Ep #377 – Robert Martinez – Award-Winning Property Management
Here is some of what you will learn:
- Build your own dream or help someone else build theirs
- It takes pain to change
- The importance of proactive reputation management
- Re-branding strategies
- The importance of building community
- Bigger is better (scaling for growth)
- Managing your business for growth
- The mindset of you vs you
- The new notions of success
To find out more about our guest: click here
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Full Transcript Below:
Ep #377 – Robert Martinez – Award-Winning Property Management
Hi! I’m Rod Khleif. Each and every week I record an interview with a thought leader that I know you’re gonna get a ton of value from. Now here on YouTube are the video versions of my podcast, Lifetime Cash Flow through Real Estate Investing. Now to make sure you get the latest information please subscribe and hit the notification bell. Let’s get started.
Rod: Welcome to another edition of How to Build Lifetime Cash Flow through Real Estate Investing. I’m Rod Khleif and I am absolutely thrilled you’re here and I know you’re gonna get tremendous value from the rock star that we’re interviewing today who happens to be the CEO of Rockstar Capital. His name’s Robert Martinez and his company, he’s the CEO, has thirty-six hundred ninety nine units in twenty one communities and they’ve got a lot of accolades regarding how they manage and we’re gonna talk about that and some of the strategies he’s used, but without further ado welcome, my friend.
Robert: Hey, Rod. Thanks so much for the opportunity on your show. It is an absolute honor and congratulations to you all your success.
Rod: Oh, thank you buddy and likewise, likewise for sure. So, you know let’s start out like I start out most interviews. Just having telling people how you got cuz you didn’t, you weren’t born with 3,699 doors.
Robert: No, no.
Rod: Talk about a little bit about your, you know, your life cycle in this business. How you got started and how you got to where you, the success that you enjoy right now?
Robert: You know, unlike a lot of people you know, you’re taught to go to school, get good grades, you know? And you go off to college and you major what you think you’re supposed to make you. You become an attorney, a doctor, an engineer. You do something like that and you think that’s gonna be what you’re supposed to do for the next, you know, 40, 50 years, of your, the best years of your life and then, hopefully you’re gonna save enough and retire and try not to die before your money runs out, you know. And that’s such a failed-failed formula and, you know, and, you know, but what happens, it would be big lesson in my life that I’ve learned is, you know, necessity is the mother of invention, you know. And when somebody gets painful enough you make a change, you know. So, just like I explained, I went to a good school. I have an engineering degree and I wouldn’t became a sales guy which I think later on is a great attribute when you get into real estate investing, right? Cuz it’s marketing. It’s like, you know, what is your personality. I didn’t, I wasn’t one of those engineer guys, they had the 3.8 A to 4.0. I would have been closer to the like 3.0, 2.9, right? And so, when my company hired me, they wanted, you know, sales engineers. They want a guys that knew how to speak it over the language but also use them that personality and so, what happened was that we went through a few transitions in the company I was working for and, as you know, they always want to cut costs to justify the purchase that they just made. This has we tried to value add properties or everyone to cut expenses, and quickest way to cut expenses is to go and adjust and monthly with everybody’s commission plan, right? And who makes the most money? The sales guys. And what you realize that you’ve been in the business long enough, sales may are about to make X amount but the CEO, the CPA, whoever they, they’re up here and they don’t want you getting too close to them. And so, they rank the monthly commission, you know, and change your plans and after a few times that happening, I recognized it, I didn’t have control of my financial future. I didn’t, my employer did. Which means he had control when I was gonna retired along that path. He had controlled the kind of school my kids were gonna go to whether I want is in the private or public. The kind of house I was gonna have, the lifestyle, my vacations. And again, once you go through that and you come to this epiphany, this realization that you don’t have control, you start to do something. The pain becomes heavy enough that you wanna make a change. I was very fortunate. I started to listen in the radio, started to, you know, watch programs and, you know, try to find a different way of moving forward and I discovered a local real estate show in Houston, Texas called Lifestyles Unlimited. I’m a big supporter of joining a real estate and a real estate club and education clubbing your town, nearby reunion with other like-minded investors and I did that. And in no seven I joined that Club. By the end of the first year I had, you know, watch the videos, I got on the road trips, I had networks and we bought our very first property and I had a business partner he and I started a company. Of the next three years we did that together and I became the operating arm. I was a COO of that company and …
Rod: Can I stop you one second? You just stop you for one second because you’ve dropped a lot of bombs that I’d really like to circle back on and just add some emphasis to.
Rod: Then, I wanna continue your story. I should wanna circle back to that first deal as well if you don’t mind. But your transition from engineering to sales is, frankly, very unusual because most analytical people are not sales people.
Rod: So, you know, that that speaks to your success for sure because, you know, I see in this business a lot of partnerships between an engineering mind and a sales mind and those are fantastic partnerships but you’re blessed to have both qualities which is …
Robert: I appreciate that thank you.
Rod: Not normal. Yeah. Now, you talked about, you talked about the lack of control and a job and, yeah, I mean, if you’re not, you know, if you’re not building your own dream, you’re helping someone else build theirs and I wanna, actually, also hammer home one thing you said and that is, you have to have pain to change. You have to create leverage on yourself and so, you know, one of the things that Tony Robbins does, I’m a big fan of his and his events, is he has you do that he calls it the Dickens process. It’s this process where you stack pain on not changing. It’s very powerful process but you did it yourself and a lot of people they reach a point of saturation; enough is freaking enough. They’d be, it’s contempt even, it’s disgust with where they are to take action. And so, guys, you know, if you, and I can hear the thunder in the background. You told me you got a lot of storming going on. So, guys, your, that’s not a sound issue. That’s thunder going on in his backyard right now.
Robert: Yeah. It’s raining bad and we got a trouble cuz of a storm. Crazy weather.
Rod: Yeah. So, you partnered up with somebody and tell us about your first deal? How many doors? Houston is your market, right?
Robert: Right, right. So, I’ve had two lives. I had that first life when I had a business partner and then, I had the second life that I had with my own company. Right? So, my very-very first deal was a property. I purchased in 2010. It was short of the recession.
Rod: Good timing.
Robert: Yeah. Timing was great but, you know, there’s a lot of risk involve because nobody knew it was the other world who is the greatest depression, the greatest, you know, financial meltdown. It’s depression all that stuff. And so, it took a little risk and I think in real estate investing you have to have a little bit of a riverboat gambler mentality, you know. It’s not gonna be for the engineers, you know. They’d only see black and white. I think you’re gonna have to have a little bit of faith and some confidence in yourself and, you know, and sometimes when you have to put it on the line. And so, that first year was a, it was a 118 doors. It was 2.9 million dollars which is right around twenty-four thousand five hundred dollars a unit. I recall.
Rod: Wow, wow.
Robert: Super cheap. It was Post-recession and you can’t get a Fannie loan. Right? It’s gonna be bridge loan, recourse loan, right? Which means I had a sign on that line. And I’ll tell you what, nothing motivates you that you have to sign on the line and have your money, your children’s money, you know, everything’s riding on the success of that business.
Robert: And you work very hard. And so, as they would purchase it, we were at 80% when I took it over. Within 30 days, were at 90%. Within 60 days, we were at a hundred percent. They literally didn’t know what to do and so they kept make rating the units but they had no one to listen to, and all we do is we’ll be first take over, is we able to see vacancy loss. Let’s reduce the price and then, as we lease a unit, raise it up twenty dollars. As we needs a few more units raise it up twenty dollars. And just get rid of that vacancy loss but also don’t give away the farm. Test the market, right? And before long, we’re well beyond our debt numbers that we needed to be and within a year and a half, we radiated up to refinance it. I got an out of temporary debt and I got into my first Fanny debt and then, we did that again a few more times and then, so, we refinanced that deal twice. Today that deal is worth a hundred thousand a door. We free finance it twice. We’ve made some of the range around three hundred seventy percent cash back to the investors, not including the value that’s still in that deal. So, we’re, actually, talking about maybe do another refinance that out next year.
Rod: Sure, sure, sure. You know, I mean, it was hard to miss, it was hard to, I mean, listen, kudos to you but, you know, the pricing back then was so fantastic but you’re right, you had to suck it up because blood was running in the streets. If you read the newspapers, that’s how they coined it. Now, I know you’ve raised, you know, in excess of 91 million dollars for your deals, you do syndications, you’ve got a lot of deals going but before we started recording, you started talking about the influence that you’ve been getting from some of the big thought leaders, not really not thought leaders, but people that everyone knows, Gary Vee and Grant Cardone, can you speak to some of the things that you’ve learned about enhancing your business through those two gentlemen?
Robert: Right. So, I feel I’m a good operator and I’m a good natural operator. I think my sales background helps me a lot. I’ve got a little bit of marketing but I didn’t know how innovative that I was. And I got started watching out Grant videos but then, I really jot an arrow at Gary. Gary, he just said, as you know, he’s just a whole another animal. Just like, the guy’s literally moving all the time, but one time he said something that really caught my attention, he said, you have to try to put yourself out of business or somebody else puts you out of business, and then, made so much sense to me and it’s like you become like this internal theme and motto inside me and so with that, it stems the innovative juices and I learned a lot with him. I went to his 40 event which is, you know, for small business people. I’ve had a chance to visit with him in person for 30 minutes. I’ve brought my whole team up to do me a work but what I learned was story time and through the use of video. You’ve got to use video to storytell and if you just give me a minute to elaborate on that, you know, with that came reputation management, you know. Nobody shows up on a Saturday morning anymore to rent an apartment with for apartment guide book. They find you during the week and they’re gonna go through, not just ten but like a hundred different places, right? And they’re gonna start first, first with reviews which makes sense. You don’t go to Best Buy and know what TV to buy. You ask the sales guy. Hey, which one is one everybody buying. When you go to Amazon, you know which one to buy, no. You’re read their reviews then you go to pricing, right? But it all starts with reviews, well, what do those review say? I re back when I got started. I didn’t pay attention to that stuff. You know, it was like an ostrich in the sand. I ignore the neighbor reviews. I acted as if they weren’t there but as the use of smartphones and the internet came more-more widespread, you know, people are really voicing their opinions and you have to control the message. And so, I thought really creepy raw, why are they upset, right? And it means you think that is everybody have said no. It’s not everybody, it’s just that one person and why are those, probably, because they’re not paying their rent and now you’re forcing them to pay their rent or their coming bringing up issues in the past but it all has to do with finances, right? But what are all the good reviews? Every time somebody rents an apartment with you and they lease, aren’t they happy?
Robert: Every time somebody renews, aren’t they happy? So, why aren’t you asking for that review. So, we trying to learn to drown out the noise, right? But through the use of drowning out the noise and video storytelling, we’re able to tell what it’s like to live in our properties through the use of video. And so, it comes Saturday, when they show up on Saturday the deal is done, you know. They’re ready to lease. All they gotta do is make sure that it matches up to what they see and to what they saw online. So, that’s what I learned from Gary. Gary is great.
Rod: Yeah. That’s huge. Let me put an exclamation mark on that. And, you know, those of you that are operators right now, I know there’s a lot of listening that haven’t done a deal yet, but those of you who are operators right now that have a property, you’ve got to be checking what’s happening online as far as reviews and, frankly, proactively looking on a regular basis or having alerts in place so that when you get a negative one, not only do you try to get positive ones to drown those out but you actually respond, okay? And you say, well, you know, this is what we believe happened. You know, happy to help you. You know, please contact our office because we had not heard from you or whatever, you know, the story is, whatever the situation is but the key is to be proactive, wouldn’t you agree? And …
Robert: Absolutely, absolutely, you know. And, you know, you don’t even have to scale around. We got, you know, just under thirty-six hundred doors. I’ve got a company that we use that monitors all of our reviews and I get it a daily summary. I don’t care if it’s Google, Facebook, wherever it’s on. If there’s a review platform, we get that. And me and the rest of my corporate team, which is at ten other people, we each get this email every day. So, everybody knows that I see that review and I read them. I skipped stars and I look through three star, for the two, stars one stars and I send it back to everybody, I say, hey, what is this about? What’s going on? You know, and now they’re trying to contact me like on LinkedIn or something like that. We’re like, wooh. Now, you got a LinkedIn guy here like this even more, you know, pressure. Who is this person, right? It’s not your typical Google review or parnerratings.com review or Facebook. It’s somebody with a higher. So, we even pay more attention but sure these is it, you just wanna pay attention. Right? I think we all wanna do a good job but education and awareness is everything and if you know there’s a problem, you’ll try to fix it.
Rod: Yeah. And, you know, like we’ve bought a thousand doors in the last short, while like six months, and, you know, we’ve had to rebrand a couple of them and change the name because, you know, that hadn’t been paid attention to and it was all negative, okay?
Robert: Yeah, yeah.
Rod: You can’t start from completely underwater so at that point you change the name and you rebrand but now, very sound advice. Now, talk about the storytelling a little bit. Drill down on. Give us an example of what you might do in a video and with some little micro down a little bit.
Robert: Well for sure. You wanna show what it’s like to like to live at your property. So, separate yourself from the noise. Anything you do is gonna separate yourself. So, show resident testimonials, show the amenities. Do you will walk there? Do a drone. I mean, it’s like, we have 3d floor plans. We have interactive video. We have what we call the VLC. It’s a virtual lessee center. They can literally put on goggles and they can immerse themselves what it’s like. You can do it from home, from, you know, or you can do it there in person. So, when the weather’s like this and they didn’t make the trek out of your property, we can still tour the property because they can put on those goggles so they can see it. So, you wanna make it as easy to understand what it’s like because many people now are moving from across the country and they sometimes don’t even have a chance to see your property but if you don’t have a way for them to see who you are, then, they’re gonna skip you.
Robert: So, this goes back to what Gary said, “find a way to put yourself out of business before someone else does”, that’s what happened. You know, we wanna make sure that people can get to us 24 hours a day. We have a 24/7 customer line. So, if you wanted to lease an apartment with us at 3 in the morning because you work the late shift, you’ll call and you’ll get a trained leasing professional. If you call us during the day, somebody is going to answer that call within 3 calls, whether it’s our leasing team or a customer hotline to 3 rings. I’m sorry, 3 rings. 3 rings, excuse me. 3 rings. So, if my team is busy talking to you and we don’t want to interrupt the conversation, the momentum, that phone’s going to get picked up again 24/7 by a trained leasing professional. You want to make it easy to lease with you. And video to returns a wonderful way.
Rod: How do you, you know, like so many people will do an inquiry online or they won’t call, they’ll fill out a form or they’ll do something, what is your, because this is one of the questions we ask property management companies, what their response time is and it’s one of the stock questions that we ask, I’m just curious. By the way, do you use third-party property manager or do you manage in-house?
Robert: We do everything in-house. We use a third-party management software. Right? Like a real page or those kind of groups like that, but, you know, we do everything in-house. Rod: You do in-house. So, what is your, you know, what is your standard operating procedure from when you get an internet need in the response time to get back? Because, you know, if they send something to you, they’re instantly going to the next one. Unless they hear back.
Robert: Yes. The deadline is 24 hours, right? And it’s funny I got an email this yesterday from my marketing director saying, hey, these properties are above the 30% number. Meaning, that 30% of their leads aren’t getting answered within 24 hours. We pay a lot of money for those leads, you know. We do a lot of research whether it’s through a third party or our own generation, right? Through to our websites, through the video promotion. There are sponsored ads on Facebook. That needs expenses. So, we make sure that our teams and there’s somebody watching, you got a pay, that said it’s 40 hours, if they’re paying attention to those leads. If it’s important enough to you, you’ll take it out of your pocket to make sure somebody’s watching it, but …
Rod: Yeah. I would even argue that it should be faster than that, frankly.
Robert: Sure, sure.
Rod: But let me ask you this because I know you’ve got, you know, that you were involved in a study of over a hundred thousand communities, nationally, and four of your communities ranked in the top one percent out of a hundred thousand communities, so, I wanna drill down on that, I mean, which is kudos. I mean, that’s really impressive.
Robert: Thank you.
Rod: I wanna drill down on, on some of the things that you do to make your communities real communities.
Rod: Can you speak to some of the things you do that people may or may not know?
Robert: Well, number one, you gotta have an active owner. I mean, it is a representation of you. It’s your reputation, right? Which means reputation management. And the way my property looks is gonna be is how I feel my standards, my quality, you know, what’s acceptable, what’s no acceptable to me.So, I think it starts at the top and then it flows its way down. As I mentioned before, we use a company called JTurner Research. Big national company. They’re the ones that monitor every single user. They had what they call their ORArankings. I forget what the O and the R stands for but their assessment of all your reviews and they monitor Facebook, Google, parameters of every platform and then, again, I get a daily summary every single night, over this app. If you’re paying attention, you’re gonna do something. It only makes sense by the end of the year, some of your properties gonna redo all. Our best properties ranked 39th in the country in reputation management out of a hundred and one thousand communities survey. That property just won the National Property of the Year at the National Park Association we’re, because we’re paying attention.
Rod: So, I wanna, sorry. I was asking the question a little differently. What do you do at the community level? What do you do at the, you know, your on-site team? What do they do to make sure, you know, before it ever gets to an online review, what do they do to create rating fans out of your residence?
Robert: It’s all about the introduction and when they move in. It’s all about that. The first impressions are everything. So, how is that unit presented to them? Was the maker made proper, right? Was there spillage of the paints? Did you not take their pest control and they saw an S and a roach the first thing they moved in? I mean, you’ve got to take care of it but they have to have a voice. Give them a voice so that interaction between the manager and/or the assistant manager and the residents soak in, right? You know, and we may vary, we’re very good about making sure that our people walk that unit. Impressions are everything. Then, once it is there, what is it like to be there? Well we spent a lot of money on amenities to make sure that the amenities and the property are what’s required. All of our properties have a pet park, all of our properties have a pavilion in an outdoor BBQ grill area, some of our properties have other amenities, right. But we wanna create as many community building events, I’m sorry. ….
Rod: That was I was looking for. That was I was looking for as well. Talk about, talk about some of the things you do to build a sense of community.
Robert: Sure. I think when you come with the understanding that this is their life and they choose to share their life at your community, so, that means we’re gonna go through birthdays, weddings, booths, you know, you will always be part of their life, five, ten years from now. And if you look at where housing is going, especially here in Houston, more than half the population rents, right? And then, it’s even getting bigger.
Rod: And numbers gonna grow. Yeah.
Robert: It’s gonna grow. So, trying to understand what people want. Well, they don’t wanna go to a laundry room, they want in house washer and dryers.
Rod: Right, right.
Robert: Right? You know. So, it’s not like for the class As only, it’s for your beads to seeds. They want that community. Now, we’re talking about smart features in smart blocks and all these kind of things that the next level but you want …
Rod: Give some examples of some of the smart features that you’re either evaluating or already implementing.
Robert: Right. So, right now at are our two of our newest sites, so these are class As, so the budget is there, right?
Robert: The ability to take, just like you’re able to take your keys open your door, I mean, your car door, what are the ability to open your front door. …
Rod: Through your PDA. Okay.
Robert: Exactly. Or if your mom’s gonna come visit your apartment and she stay for the weekend, right? You can send her the password code and she can use it in, you know, the plug-in, nest-thermostats. The ability to pay, well, right now, all of our problems have been to pay rent online through voice. So, you can go to, hey, Alexa pay my rent, right? It’s just the ability. Anything that saves time is where we wanna be.
Rod: Very cool. Have you, have you installed the, you know, the FedEx boxes in all your community so your management team doesn’t have to deal with all the packages coming in.
Robert: That has not happened yet. Visiting committees where I see them, it’s actually pretty cool. I’ve actually surveyed my company’ at my communities in … for reason I understand why we’re gonna work against the norm but their same packages isn’t an issue yet which I’m shock but every case but I’ve been at other communities were, you know, would you like to hear where I live? They don’t have that but they deliver the package to my front door every day.
Rod: Okay. Your front door, yes.
Robert: My front door.
Rod: In a lot of the communities, of course, it ends up in the leasing office and I’ve seen stacks and stacks of that stuff so I was just curious. Okay. So, also …
Robert: No, no. I’m sorry. I lost connection for a second.
Rod: Okay. No, no. No problem. Talk, you know, we talked before we started recording about one of the secrets to your success is the size of your communities. Can you speak to that a little bit as well?
Robert: You know, it’s really interesting when I was early on in my career I thought the smaller count the better because if I can eliminate any middleman between the property manager and the resident that was good because if I have an issue I go straight to you, you probably wanna, if I’ve hired, right, do you want to fix my issue? I saw that in our larger sites when I was a little earlier in my career had the occupancy issues, had to turn over issues. Right? Because there’s too many people in the loop between the resident and the manager. As I evolve and those problems were really good, right? Though those early ones, hundred units, 150-unit ,180 units but because I was putting my own personal effort into it every single day. I was basically another person paying attention. As you grow, you can’t do that. You can’t have 20 properties and be every single site so, you need to have the budget to be able to hire somebody closer to your standards, closer to what your expectations are. That doesn’t have during have 50 units …
Robert: Or hundred units. You need to have 300 units and even in 300 units if you’ve got Class C rents, right? You’re gonna get a class C manager at 300 units but Class B rent, you get another one hundred, two hundred dollars on the average rent number. Class A rent, you go get you a 80, 90, 100 thousand dollar a year type person who has higher standards, right? So, units is very important. Bigger is better and I think …
Rod: Bigger is better.
Robert: But it is better. I recognize that because it’s not just staff, you have a bigger marketing budget. You know, if you wanna do $1,000 ad on Facebook or wherever, $1000 on a hundred-unit property it’s a bigger percentage than it is on a three-unit property, right?
Robert: So, it gives you more options.
Rod: Sure, sure, sure. Good, good. Let me ask you this. I like to ask this question, especially someone of your stature. If you could go back and give your 20-year-old self some advice about this business, with what you know, what might you tell your 20-year-old self?
Robert: Go low faster. Go low faster. You know, my first year about one deal a year for the first, three or four years of our growth. It wasn’t until later that I recognized, man, we’re really good at this. Man, we have these achievements and I can, we do my, I can only be doing better myself but better for my team because actually, obviously, as they, as we grow, they’re gonna grow. I can pay them more. We can get, you know, we can grow together and I think that would be the biggest one is that, you know, but why, why didn’t I grow? Because I wasn’t confident in myself.
Robert: You know. I think you need to find that confidence and I think you need to jump into the pool and learn it and once you figure out, push yourself, right? Because it’s only getting more expensive. We talked about it. Twenty-four thousand a door. I mean, you know, …
Rod: Yeah. I mean, that’s nice. Those days are gone. Will they come back? Very possibly. But they’re gone for now. So, let me ask you this. Throughout your career, you know, people think that it’s all drowses the whole way. Talk about a time you got your butt kicked. Like a dozy. Talk about one of those.
Robert: Well, you know, what the biggest the big is your successes in the future come from your mistakes in past.
Robert: It’s okay to have those setbacks just to learn from it. This goes back to where I learn with the bigger is better. We did not have any class A properties at this point, this is 2015, and oil was crazy in Houston. Oil like, you know, near $100 a barrel. Jobs are left to right we’re growing at a pace of a hundred and 110 thousand jobs a year for the past three years. I’m like, you know, what I’m gonna kick it up a notch. I’m gonna go buy a Class A. I’m gonna see if our business model will work in the class A and I’ve learned that it’s really doesn’t. You gotta adjust the model differently but that B, C model doesn’t work in the Class A because there’s too much turnover but there’s, at that time there was so much new construction going on in Houston. I lived in with a 51-unit deal. And I was in Downtown, Midtown area. Going up against 3, 4, 500-unit in the communities that have theater rooms, like amenities, you know, and I’m like, you know, it’s okay. I’m gonna be the low-cost provider. The rents are 1,800 to 2,000 dollars. I’m at 1,200 1,300. It’s okay. I’ll manage this like I have because it’s only 51 units or limit my exposure, you know, it was over a, I think, hundred eighteen thousand a door at that time. At that time, the most expensive property I had is 60 a door, you know. So, it was a big job.
Rod: It was a stretch, yeah.
Robert: It was a stretch. What happened was, the market tanked and when I’m underwriting, it was a hundred the day we closed at sixty. By Christmas of that year, oil it was $30 a barrel. What jobs? If you had all this construction going on, everybody is trying to lease up. Everybody discounting concession and you just eat everybody below you and I got caught in a situation where I didn’t have enough units to be able to have enough options but, again, necessity is the mother of invention. That probably was our very first website. This is back in, I’m trying, 2015, I think is when 2014, 2015. I learned websites, learned SEO, I learned Facebook sponsored ads, I learned reputation management. We, that was the first party we ever had that ranked in the top 1%. Why? Because we had to. We had …
Robert: We had to learn all that. We had to be top ranked among these class As so we can try to get any kind of attention and demand and, you know, I didn’t, I was not the big ROI winner in our portfolio. In fact, I think we only may, like maybe, nine percent annualized 7% per year for, you know, four years of ownership, three years of ownership. Why? I learned all the lessons that we take for granted today that I took back to the rest of my portfolio because as times changed websites, sponsored ads, reputation management, mean everything on the B and C market or they didn’t mean anything five years ago, right? So those are the best lessons that I learned. I mean, you gotta get keeps in the face once a while to really learn that. …
Rod: Absolutely. Yeah. I know. Absolutely. And, you know, it’s interesting. Some of the most successful companies on the planet are the ones that started in the contraction because for that very reason. Because they have to be scrappy. They have to think outside the box and innovate and all these things that the companies are sitting on their laurels don’t so it’s an interesting parallel.
Robert: You have heard that. Blockbuster, I mean, Gary talks about some blockbusters who got killed. Netflix is actually in their office trying to sell their stuff.
Rod: Oh, I know. they could’ve boughtNetflix. Yeah. They could’ve boughtNetflix. It’s astounding.
Robert: They were no willing to evolve. They’re not willing to see where the market is going and I think that saves time, saves money and that’s where the values at.
Rod: Yeah, sure. You know, like taxi medallions.
Robert: There you go. Those were gone.
Rod: Right. So, let me ask you this. What do you think is the most challenging part of your role in your company?
Robert: The quality control. Cuz as you grow, you expect those standards that you have from way back when you expect when you were making, you know, 20-25 percent returns annually for your investors and as pricing goes up and rent follows is somewhat, you know, you’ve gotta reassess your expectations. Those early investors are so excited. And want ….
Rod: Sure. And they expect that. They expect that to continue.
Rod: That’s a big problem, yeah.
Robert: That puts a lot of pressure on you right now, you know, and what’s going on to here and Houston and this isn’t gonna be, you know, very, I don’t know, specific in your market but property taxes are out of control right now within a city, Houston in primary because, you know, you’ve got a change of administration, you’ve had hurricane Harvey, they hit us real bad and they want you a lot on infrastructure, so, in one year we can see a property tax increase of 70 percent and they act like nothing, you know. And if you’re already paying a hundred thousand a year and now you’re asked to pay one, so where’s that something doesn’t gonna come from?
Robert: You know. So, you have to fight it, protest it. You get happy you only get 15% because you were facing the borough of 70%, is the issues that I can’t control, you know. I can’t control others and my father, who is a master team builder and business guy. You can control what’s on the four walls of your business but I can’t control what happens outside the four walls my business, right? So, make this as strong as they can possibly be so that when these other issues attack from the outside you can better withstand it.
Rod: Love it, love it. So, what, who inspires, brother? Is there any or what inspires you? Do you have any favorite quotes? Tell me what …
Robert: I think my favorite quote is, “if you don’t like your situation do something about it”. It’s as simple as that you know. You know Gary’s quoted, “it’s always been you versus you”, and when you realize that, you’ll may change, you know. You know, don’t over qualified don’t give too much emphasis as somebody has an opinion of you or what your to, just follow your heart and to do what you want. You know, more people aren’t successful today because they listen other people. I said this fall is what makes sense to them and I think, once you can learn to eliminate the noise, you know, you get better but I think change is everything. Change is gonna come, right? I heard very few people in my life, in my exposure, that when change occurred, it didn’t get better for them, right? So, you don’t like your situation then change your situation.
Rod: Change it. Thank you, thank you. Let me ask you just a couple last follow-up questions here. What did you have to give up to get to the success that you have now? You have a family? Kids?
Robert: I do have a family and kids. I’m very early, you know. I’ve gone through divorce. You know, I hate to say that that’s what I gave up but, you know, there are goals that you wanna hit in your life, you know. And again, it’s you versus you, you know. But my tutor or the centerpiece of my life, you know, with soccer’s, a huge Park Club soccer’s a big part of what we do there, 13-11. I like to incorporate my kids in my daily business, you know, so I do put a lot of means to my kids are in that with me. We have lessons in the car, we talk about stuff. So my little window is all about water conservation and stuff like that, any importance of how money it, you know, the importance of the low flow toilet or what have you he gets it but, you know, that’s a big part of my life. I think you have to get rid of old notions of success and understand that things are changing and what is it really about in the future and how important it is and what supporting your life, you know. So, I think that’s important. I think you need a change about your life and what’s important to you 10 years ago, is it as an important five years ago? Is it as important as it is as right now, you know? So, you’ve gotta figure out what you want in life and then, go after it.
Rod: Yeah, yep, yep, yep. Well, listen, I really appreciate you coming on my friend and I’m looking forward to getting to know you better and …
Rod: You know, very impressive what you’ve done with your company Rockstar Capital and we’ll put the information in the show notes and thanks for your time, brother.
Robert: Thank you very much. We’ll, again, it was an honor to be on your show. It’s awesome to meet you. Thank you, thank you.
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