Alex Osenenko and Steve Rozenberg sit down with Dr. Charles Steve Shaffer and talk family, investing, and quitting one job for another.

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Transcript

Alex Osenenko: Boys and girls. Welcome to the next episode of the Mindful Investor Podcast Show.

Steve Rozenberg: Nice one.

Alex Osenenko: It’s pretty good. Today we have Dr. Steve Shaffer. Man, this one we teased out an [crosstalk 00:00:15] introductory episode. Yeah. Man, how exciting. This guy is an amazing personality. Like I’m talking about emotional, like if you watch this on video, his eyes light up. He’s so passionate about medical, he’s a doctor MD about curing people, and real estate. Equally, as passionate. And we talked about him potentially quitting. Actually, he’s really seriously considering quitting being a doctor in the interest of being real estate investor full time. Steve, you consider quitting your [pilot 00:00:44] so this was near and dear to you [crosstalk 00:00:46]. You took over this show.

Steve Rozenberg: We actually had some great conversations. And you know what you’re going to learn here is, putting himself through medical school, the guy bought a triplex, worked his way through and ended up leaving medical school debt free. How many people you know do that?

Alex Osenenko: That’s incredible.

Steve Rozenberg: That’s incredible. And the guy now he’s a doctor, and he just loves being a doctor, because he enjoys doing what doctors do. Bringing in life, being there when life ends, the full circle. He just enjoys what he’s doing and doesn’t have to worry about money. I mean, what a nice life that would be.

Alex Osenenko: It’s amazing. Let Dr. Shaffer save himself. Let’s get into the show guys. So we hear it, 2019 BiggerPockets Conference met a very interesting group of people, a lot of folks in different stages of real estate investment, adventure, career I should say, and this is what we’re going to talk about today is the adventure versus career. A lot of people get into real estate investing with a vision of passive income, with a vision of freedom for their families, for themselves, whatever the case is. But a lot of people who get into are professionals and today I’m blessed to have my co-host here, Steve Rosenberg, who’s an airline pilot, flies for United. And I have Steve-

Dr. Shaffer: Shaffer.

Alex Osenenko: Shaffer. That’s easy. I can pronounce that. Steve Shaffer who was a medical doctor. Both of them are successful real estate investors and have a little bit different paths. But at the end of the day, Steve Shaffer is going to talk today about the decision that he’s about to make. On whether to keep his day job, or transform it into something else. So, he can focus on real estate investing full time. This is fascinating topic and I’m sure many of you listening-

Steve Rozenberg: I think there’s a lot of people that either are in this boat or could be in this boat, like Steve and myself that you focus your whole life on one path. And all of a sudden for whatever reason and everyone has different reason, but their why changes and now they do a shift. And so, I’m curious to hear your story as to what happened and what caused you to, to actually even think of doing that shift, let alone doing the shift.

Dr. Shaffer: Sure, absolutely. No, that’s a great question. My story is probably a little nontraditional as far as the path of medicine, right? I don’t come from a long line of medical people. And my dad was a police officer and my mom’s a teacher and nobody medical in the family. And I grew up in West Virginia. And I wouldn’t at all say poor, like we were great. But I didn’t realize until I was much older that like, “Oh my goodness, like we had the nice house. And it costs, this house that we paid for forever, it costs half of what medical school costs.” So, I went to a private undergraduate institution in South Carolina for my undergrad. And it was kind of hoity toity, a lot of people there had some dollars. It was a private school.

Steve Rozenberg: [inaudible 00:04:08].

Dr. Shaffer: Yeah, they were doing great and I was not in that boat. And so I worked four jobs all the way through undergrad. And they were all food service. So, you know. And when I was a manager, when I was a cook, when I was a server. And was just grind-

Steve Rozenberg: Just scrapping and grinding.

Dr. Shaffer: Just grinding. And was able to graduate debt free, which is wonderful.

Steve Rozenberg: Oh wow.

Dr. Shaffer: And then again, looking up at the mountain of the med school debt. And so, I actually did an air force scholarship.

Steve Rozenberg: Okay.

Dr. Shaffer: And so I was a doctor for the air force for a while. But yeah, somewhere in there, into high school really. Even before I got to college, I read Rich Dad Poor Dad just like everybody else. [crosstalk 00:04:46]. Got bit. So, in medical school I bought a triplex, lived in the big unit, rented the other units to classmates. It pretty much covered the mortgage.

Steve Rozenberg: Based on that book? Based on what you’ve learned basically?

Dr. Shaffer: Yeah kind of, I mean just based on assets, liabilities.

Steve Rozenberg: Okay.

Dr. Shaffer: Right? Trying to wrap my head around that. Even at that stage where everybody’s just accumulating the student loans. And I accumulated some student loans that I shouldn’t have, especially in light of the air force scholarship. I’ve made a lot of mistakes along the way. But that was the first thing, that triplex looking up and being like, “Oh I live for free.”

Steve Rozenberg: Right?

Dr. Shaffer: Like the rent-slash-mortgage is covered. And that was in the good old days where I walked into a bank and they were like, “You’re in medical school?” And I was like, “Yeah.” They were like, “What’s your income?” I was like, “Absolutely nothing.” They were like, “Well sign here, we’ll give you a house. [crosstalk 00:05:31] Here’s your triplex.”

Steve Rozenberg: Yeah.

Dr. Shaffer: And then you know that shift, 2008 happened while I was in medical school. And so, when I came out I was on the back end of it. So, I bought a foreclosure for residency and did a live-in flip. And that was really the second deal. And then worked with the air force a little bit, got transitioned to a station in New Mexico.

Steve Rozenberg: Okay.

Dr. Shaffer: And did a flip down as well. And so like this, you know, primordial, starting with the single families and working my way up with the idea of always passive income.

Steve Rozenberg: Right.

Dr. Shaffer: So, I would say that the grind stuff for me, that shift was… It’s old.

Steve Rozenberg: So, now were you actually… You started doing real estate as a doctor?

Dr. Shaffer: Yeah.

Steve Rozenberg: It wasn’t a doctor first and then real estate.

Dr. Shaffer: Correct.

Steve Rozenberg: It was both running parallel.

Dr. Shaffer: Absolutely. And I mean I think it’s valuable the way that it worked out for me. So, like I house hacked in medical school. So, this time where some people were starting to eye the BMW and stuff, I was able to pull the reins back on that and be like, “Hey listen, you know, if we live for free, we can get out of this thing and not really have a lot of debt.”

Steve Rozenberg: Yeah. That’s some huge insight. I mean that that alone, just to think that way is, I mean talk about contrarian, I mean your complete opposite of what society thinks.

Dr. Shaffer: Sure.

Steve Rozenberg: Which is probably where you are today because of it.

Dr. Shaffer: Yeah, a little, I mean I have to be careful because that’s my thing, right? Is that contrarian side and that chip on my shoulder.

Steve Rozenberg: Right.

Dr. Shaffer: And so when I was in undergrad, I am sure that it was not actually as bad as it is in my mind. Where these guys, all of these rich guys, making fun of me for smelling like French fries. It probably wasn’t that bad at all.

Steve Rozenberg: Sure.

Dr. Shaffer: But that’s the way I remember it. That like that was-

Steve Rozenberg: So, that’s how it was.

Dr. Shaffer: Yeah.

Steve Rozenberg: If that’s what you think that’s what it was.

Dr. Shaffer: Right, right. But that was my chip. That’s what kept me going. And so I could not afford the Kaplan course to study for the MCAT, this admissions test to medical school. I couldn’t afford it. And there was no possible way I could afford it. Well, everyone else went and I remember showing up to the MCAT, a lot of them rode together too, and I wasn’t invited.

Steve Rozenberg: [inaudible 00:07:45]

Dr. Shaffer: That’s in the back of my head. Yeah. And so I showed up and it was me and a pencil. Because, that’s what you needed to take the test. It’s not a big deal, right? These guys had the layers that they teach you to wear in case the room is cold. They had the salty snack. They had Gatorade. They had like a system-

Steve Rozenberg: They’re in teams.

Dr. Shaffer: And they looked at me and I mean that was the one memory that I’m pretty clear on. That actually happened and they gave me a really hard time about it.

Steve Rozenberg: Really?

Dr. Shaffer: Yeah. And then I ended up doing quite well on the exam and got accepted to medical school first. And that was my thing, I was just like all right, well.

Steve Rozenberg: That’s awesome.

Alex Osenenko: That’s a pretty cool story. So, that sounds like you are basically putting… You’re scrappy, right? You’re entrepreneurial.

Dr. Shaffer: Yeah.

Alex Osenenko: That’s what it is. And you don’t see a lot of entrepreneurial doctors, nor pilots per se.

Steve Rozenberg: No.

Alex Osenenko: It’s interesting. So, let’s explore that a little bit. For those who are listening. Maybe they’re maybe an accountant, maybe it’s some other job.

Steve Rozenberg: Engineer.

Alex Osenenko: Engineer. So, your passion from what I understand, your passion for real estate is not really for real estate. Your passion is for independence. Is it building that-

Dr. Shaffer: Yeah, exactly.

Alex Osenenko: Building that wealth? And real estate is just a vehicle or you actually are passionate about real estate?

Dr. Shaffer: It is both. So, it is definitely in that financial independence, retire early mindset. And I consume a lot of content in that space. I love that stuff. I love thinking that way. I’m more of that… If you’ve talked to many of these people, the [fat fire 00:09:15], like I don’t want to be extremely frugal. I want to be able to enjoy my life. But yeah, it’s freedom. That is the driver. Real estate is an excellent vehicle. And heard other people say this so I don’t get credit at all. But like it’s not get rich quick. It’s get rich for sure. And especially in the market that I’m in.

Alex Osenenko: [crosstalk 00:09:29] I haven’t heard that before.

Dr. Shaffer: Yeah. So, the market that I’m in. Fargo, North Dakota, 2008. They didn’t know that it happened.

Steve Rozenberg: Yeah.

Dr. Shaffer: Because, every year you’re going to get that 2 or 3% plod. You’re never going to get 30% appreciation.

Steve Rozenberg: It didn’t swing far, so it didn’t swing far the other way.

Dr. Shaffer: It never went up a ton. It never went down a ton. It just, it just plods along and the population increases. You have a diversified employment base, like those kinds of things. So, I don’t know if he’s been on this podcast yet, he’d be an excellent guest? Neal Bawa offers a lot of insight into demographics and those kinds of things in areas as a multi-family guy. And like that is the part of real estate that I love.

Steve Rozenberg: So, you like the data, you like the data side of it or?

Dr. Shaffer: I like the data side, but it’s just really, yeah, I actually really liked the nitty gritty, but the multi-family reposition.

Steve Rozenberg: Okay.

Dr. Shaffer: So, this building is a small business.

Steve Rozenberg: Absolutely.

Dr. Shaffer: And it’s failing and I can fix it. So like Shark Tank, The Profit, those kinds of shows. That’s my jam-

Alex Osenenko: I love those too.

Dr. Shaffer: Yeah, right. [crosstalk 00:10:33].

Alex Osenenko: In Shark Tank-

Dr. Shaffer: Oh man.

Alex Osenenko: Every episode, every time. There’s not enough of these shows out there.

Dr. Shaffer: Yeah, sure. And the funny thing is they’re quite popular, you know? And so, Shark Tank’s doing great. But yeah, I mean Marcus Lemonis goes into this business and people, process, product. And fixes it, that is fascinating. And I don’t know enough about the [small 00:10:53] business.

Alex Osenenko: [crosstalk 00:10:54] Major dumpster fire.

Steve Rozenberg: [crosstalk 00:10:57] I’d like to backup.

Dr. Shaffer: Yeah, yeah. Sure.

Steve Rozenberg: So what I’m curious… Especially for people watching. How do you think differently today? Because, I want to go to where you are today.

Dr. Shaffer: Yeah.

Steve Rozenberg: But for people that are thinking of doing this, how do you think that you were able to change your mindset from what you thought of back in med school, right? You were on that path, but how do you think you are different today than you were then? And if you were talking to yourself, what advice would you give yourself back in the day?

Dr. Shaffer: Yeah, that’s an excellent question. I would say the reason I led in that way. The reason I laid that groundwork was I didn’t change that much. And so I think that if somebody is coming to this kind of a podcast from the medical community or whatever, they may have a bigger mountain to climb as far as mindset.

Steve Rozenberg: Yeah.

Dr. Shaffer: Because I was there mindset-wise, the things that I would do differently… I mean this is very candid, very personal stuff. But I used to gamble too much and I didn’t have money because the [macro 00:12:00] I was excellent in. You know what I mean? Like, “I’m not paying for a house. My car costs $3,000 and it’s great.” I’m doing all these different things to start revenue streams and all this stuff that’s smart. And then you go and give money away to the house.

Alex Osenenko: You have to live with little though too. Right?

Dr. Shaffer: You got to live a little.

Alex Osenenko: I was going to ask you-

Dr. Shaffer: Yeah.

Alex Osenenko: This is my question. When you had four jobs.

Dr. Shaffer: Sure.

Alex Osenenko: You went through medical school.

Dr. Shaffer: Yep.

Alex Osenenko: Air force scholarship. What do you do for fun? That was my question.

Steve Rozenberg: Gamble.

Dr. Shaffer: Not anymore.

Alex Osenenko: I guess there’s a little bit of a life has to be left. So, when people are listening, they might be wondering like, “Hey man, I can’t do that.” I mean Steve Shaffer is a monster. Like he’s smart, he learns stuff. He passes the tests, you know, without layers, what have you. But how do you blow off steam? How do you actually mentally get back on?

Dr. Shaffer: Yeah, I think, I’m glad you brought that up, I think that is a glaring weakness of mine. I’m not good at it because I had that chip on my shoulder still. You know what I mean? I’m the kid from West Virginia, I moved, the nobody believes in this thing or whatever. It’s really a lot of artificial now. But that’s what drives me and I’m not good at it. I’m not good at relaxing. I’m not good at unwinding and I actually have to work on it.

It takes work for me to be like, “Okay, I’m going to do nothing for a few days.” And I read, I mean, I really enjoy that. And so some people might get on me for that, “Hey, well that’s not really taking time off.” Or whatever. Like you’re still the… I love reading and I don’t get a lot of time to like sit and read. I consume a lot of content via audio because I commute. Back and forth [crosstalk 00:13:44]

Alex Osenenko: Yeah. We all are the same. I’m an avid podcast listener, and audio books.

Dr. Shaffer: Right.

Steve Rozenberg: But I will say much like him… And so I did a, over the summer, I did a mastermind with the BiggerPockets people.

Dr. Shaffer: Awesome.

Steve Rozenberg: Some very high successful people in this mastermind. And the biggest thing I got out of it was that I never celebrate my wins.

Dr. Shaffer: Yeah.

Steve Rozenberg: I’m always any win I get, it’s in the rear view and I’m looking at the next thing.

Dr. Shaffer: Yep.

Steve Rozenberg: It’s a fault, I think, of mine because I never, I mean, airline pilot, real estate, built a business. I never stop and enjoy any of it. Anything I do it maybe a dinner, but that’s it. And it’s moving on to the next.

Dr. Shaffer: Yeah.

Alex Osenenko: Yeah. I agree with that. So, celebration, let’s put a pin in this because this is an interesting topic. But you have a hobby. You ride a Harley, don’t you?

Steve Rozenberg: I do, yes.

Alex Osenenko: I fish. Fishing for me is that.

Steve Rozenberg: Clears your head.

Alex Osenenko: I’ll listen to a book. Like I wait. I’m not one of those OCD bass fisherman. I sit there and let them come to me. I like set it all up. What do you do? Do you have a hobby?

Dr. Shaffer: Yeah, kind of. I mean I actually really enjoy, I don’t know if this is obvi or not, it’s more work I guess, but I really enjoy working on the properties. So my-

Alex Osenenko: That can be therapeutic.

Dr. Shaffer: It’s really cathartic. And so, I have outsourced much. I have learned a lot. I held on to too many things for too long. But painting? Painting is mine. Painting is catharsis. And so, man, cutting in those lines and it’s so transformative in such a short amount of time for just [crosstalk 00:00:15:18]-

Steve Rozenberg: You’re seeing [crosstalk 00:15:19] You’re reaping the rewards of you’ve done.

Dr. Shaffer: Yeah you step back, and you’re like, “Oh.”

Steve Rozenberg: “I did that.”

Dr. Shaffer: “That’s pretty.” Yeah. And so, I really enjoy painting, but like painting houses. I wish I could paint people. That’d be awesome. I can’t-

Steve Rozenberg: You can [crosstalk 00:15:32].

Dr. Shaffer: No, absolutely not. Like I, yeah, I go to the painting classes. I really enjoy those.

Alex Osenenko: You do that? Wow.

Dr. Shaffer: Yeah, I really enjoy those. Those are fantastic. So, that kind of stuff. Like I, I want to do things. And so like the painting classes, the cooking classes, learning new things that is my relaxation. Like I love learning juicy stuff.

Steve Rozenberg: Do you tinker with stuff?

Dr. Shaffer: Yeah, some.

Alex Osenenko: Do you, let’s shift gears a little bit, let’s talk about your decision to now forgo or mostly forgo this hard earned profession that you’ve built a career-

Dr. Shaffer: Sure.

Alex Osenenko: You’ve built this, there’s progression, there’s opportunity where you are, right? And is a medical doctor.

Dr. Shaffer: Yep.

Alex Osenenko: Talk us through that decision. When was that initial thought occurred in your brain and how you developed it?

Dr. Shaffer: Yeah, I mean again, I have always been looking down the barrel of freedom. You know what I mean? From the get go. And so I took a step back and I was like, “Okay, science, I like people, how do I make money?” And then that’s how I ended up in medicine. Which is really difficult to put out there in the universe because that’s judged pretty harshly, right?

Steve Rozenberg: Sure, there’s a stigma to it.

Dr. Shaffer: Yeah, right. The answer in the interview is to help people and it absolutely is to help people. And the things that medicine has afforded me have just been outstanding. I mean, fabulous. And being there when babies are born and being there when people die and this amazing profession. I love it. And I think that’s an important point to make is that I don’t dislike medicine. I don’t hate my job.

And there’s a lot of doctors who do, they’re burned out. And that might be some of this audience, they’re burned out. They’re tired. Paperwork, insurance companies, their staff, billing. There’s so many things in medicine that that can cause you problems. And just like anything else, I selected my job on purpose. And so the job that I’m currently doing is perfect for me. Like schedule wise and the pay’s great. And the people that I work with.

Alex Osenenko: So, how do you leave that?

Dr. Shaffer: Well and that’s the question, right? So, I mean I am not-

Steve Rozenberg: You’re not like pushing to go, “I got to get out, I got to get out.”

Dr. Shaffer: Exactly. I am not leaving out of a sense of frustration or bitterness or anything like that. I’m leaving out of the ability to do so.

Alex Osenenko: Yeah, it’s intentional. I get it Steve. But what I’m trying to get to is why?

Dr. Shaffer: That’s all right, let’s get there. Yeah.

Alex Osenenko: Right? So, are you… The opportunity costs, right? So you leave that, you leave your professional behind, the opportunity cost is significant. Like what are you going to do with that time?

Dr. Shaffer: Right. Excellent. And I think that, to throw it back on you would be, why not? And like you bring up opportunity costs. And I would counter with sunk cost fallacy.

Alex Osenenko: [inaudible 00:18:31].

Dr. Shaffer: So, like 11 years of my life, so four of undergrad, four of medical school, three of residency. And I did this air force scholarship, which genuinely… I mean I’m entrepreneurial. The military is a bad place for entrepreneurial people as Steve made out. So, I did not have a good military experience and most of that, almost all of that was entirely my fault. And so there’s a lot of lessons that I learned there. But you have this massive cost in the rear view mirror and now you have this great salary. And honestly, the hardest part for me in the fire discussion is 401k, 457 some of these tax deferral vehicles for that income. I don’t need it. So, I think that-

Alex Osenenko: Hold on, let’s just take a second here.

Dr. Shaffer: That’s okay, yeah.

Alex Osenenko: That’s really interesting. So, your aspiration is not to make more money, but then this is where I’m confused. You are an incredibly driven person. I think a rare breed I’ve met, top the top 1% of people I met. And I meet some high powered people.

Dr. Shaffer: Sure.

Alex Osenenko: Very driven. Where is that drive going to go? I’m wondering like, okay, it’s not the money necessarily. You’re not going to all of a sudden start making 10 times as much in a year or so. But-

Steve Rozenberg: I think what you’re asking is, is you’re asking destinations [crosstalk 00:19:56] and I think he’s saying he’s doing it for the ride.

Dr. Shaffer: Yep.

Steve Rozenberg: And I think that’s a bit of the difference because I’ll tell you very similar, just like an airline with airline pilots, I fly with guys all the time that are miserable. And they would be miserable if they were sitting on their couch flying from home. They would still, whether it’s the company screwing them over, or the union, or this, and it’s just nonstop. And whenever I hear that, I’m sure, just like with doctors, I always think of the Guns and Roses story, right? Guns and Roses was at the top of the world and they broke up because basically they didn’t get along. And you’re thinking these guys were on top of the world. They were making the money, they were living the life. But to us they were living the life. To them they were miserable and unhappy.

So, the fact that like I… Same thing with flying and maybe the same thing in your position. I love going to work because I don’t need it. I go to work and fly, but I don’t need to be there. So when I hear people bitching and moaning all the time, I’m thinking to myself, you can complain or you could change your environment. You’re choosing to be unhappy. You could do what I did. You could buy real estate. You could do these things you choose not to. So, this is the environment you’re in and you go to work and it’s like, “Oh, did you hear about the union? Did you hear about this?” And I’m like, “No, I didn’t hear anything.” I don’t get any of those emails. I don’t get anything. Because I want to go to work and I just want to fly and enjoy it. And is that similar?

Dr. Shaffer: It’s very similar. And we can get into… I have some questions for you with that too, that Alex kind of clued me in on. Because you kind of hacked your job.

Steve Rozenberg: Yeah.

Dr. Shaffer: You’re doing the what? This two route thing, right?

Steve Rozenberg: Yeah. Two times a month.

Dr. Shaffer: That’s awesome. That’s amazing. And like it exists out there for a certain number of pilots. And some of these guys are grinding it out and they’re miserable. Charlotte to Dallas and you’re like, “Listen man, switch gears. That’s all you have to do.”

Steve Rozenberg: Just change your perception.

Dr. Shaffer: Yeah. And so, I was a primary care physician. I’m family medicine trained. And so I was a primary care physician and I loved primary care, you have this sense of ownership and these are your patients. And you get to see the progress because they’re coming back. I really enjoyed it. There’s also a lot of challenges in primary care. It’s not extremely well compensated. There’s tons of paperwork, there’s a lot of frustration. There’s frustration around noncompliance. And so, it gets into this huge ball of bitterness where you spent 11 years of your life to like help people. And you have lost it.

Steve Rozenberg: [inaudible 00:22:16].

Dr. Shaffer: You have 0% of it. Now, you hate these patients. Some people. You know what I mean? They’re coming in and you hate it or whatever.

Steve Rozenberg: And that feeds upon itself.

Dr. Shaffer: How did we get here? It’s 100% the wrong way. And so I have been very fortunate where I’ve been offered opportunities in my life, and been able to take advantage of them. But I started moonlighting at this, [inaudible 00:22:44]. I’ve got a second job. Because the job that I’m currently doing now, I started as a moonlighting position. And I’m a hospitalist.

And what that means is when the ER calls to admit somebody to the hospital, I’m that guy. So I go down to the ER, I admit the person at the hospital and then I’d take care of the people that are in the hospital overnight. Overnight only. I only work nights. And there’s a couple of reasons for that. But that was one of my conditions when I came on to that position. That position had never existed before. But several of the doctors that were there didn’t want to work nights. They don’t like it, you know?

Steve Rozenberg: Right. They probably want to be with their families.

Dr. Shaffer: Yeah. They’ve got families. That’s great. And so I love it. And so it’s, it’s seven on, seven off, 12 hour shifts. I have half my time off to myself. 12 hour shifts if I am not busy, I get to sleep.

Steve Rozenberg: Now is some of that because you don’t have to be around other doctors? And you can just do what you want to do, which is take care of people.

Dr. Shaffer: Absolutely. And then the cool thing with that is, I mean I’m really hesitant to put this out on a podcast just in case it ever goes anywhere. But I had an administrator from the hospital the other day literally run into me like physically in the hallway and he’s, “Oh excuse me.” Because, I was in this kind of employee stairwell. He’s like, “Hey, are you lost? I can get you back to the main area or whatever.” And I was like, “I work here.”

Steve Rozenberg: “I work here.”

Dr. Shaffer: Yeah. He’s like, “Oh cool. What do you do for us?” I was like, “I’m a physician.” And he’s like, “Oh neat man. Did you just come on?” I was like, “I’ve been here two years.” But that was the secret sauce to me.

Steve Rozenberg: Absolutely.

Dr. Shaffer: I don’t go to a meeting.

Alex Osenenko: Are you thinking then, this is going to be your gig moving forward?

Dr. Shaffer: No, no. So, this is the gig that I’m potentially hanging up and it’s great. It’s wonderful. I love it. But just like the flying two routes or whatever, it is wonderful to know that you can lay it down.

Steve Rozenberg: Yeah. It’s funny, you know, I did a trip one time where I was about three, four years ago. I was going down to Rio de Janeiro and we had the chief pilot with us and we’re flying down to Rio and he’s like, “Stevie, how long have you been here for?” And I said, “About 15 years.” And he’s like, “Really?” He’s like, “I’ve never met you.” And I said, no offense, “I don’t want to meet you.” Because that’s the 10% that are always in trouble. And I said, “Do you know what’s even more funny?”

I said, “When I was based in Guam, you are the chief pilot in Guam. And I never met you there either.” He’s like, “I get it.” He’s like, “I get it.” But that’s, again, I don’t want to be in that crowd. I go to work, I love what I do because I love to fly. And then I love to go home and I leave it all there. And so, a lot of people they take that home with them. And that’s when it starts eating them up and it eats them up from the inside and then they’re miserable at home. Then they’re complaining, then they’re this and that’s the challenge.

Dr. Shaffer: Yeah. And I think the one thing that, and Alex was probably going there, but like pilot and doctor. And you mentioned engineer earlier.

Steve Rozenberg: Yep.

Dr. Shaffer: It’s interesting to me because like I have met so many engineers in real estate investing. And several of them that have gone full time and now they’re realtors and there’s a lot of that. I have, and I’m sure their family gave him grief or whatever, that doesn’t seem as big a deal. But if you are a doctor and you said that you were going to quit medicine to be a real estate investor, everyone thinks you are. [crosstalk 00:25:46].

Steve Rozenberg: You got on the podcast.

Dr. Shaffer: Yeah. Right. I got on this podcast, they were like, “This guy’s an idiot.”

Steve Rozenberg: “What is he thinking?”

Dr. Shaffer: Absolutely. Because it’s this massive income and you’re potentially landed down for something that is perceived as risky.

Steve Rozenberg: Sure.

Dr. Shaffer: But the thing with pilot and medicine and engineer and a couple other professions, it is so woven into your identity.

Steve Rozenberg: Absolutely.

Dr. Shaffer: And I mean you are a pilot. You have a thing-

Steve Rozenberg: It’s who you are. [crosstalk 00:26:13].

Dr. Shaffer: You have the cool hat.

Steve Rozenberg: I got the hat.

Dr. Shaffer: I got the white-

Steve Rozenberg: I should wear the hat from now on.

Dr. Shaffer: You should wear the hat from now on. Be the captain. I’ve got a white coat. I’ve got a stethoscope.

Steve Rozenberg: Yeah. That’s the identity.

Dr. Shaffer: That’s it. That is your identity. You know what I mean? And so laying that down, that is, I think the climb that most people in medicine would really have a hard time with. You are-

Steve Rozenberg: You have to change who you are.

Dr. Shaffer: Sure.

Steve Rozenberg: Yeah, absolutely.

Dr. Shaffer: And it’s not even the people who like, correct you when you say Mr. because those people are a special breed. “Dr. If you please.”

Steve Rozenberg: “It’s doctor.”

Dr. Shaffer: Yeah. You don’t like those people. But not even just those people. I mean you’re a doctor. It’s a lot of work. It’s, it’s one of the hardest paths there is, right?

Alex Osenenko: So let’s sort of take it all the way.

Dr. Shaffer: Yeah man.

Alex Osenenko: I still am struggling to understand why.

Dr. Shaffer: That’s okay. Yeah.

Alex Osenenko: I want to get that. I want to leave here-

Dr. Shaffer: Sure.

Alex Osenenko: And the audience with understanding. All right, what’s next for Steve Shaffer? What is that next thing? Is it more freedom?

Dr. Shaffer: Yeah.

Alex Osenenko: More freedom to do what you want. Because you’re a driven guy you’re going to do stuff.

Dr. Shaffer: Yeah I know.

Alex Osenenko: You’re not going to paint.

Dr. Shaffer: Oh, yes I will. To your point the… When you asked about relaxation earlier, that is actually the part right now that I am figuring it out. And that’s the part that scares me. Because if I get to the point where I’m satisfied with my passive income and I don’t have a full time job anymore. But I mean I have three kids and absolutely love them. I love chasing them around and occasionally I catch one of them.

Alex Osenenko: You have three kids? There’s new things-

Steve Rozenberg: Keep popping up.

Dr. Shaffer: Yeah. Yeah, no.

Alex Osenenko: 24 hours a day. Do you have more?

Dr. Shaffer: Yeah, no.

Alex Osenenko: Do they teach you more than school? [crosstalk 00:27:57].

Steve Rozenberg: Time travel.

Alex Osenenko: Time [hockey 00:00:27:59].

Dr. Shaffer: Yeah. The same amount of time. But I, to answer your question directly, I am scared about what’s next. Because I’m not good at taking my foot off the gas. I’m just not good at it. And I am sure that it will pivot into something. Like you asked the tinkering question I wanted to like take off on this whole, like I got a grant for this STEM education thing that I came up with.

There’s stuff in my head that I haven’t had time to act on, but like I am genuinely… Us three at the table. I would love to go to culinary school. Why? Because I don’t-

Steve Rozenberg: Why not?

Dr. Shaffer: Because I don’t know how to do it yet. You know what I mean?

Steve Rozenberg: So, you’re a problem solver. You like to solve problems.

Dr. Shaffer: Love solving problems.

Steve Rozenberg: Puzzles?

Dr. Shaffer: Yeah, absolutely. My daughter inherited it. We did an escape room for her birthday the other day and it’s… She is the best. So my daughter is-

Steve Rozenberg: I’d love to go to a game night at your house.

Dr. Shaffer: Oh my gosh, my daughter… Oh, no you wouldn’t.

Steve Rozenberg: It’s probably pretty intense.

Dr. Shaffer: It’s cut throat. Yeah. So, my daughter is a testable, verifiable genius. Like literal genius. People call, they want to put her into programs. Like she is off the charts smart. I hope she never hears this. She’s off the charts smart. And I love that kid so much because she doesn’t know it yet.

Steve Rozenberg: Right.

Dr. Shaffer: And she’s still very grounded. And so, we walk into this escape room thing. And it is minimum four people per team because of the size of the rooms. And it’s her and I. And like she is below the age limit, everything. And the guy was like, “Hey man, well come on in and have a good time.” But whatever, we got out.

Steve Rozenberg: No kidding.

Dr. Shaffer: Oh yeah, absolutely she got out. That kid is so awesome at solving problems and whatever. And like seeing that, I mean that’s what’s next.

Steve Rozenberg: So, I have a question. Quick side note, kids.

Dr. Shaffer: Yeah, yeah, go for it.

Steve Rozenberg: How are you going to and are you going to instill this freedom mindset? Because I think what you’re asking and what he’s done. And like myself what you’re actually doing is it’s not necessarily… I don’t know if it’s necessarily a destination. I think what you’re doing is you’re buying your freedom or you’re getting your freedom. You’re getting the ability to make a decision on what you want to do.

And that is very hard. When you’re a pilot, when you’re a doctor, when you’re any of those things, you’re very conformed. And you can’t move out of these huge organizational structures. And now with him, he could do what he wants. He could say, you know what, tomorrow-

Alex Osenenko: He hasn’t done it yet so-

Steve Rozenberg: But he has the ability to say, “You know what, I’ve got real estate. I’m going to punch out. I don’t need this.” And so my question is are you going to instill that in your kids? And if so, how?

Dr. Shaffer: Yeah, excellent question. Absolutely. I don’t know how yet. I mean, exactly. And the, the interesting thing for me, I might get a little emotional. I’m going to try not to. My daughter, verifiable testable genus. My son, my middle son, so my daughter’s the oldest she’s 12, my middle son that that kid is awesome. I just really enjoy him. He is so fun. He’s 10 and he is perfectly normal, like upper tier of normal but normal. And then my youngest is six and he’s autistic. And so like you take those three kids somewhere and try to keep everybody busy for a minute, good luck.

And so, it’s been fascinating to find the things that they can all enjoy. And so solving problems, building, that kind of stuff, that’s one of those things. And so there’s these… That’s kind of where the STEM education concept was born when I was working on that. A little more full. Like you can take them to these places, these Lego STEM kind of plays where they build things. There you go. The smart ones over here like, you know, constructing a skyscraper. And then my little guys like patterns, and so. But, you can keep everybody busy. And so my thing is I don’t have a book. I don’t have a program. They’re going to be very individualized. So, my daughter has already read Rich Dad Poor Dad.

Alex Osenenko: So, that’s an interesting. How old is she? 12?

Dr. Shaffer: She’s 12. And so the Rich Dad Poor Dad thing for me is interesting because I love that book very much. I read it every year. And there’s a lot of problems with it, holes in it, and people poke holes in it all the time now. But that inspirational piece is invaluable.

Steve Rozenberg: It’s a mindset shift.

Dr. Shaffer: It’s a mindset shift. It’s a great mindset book. And the cool thing for me is I am both, I’ve done both. I’ve climbed the academic mountain and I’m willing to lay it down to be the poor dad. Because he wasn’t the poor dad, right?

Steve Rozenberg: He wasn’t.

Dr. Shaffer: He wasn’t. And that, and that mindset shift, I want my kids to always be empowered to quit. Yeah.

Steve Rozenberg: Yeah. To have the freedom to make a decision.

Dr. Shaffer: Absolutely. I want them to be monsters that are absolutely persistent and never quit and like work so hard, until they should quit. And I want it to be their decision.

Steve Rozenberg: So one of the parts of that book, and I believe it was that book where he talks about minding your own business.

Dr. Shaffer: Yeah.

Steve Rozenberg: And basically you know where you work your job, but you mind your business. Meaning you run your business at nighttime and on the weekends to build up that empire basically.

Dr. Shaffer: Sure.

Steve Rozenberg: So, that’s obviously… So, I’d like to go into where you’re at now. So, that’s kind of what you did. You basically minded your own business.

Dr. Shaffer: I did.

Steve Rozenberg: You ran your real estate up. So, take everyone to where you are today in this cycle, and what you’re doing and where you want this to go.

Dr. Shaffer: Excellent question. Thanks.

Steve Rozenberg: You notice I get the excellent questions, he hasn’t said that about you.

Alex Osenenko: I’m just fascinated processing.

Dr. Shaffer: It’s because excellence’s not a good enough word for you Alex.

Steve Rozenberg: Oh wow.

Dr. Shaffer: We need a better superlative. [crosstalk 00:33:41]. Right now I am at 42 units. If I close, what’s in front of me, we’ll be at 61 by the end of the year. I say we a lot, it’s just me. And so I own 100% of the equity right now. I used my own money up until this year.

Steve Rozenberg: Okay.

Dr. Shaffer: And I have started taking in some outside money but as debt.

Steve Rozenberg: Sure.

Dr. Shaffer: And so just saying, “Hey listen, I’m going to give you a return on your money and I’m using that for down payments and renovation.”

Steve Rozenberg: And there’s nothing wrong with that.

Dr. Shaffer: No, no, no. And the thing for me is like the only deals that I’m doing right now are grand slams.

Steve Rozenberg: Right.

Dr. Shaffer: And so, I’m able to be a little choosy. I’ve closed on a couple of decent multi-families. And in Fargo, North Dakota, there’s probably 50 people that trade everything. It’s just-

Steve Rozenberg: It’s a small community to begin with. And then you get-

Dr. Shaffer: Sure. So, if something’s coming up, I’m on the list of people who get called, you know what I mean? And so, that transition. That shift is enormous. And so, and I don’t know if you guys have experienced it yet, in your businesses and stuff. But I mean, yeah, you get to that point where people start bringing you deals. And then it’s picking gold up off the beach.

Right now my baby is a 15 unit building. I love it. It’s gorgeous. I’m so excited about it. But it is my problem solving just masterpiece. So, the thing in multi-family is you buy on [actuals 00:35:00], right? You do not buy in [proforma 00:35:00] period. Understood, this building, the actuals were horrible and no one bought it because no one went to look at it with their eyeballs. And so I walked in and did this massive renovation. It was ready. It was a release project.

Steve Rozenberg: Oh wow.

Dr. Shaffer: Yeah. And I mean management wasn’t where it needed to be and all this stuff. So I mean, I just stumbled into it and it’s awesome. So, by the time we closed that… When I bought… When I put it under contract, there were 40 units that were full out of this building. You know. So, when I closed there were nine, now we’re full a couple of months later.

Steve Rozenberg: Nice.

Dr. Shaffer: Yeah. But they have this massive attic space upstairs that is an attic. That’s what it is. It’s going to be a three bed, two bath showpiece.

Steve Rozenberg: A penthouse type?

Dr. Shaffer: Oh, it’s going to be great.

Steve Rozenberg: Nice.

Dr. Shaffer: And so, like that kind of stuff. There’s this massive boiler that fed the building, but it’s been decommissioned for 30 years. I found a gentleman, an enterprising gentleman with a sledgehammer and a [settling 00:35:53] torch and now the boiler’s gone. So, there’s going to be a unit in the boiler room.

Steve Rozenberg: Nice.

Dr. Shaffer: And-

Steve Rozenberg: So, you’re seeing opportunity where other people don’t.

Dr. Shaffer: Oh man, the multi-family reposition stuff, juice in the [NOI 00:36:03], getting to where it needs to be and then how that translates into the value of the building. I love that.

Steve Rozenberg: Now when you’re taking in capital, what’s the exit strategy on those deals? Or is there an exit strategy?

Dr. Shaffer: Yeah, it’s a great question.

Steve Rozenberg: Great question again.

Dr. Shaffer: He got it again. Yeah, no. So I been refining out-

Steve Rozenberg: Okay.

Dr. Shaffer: All this stuff has enough meat on the bone, right? I’m coming out like 70/30 paying everybody back.

Steve Rozenberg: Nice.

Dr. Shaffer: Yeah. And it’s, yeah, it’s been pretty great.

Steve Rozenberg: That’s awesome.

Dr. Shaffer: Yeah.

Alex Osenenko: So guys, I feel like two of you can sort of sit on a plane, fly to what’s the furthest destination? Is it Sydney?

Steve Rozenberg: Sydney, Australia.

Alex Osenenko: 17 and a half hours. Talk one way. Talk to the other way and just like barely get to know each other. So, so why don’t we, why don’t we call this? It’s been a fascinating experience-

Steve Rozenberg: Yeah, great story man. Awesome.

Dr. Shaffer: Thanks for having me.

Alex Osenenko: I think the underline here is like the is the passion. You have the drive and the passion for all these things you do. So, I think in this people have this term for something like this, whatever you touch turns to gold. Because you have full attention and intent and focus behind it, which is quite fascinating.

Steve Rozenberg: Yeah.

Alex Osenenko: But let’s see how this story develops. So Steve, I’d love to have you on the show maybe what six months from now. Do you think that-

Steve Rozenberg: Will evolve by then?

Alex Osenenko: The job will come to an end.

Dr. Shaffer: So, we didn’t get into specifics. The job, what I’m looking at. I signed a couple of sign on bonuses when I came on and there’s really no reason for me to pay a penalty. I love my job. So 20 months.

Alex Osenenko: 20 months.

Dr. Shaffer: 20 months is what it is right now. There’s a step off point. So it’s basically, is it going to be one year or two years? There’s a step off point in nine months.

Steve Rozenberg: That’s when we need to talk to him, is in nine months.

Dr. Shaffer: Yeah, eight, nine months.

Steve Rozenberg: Yeah.

Dr. Shaffer: So eight, nine months I’ll be at a decision point.

Steve Rozenberg: That’s-

Alex Osenenko: That’d be a good show.

Steve Rozenberg: That would be a good [crosstalk 00:37:48].

Alex Osenenko: Let’s have a conversation then. And I’m so fortunate to go to this conference and meet people like you. Steve it was incredible.

Steve Rozenberg: Yeah it was awesome.

Alex Osenenko: Thank you for your time.

Dr. Shaffer: Thanks a lot fellas.

Steve Rozenberg: See you next time guys.