoke at bigger pocket's conferences and that kind of stuff. And I've been very, very fortunate. And I believe the biggest reason is, is because I've learned that this is a business and I've learned I learned the hard way by getting taken advantage of, lost a lot of money, all those things. But I don't think if I had not done that and learned those valuable lessons, I don't think I would be here today.
Dave Debeau [00:08:02] While I was looking at your website before we jumped on the call. And I think remind me of the title of your latest book is really it's a good title. What's in this book called?
Steve Rozenberg [00:08:11] It's called Failing Our Way to Millions Building an Empire.
Dave Debeau [00:08:14] Beautiful, beautiful title because so many people, myself included at different times, are so freaked out about failure. Yes. So many people don't take action. We are talking a little bit off camera as well, that a big a big thing that you like to talk about and teach people about is the whole mindset thing when it comes to real estate investing. So why do we kind of go along that path, if you wish? Because I think that's right.
Steve Rozenberg [00:08:40] Absolutely. Yeah. And I think that, you know, a lot of people always want to know the how everybody wants to know how do you do something? How how do you get a deal? I think it's more important to ask yourself the why. And nobody really takes the time to ask themselves. And I was the same person, which I think is why I'm so passionate about this, that people never really sit back and say, why am I doing this? And they never set a goal and end destination or a North Star and they never really think about what it is. That is the reason they are actually buying deals. What is their goal that they want to go to? And then the strategy and, you know, we all have this doubt in this negative self talk and things that go on in our brains. I think the biggest challenge is the great thing about real estate is there's no rules. You can flip, you can wholesale syndicate, you can do whatever you want. Right. That's the great thing. The bad thing is there's no rules. You can flip, you can wholesale, you can do whatever you want. There's too many choices. Sometimes it's yeah, it's I go I tell people it's like going to the Cheesecake Factory and you look at the menu and it's 50 pages and you're like, I don't know what to get. I think I want to leave, you know? And so the challenge is, is I think everybody is when they get into real estate, they're waiting for someone to give them that advice. They're waiting for that one word or phrase of advice. And I tell people that doesn't exist. You being successful is made up of a lot of good decisions, not one great decision. So there's not one great thing that you're going to do today that's going to get you across the goal line. It's a matter of doing things good consistently. And it's not perfection. It's persistence. And I've learned that myself. And we're all going to have bad days. We're all going to doubt ourselves. We're all going to make mistakes. And it's just a matter of just getting back up. And, you know, I think a lot of people have this illusion of balance. I think balance is a very misused term because I don't think there's such thing as balance. I think there's balance and counterbalance. And I think you've got to go one way and go to the other. And a lot of people want to live this life, this illusionary life of investing that they're not going to do anything and they're going to get passive income and it's going to be so easy. And we're all going to be sitting on the beach and we're going to be laughing and joking as we get on the yacht because we're making all this cash flow. And that's just not reality. And I think it's because a lot of them were sold on an idea from a sales person who is selling the course. And I think that's the biggest challenge that I tried to impart upon people, that that's not reality. Reality is what you. Wake up in every day.
Dave Debeau [00:11:16] What I want to ask you there, Steve, because again, you know, a lot of us have heard you really ought to figure out what is your why? When are you going to do? Well, pretty much any any endeavor. But a lot of times I don't hear people saying, here's how you find out what your Y really is, you have any tips or tricks or strategies for people to really figure out what the hell it is, why they want to do this, because just get rich. Isn't that allow you that persistence?
Steve Rozenberg [00:11:42] I know a lot. I'm sure you do. And I know a lot of rich people that are miserable. You know, I use the Guns and Roses theory. Guns and Roses is making more money than anyone on Earth. And they broke up. So it's not money. Right.
Dave Debeau [00:11:53] And so I like your taste in music, too, but
Steve Rozenberg [00:11:56] I think so what I tell people, as I say, you know, and I help a lot of people and a lot of people, I just, you know, I give advice to and I tell them what you need to do is two things you need to figure out. What does your life look like as a result of owning real estate? What does it look like? Is it it's not money, right? It's it's what the illusion of that money gives you. It's the safety and security that money is giving you something. And why are you doing it? Meaning are you doing it to pass down to your children? Are you doing it to live off the cash flow? Are you doing it to say that you've got one hundred million in assets? What is the reason? And the second most important thing you have to do, which may supersede you have to align with your family, with your wife, with your children, and make sure that everyone if you say my end destination is Disneyland and your wife thinks that you're going to Magic Mountain, you say, hey, we're going to the amusement park. And they're going, Yeah, but I'm going here. You're going there. We're going to different destinations. And one of the things that got pretty well known for my son, he's sixteen now, but when he was fourteen, he bought his first rental property. And what's funny is a lot of people are telling me they go, well, how does a kid get a loan and how how can he buy a property? And I said, you know, you're asking the wrong question. You should be asking, why did he come up to me and say, Dad, I want to own a rental property? The how is anybody can figure out how do we get to the moon first? They figured out they wanted to go, why do they want to go to the moon? And then they figured out the house. And it's the same thing. It's you know, people get so focused to shoot holes in theories. Everybody has their moon, right. Everybody has their end destination. But you've got to make sure that you can clearly identify it. And I talk to people when I when I speak, I say, raise your hand if you know your goals and have people raise your hand and go, hey, keep your hand up if it's written down. And then about three quarters. Now keep your head up. If you've aligned with your spouse and your children and everyone is going to the moon, be one person. So that just tells me that there's a disconnect in what we're selling or telling and what people are buying and people are buying. I've always heard that people buy to fix problems. Businesses sell solutions and they're normally not aligned. And that's that's the biggest challenge I think that's out there is you know, we're just the goal setting. Everyone here is the why and the goal and all those fancy terms. And I'm not a guru on this. I'm not a motivation guy. I'm just someone who was in the heat of battle going, you know what, it can be done. I, I do it. I've got a job. I've got a career. I fly for an airline and I built a company successfully, built it up, sold it. I owned a lot of real estate. You just have to say, what is my goal? You know what if somebody said my goal is not to own any real estate, I'd say, well, then why are you listening to me? I'm not the guy, you know, listen to someone else.
Dave Debeau [00:14:42] A question for you to do then, because when you're working with people. I've seen this I experienced this myself in my previous marriage. What if you're not on the same page as your spouse? Do you have any suggestions on how to how to get that alignment actually happening? I mean, you have to help people through that.
Steve Rozenberg [00:15:01] I have not. I'll disclose that. But what I would say and it's tough, right? Because you may be out there, you go to a seminar and you come home and you're telling your wife, we're doing this and we're doing this and she's gone. Oh, my God. Here we go again. Another three weeks of him going crazy till he stops doing it again. Right. And then, you know, you've got all these notes and, you know, you're making posts all over the house and, you know, saying mantras and sayings and stuff. And I think the challenges is you don't actually sit down and have the conversation, like, OK, what do we want? And I don't think it's a one and done. I think it's something that you have to constantly revise and revamp because life happens, change happens. And you can't assume that what you set off on the course five years ago is still the same course and that person is still alive. So, you know, when we were coached by our business coach, one of the things we had to do every years, we have to go in for an alignment with our wives and my business partner for the business. That's OK. Are we do you understand what these guys are doing? Do you understand where they're going, where their destination is? Do you agree? Do you not agree? And this is where we'd have these conversations, which were very helpful because, you know, me and my business partner are kind of sitting there, you know, and the coach is talking to them. Right. And we include them in we would with our business, we would do a board of directors meetings every quarter. Why? Because we're a business and they're they're the board. And so I would suggest that it's a matter of not having this huge one weekend and five year conversation. I think it's a continual show them the finances every month. Do a board of directors meeting. It's a business, right? If you're having finances, your finances are a business. Treat it like a business. Don't treat it like an emotional thing that you're hiding from someone and include your children, include your loved ones, whoever they are, bring them in so that they see the vision and so that they buy into where you're going. Because if not, you're going to Disneyland and they're going to Magic Mountain and you guys are going to be in different hats. Yeah, exactly. It happens all the time.
Dave Debeau [00:16:58] That is excellent advice, my friend. Thank you very much. Time flies when we're doing a quick interview, that's for sure. If people want to find out more about you, what you're up to, maybe get a hold of one of your books, what should they do?
Steve Rozenberg [00:17:09] Sure, they can go to my website at Steve Rosenberg dot com. They can also find me on mind dot seo, my end dot seo, which is mind property management, and they can find me on Instagram. Rozenberg Steve with a Z are Ozzy Osbourne or Steve Rosenberg on Facebook. And I'm you look me up and you'll find me. I'm out there doing a lot of stuff.
Dave Debeau [00:17:31] Excellent. Very good. Thank you very much for your insights, your wisdom. Really appreciate it.
Steve Rozenberg [00:17:35] Thank you. Bye bye.
Dave Debeau [00:17:36] All right, everybody, take care and we'll see you on the next episode. Bye bye. Well, thanks very much for checking out the property profits
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