Our good friend, Rick Jarman is old school real estate, and has been doing it longer than any other guest we’ve had on the show so far. Rick has been successful, but has also been knocked down many, many times. This episode of the Myndful Investor Podcast explores his wins, failures, and how to get back up after real estate investing knocks you down.

Transcript

Alex Osenenko: Ladies and Gentlemen, welcome to the next episode of the Myndful Investor Podcast Show. It’s so good to have you here with us listening, learning, improving ourselves. Real estate is one of the best ways to build wealth and a future for your family.

Alex Osenenko: I’m very excited. I’m learning alongside with you, but I’m very, very lucky to have my co-host who’s … It’s difficult to call people experts, because there’s always more and more to learn, but true experts know that there’s still so much more to learn, and yet they already have this amazing foundation. My co-host is Steve Rozenberg. Steve, good morning.

Steve Rozenberg: Hey. Good morning, Alex. I agree. I don’t think of myself as an expert. I think of myself as a student. The day you stop learning is the day you start going backwards. You never stay the same, I’ve always learned. Every time you think that you’re the expert you’ll run into someone else who’s better. You do martial arts, right? You know that every time you think that you’re the baddest person there’s someone else that will come in and give you a lesson, right?

Alex Osenenko: Oh, yeah. That happens. Also, it’s this constant practice and constant improvement. It’s true for anything. You stop, you’re black belt, I don’t care, you’re third degree black belt, in two years, in a year, in six months, you just lose it. You lose a lot of it, or most of it, or some of it, but our guest today hasn’t lost it in many years.

Steve Rozenberg: He’s a black belt [crosstalk]

Alex Osenenko: [crosstalk] But he’s been at it for a while.

Steve Rozenberg: Yeah. He’s a black belt in real estate I would say. He’s one of those guys who does the fundamentals, right? That’s martial arts. You do the fundamentals over and over and over again to perfection. Our good friend, Rick Jarman, who if you follow him on social media he’s the old school real estate. Rick, thank you for joining us today. Appreciate you being on.

Rick Jarman: Well, I really appreciate you all having me on. I always tell folks, “I’m excited to be here.” I’d rather be here than in the best jail in Tuscaloosa.

Steve Rozenberg: Well, that’s good to know.

Alex Osenenko: Does real estate take you on a tour of multiple jails? I don’t know if that’s a thing. But, Rick, it’s really good to have you. It’s fascinating, I’ve been reading your bio and looking at your videos and you’ve done it for longer than any other guest we’ve had in here, and you’ve been successful, but you’ve also got knocked down many, many times. So we want to explore both the wins and the failures with you today. But maybe you can tell folks a little bit about how you got started and what motivated you, and the excitement of making your first few dollars. That would be cool to know.

Rick Jarman: Well, if I go all the way back, which me being 64 years old, my story’s kind of long. But I started doing construction between my 11th and 12th grade of high school, and I found out then I loved it. So I knew that’s what I wanted to do. So my senior year of high school I’d been working all my life. My dad was a World War Two veteran, had a complete mental breakdown when I was three years old. So he was in the VA hospital till I was like 15. Well, I got married at 18. So my dad was more like a big brother. But when he got sick, this would’ve been 1958, in those days the women didn’t work most of the time, the mother stayed home or housewife. Well, my mom didn’t have a job, didn’t even drive. I don’t know if they sold the house or lost their house, but the house, the car. I found out about four years ago, I have an older brother, that we were homeless for about nine months to a year.

Rick Jarman: I’m sorry. I know now why my mother worked so hard, to keep a roof over our head. So she instilled in us to work. So I had to work all my life, started really early. So anyway, I discovered construction. I knew I loved it. So I meet my wife my senior year of high school. She’s a little bit older than me, but she didn’t know it, because I was in her brother’s band. Anyway. I was playing music six nights a week at the Amata Inn. So I paid down on a mobile home. I found a piece of land. The guy finances it for me for $500 down. I put a septic tank in, water main. That’s my first piece of property I ever bought. I hadn’t turned 18. So I graduate from high school. Right before I graduated they delivered the mobile home and it gets destroyed. An 18-wheeler hit it when they was delivering it. And I’m thinking, “Now I’ve got to pay for this thing?” Because I’m just 17, fixing to turn 18 years old. I’d been 18 a couple days.

Rick Jarman: So anyway. I get out of school. I get a job at a cabinet shop, minimum wage, a $1.60 an hour. My wife, she was going to college. She dropped out till we could get on our feet. Just a few months later, a couple months, I knew I couldn’t live off that. I get into the union for a labor on construction job. Just a bottom low-as-you-can-go. Then I found out about the Carpenter Apprentice Program, and I said, “Hey, how do you get in this thing?” Well, my foreman said, “You just go down and tell them you want to join.” Well, it didn’t work like that, but I worried them for 30 days and I finally got to take the test. So become a carpenter apprentice. So I started learning my trade, and that was the start of it. I was one of these that was hustling, always doing work on the side. Things got a little tougher in the industry. I had a chance to get onto the University of Alabama in maintenance.

Steve Rozenberg: What year was this?

Rick Jarman: I graduated high school in 1973.

Steve Rozenberg: That’s when I was born.

Rick Jarman: So I got on at the university in October of 74. So I’m working at the university, of all things in housing. In the dorms and the rental property. I never was in the classrooms. What better training for having rental property? So my wife decides to go back to school. So I go to doing side work for people, and I did some work for a man that had rental property. That was my first exposure to somebody owning property and renting it. Of course, all my life my mother had always said, “You want to own your own house. You don’t want to rent”, because they had to rent all those years. So I’m doing this work for the man that owns this rental property. I’m thinking, “You know, this might be something right here.” So at this point we’re still living in the mobile home, but we sell it, and we decide to get our first house.

Rick Jarman: I was 21 years old. We bought it. We had a second mortgage on it for about a 1/3 of what the house was, but I didn’t have any money to get in it. But we bought this house. My wife and I fixed it up. We flip it. We go to our second house. We buy it, both these loans with some FHA loans. Second house, we buy it. Fix it up, flip it. So by the third house, which I was 21 when we bought the first one, two year later we’d lived in three houses, and I assumed we’d went from like a 700 square foot house built after World War Two to a 1800-something square foot brick house with an acre of land. So I’m thinking, “This is good.” That was my first flipping. But I just was still learning my trade and working on the side. But by 1981 I bought my first rental house.

Steve Rozenberg: Rick, did anybody give you advice on how to buy that rental, or was it just stuff that you had seen and you thought, “You know what, I’m going to dive into this”, or did you have a strategy based on the work that you did for the other gentleman?

Rick Jarman: Just working with the other guy, and I read an article, I’m going to date myself, in Reader’s Digest. It was called Beating Inflation With Real Estate. This article would’ve probably have been somewhere in the late 1980 or before I bought the first house. It listed three books that I said, “I believe I’ll get those three books.” In 1981, I’ve got one child and maybe another one on the way or whatever. My kids are 18 months apart in age. But my mother said, “What would you like for Christmas?” I said, “I’d like to get these three books.” The three books were a guy named William Nickerson. If you look he’s probably the oldest person you will find, or further back you could find somebody writing about real estate investing. His book came out in the 60s. The second book was by Robert Allen. I think it was Nothing Down.

Steve Rozenberg: No Money Down. Yeah.

Rick Jarman: And the third one was by a guy named Albert J. Lowry. I can’t remember the title. I probably should’ve got it before we sat down here. But it’s kind of funny, I keep those three books in my bedroom on a stand with bookends so it reminds me.

Steve Rozenberg: Question, how relevant are those books today? I know the answer in my mind, but do you think they’re time-dated and stamped just for them, or are the principles, the general principles, still relevant to what people could do today?

Rick Jarman: Definitely. That’s what I always tell people. Real estate doesn’t change. Financing changes.

Steve Rozenberg: The words change. The terms.

Rick Jarman: But I tell them, I said, “You’re either going to rent or buy, or live under the bridge, and only so many can live under the bridge.” When I first got on Instagram about nine months ago, my first dose of real social media besides Facebook, I thought Instagram was Facebook for young people. I had to learn all these abbreviations. I didn’t know what half this stuff meant. But it was just the terminology, but nothing changed about the business.

Steve Rozenberg: So, Rick, if you flash-forward to today … Now, for people that follow you on social media, you’re the old school real estate. I follow you and you do a video every single day.

Rick Jarman: Every day, yeah.

Steve Rozenberg: And that’s what you do, and they’re great videos. I’m curious, how does that tie into your real estate world? And let everyone know where are you in your real estate cycle now as far as assets that you own, what you do and how you balance your life.

Rick Jarman: I went full-time in this business in 1984. In 1983 I got my real estate license. Not because I wanted to be a real estate agent, I thought it’d help me find more deals, because I was flipping houses and buying rentals. So by 1984 I had been doing remodeling and things, and houses and flipping and work for other people. Actually I turned 29 in May 1984, and in June 1984 I told my wife, I said, “I’m fixing to go into this business full-time. I’m going to start building houses.” By this time she’s a teacher, she was a Special Ed teacher, and we had two little kids. I’d been on my job for 10 years at the university, and I’d been a part-time realtor for a year. So I quit two jobs in one day and I started my career as a builder. Built for 31 years up to 2015. I turned 60 and I said, “That’s enough.”

Rick Jarman: I’d built approximately 500 houses. I did remodeling. Whatever the economy would need to let us do. If we needed remodel, we’d remodel. If we needed to do commercial remodeling, we did it. We was always building. All through this I’m buying property, and of course I can back up. We went through some hard times in the late 90s like a lot of people, but to kind of bring you forward to today, we just flip a few houses, because my son works with me. He’s been with me, it’ll be 20 years in May. He’s 38 years old. Right when he come out of high school, just like I did. He’s a licensed home builder. I’m a licensed home builder. He kind of followed in my path. He doesn’t do the real estate. I became a broker in 1976. But we just flew. We’re flipping houses, and we have between 100 and 125 rental houses depending on which day you’re looking at.

Steve Rozenberg: These are in Tuscaloosa, Alabama?

Rick Jarman: Everything I have is in Tuscaloosa County. Two cities, Northport and Tuscaloosa side. They’re across the river from each other. We self-manage, so I have a full-time maintenance man. My son, myself. I have a office manager. Then I’ve got another got that I might as well say he’s a full-time. He’s been working for me every day for five years now. We just do that. We collect the rent and flip houses. I get people all the time saying, “Don’t you want you grow your business?” You know how they do on here on social media? I said, “Oh, I’m not trying to grow. I’m just trying to enjoy things now.” Because the building was stressful.

Steve Rozenberg: Sure, absolutely. Now, real quick, and I think Alex probably has some questions for you I’m sure. I’m just curious, how does the Instagram technology weave into what you’re doing? Why did you even get into that world? Because you don’t need it. I’m just curious, the draw.

Rick Jarman: If at any point you all need to tell me if I’m telling too many details and too much stuff, because it’s a long-

Steve Rozenberg: I think this is good for our listeners, because there’s many people that were you, what you were doing 30 years ago, that are today … Again, that’s why I think it’s so relevant to ask you if those books were timestamped, or the concept was timestamped, which I don’t think it is. It sounded like you agreed with me. Alex, you can correct me if I’m wrong, but I think that many of our listeners want to know like, “Okay. Yeah. He did this 30 years ago. That’s not relevant.” Well, it is relevant, because the dirt didn’t change from 30 years ago to today. The four walls and a roof doesn’t change. The money coming in doesn’t change. So it is very relevant, and I think you have a lot of knowledge to teach people. That’s why I’m curious. The shift that you did to Instagram and social media, I’m just curious why, what that was for.

Rick Jarman: Here’s how it came about. My son introduced me to BiggerPockets Podcast about two years ago. I’m listening, because I’m always wanting to learn. I’ve always been that way. I never went to a day of college, I barely got out of high school. I tell folks all the time, I can’t spell, but I can add like hell. But he introduced me to the podcast, and I was listening to it. And I think, “You know, not trying to think I did a lot”, I said, “But you know, I did a lot of stuff. I might need to see if I can get on this show.” So I’m thinking how I can do all this. So I say, “Well, how do you get on the show?” So I get to thinking. Well, I said, “Well, David Greene, he’s a real estate agent. His number’s out there somewhere.” So I find his number. I go on the web and find his number and I’m sending him some messages, and I leave a call and leave a message, text him a few times. I don’t hear from him. Well, I’m not the kind to give up.

Rick Jarman: So I sent a couple more and finally he sends me a message telling me how you go on their website and how you fill out … So I go to their website, and it needs you to write out the bio basically like you talk about for here. So I do the bio. I stay up till 1:00 working on that thing, and I’m not much on this kind of stuff. Well, there when I go to send it I think I lost it. So I said, “Well, heck.” So the next day I do another one. Then I send him a message, I said, “Look, you may have one or two letters from me. I don’t know.” I said, “But you just pick out the one you like the best and go with it.” Of course, I hadn’t heard anything from him. I said, “Well, heck. I’ll just do my own podcast.”

Rick Jarman: So I went on there and started looking on YouTube, what you do, your mics, garage band and learning all this. It said, “Well, you needed a website.” Well, I don’t even have a website. So I was trying to get two or three people to do a website for me, and it never came about. I said, “Well, heck. It’s just too much work. I don’t think I want to fool with this. I think I’ll do me a YouTube channel.” So I go and set me up a YouTube channel. All along I’m learning all this off of YouTube. Well, it’s slow, and of course I didn’t really about thumbnails and stuff. I started learning on a couple of them. But then I even quit doing that.

Rick Jarman: I didn’t have hardly anybody to follow me. I said, “Well, I must not have nothing anybody wants to hear.” Well, I forgot who it was, somebody said, “Well, try Instagram.” I didn’t have a clue what Instagram was. So I go on YouTube, and I got a 15 year old granddaughter who was 14 at the time, I’m trying to get her to tell me a few things. She’s too busy and I’m thinking, “Well, I’ll just stick to YouTube and learn it.” So I get on Instagram, it just kind of takes off. So I had no plans of doing anything with it other than I just wanted to share and help people.

Steve Rozenberg: The knowledge you have is great, and for people that are learning its great knowledge. That’s what I think is great about real estate, is it’s a zero sum game for everyone. If I help you it’s not like I’m not helping myself. I’m on this show and I’m not an expert I don’t think. I’m just someone who’s learning, and I’m a student, a life student. I learn from everyone else. I learn from the BiggerPockets people, I learn from the forums. I’m curious, looking at your story. I’m curious, you had a tornado come through and decimate or damage 75 homes. That to me would be something that would probably make some people push out of the game and say, “I’m done.” Obviously you didn’t. I’ve had similar damages.

Rick Jarman: One more thing about the Instagram and I’ll be done with that. I’ve been really blessed. I have like 5700-something followers in about eight or nine months.

Alex Osenenko: Wait, 5700?

Rick Jarman: Yes.

Steve Rozenberg: Yeah.

Alex Osenenko: Steve, how many you have?

Steve Rozenberg: 3500. Yeah, I know, right? [crosstalk]

Alex Osenenko: You got pwned.

Steve Rozenberg: I know.

Alex Osenenko: Steven, how long have you been on Instagram?

Steve Rozenberg: About a year, or a year and a couple months.

Alex Osenenko: Rick, how about you? Nine months?

Rick Jarman: About eight or nine months, yeah.

Steve Rozenberg: He’s killing, man. I know. Hey, I’m a student. I’m the best student. I’ll raise my hand and learn, man.

Rick Jarman: I don’t do any writing along with mine, I just do a title and I post the video. They say a lot of people like it because it’s organic. I call it half-assed, but I guess it works.

Steve Rozenberg: You know what it is? It’s real. It’s you talking real about real things. You’re not talking these big words to sound like you’re smarter than everybody else. You’re just giving the down home information that all investors should know. The stuff you talk about, similar to the stuff I think I talk about, it’s common sense stuff. I’m not creating anything magical or new, it’s just real information. I think that’s what people really want to know. Once the fluff is gone they want to know, “What do I do on day two when the tenet says, ‘I lost my job and I’m not leaving your rental property’?” What do you do then, Mr. Instagram, Fancy car and all these other things? They don’t have those answers. Only people like us that’ve been in the grind and in the trenches that have dealt with these things, that have walked properties that’ve been stripped of wiring, trashed out, that can actually walk that walk to say, “This is how I handled it. Not sure it’s right, but this is how I did it and this is how I came out to fight another day to become better at it.”

Rick Jarman: Right, and they have accepted me. My average age of my followers are 24 to 35, and my largest city’s New York, then L.A. I’m thinking, “Man.”

Steve Rozenberg: There you go. There you go.

Alex Osenenko: Rick, what advice would you give, or maybe even you have so much experience, maybe what would be the playbook for someone starting today? For example, someone has been listening, someone has been learning, reading books, kind of like myself, but has not really taken the first step. What strategy would you recommend? I understand [inaudible] dependent in individual, but what would you recommend somebody to do to get started in this economy, in the current situation?

Steve Rozenberg: Well, we’ve got such a great economy, and the interest rates are unreal. I always tell people go and look at the history of the interest rates. I tell them from 1973 when I come out of high school. When I come high school we had a gas embargo. We’d line up at gas pumps hoping we’d get gas to go to work on next week. Look at the interest rates. Look at how many recessions we’ve had. Like I said, right out of high school I’m in the middle of a recession. But I would tell them, “Don’t be afraid to get started. You’re going to mess up, we all do, and we still mess up.”

Steve Rozenberg: But what I see most with a lot of the young people, they’re scared, they want to know everything’s going to be okay. They want you to tell them everything like how’d I get started, and I can tell them three or four things and then they’re ready. And it’s not like that. You’ve got to get a direction, you’ve got to find out if you want to flip houses, buy investment property, wholesale, whatever it is you want to do. You’ve got to know a direction that you want to go then what markets you want to be in. You just got to get started.

Steve Rozenberg: Alex, it’s funny, I was on a panel last night in Houston.

Alex Osenenko: I saw that. It was Facebook Live. I saw that. You were excellent.

Steve Rozenberg: It’s funny, the one thing, there was a person, one of the representatives, I think he was a COO for Camden Apartments, which is one of the largest apartment complex owners in the country, and there was a very well known wholesale person, hard money lender. So it was myself, all different walks of life in real estate, and the one thing that we all agreed on was that at some point in the future a recession will come. Don’t know when, but it is going to happen, right? When that happens, every year, you don’t know. Every year they say, “Is a recession coming this year? Is there going to be a dip?” The only thing that we can guarantee is someone will win and someone will lose. What’s funny is more wealth is created in a down economy than there is in an up economy, and the up economy, you’re paying retail pricing. The down economy, everyone’s running away from real estate very much like our co-founders, Doug and Colin.

Steve Rozenberg: They were running in to buy properties with Waypoint when everyone else was running out. That’s when it’s on sale. That’s when the deals happen. Again, it takes education. It takes knowledge, and I think it takes that fortitude to actually say, “You know what, everyone’s telling me I’m crazy, that’s when I need to go in and buy”, because that’s the time that you’re actually going create exponential wealth. Again, when you’re new you don’t want to be that one that’s risking your family, your career, and obviously everybody is comfortable in their zone and they’re comfortable with their life, and this is an outlier doing something that’s real estate, because it’s something you should do.

Steve Rozenberg: It’s not something you must do. I think that, Rick, and correct me if I’m wrong, I think it was a must for you. Just like myself, 9/11. I had to have a must with the airline industry. So it was different perspective for me and probably Rick and many people out there, and if people had that perspective like it was a must I think you would see more action being taken by new people than the, “I should do it. Not this week because I’m busy.” That kind of thing.

Rick Jarman: Well, I just didn’t want to grow old and not know I tried. I had a good job. It was the University of Alabama. It was just a good job in maintenance. But you just can’t be a quitter. Like I said, when they were delivering my mobile home it was destroyed. They said they’d have another one in two weeks, it was two months. We were living with my parents after I got married waiting on the mobile home. We sell it, we buy our first house. We’re not in it two weeks while we were remodeling. The air conditioner goes out. I didn’t have money for a central unit. We’re sleeping in the screened-in porch because it’s 100 degrees in Alabama. We sell it. So things was going pretty good.

Rick Jarman: So I buy my first rental house. Went good. 1981. I bought a second one. It’s totaled by fire. I had my first fire and I’m thinking, “Oh, Lord.” But I did all the remodeling myself. They wanted to total it and it was better for me insurance-wise they didn’t. So I had a guy to be the contractor and I did the work. Things are going to happen. Fast-forward, I’m building houses. I’ll give you a quick story. I told you I went to work at a cabinet shop. I just turned 18 years old, it was 1973. We’re on break one day. Well, I knew what I wanted to do, I wanted to build houses, and I was stupid enough, one day on break I made the statement, “I’m going to build houses one day”, and they laughed.

Rick Jarman: They’re looking at me, here I am learning how to sand wood and not go over the grain and stuff and I’m talking wanting to be a home builder. But I went on. I become a laborer on the construction job like I said, got in the apprentice program, starting doing work anyways. 1984, I started building my first house. By 1993 I’m building so many houses I need a second cabinet shop. Guess who I hired? Man I worked for in 1973. It was 20 years later. Now, I never said nothing, but every time I wrote a check to him I thought about it.

Steve Rozenberg: Put a little happy face on your signature, a little smiley squiggly?

Alex Osenenko: This is challenging. You brought up a very, very good point. Have some mindset. Like, Steve, you like the mindset, you’ll love this.

Steve Rozenberg: [crosstalk]

Alex Osenenko: Having to do stuff, like I’ve started businesses, I’ve done things, I’ve exited businesses and put in 18 hour days. You do what you have to to support your family, to make sure your family is happy, but you’re absolutely right. This isn’t must. Do I want to invest? For me it’s like, “All right. I invest enough time to learn, understand about it, and I’m sure folks that are listening might be in a similar boat. You keep listening to, you’re kind of in the community, but you’re not actually playing the game, because you’re absolutely correct. This just hit me. This is why I love these podcasts. It’s not a must. So what do you say to those old folks? Like a lot of people have some money stashed away, stock market, whatever, but it’s not a must.

Steve Rozenberg: Well, I’ll just give you my perspective, and, Rick, I’d love to hear what you think. I think that we get comfortable in our zone and we get comfortable with the people around us, and those people around us, what they say resonates with us, right? What I think is funny as a kid, you’re told, and we tell our children, “You can be whatever you want to be. You can be successful. You can be an astronaut. You can be a president. You can do whatever you want to do.” Then at some point when you become an adult, or you’re 18 years old like Rick and you’re working in a cabinet shop and you go, “I’m going to start doing this”, it changes. Then go, “You’re a moron. You’ll never make money. You’ll fail.” So at what point do we go from saying, “You can be whatever you want to be”, to, “You can’t do it. You’ll fail. You’ll lose everything. That’s stupid. Take the safe secure job”?

Steve Rozenberg: It’s actually not safe and secure, it’s the least safe and secure. Again, I learned it from being a pilot with 9/11. Rick learned it from his upcoming. So the people that you hang around with, I try to hang around with people that say, “You know what? Double-down. Do it.” That’s what I want. I don’t want the people that say, “You know what? You don’t need that. It’s okay.” Because it’s really them saying they don’t know how to do that, or they don’t want to do that, and the last thing they want deep down, is my belief at least, they would hate to see you succeed when they go, “Man, I should’ve done it too.” Rick, you tell me.

Rick Jarman: It’s like when I left the university. The guys, nobody come out and wish you bad, but they want to see you fail, because it reassures them they did right staying where they’re at.

Steve Rozenberg: Yup, absolutely. Now, Rick, would you say going back, and to someone like Alex, right? You got someone like Alex, he’s got a great job with an amazing company, he’s got a great future, he’s financially stable, financially set. He doesn’t have a must. He has a should. How would you get someone like Alex to understand why it is a must, or how to ask himself that question? So we’ve got a little coaching here for Alex.

Rick Jarman: Well, let me tell you this. I don’t want you all to think it’s all been gravy.

Steve Rozenberg: Oh, I know that.

Rick Jarman: Like I said, I started in 84. By, I’d say, the time I was 33 I was a millionaire. Then by 1998, the same time around 97, 98 where President Trump got in trouble and a lot of other people … I got in trouble. My building business I’d gotten away from. I was just all into speculative building, and you had the golden touch, it’s like you can’t do any wrong. I had 35 rental houses. I had a 16-unit apartment complex. I had a 10-unit apartment complex. All of a sudden we kind of went into a recession. It’s like no matter what you do things aren’t working.

Rick Jarman: I’m out here with like 20-something spec houses, nothing selling, no way of making money, and I literally had to sell off all of my rental. I sold off everything. I had to start over. I’m talking about I couldn’t get a $19 pager in my name. I’m 43 years old. I got a daughter fixing to start college. So I’ve been from nothing to something back to nothing, and that’s when you find out what you’re made of. But you know it’s easier the second time around, because you’re a lot smarter.

Steve Rozenberg: I was just going to ask you that, because everyone I know, myself included, has hit rock bottom financially in their investing career, in their mental state of what they’re doing. When you get punched by real estate or reality it punches very hard, and it’s relentless. It doesn’t just punch you once, it will punch you into the ground many, many times over. And you’re right, that is where you decide how bad do you really want it. How bad are you willing to get back up and punch back and fight? Because now that you have that knowledge, and this is why, Alex, you mentioned the mindset.

Steve Rozenberg: This is why I’m such a big believer in that, is once you have the reason why, you have your why, the how is easy, right? You have your why, why are you doing it, and that is what’s driving you, that is easy to duplicate over and over again with the how. When you don’t have a why and you don’t have that drive, the first flinch, he could’ve stopped on the second house fire and said, “This sucks. I’m out.” That’s very easy to do, but his why was stronger and he created that. That’s I just think something you’ve got to go through mentally with the gymnastics of it all to figure out is your why stronger than your how?

Rick Jarman: So 98, I pulled my tools back out and I started doing what I did when I was in my … I started doing work for other people, remodeling again, and built myself back up. They were people that knew me and believed in me that wanted to do business with me. That’s why I have video on my Instagram telling how you work with partners. Like they’d be the money, I’d be the talent. I told exactly how we worked everything. I read a book by Trammell Crow. Are you familiar with Trammell Crow?

Steve Rozenberg: No.

Rick Jarman: He owns Lincoln Properties. He was in line to be the richest man in the United States but he got caught up in a commercial downturn in commercial real estate. He was wealthy. Anyway. He had a book called Trammell Crow, Master Builder. In it he shows how he worked with different partners. None of the partners were related. It was like a spiderweb, and he’s in the center. He would work in all these different companies, and that’s what I did. I had accountants I was working with, lawyers, people that knew that I knew how to make money and what to do, and I could get it done. We’d split the profit at the end, they’d come up with the money.

Rick Jarman: Then when I reached the point I didn’t have to have them, a lot of them said, “Well, I guess you don’t want to do …” Which I don’t have any partners I deal with anymore now, but my son … But that helped me get started again, because like I said, I couldn’t even get a pager in my name. $19 and something, I was upside down. But you either pull the cover over your head, or you get up and lace up your bootstraps and you go to work. I saw a movie, it was after I’d come back, and it hit home. You ever seen the movie Cinderella Man?

Steve Rozenberg: Yes.

Rick Jarman: True story about the boxer. You remember when he’s sitting there doing that interview and they ask him, “What’s the difference in you now than your career before?” Because he got caught up in the Depression. It hit and lost everything. He says, “I know what I’m fighting for. I’m fighting for milk.”

Steve Rozenberg: Yeah, because his why was stronger, right? Now all of a sudden he’s not just fighting to fight, he’s fighting to [crosstalk]

Rick Jarman: I’ve got a daughter starting college and a son in a private school. My wife’s still working as a teacher, but I got the daggum IRS taking $1000 a month out of her salary. I had a partner at the time in the construction company, and that was a lot of it, but you can’t blame the blame on somebody else. You’ve got to take responsibility and suck it up. But anyways. The long story short of it, it was hard. I look back now, it was about two years. Now it’s just like a bump in the road, but when you’re going through it, it was tough. I’ve been blessed.

Rick Jarman: I was probably worth a million and a half dollars then. My net worth is several million now. I live in a neighborhood, at two houses up from me, if you’re a sports fan, Nick Saban, coach of Alabama football, lives two houses up. I’m in a pretty nice little neighborhood for an old country boy. See, I didn’t even told you about when I started out my first job that I paid taxes on, I was 14 years old, I worked on a garbage truck for the City of Northport. Now, that don’t look too promising when you see your friends playing and you’re hanging on the back of a garbage truck.

Steve Rozenberg: Yeah. No, you’re right. You’re right.

Rick Jarman: I showed my kids. You know how we always tell our kids, “Yeah, this is what I did when I …” I showed them. In 1969 I was 14 years old. It was after that summer working on the garbage truck I got on at [Ball & Company 00:38:01]. I’d get out of school, what they’d call a hardship case. I’d work till 7:00 at night load and unloading trucks, because they’ve got to be loaded the next day. Rain, sleet, snow, it didn’t matter. I showed them, I said, “I paid $700-and-something income tax, 1969 at 14 years old on a $1.30 an hour.” That’s a lot of hours.

Steve Rozenberg: A lot of hours.

Rick Jarman: So I’ve worked all my life. Then you get up there and you think you’ve made it. Then everything’s upside down and you think, “What was all the hard work for? I’m busted.” I don’t get into this on my Instagram because a lot of people aren’t ready for it.

Steve Rozenberg: But it’s the truth. It’s the reality, and it’s very common. You talk to anyone successful and they’ve got the scars to prove what they went through. All of us have them, right? Everybody gets those things.

Rick Jarman: If it hadn’t been for my rental property I couldn’t still have been in business, because I was able to sell it off. I don’t know if you’ve ever heard of a thing called Phantom Income?

Steve Rozenberg: Yup.

Rick Jarman: I learned a lot about phantom income. When you fire selling your rental property the government says it’s worth this and you’re paying taxes on money you didn’t even get.

Steve Rozenberg: Absolutely.

Rick Jarman: Pardon my French, but it can be a shit storm. Life can get upside down.

Steve Rozenberg: Now, Rick, let me ask you this. Coaching session’s over for Alex. Now I’ve got a question for you. You’d mentioned that you’re doing this with your son. I’m curious the balance that you have. You’ve got 125 homes, but that could a lot of work, right? Because you’re self-managing in a way. You’ve got people doing stuff for you. But how do you balance the family life, the separation between your son as well as business partner, or however you guys have it set up? How do you guys balance that out, and how do you step away from it? Because when you own it as a family it’s hard to remove yourself mentally to say, “Okay, we’re family. It’s family time. Don’t talk real estate.” How do you do that?

Rick Jarman: We pretty much just like you said. Back before the recession I had like 16 employees. We did our own framing, vinyl siding, because see, I hadn’t even touched on the recession. I’ll answer that question, I’ll back up with your first one about the tornado. I had to start over in 98. We had the recession in 2008. I’m doing good. Man, I am doing great. I’ve learned a lot of lessons from 1998. We pulled back. I just bought 1.4 million worth of building lots, but I was able to work. I don’t want to sound like the recession didn’t hurt me, but it didn’t, because my rental property carried me through. I had to deal with the banks on some lots and stuff, because I even had a bond issue back then.

Rick Jarman: I done built my rentals up, I did the swap like you see in the … Oh, what’s the movie? The Big Short? I did a swap. I’m dealing with banks on that, because all of a sudden my fix rate goes to double what it’s supposed to be on 4-point-something million dollars. So I’m dealing with them on that, but I’m under a gag order, because when you’re under a gag order they try to screw you and you won. But that’s another whole story. But anyway. The recession came in 2008, we’re doing good, we just pulled back full with our rentals. We actually opened up an interior and antique shop for my daughter-in-law who’s an interior designer, had just finished at university. She couldn’t find a job. My son didn’t have any work because we wasn’t building other flipping our rentals. So we opened up a store for four years. You make things happen. You do whatever it takes.

Steve Rozenberg: I hear you. I hear you.

Rick Jarman: 2009 I was President of the Home Builders Association here in my town. The worst time I could be president right in the middle of the recession.

Steve Rozenberg: Yeah, not much building going on then probably.

Rick Jarman: I’m trying to hold everything together. So we get through the recession. 2011, we have a tornado hit. I lost 26 houses total. I had damage on another 70-something. I had a two million dollar insurance claim. Had to deal with that for three years. But I had insurance. It was okay, but still, it takes time to buy them back. The thing I want people to know, stuff happens. It’s life.

Steve Rozenberg: To me, and I know we’ve got to start wrapping up here, but I think that that to me is the biggest lesson that I personally took away. It reconfirms myself, and I don’t know if it kind of got through to Alex, but to me, it just happens. It’s going to happen. Don’t be afraid of failing, because you’re going to fail. Don’t be afraid of making mistakes. You can’t stop a tornado. You can’t stand in its way and think that you’re going to stop it. Things like that are going to happen. It just happens. It just is, right? It’s just part of the sandbox we’re all playing in called real estate, in my opinion, and that’s kind of the biggest takeaway. And for you doing this for 30-plus years, it sounds like it doesn’t change, right? Technology, non-technology, it just happens.

Rick Jarman: And I know I’ve talked a lot, but it’s been so many years I’ve tried to cover to give you my story. But the tornado, I’ve got a video where I show some of my houses that were destroyed. You just don’t know. If you’ve got real estate you don’t know how good it can turn out regardless, okay? The tornado hit, I lost nine houses in a row on seven lots, okay? It flattened this whole area where these houses were. They’re on the road that’s leading into the University of Alabama from the interstate. The city comes in and widens the road, it buys some parts of people’s lots. They couldn’t sell the lots. The city buys their whole lots. Now my property was one block in, guess what? Where I lost my houses from the tornado, those nine houses I own from one block to the other except for one lot. They’re now road frontage.

Steve Rozenberg: Nice.

Rick Jarman: Because the city widened the road. So now if I hadn’t had the lots, or the houses to begin with … Now I’ve got nine lots there worth about $350000, with no debt on them. I call it my 401K just waiting. They’ve been redoing the roads, and I’ll probably sell it all, do a tax-free exchange. But you just don’t know what can happen. It’s exciting. It’s like a drug. It’s addictive. You ask what I do, I forget I’m almost 65 years old. I’ll be 65 in May. I get as excited if I buy a house to flip, if I find a deal. That’s what I did a video the day, I told on here. I said, “You might want to go watch it.” I said, “You people here on Instagram, you inspire me and you piss me off.” I said, “Pee me off.”

Steve Rozenberg: I saw that. Yeah.

Rick Jarman: Because they’re making me work harder than I want. I get excited, I see other people doing things. It’s hard for me to pull back. Like I said, I was 60 years old before I realized I didn’t have to go to the office on Saturday or check a job, because I love it. I never let it interfere with my kids’ ball games and stuff, and I play music. But if I wasn’t doing any of those items I work, I don’t hunt, I don’t fish. I tell them I hunt those George Washingtons.

Alex Osenenko: That’s a really way. So, Rick, I’m going to say thank you very much for your time and your inspiring story. It’s fascinating. I think if folks want to find you I know you’re at Old School Real Estate on YouTube. That’s how I found you. Just look for Old School Real Estate on YouTube, and you come across Instagram. Those of you listening, we appreciate your sticking with the show, and hopefully you enjoy this episode. Find us on Facebook. Steve, we’re at MasterMynd Real Estate Investment Club?

Steve Rozenberg: Yeah. The MasterMynd Real Estate Investment Club on Facebook in the Facebook Group. Obviously you can find me on Instagram and Alex, and Mynd Property Management. If you do want to talk about management needs, obviously we can help you. Also, we have the INVESTimate software, which is free. In the Facebook Group we actually do webinars for free that show people how to use this software. It’s like the MLS for investors. I’ve got to say, as an investor it’s pretty slick. So if you want to know more about it you can send me a message. Happy to make the connection. It’s a free service to have for investors that in, I think 20 different regions. But again, we’re all about educating. We just want people to learn to be better. Rick, I love the stories, man. We got to have you back on. I like following you. I like watching your videos. It’s inspiring. I do have to pass you at some point in followers. Maybe before we have you on I will pass you up, or you will just dominate me and maybe that won’t happen. I don’t know.

Rick Jarman: With my first Live I’m going to go to New York and do a boardroom meeting, 40 people or less, and I never had any plans when this started. I told my wife, “We may get some paid vacations out of this thing.”

Steve Rozenberg: That’s right, man.

Rick Jarman: But I’m going to go, so you’ve got to watch. My goal is by April the 18th I want to have 10000 followers.

Steve Rozenberg: Oh, man. All right.

Alex Osenenko: [crosstalk]

Rick Jarman: I’m a goal setter.

Steve Rozenberg: Eye on the prize.

Rick Jarman: Now, guys, I feel like I did nothing but talk on you all’s show and I apologize. It’s hard. I had a lot of years to talk about there.

Steve Rozenberg: Yeah, it’s invaluable. I appreciate it, and I’m not even close to where you are in knowledge. So I soak it up. I’m the best student when it comes to this. I know Alex is still kind of figuring out his why and I think it helps his direction. I think our guests that watch the show, I think it’s helpful for them. I think they really can relate to the fact that you’re not this person pontificating on something that you never did. You’re someone in the grips battling it out, dealing with it, heartache, problems, and you’re finding a way to win. That’s the key. A good friend of mine always says, “When we all win, we all win.”

Rick Jarman: We all win.

Steve Rozenberg: It’s very simple.

Rick Jarman: One thing I would love to leave your listening audience with, don’t end up being 64, almost 65, getting ready to retire, or 62. I have a lot of friends, they work jobs at plants or whatever, or they retire and they don’t have anything. They got their retirement and that’s it. My wife taught school for 25 years, and if I had to live off of what she’d draw … She asked me one time, “Are you going to retire at 60?” I said, “Girl, you can’t live like you live and me retire.”

Steve Rozenberg: That’s right.

Rick Jarman: [crosstalk] Don’t look back on life and not tried it.

Steve Rozenberg: Absolutely. I think that’s a great way to end the show, man. Just like he says, guys, don’t be 64 or 65, 55, whatever that is, and wake up and realize the one opportunity you had was time and that’s the one thing that we’ll never get back. You can never get back tomorrow, you can’t get back this hour. I don’t want this hour back because it was great information. Rick, again, thank you very much for being on the show. Everybody, please subscribe to iTunes, follow us on Spotify, Facebook, Instagram, all those things. We’re all here trying to help. We’re all doing the same thing. So, everybody, thank you so much for being on the show. I appreciate everybody and all the well wishes that we get, and the reviews and everything. Again, thank you again. I’m humbled by the fact that everyone loves this show. Me and Alex are really trying to do a great job. So until next week, we’ll see everyone later. Bye.

Alex Osenenko: Thanks for listening.

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