May 7, 2022
Are you an entrepreneur who wants to scale your business without all the stress and hassle?
In this episode, Steve Rozenberg discusses how to protect your portfolio and achieve long-term success, as well as how to find a good real estate partner who can help you grow. He also talks about if you're not able to scale your business, it's not a business. It's a hobby. So make sure you have the right people in place and focus on monetization, focus on product, and focus on sales. After that, you can worry about the rest of the business stuff!
[00:01 - 06:41] If You Own One Rental Property, You Own a Business
- How Steve became a commercial real estate coach and influencer
- Steve learned that his safe and secure career was nowhere near as safe and secure as he thought
- How people don’t understand the goal of owning an apartment complex
- To make money and have it sold to someone else for a higher value
[06:42 - 15:05] Own Your Job, Not Your Business
- The keys to understanding your customer's buying process
- Start with monetization
- Systemize your business so that repetitive tasks are done perfectly and efficiently, and outsource any necessary tasks to help grow your business
- If you are the bottleneck of your business, work to remove yourself from that position so that your business can grow
- How freedom can be lackluster if it's not used to create purpose
- Tips to avoid feeling overwhelmed
[13:42 - 20:59] Gain Your Freedom with Virtual Assistants
- Steve talks about how he and his team had to unite their definition of their goals
- Why you should create processes and procedures and outsource to virtual assistants
- The importance of communication and accountability between you and your VA’s
- The benefits of outsourcing and why it will gain back your freedom
[21:00 - 21:47] Closing Segment
- Reach out to Steve!
- Links Below
- Final Words
Tweetable Quotes
“So they think they want freedom… Let me just say I think that's **** because you can sell all of your *** tomorrow. Go live in your car, and you can have all the freedom you want. But what you won't have is the memory that you want. So we're not buying freedom. We're actually buying the memories that freedom is giving us.” - Steve Rozenberg
“You can have the best product in the world. But if you don't understand how to not only get the money, but to get the right money from the right target of grading your clients… You need to understand that common thread of what is their problem and how does your product solve their problem.” - Steve Rozenberg
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Connect with Steve Rozenberg
LinkedIn: https://www.linkedin.com/in/steve-rozenberg-20593553
Facebook: https://www.facebook.com/steven.rozenberg
Instagram: https://www.instagram.com/rozenbergsteve
Youtube: https://www.youtube.com/channel/UCck4Ww77C6IoZQDPne9fHgQ
Webiste: https://steverozenberg.com
Connect with me:
I love helping others place money outside of traditional investments that both diversify a strategy and provide solid predictable returns.
Like, subscribe, and leave us a review on Apple Podcasts, Spotify, Google Podcasts, or whatever platform you listen on. Thank you for tuning in!
Email me → sam@brickeninvestmentgroup.com
Want to read the full show notes of the episode? Check it out below:
Steve Rozenberg 00:00
So they think they want freedom, right? You hear all the time, like, why do you want this? I want freedom to live my life? Well you know what? Because you could sell all of your *** tomorrow, and go live in your car and you can have all the freedom you want, right? But you know, what you won't have is you won't have the memory that you want. So we're not buying freedom, we're actually buying the memories that that freedom is giving us.
Intro 00:23
Welcome to the How to Scale Commercial Real Estate Show. Whether you are an active or passive investor, we'll teach you how to scale your real estate investing business into something big.
Sam Wilson 00:34
Steve Rosenberg is an international commercial airline pilot, who after the tragedies of 911, was forced to realize that his safe and secure career was nowhere near as safe and secure as he thought it would be. He chose commercial real estate, and he's been able since then, to control his own destiny. Steve, welcome to the show.
Steve Rozenberg 00:51
Hey, thanks for having me, man. Appreciate it.
Sam Wilson 00:52
Hey, the pleasure is mine. Three questions I ask every guest to come to the show in 90 seconds or less. Where did you start. Where are you now? And how did you get there?
Steve Rozenberg 00:59
I started my real estate path on the day after two days after 911 When I got my furlough notice from an airline. And that was where I started. Where I am now is I am a coach and an influencer working with businesses and real estate people. I was showing them how to grow and scale their business to run without them. And how I got there is the last 20 years in between of a lot of fucking mistakes, a lot of hard work and a lot of listening to smarter people than myself to learn how to scale and grow a business.
Sam Wilson 01:29
Got it, man, that's awesome. And maybe I miss interpreted this in your bio there. Do you actively invest in commercial real estate or no?
Steve Rozenberg 01:37
I do. Yeah.
Sam Wilson 01:37
Okay, cool. All right. I thought that was the case. It was like, wait, I think I added that part in your bio on my own ad lib. Hey, that's fantastic. You are currently still a pilot with United Airlines. And you fly around the world all the time.
Steve Rozenberg 01:50
Yep. Yeah, I fly a Boeing 777. Actually, as we speak. Right now I'm in Maui, Hawaii, on a layover. And so I get to travel the world, I get to do what I want to do. I don't have to worry about money, I don't have to worry about anything except doing what I want to do when I want to do it. Because I built in scale the business that basically can take care of me for the rest of my life.
Sam Wilson 02:09
What business have you built in scale that is your primary driver of revenue?
Steve Rozenberg 02:14
So my initial business that I built, scaled, and eventually sold to venture capital was a property management company out of Texas. We were the fastest growing management company at the time sold that to venture capital did that whole thing with stock options and all that stuff. That was kind of the thing that got me accelerated to the next level of my life. So the next level of my life now is I show people how to do what I did, because I show... The way that we built our business was we built it on the fundamentals of what I've been trained for the past 30 years, which is an airline pilot. So understanding how systems structure procedures, checklists, to make a business truly run without you, so that you don't have to be involved.
Steve Rozenberg 02:58
And when I say business, look, if you own one rental property, you own a business, you just may not know it, if you own an apartment, syndication, whatever it is, that is a business. And if you don't have a business plan, you don't have a structure, you don't have a model, you will fail, that business will run you into the ground, or you will die with that business on your back, and you will not have the life you wanted. Because you chose not to do the work on the forefront to be successful. So you know, fail to plan, plan to fail, all that stuff you hear but the reality is, is I have learned that you have got the devils in the details and how you do the little things is how you do everything, especially in business, I'm sure as you know.
Sam Wilson 03:35
Absolutely. And we see so much of that in the you know, the mom and pop operators. Yeah, I mean, yeah. And that's quite honestly, where a lot of value is created. For those of us coming in with a more sophisticated approach. You go…
Steve Rozenberg 03:50
Well, here's an example, right? You buy an apartment complex, what is that you're basically buying a business that is not being run correctly. And you feel that you can come in and run it correctly. It's the same, for all intents purposes, it's the same four walls in a roof. It's the business model running inside the four walls of the roof. Now you could take it make a lot of money, sell that same business to someone else, and they run it into the ground. So when you look at how people get so caught up in the actual strategy, meaning the house, the apartment, the syndication, whatever it is, but they don't realize they don't take the time to focus on building the business around it for a successful exit and a successful outcome. And that's where people fail.
Sam Wilson 04:30
Where do you start with people when they come to you and say, Hey, Steve, I need your help. I don't even know where to start. What's the first thing you look at?
Steve Rozenberg 04:38
First, I want to know what the hell did you do and how bad is the situation because people don't come for help because they want to help they come for help because they've totally screwed something up. And they go, I need you. I need you to save me is what they're saying. You know, people don't do what they want to do. They do what they have to do. So when they're at that position, they have to do something. So my first question to anybody is I want to know, where does this go? What is the goal of this?
Steve Rozenberg 05:04
Now, here's the thing, a lot of times people don't understand the goal, a goal has to be something that is a date and time that has a result. For example, you may say, like, I want to sell this deal for, you know, 25x of what I bought it for, based on these derivatives of NOI cap rate everything else, right? Or if it's a business, it doesn't matter, I want to know, what does that look like to you? And can you clearly define that to me? Then what I do is everyone they work with, I will leave, have them stay out of the room. And I will ask each one of them, you tell me, what does this look like? What is the goal of what we're doing? Everybody has a different answer. So I'm like, this is your problem, you guys are all going in different directions. Nobody knows what you, the leader are trying to impart upon your team. So you have bad leadership, you know, there's no bad team members, there's bad leaders. And so if you look at people that are bad leaders, they don't, they're not leaders, they're managers. And people mistake that. And so my first question when I work with people is I want to know,
Steve Rozenberg 06:03
There's three things to make a successful business three things. And if you're watching this, I would suggest you write this down. The first thing is monetization. So monetization is the sales and marketing, this is getting the frickin money, right? You can have the best product in the world. But if you don't understand how to not only get the money, but to get the right money from the right target of grading your clients A through D, firing the D's, keeping the C's and understanding the common thread between A's and B's, and I won't go into the detail, but understanding that common thread of what is their problem? And how does your product solve their problem? And that's the marketing message to the A's and B's because that's who you're going after. So that's monetization, then you got to figure out how do you get recurring revenue from your A's and B clients? And more importantly, they hang around like minded people? How do you create a referral system to get your A's and B's to refer people to you, because that brings down what's called your client acquisition costs. Right? So the first thing is monetization, and becoming that go to brand like that in the spa industry. You think of Jacuzzi in the tissue industry, you think of Kleenex, in your industry, who do they think of are you that go to brand. So that's the first thing. The second thing is the systematization and the admin of your business. So what I mean by that is, you know, a business is made up of repetition tasks done over and over again to perfection. And the definition of a business is a commercial, profitable enterprise that runs without you, and it has a sale date on it. So if you break down that sentence, commercial, profitable, enterprise is monetization. It running without you part is the systematization of your business, and having a sale date, I'll explain about that in a minute. So let's talk about the systematization of your business. First thing you have to do when you own a business is you've got to systemize it, then you automate it, and then you outsource it right now, that could be outsourcing to a company and employee or virtual assistant, whatever. If you have to be there involved in your business every day, well, you don't own a business, you own a job, right? And so you have to understand, are you the bottleneck, there's so many people, I'm sure as you do, so many people I've talked to that I work with, and I'm talking to them, and I tell them, You know what you are the problem. You are the reason this business is not growing, because you have ego and pride. And you think you're more important than the business. And the reality is, is when you're a leader and you're the leader of the business, you have to be selfless. And a lot of people who run a business syndications apartments, they want to pound their chest and say how proud they are. And it's their deal and get out of their way. That's ego. That's pride. That's the success inhibitor. So the last part of that sentence is the third thing you need, which is the scalability and scalability of your business. Meaning, what is the sale date of that business. And when I say that, if somebody cannot give me a specific date, like February 1 2023, I am selling this deal. If you can't do that, then that goes into Sunday calendar, which is the busiest day on the calendar because it never happens. So the reason you have to have that is you have to have a finite date and work everything backwards from that sale date. And the scalability side is could I sit in any role in your business in your operation structure, sit down at a desk, open up their systems manual, read the manual, pull out the checklist Operations Guide, do that job without ever having to talk to you? Because if not, how do I do this in multiple cities? So when we built our business, we scaled in multiple cities, and 60% of our company was outsourced to Mexico with virtual assistants. So we had to master and understand how do you outsource that role, so that we could grow exponentially by having a command center that we could go into any city and so I tell people could you go into Tulsa, Dallas, Denver and exactly imprint your business model without having to talk to anyone that's a far fetched I get, I get that's pie in the sky. But if you don't even have a semblance of that you are never going to grow to scale your company, which means it will run you into the ground. That's the reality. It's not a company, it's a job.
Steve Rozenberg 10:06
And the problem a lot of times is many people go into real estate, right? So a lot of times, I'll ask people, you asked me the first question, and I'll ask people, why are you doing this? And they will go on maybe a five minute rants of them telling me what they don't want in life. I don't want to be told what to do. I don't want to have a nine to five. I don't want this. I don't want that. And I'll sit there. I'll listen. And when they're done, I'll you know, you don't. And they're like, yeah, like, Okay, my question was, what do you want? You just went through a whole story of what you don't want. That wasn't what I asked you. Right? Tell me what you want. And so what happens is, they'll tell me, I don't know. Like, the really, I'm like, think about this, what do you want? So they think they want freedom, right? You hear all the time? Like, why do you want this? I want freedom to live my life? Well, you don't let me just say, I think that's ***. Because you could sell all of your *** tomorrow, go live in your car, and you can have all the freedom you want, right? But you know, what you won't have is you won't have the memory that you want. So we're not buying freedom, we're actually buying the memories that that freedom is giving us. Let's say I buy multifamily. I'm making a *** of money. And I go, I have the freedom. But what am I going to do? Well, I want to go have dinner in Greece with my wife on the Mediterranean. Now, that's the memory I want to create. Right? The Freedom does, you could go do that. But you may not like the results, you know, maybe you're flying and coach, whatever. So I tell people do not focus on the freedom, you're cutting yourself shy of that focus on the memory because look, at the end of the day, I can't take back last week, if it was a good memory or a bad memory, all I can do is have it in my mind. So when I sold my business, yeah, I made a *** of money, seven figures. That was great. But it didn't change the memory of it. And there's nothing I could do. I can buy more cool memories, but there's nothing else I could do. I have all the freedom I want. And once you have that freedom, and I tell people this and it's like it's hard to explain it to people that don't have it. But I tell them, once you have that freedom, it's very lackluster. Having the freedom to do what you want. If you're aimlessly walking around doing nothing, there's no purpose. So create memories. So that was my long story.
Sam Wilson 12:08
No, I love it. Man. That was a good sermon right there. That was good stuff. I love that because it is pointless. I mean, you know, there's no perpetual novelties. And so when you don't have any reason, it's like, it's why retirees work at Walmart, you know? Exactly. You know, come on, welcome to Walmart, because otherwise, I made a bunch of money, and I don't have to do anything. And now I'm bored to tears. So and that doesn't sound like any fun. Is it challenging for you when you sit down next to your co pilot? And I mean, you guys are operating in just completely different universes. You got a guy that's probably on a career track work in the airlines. That's all he knows. I mean, how do those conversations shake out in the cockpit? I'm just curious.
Steve Rozenberg 12:49
Yeah, it's interesting for me, because, you know, I love flying. I love what I do. But I also know it's a job. And it can be taken away at any moment. And I'm aware of that, and I don't really give a ***, right. I love what I do. But I'm okay if that happens, because I'm fine. So when I hear people talking about, oh, the union and this now, don't get me wrong, as airline pilots, you can make anywhere between, you know, 250 to $500,000 a year living a good life, right? I mean, it's not small amount of money. So it's not like these guys are paupers. They're not unintelligent people. But you know, what they are, is their employees, their employees by nature. And so what happens is, it's hard for me any employee that is living out of fear of them taking away from you, it's always hard to have that conversation. Because as a business owner, I kind of understand sometimes when the airline makes a decision and does something from a business owner perspective. Now, as a union employee, I may be like, yeah, that's ***. But as an owner, I go kind of get it. So to answer your question, I do something that's a little bit different. And I'm a published author. So some people have actually read my books that know me from the airline, and some would just kind of awkward. But what's interesting is I do a lot of compartmentalizing in my life. And I'm not saying this is the right thing or wrong thing to do. But what I do is, if I am talking to someone about flying, I keep it in that box. If I'm talking to someone about real estate, I keep it in that box. And if I'm talking to someone about the gym, I keep that in that box. I don't cross over like people flying don't really give a *** about me working out and people working out really don't care about real estate. I don't cross those over. Because I don't think a lot of times when we're starting to get into this world of real estate, we want to shout from the rooftops. We want to tell everybody, not everybody cares, or even wants to see us do good, right? Because it's a self reflection on us. If all of a sudden if you're like, Hey, man, I'm killing it in real estate. And we started together. I'm gonna go like, "Aw man, I should have done that one. And I like I'm so lazy." Where if you fail, I go see, I told you, you shouldn't have done it. You should get a job like we have. So instead of fighting that fight of the perpetual employee, I just don't say anything. I listen to them and they talk Yep, whatever. And I just do my deal. That's just me.
Sam Wilson 14:54
That's interesting. I mean, again it because it's a lot less stressful. I was just curious if those conversations ever run full or like...
Steve Rozenberg 15:02
look, I'm sure like when you go see family, and they're like, What do you do again? How do you, you know, try to explain it like, oh, that you know, is it legal? Is it immoral? It? But you know, but you have to have that conversation. Otherwise, I just don't say anything. I'm like, "I just do real estate."
Sam Wilson 15:16
Bingo. Yeah, I get that question all the time. Like, you run a like, even for my own siblings, you do a podcast? Yeah. What is that? Yeah. You do the daily real estate? That's interesting.
Steve Rozenberg 15:27
And then move on. Yeah, like, whatever, like, whatever.
Sam Wilson 15:29
I don't know what that means. But cool, man. So what are some of the things you know, after you get through that initial question? You know, drilling down and getting systems and manuals put together is a laborious task. Is there any way around it?
Steve Rozenberg 15:44
No, there's really not, you know, you can template stuff. But the reality is, is, you know, when I first learned about this, we had a guy, I'll tell you, we had a guy come into our office, and we were just we had growing pains. And we had a lot of challenges in our company. And this guy came in and again, he said, tell us what you do. So we told him and had everyone leave the room and did one at a time. And we all had different answers. And he's like, this is your problem. So this guy for two years was in our business, structuring and systematizing, our company. Now, in the Property Management realm, typically every business has anywhere between 8 and 11 systems and processes and procedures that they function with all the time. Every business, it's about 18. In property management, it's about 19. So there's several more because you have almost three clients, you have a tenant, you have an owner, and you have a contractor, and there has to be processes for everybody. And look, nobody likes us in the management company. We're like the Trashman of the industry. They call you to fire you or yell at you. That's the only thing right? So all we can do is have processes and procedures. And that's why we were able to once we did this, we are able to outsource to virtual assistants very effectively, because we knew what we were doing. And we knew.
Steve Rozenberg 16:54
So one of the things I do, I'll give you to answer your question. When I first started coaching people, one of the first things that I have them do and people watching is a great tool for you is I have them do a time study. It's a two week time study. And so there's three parts to this. So again, you want to see how much food you're eating, write down your food, you want to see where your money's going write down your ledger's, you want to see where your time is going to a time study. So what I have them do is from the time they wake up to the time they go to bed, we track every single minute of the day, I don't give a *** what they're doing email, social media driving, don't care. So they have to track it. Okay, that's the first part. Second part of this equation is they have to totalize up driving two and a half hours on the phone for our social media one hour, I don't care. That's not the reason I want them to do it. But we have to block it. The last part is they give me an executive summary, telling me how do you think your day went today? Tell me I think your day one. And after one week of you doing this, and every night, they have to send it to me. So they have to sit and I explained to them, the day you don't send it is the day you will never hear from me again. And yes, you've already paid. So I can't make you want this, you have to want this. I'm not here to be your friend. I'm here to make you successful. So you want this done, we're going to do this, but you're gonna do it on my terms. So that's just my deal. I've got too many people that want my time. And if they don't, then that's fine. So once they do this within week, number one, they will actually come back to me and be like, I know what I'm doing wrong. Week number two is fixing it. So the problem is if I said, Hey, Sam, stop doing all the stupid *** like, you don't need to this, you wouldn't be like, Oh, no, I don't do those things. But when you actually write it down, and it's coming from you, and you have to tell me how your day went, night and day difference. So then what we do is we take those things, and we say, okay, week number two is what are the low level low enjoyment tasks that you're doing that are minimum wage activities? Yep, we start basically separating the egg yolk and the egg white. And then we go, okay, these are things that we can look at outsourcing to virtual assistants. So now we need to create systems on how to do those things. And we start Systemising this for the VA's. And that is how we start systematizing their life in their business.
Steve Rozenberg 19:01
I've got a personal virtual assistant, she actually probably just want to book this call. But she runs my life. She runs my calendar, she runs my flight she runs I mean, you name it, a lot of people think of when they think of a VA they think of just business, right? So wrong way to look at this is an extension of you, everything you do. And so the more that, you know, look, think of it this way, if you get a virtual assistant, right, and I had a company that actually placed them, we got so good at this. But think about this, if I get a VA I'm gaining back 40 hours of my life every single week. How much more productive Could you be? Because here's something that people don't realize, one five minute phone call, one call that is equal to 23 minutes of lost time. So you get 10 calls a day, that's 230 minutes on average of lost productivity when you go oh, man, I don't know what I did today. I was just putting out fires that's living a reactive life and live in a reactive business. Right. So what if you never had to take those calls and you could focus on high income activities. And now you go you know But I don't need to take these calls that's handled. So again, that's how we ran our company. And that's how we were able to scale, which is one of the reasons we got acquired is because they're like, how are you guys doing this. And so we show them what we did and how we did it. Now, we took my knowledge of being a pilot with systems and checklists and procedures. And we basically use that of leverage and scalability to grow our company, which it was the best way. So I kind of took you through a path there. But that's kind of the best way to do it. In my opinion,
Sam Wilson 20:27
Steve, I've enjoyed this man, I love the energy you bring to it. It's your full on. And that speaks to me. So thanks for taking the time to come on today. How fun it is to be an airline pilot, why you love what you're doing, how you've protected and insulated your portfolio so that you really don't care if they fire you, but you get to go out and fly and have fun. And yet at the same time, your ability to scale and build systems and help people all around the world. I think it's absolutely fascinating. So thank you for doing that. If our listeners want to get in touch with you or learn more about you what is the best way to do that,
Steve Rozenberg 20:59
so they can follow me up on my website, Steve rosenberg.com. They can follow me on all the social media channels, Instagram, @Rosenbergsteve, YouTube, Facebook, LinkedIn, all those but I'm very accessible. happy to chat, happy to answer questions. I do coaching. I do masterminds. I speak all over the world. People have a question, feel free to call me and I'll be happy to help
Sam Wilson 21:20
Steve. Thanks again, man. Appreciate it. Thanks, brother. Take care.
Sam Wilson 21:23
Hey, thanks for listening to the How to Scale Commercial Real Estate Podcast if you can do me a favor and subscribe and leave us a review on Apple podcast, Spotify, Google podcasts, whatever platform it is you use to listen, if you can do that for us. That would be a fantastic help to the show. It helps us both attract new listeners as well as rank higher on those directories. So appreciate you listening and thanks so much and hope to catch you on the next episode.