Jett Buys His First Rental Property at 14 Years Old
Jett and Steve Rozenberg talk with Alex Osenenko about how Jett, at 14, not only purchased a rental property but was excited to do so.
Alex Osenenko: Well, hello there and welcome to the next episode of the Myndful Investor show. It’s great to have you here with us. Steve and I are continuing to explore the single family investment realm and we are in this season trying to understand what it takes to be successful in single family investment. Luckily my cohost Steve Rosenberg has deep expertise in this field and he’s failed and won a lot, so but want to unpack, want to bring people, interesting people here who have done it or are doing it, unpack their experience and see if our audience, you guys and girls can learn something and so can we as well. Steve, how’s your day today?
Steve Rozenberg: It’s good. It’s good. We’re down here in Houston, which is rare that you get to come down to Houston. We’re in the headquarters of Empire and special guest, we have my son Jett here. Jett?
Jett: How’s it going?
Steve Rozenberg: Thanks for being with us today. But yeah, we’ll talk about a lot of people were very interested hearing about the story of Jett buying a rental property when he was 14.
Alex Osenenko: Well, don’t give it all away.
Steve Rozenberg: Well. Okay.
Alex Osenenko: There’s a special reason why Jett is here.
Steve Rozenberg: There is a special reason.
Alex Osenenko: Jett is 16 which is not defining him as an individual, but it is a factual statement. Is 16 years old and he’s not ashamed of it are you?
Jett: I am not.
Alex Osenenko: You know he’s not because you know what? He’s probably ahead of a lot of people including myself. He owns a rental property.
Steve Rozenberg: He does own a rental. Yes.
Alex Osenenko: He actually owns a rental property and this is exciting. We’ll get it in the show in just a second. If you want to get more, find us on Facebook, we have this new mastermind, real estate investment club. Would love to have you join this private group. Doing a lot of meetups. Would be great to meet you and of course if you need property management help, it’s all Mynd.co, M-Y-N-D.C-O.
Alex Osenenko: Well let’s get into the actual introduction. So, a little bit about Jett. Steve, I know you know your son but I’m just going to give a quick overview. So, he’s 16, 10th grade, lives in Houston. His hobbies are cool though. Drummer, knife flipper, rugby player and he bought a rental when he was 14. Steve, why don’t we start with you? Like our kids never want to do, like in my experience, my daughter, oldest daughter is 10.
Steve Rozenberg: Yeah.
Alex Osenenko: So she still likes daddy but like as they become teenagers they want to be the opposite. Like so if you’re a pilot like he builds like he goes into the ground.
Steve Rozenberg: Yeah. [crosstalk] Well, you know it’s funny you say that because a lot of times I’ll ask him, “Hey do your friends at school know what I do?” “Yeah. You own a business.” I say, “Well, they don’t know about me being an airline pilot.” “No.” Doesn’t tell them. So, very much to your point they kind of do go opposite. He seemed to resonate with the me owning a business and with empire and being involved in investing maybe because he was around it. We would kind of include him in meetings and bring him into conversations and when I’m on the phone in the car, he’s kind of immersed in it whether he wants to be in it or not. He’s in the car.
Steve Rozenberg: And I think that’s what kind of got him more understanding of it. Not like, “Hey, sit down and read this book.” Initially it was more just, I think him listening to conversations is what started this whole process for him.
Alex Osenenko: Yeah. So as the theme of the show, and you may be wondering what is this going to be about? Well, I think it’s about to help our children, our kids to be successful in whatever they want to be successful in but I think buying a rental property and becoming an investor can just help with whatever else they’re going to do. It doesn’t need to define them.
Steve Rozenberg: Sure.
Alex Osenenko: But it’s great experience doing it. I wish like if we were in United States, if I grew up in United States and my dad was doing this, like this would be like by now I’m 40 which you think is super old, but like in reality is like super young. Right?
Steve Rozenberg: I’m older than you so I don’t know-
Alex Osenenko: You’re also super young but the point is like we have a whole life ahead of us. Had I had capture four or five, seven [inaudible] of houses by now or reinvest that money like I’d be a lot better off than I am today. So, in anyway enough talking for us. I want to sort of understand like what was the first thing as a first time, Jett, that you thought, hmm, maybe I should do this on my own?
Jett: Well the first thing is like my dad said like just being in the car with him and listening to the audio books. Half the time I wasn’t really paying attention, but it was still going through in my ear and sitting in the back of my brain. So, I’ve always had an interest in it and how you can do what seems like a little work and get a lot of profit out of it. There’s still work to be done it’s just different work. I don’t specifically know why, I just liked it.
Alex Osenenko: So, as far as I remember at 16 years old-
Steve Rozenberg: 14.
Alex Osenenko: 14. Even 14, 14 you would get a job permit. So, if you want to have your own money-
Alex Osenenko: Like I was 16 here and what I had to do is get a permit from my school, work and flip burgers at a restaurant, which was great, I actually enjoyed it a lot. You could do it still, but the point is like that was my option.
Steve Rozenberg: Right.
Alex Osenenko: Like go flip burgers only like so many hours a week and I had to come in on this time. Like there was a lot of restrictions so is this a way for you to make money and finance your hobbies or did you think of it as future opportunity?
Jett: I thought of it as both. I thought of it as well now it’s just the beginning point so I can just like keep reinvesting into savings, put some of it into my hobbies and then later when like the mortgage is paid off and you’re getting a lot more income from it, then it’s more of an opportunity thing to do it now when I’m younger so that I can have all that when I’m older.
Alex Osenenko: Do you even know how smart it is? You’ll listen to this podcast a few years from now and be like-
Steve Rozenberg: Well you know it’s funny because when we first started having the conversations and one of the things that I think was really helped and it wasn’t necessarily real estate related is you know we had the Grant Cardone University for the sales team and part of that you got the whole package of stuff and one of the things in there that he has is a hundred ways to stay motivated. And so what I started doing and they’re little five minute segments and so that was part of his chores is every day he had to listen to a five minute segment of Grant Cardone a hundred ways to stay motivated. And I think it just started, I’m assuming it just started getting him more in-
Alex Osenenko: Subliminal messages.
Steve Rozenberg: Yeah he just started-
Alex Osenenko: You programmed your kid.
Steve Rozenberg: Well it was part of his chores so-
Alex Osenenko: For success. [crosstalk]
Steve Rozenberg: And you had said it when I started talking about a mortgage and taxes. Well he doesn’t know what any of that was and he’s like, “What’s a mortgage?” So then now we had to go back to basics of a deed, a mortgage, buying a, so you really had to get very basic for him to understand appreciation, stuff that we kind of assume he’d never heard those words before. He knows rental, cashflow doesn’t really know what they mean so we had to say, “Okay, your mortgage is this, this is what a tenant will pay. The difference is what we get.” You know, really had to get very rudimentary for him to understand it and maybe he did or didn’t understand it at the time, but we kept working through the process of trying to understand it, which I think was key.
Alex Osenenko: Did you do it on purpose Steve? Like was your goal and we’ll come back to the first time you thought about buying a house by the way, I didn’t think I got an answer, but like did you do it on purpose? Like did you want your son to buy a property at 14 or you just wanted to educate him? Like what was your end goal?
Steve Rozenberg: No, I mean actually he came to me and said that he wanted to buy a rental property. I mean obviously everybody would want their child to be successful and carry on buying something that I’m in, real estate, but no, he actually was the one who came to me and said, “Dad, I want to buy a rental property.” And I was just like, “What? Like, how do you even know about that?”
Alex Osenenko: So let’s go unpack that moment like maybe it’d be interesting for me and our listeners to hear like what was the pivotal point for you? What was the trigger for you?
Jett: I don’t really think it was a trigger or like anything that just kind of causes a snap. It was just a steady thing over time and then I was like, “I guess I’ll just ask him and tell him that I want to buy a property.”
Alex Osenenko: So you were thinking about it?
Alex Osenenko: You were brewing it?
Jett: Yeah. It had been stirring in my mind for a couple months.
Steve Rozenberg: You know, he and I had talked about it and he had the money in savings that he had saved, which I didn’t know he had that much, but he did. But you know, then his thoughts, what he said to me is, “Well, it’s not going to make anything sitting in a savings account.” So, he was smart enough at the time to realize that he didn’t really know that it was called a return but he knew that it was not going to make him any money just sitting in a savings account.
Alex Osenenko: Let me ask you this. On the savings account, personal interest, how old were you when you had your savings account first?
Jett: I don’t quite remember exactly how long-
Alex Osenenko: So, that young?
Steve Rozenberg: I think he had had it. Yeah. I mean we had opened it when he was young.
Alex Osenenko: Like how young?
Steve Rozenberg: I mean probably like three. You know what I mean? Yeah.
Alex Osenenko: Three?
Steve Rozenberg: We started a savings, you get birthday money and you get this and you know, we’d always put money, we had like some he could have and a ratio. And that’s actually, you know, speaking of that, that’s what he does with his cash flow. He has to divide it. He gets 60% he can use and 40% goes back in to save for another rental or whatever so of his cash flow, he gets some that he can use and he gets some that no matter what it goes reinvest back in.
Alex Osenenko: So let’s talk about now that you’ve had an ask, like, “Hey, can we do that together?” I listened to your podcast on Bigger Pockets and sort of, I know some of this, but I want to unpack this for the audience, too. There’s more to buying a property than just wanting buy it. There’s a lot of people who are listening to us who want to buy property who can’t or won’t or like there’s a lot of blocks. It’s a complicated.
Jett: It is.
Alex Osenenko: And to me the first thing I think about is down payment. Like have to have that. So you had some savings, was that enough to-
Jett: No, definitely not. I ended up going in splitting it with my parents.
Alex Osenenko: Splitting so they gave you part of it and you had part of it?
Steve Rozenberg: We didn’t give him part of it. We partnered with him and invested part with him.
Alex Osenenko: Tell me more.
Steve Rozenberg: So you know, we had the discussion and he didn’t have enough. He had like $10,000. And so it was like, that’s not enough. And I don’t know how much he remembers of this, but it was like, “Well, how do I get more? How do I make it?” And I’m like, “Well you need about 20 minimum.” You know?
Alex Osenenko: In Houston.
Steve Rozenberg: In Houston, yeah. [crosstalk] And I’m like, “You need about at minimum of 20, you know? Not counting if there’s a make ready that needs to be done or anything like that.” And he was like, “Well that’s going to take me forever. I mean, I’m 14 and this is what I have.” And I’m like, “Yeah I agree it’s going to take you forever.” You know? And the one thing he asked me that I remember is he said, “Well how can I do it? How do I do it?” And I thought that’s a pretty smart question, right? Because he’s actually asking how, and instead of that’s not fair, whatever.
Steve Rozenberg: And that’s when we kind of went down the path and I was like, “Well you can partner.” You know? And that’s when we started unpacking the thing of, “Well, you know, would you partner with me?” “Well, what’s the deal?” You know? And so we had to talk through the deal and of course, first I had to explain to him how a rental property pays money because again, I go back to if I was a young kid growing up in Los Angeles and my parents had the ability to buy me 10 houses, right? No offense, but you and I probably would not be sitting here right now. But you know, if he can get that now 30, 40 years from now, I mean, where will he be? Right? And so my thoughts were, I don’t want to give him all the answers, but I want to have him understand the dynamics of owning a rental property, the cashflow, they appreciate.
Steve Rozenberg: So, I had to explain to him that how you make the money? Of course he’s thinking cash flow of what he’s going to make in lieu of maybe getting a job or whatever he wants to do with it but I’m trying to explain to him like, look, there’s more to the story here. Like this is for your future and this is going to go up in value. So, I had explain why is it going to go up in value and I remember we sat down on the kitchen table one day, right? And I drew a map and I showed him what appreciation does on the East coast and West coast of the US and the Midwest and all this and I wrote all these numbers down and showed him, kind of walked him through the numbers and then it was probably month or two or a couple weeks later when I went into his room and it was actually up on his wall.
Jett: Still is.
Steve Rozenberg: Still is on his wall and I was thinking, wow, like he actually listened.
Alex Osenenko: Give us a shot for this podcast, we’ll put it in the show notes or something. I think it’d be cool for the listeners to actually take a look at it.
Steve Rozenberg: Yeah. Oh, a screenshot?
Alex Osenenko: Yeah.
Steve Rozenberg: Yeah. I mean, I’m not the best artist in the world for the record, but I did a pretty good job.
Alex Osenenko: You can’t be best at everything, Steve.
Steve Rozenberg: That’s true. That’s true.
Alex Osenenko: You know, having 16 things be best at, that’s enough. [crosstalk 00:14:16].
Jett: He got his point across and it’s all I needed.
Steve Rozenberg: Yeah.
Alex Osenenko: Exactly. And then you just put that as a reminder?
Alex Osenenko: And that’s probably like when we talked pre show and I said, “Hey, couple of things you get out of the hundred ways to motivate yourself,” and you like had a little bit of a like hesitation is probably a lot of things you’ve learned out of there?
Alex Osenenko: But maybe looking at your goal, visualizing every day, that’s probably out of there somewhere.
Jett: Yeah. Persistence is a big thing.
Alex Osenenko: Yeah. So, that’s good. I have a question for you, a little bit of a challenging question. So, you know we’re right now-
Steve Rozenberg: No I’m not buying you a house.
Alex Osenenko: No, no, no, no. It’s not like, “Yeah, let’s partner. Let’s partner.” No, seriously. It’s along the lines of what we’re currently educating on and we’re big on out of state investing.
Steve Rozenberg: Sure.
Alex Osenenko: Right? You do a lot of presentations. We acquired a company called HomeUnion Investment. You can go there and actually just like you would on your bank account or something or something like you can look at properties and you know, bid and acquire an investment property. So, question is like if you had 10 grand, why not go to like Indie or Detroit or somewhere where the medium price of the house is say $110,000 versus $220,000 or whatever. Or is 10,000 this little money? Like your loan to value needed to be what? Like over 20%? Like why not buy somewhere else where it’s cheaper?
Steve Rozenberg: So, okay. So, that’s a good question. Some of the reasons were I’ve got a local network here, right? So, of course we bought this before Mynd was in the picture or Investment was in the picture. Right? And so for me, we know Houston, right? I know I’ve got a large connection in Houston of investors and everything so when I put some feelers out to people that I know that were for a rental property, “Hey, when you get one, let me know. You know, I’m looking for something that,” I didn’t want to get him a property. I didn’t want to find a property that had a lot of problems. I didn’t want a project for him to get, right? I wanted him to learn the numbers and not learn the working side of it, per se his first one. So, I wanted a property that was pretty much, we buy it and it’s ready to go for the most part. Right? And that’s pretty much what we found. Now I was able to do that through connections and through people I knew that were able to find me a deal that had those numbers.
Alex Osenenko: What about the listeners that don’t have those connections? People who are just starting out. So if I’m thinking if I’m just starting out like, Oh, that’s great Steve, you had all these connections-
Steve Rozenberg: Right.
Alex Osenenko: Super good. How do I do it?
Steve Rozenberg: Well, I think now, I mean, look, you’ve got the investment software. Now, the guy that sold me or sold us the house, I didn’t get a fantastic deal. He had a house that he needed to get rid of. I had money that I wanted to buy.
Alex Osenenko: But you knew the type of deal that he needed to get into to qualify for your specific goals, which is not giving him a deal that requires a lot of work.
Steve Rozenberg: Yeah. I didn’t want to get a major rehab for him first property to take a property go, “Okay, now we’ve got to knock down walls. We got to do this.” I wanted something turnkey. I think to answer the question is, is that’s where education comes in. That’s where someone who buys a property needs to be educated in the area, in the prices of all that before they buy something, they need to know what are they buying. Like again, could we have bought a total rehab and bought something for pennies on the dollar and done it together? We could have, but then we’re trading time for money.
Alex Osenenko: Ah, so this is an important extrapolation that I want to stop here and unpack this for a second. I think it was J Scott, I think multiple guests talked about you have to have time, money and what’s the other one? There’s three things, time and money is specifically stick out to me so if you are willing to invest time and go rehab the house, because if you had a construction business for example, and you were like spending summers working there, you guys would probably do different things.
Steve Rozenberg: Exactly.
Alex Osenenko: You throw in the five grand or on like a dilapidated house and rebuild it together.
Steve Rozenberg: Yeah.
Alex Osenenko: That’d be cool too.
Steve Rozenberg: And there’s a lot of very successful people that have that as a model that do that and very well that could have been a way to do it, but that’s not my specialty and not my educational knowledge. So, I could have, but it also could have turned into a disaster.
Alex Osenenko: Sure.
Steve Rozenberg: Because of that I’m not educated. So, for me to do that, that’s like me buying a deal in an area that I don’t know in a price point that I’m not familiar with, with clientele and all that. I’m going out of my circle of knowledge and so it would be on me. If it fails, it’s always going to be on you. Right? But I wanted him to get, I don’t want to say a layup. Right? I don’t want him to get a softball, but I didn’t want him to have a problem where now he’s going, “I don’t like real estate. All this is doing is costing me more money, more money, more money.” Again, I look at real estate, especially for him as very longterm. Right? So, I wanted him to get a deal that he could get. I mean, I think in this property, I think we rented it like, well, we handed over to Empire. Right? And how many times have you seen the house?
Jett: Just once.
Steve Rozenberg: One time. Okay? It’s been rented ever since. What are the problems that we’ve had?
Jett: We had to rebuild a fence.
Steve Rozenberg: Rebuild a fence when the tenants moved in and we had an AC call, I think.
Steve Rozenberg: That Empire took care of.
Jett: AC issues.
Steve Rozenberg: But other than that, he’s learning from here up, which is what I wanted him to learn. I want him to learn the education side.
Alex Osenenko: Right.
Steve Rozenberg: And again, not that there’s anything wrong with rehabbing a house but that’s just not my specialty.
Alex Osenenko: I understand. Like this is really well explained. Thank you Steve. Because like people who are listening in different circumstances-
Steve Rozenberg: Absolutely.
Alex Osenenko: And so the understanding is like look, for example for me, I’m in San Francisco Bay area, like you were in a super investible town like why go outside if you able to make this work?
Steve Rozenberg: Right.
Alex Osenenko: You have a network here and all that. I’m in the San Francisco Bay area. I will probably call you.
Steve Rozenberg: Yeah because this is marketable, right?
Alex Osenenko: Right.
Steve Rozenberg: But if you were saying, “Hey Steve, I want to get a property and rehab it and do this and do that and I want to tear it down, I want to rebuild it,” I’d be like, “I’m not that guy.”
Alex Osenenko: I wouldn’t be calling you.
Steve Rozenberg: You wouldn’t be calling me. Right?
Alex Osenenko: But you’d probably give me a card or give me a phone number.
Steve Rozenberg: But to your point I think is if I was doing that and that was the way that he and I were going to get involved in real estate, then that would be the avenue that we took and look at the end of the day, you’re not buying it for the rehab, remember you’re buying it for the long term 30 year goal still, or 40, 50 year goal for him. So, it’s still the education of him understanding why are we even buying a rental and how does a rental even work? Like how does that work where you’re getting cashflow and oh, every year the tenants renew and the rent goes up and his cashflow goes up or expenses go up and your cash flow goes down. And so he’s learning about finances and all of a sudden it’s like, “Hey Jett, we had an AC issue this month.” It’s like, “What does that mean?” It means no cashflow. You know what I mean? There’s a maintenance call, you know? So he’s learning about that where he wouldn’t have learned, I don’t know how you teach that in modern day.
Alex Osenenko: It’s invaluable. It’s invaluable. I mean kids these days put money in the piggy bank and I’m just impressed about the savings account. Like I’m thinking, I’m like seven years behind because my daughter is 10 and then the other one is five so it’s like I better get on it because I think they’d love to see the bank balance and like really start understanding like, “Hey, I can spend it now. Get the candy, eat the candy, have nothing. Or I can look at my little app bank account and see that number grow.”
Steve Rozenberg: Yeah.
Alex Osenenko: But you’re right, there’s no interest. Like you’re not earning any money.
Steve Rozenberg: You’re not earning anything and that’s what he took out of it was, again, once he realized that the savings account, and that’s what he said we had the conversation was, “I’m not going to get anything out of the savings account.”
Alex Osenenko: So what’s your plan Jett? Let’s talk about like what are you thinking-
Steve Rozenberg: Yeah, that is a good question. What is your plan?
Alex Osenenko: Right now, you know, I know it’s like you haven’t lived through college or anything yet. But like when do you want to get your first Ferrari?
Jett: Whenever I can. When I can afford it.
Alex Osenenko: That’s what I want to know.
Steve Rozenberg: Is it the Ferrari or what is it that you were talking about?
Jett: It’s whatever car I’ll be happy with when I can afford it.
Alex Osenenko: Interesting. So, it’s just a car?
Steve Rozenberg: Here’s a question. So, he gets his cashflow so maybe you can explain a little bit about what you do with your cashflow and how much you get and all that stuff so that you can break down the actual numbers maybe tell them what we bought the house at, what it was worth, all that stuff.
Alex Osenenko: Oh yeah, let’s do some math. That’d be great.
Jett: All right. Let’s do some hard numbers. So, the house we got, we got it for what, 150?
Steve Rozenberg: 159.
Jett: Yeah, 159 and the house was worth 180. So, for the math I was told for putting a good rent price we set our rent at 1500 per month.
Alex Osenenko: What was the down payment?
Steve Rozenberg: I think we put-
Alex Osenenko: Like 20%? let’s just percentage-
Steve Rozenberg: I think it was about 20% I believe. Yeah, I think it was about 20%.
Alex Osenenko: What about financing?
Steve Rozenberg: I got the financing.
Alex Osenenko: So, he’s not mentioned on the loan?
Steve Rozenberg: He’s not mentioned on the loan.
Alex Osenenko: Okay, got it. Okay. Then there’s no way to [crosstalk 00:23:29].
Steve Rozenberg: Under 18 yeah. Yeah.
Alex Osenenko: Do you have a trust? I know that’s a separate question.
Steve Rozenberg: No.
Alex Osenenko: Okay.
Steve Rozenberg: No.
Alex Osenenko: So, this is one of the things that I’m thinking about, like setting up a trust and then having the house in a trust name instead of your own personal name.
Steve Rozenberg: Yeah.
Alex Osenenko: I’m not an attorney, so. But go ahead please. So, 1500 rent.
Jett: 1500 rent and then since we split it halfway, they would get half the profit, we would get half the profit. So after mortgage, taxes, HOA, all that stuff, that’s a total profit is about 500.
Alex Osenenko: Cool.
Jett: So then we split it 250/250.
Alex Osenenko: That’s good money.
Jett: Yeah it is.
Steve Rozenberg: But then he’s got to break that down into a ratio.
Jett: So, then I got to break that down 60/40 where 40 goes into savings and I keep 60. So, 60%, $150 I keep that and then a $100 goes back into savings for another house, say.
Alex Osenenko: Gotcha.
Steve Rozenberg: So, I taught him a lesson over the summer is he uses his money to buy knives, right? He’s big into flipping and all that stuff. And what you were trying to do earlier, not very successfully, but you’re trying. But-
Alex Osenenko: We’ll see about that. Better than you.
Steve Rozenberg: Yeah, I don’t even try. But so he uses that money to buy and sell knives and do all the stuff that he does. So, I took him to a knife show and he wanted an advancement on his cash flow because he wanted money to go to the-
Alex Osenenko: Don’t tell me you charged him interest?
Steve Rozenberg: I didn’t the first time. So, he wanted the money to, you know, to ahead and so we gave him the money and said, “Okay, well this will be the next quarter’s worth and here you go, here’s your money.” And then he wanted another advancement on top of it and I said, “Okay, here’s the deal. We’ll loan you again but that’s it. After this you got to start paying interest on the money that you borrow because you’re defeating the purpose of the waiting for the cashflow to come through. So you want to borrow it? That’s fine. Now you’re going to pay a percentage of interest against what you borrow moving forward.”
Steve Rozenberg: So, it was kind of a secondary again, that’s why people get in debt. They borrow and borrow and borrow, and all of a sudden he could be six months behind going, “Hey,” and now let’s say the house goes vacant but there’s a maintenance.
Alex Osenenko: Yeah.
Steve Rozenberg: Now all of a sudden he’s in a bad negative position.
Alex Osenenko: Hey, let me ask you a question. This house sounds like a screaming deal, like I hope it turns out that way for you. Why would somebody sell it? Like you said a guy had to get rid of it. Like why would somebody do that?
Steve Rozenberg: Yeah, so the guy that I bought it from was a rehabber.
Alex Osenenko: Oh.
Steve Rozenberg: He bought it for, I think he told me he bought it for like 130, he rehabbed it, made it basically immaculate, perfect inside and he called me and he said, “Hey, here’s the deal. This thing is turnkey. It’s ready to go. I did all the work.” He told me, he said, “Listen, this is what I bought it for. This is my profit and this is what I’ll sell it to you at.” And he said, “If you don’t want it, I’ll throw it on the open market.” But he said, “I know you’re looking for something.” He goes, “This is perfect. And it’s in a great area that’s it’s a solid area that’s going up in value.” So I’m thinking this is a good lesson for him. Right? And so to me, working with flippers and rehabbers, it works. I mean the model works.
Alex Osenenko: I just bought a house that was rehabbed. It’s awesome, I don’t have to do any work.
Steve Rozenberg: You don’t have to do anything. Same thing. That’s the same thing with the rental property. So, it’s very much along those lines and it just goes to show, he met the guy, we’re at closing, we took a picture with him and everything and you know what I mean? We’ve got a good relationship and he calls me, he’s like, “Hey, you want another one?” I’m like, “Do you want one?” He’s like, “No, not right now.” I’m like-
Alex Osenenko: Next time he calls you call me.
Steve Rozenberg: Well there you go.
Alex Osenenko: You’ve heard it here first.
Steve Rozenberg: But to me that’s the thing, is he’s seeing how it works. Yeah. Did I pay, did we pay a little bit more than probably I would’ve liked to? Yes, because I didn’t go find the property myself. Right? I didn’t do the rehab myself. I probably could’ve found the house for 130 myself, put all the time and energy and effort. You know, we have crews. We could’ve gotten it done, but I’m thinking that’s not the lesson I want him to learn. I want him to learn the lesson that you can get this, you’re going to pay for it but do the numbers work? The numbers still worked at the price we bought it at.
Alex Osenenko: Hey Jett, how busy are you? How many hours a week you go to school? What’s your situation?
Jett: Five days a week, seven hours a day I go to school. After that I got rugby practice two days a week for three hours. Three hours a day.
Alex Osenenko: Have you thought about getting like a part time job? Like is that a thing?
Jett: Yes, I have been thinking about that more and more recently and…
Steve Rozenberg: Yes. Yes.
Alex Osenenko: I’m just curious. Like right now, like I know I’m putting you on the spot a little bit, but I’m just curious like, hey yo young people these days, there’s different situations, there’s different things. It doesn’t look like things are just given to you.
Alex Osenenko: Like they probably got the jeans for you but that’s as far as it goes. Right?
Steve Rozenberg: Yeah. I mean he works for his stuff. He understands, he gets it, you know, he’s a good kid. Good in school and he drums in a band and he does the rugby and I mean, he’s out there, he’s being a kid, which is what we want him to do but he’s also learning. I mean, I asked him and you could ask him about teachers, your teachers that-
Steve Rozenberg: I asked him, I go, “Do your teachers know that you’ve,” so he’s in a class about money. It’s called money matters.
Alex Osenenko: Oh really?
Jett: Yeah [crosstalk 00:29:05].
Jett: Yeah they have that now it’s-
Alex Osenenko: I never learned that.
Steve Rozenberg: No.
Jett: It’s pretty much just a class that tells you how to invest your money properly, how to finance it correctly and just how to make sure you don’t go in debt.
Alex Osenenko: That’s really cool.
Steve Rozenberg: It is cool. But I said, “Do they know like kind of about your history and you owning a rental?”
Jett: No, that’s not their business to know.
Alex Osenenko: All right, so-
Steve Rozenberg: So he doesn’t tell them.
Alex Osenenko: That’s interesting. Let’s talk about this for a second. You don’t say that your dad is a pilot and you don’t say to you own or rental property. I could see multiple reasons for that but what are your reasons?
Jett: Because I don’t want to seem like the guy that just shows off everything that’s like, “Oh yeah, my parents do this, I do this, I’m better than you.” I don’t want to be that guy.
Alex Osenenko: That’s really smart. Humble. Humble, mind your own business, do your thing. I need to learn from you man. Sometimes. Sometimes I show up in a M3 and that’s how it is man. It’s a stick shift and it’s very loud.
Steve Rozenberg: Yeah. I mean look sometimes you want to show and let people know that you’re doing well.
Alex Osenenko: Yeah.
Steve Rozenberg: He’s more reserved. I mean, he’s very reserved. He doesn’t talk about it, doesn’t say anything about it. I mean, being able to be a pilot, we’ve traveled all over the world and seen a lot of [inaudible] He’s gotten to experience a lot. Like you, he’s done martial arts. I mean he’s got a second degree black belt. I mean he’s done a lot.
Alex Osenenko: One degree above me that’s for sure. That’s awesome.
Steve Rozenberg: He’s done a lot but he understands the work ethic and maybe martial arts taught him that, to be humble about it.
Alex Osenenko: That has a lot to do with it. This is what I learned. Like I sold my M3 three years ago as soon as I start getting like really into it. And I think it’s part of it. I think it’s true. There’s a little bit to it, but I’ve looked at like a lot of people I know and I read about and I’m an avid podcast listener, love podcasts and I found that like most real, true, successful people are more like you.
Alex Osenenko: Right? It’s not the talk, it’s the walk. Right? You do your thing, somebody asks, free to give advice, you’ll discuss it, you’ll be transparent and honest, but you’re not going to volunteer, you’re not going to go, you know-
Steve Rozenberg: So, let me ask you this. So, your friends, do a lot of your friends know that you own a rental or do you… Like how do you have that conversation with them?
Jett: Just a couple of my closer friends know and that’s just, I mean, because you hang out, you talk-
Steve Rozenberg: Have conversation.
Jett: Yeah. Just in conversation. You talk about your interests and whatnot, so that-
Steve Rozenberg: But it’s not a, yeah.
Jett: I don’t make a full conversation over it. It’s just a-
Alex Osenenko: Gloss over?
Jett: Yeah. Just kind of gloss over.
Steve Rozenberg: So, I’ve got a question. So, if you’re in high school and kids were to come up and talk to you and ask you advice, what advice would you give them?
Jett: Don’t spend your money on stupid things and put it into a savings account.
Steve Rozenberg: Start putting money away?
Jett: Yeah. If you think you need the money, you don’t need the money, it can wait unless it’s a big emergency, you don’t need it because if you’re still a dependent, then all the major things are still covered for you.
Alex Osenenko: Learn how to work with your parents.
Alex Osenenko: That’s what I would say. Hey, if my daughter vacuums, like I’m happy to pay, like somebody is going to wash this table, like it’s either going to be my time or her time, you know. It’s a glass table, it’s a pain in the neck. Like you know, my wife, she’s going to sit there and like 15 minutes, maybe she does it and then she vacuums, she does those things. Like there are jobs to do in the house I’d say that parents are willing to pay for-
Steve Rozenberg: And you know the other thing too is-
Alex Osenenko: That’s money.
Steve Rozenberg: He’s learned like with his knives, right? He buys them, he sells them, makes money, buys them, sells them-
Alex Osenenko: That’s a side hustle, there’s money involved?
Jett: Yeah, that’s actually why I am happy that I did take out that advancement earlier is that because now I’ve gotten the collection to be where if I want something else then I can sell something off again, get that and then it’s just a constant circle of-
Steve Rozenberg: So, he’s learning how to use money and start moving it around and flipping it, no pun intended, flipping it over.
Alex Osenenko: Dan, how old is your son?
Alex Osenenko: Are you downloading here? [crosstalk] Are you recording?
Dan: My son has a savings account already.
Steve Rozenberg: See?
Alex Osenenko: But it’s pretty cool. That’s smart.
Steve Rozenberg: Yeah.
Alex Osenenko: This is something that I need to even myself get behind is getting a hobby where your things are worth something because, and knowing so deeply, like because I go fishing, like you know, I spend money on fishing, I go catch the fish, I eat it. There’s really no value in it but like if you were collecting knives or I suppose cars, if you’re in that position, like that’s a lot of money. Like that’s value.
Alex Osenenko: Like asset.
Jett: Yeah. That’s one of the big things that I got from Grant Cardone and the Rich Dad, Rich Kid, Poor Dad, Poor Kid books is that always look for opportunity. So, that’s the first opportunity I saw and said, “I can buy these and then sell them for just a little bit more,” but that little bit more still profit and over time that piles up to be more and more profit.
Alex Osenenko: That’s really good stuff.
Steve Rozenberg: I mean because pretty soon that could become cars.
Steve Rozenberg: It can be become houses. I mean, he’s learning the concept of, in my opinion, he’s learning the velocity of money. He’s learning how to get something. He plays with the knives, he does whatever he does for a while then he’s like, “Okay, now there’s a better one out. I’m going to sell this one. Use the money for that, make a little profit and keep it rolling.” You know?
Alex Osenenko: Be honest with you, like this is sort of a definition Rich Dad, Poor Dad and I’m not saying that you’re a rich dad or anything like that-
Steve Rozenberg: Yeah I get what you’re saying.
Alex Osenenko: But it’s like-
Steve Rozenberg: It’s a mindset.
Alex Osenenko: I grew up in Minsk, Belrose like socialist country. You know, two years ago before I was 16 and when I say I’m 16 now, it’s a little capitalism, but nobody knows anything much less your parents.
Steve Rozenberg: Sure.
Alex Osenenko: You know? And so I never learned any of that but when I came to US I got really hungry, started learning. But to me it’s like associating what I’m reading to reality was very, very difficult. Like it’s really good to have an example and then it’s interesting because before the show you couldn’t really tell me exactly what you’ve gotten out of this Grant Cardone book.
Steve Rozenberg: Yeah.
Alex Osenenko: And now it’s just coming out. It’s like, think about it. Those knives are an asset and I make a profit on those. That’s amazing.
Steve Rozenberg: Go ahead.
Jett: So what I was going to say is like, just like to kind of help with how I saw how I can do this with knives is that I would just like see something in school. I would pick an object and I’m like, “All right, what can I do with this?” And then I’ll just do that with other things. Like, just walking around like in the mall, I’ll look at that. I’m like, “All right, what can I do with that?” And it’s just constant thinking.
Alex Osenenko: That’s an entrepreneur mindset.
Steve Rozenberg: That’s a muscle, right? I mean you’re working that muscle to figure out, okay, is there something here? One day he’ll see, I mean, he’ll probably see something that I wouldn’t see and go, “That’s a deal right there.” I may be looking at a plot of dirt, right? And going, “I don’t know what he’s talking about.” You know? And he may see it where it’s something there that he’s going to go, “That’s opportunity.” And you know, the thing that I always think about is, you know, as entrepreneurs of all of us out there grinding and trying to be successful, we’re so busy being successful, we forget about them, right? We forget about the kids.
Alex Osenenko: Oh yeah.
Steve Rozenberg: And so we’re so busy trying to make it, we kind of forget to show them what we’re doing and help them and that’s why, you know, again, I can’t say that I did this on purpose, that I realized that he was learning all this Andy Frisella and all these podcast shows and audio books that I’m constantly hearing. But it was, and I remember one time we were in the car and you know, I take him to the gym, we’re going to the gym together and we had a friend in the car, I’m taking him to the gym also and I think we’re listening to Andy Frisella or something, one of his podcasts, and he goes, “Oh Jeff, this is the guy you were telling me about.” So I’m thinking, oh, okay, so he’s listening and then he’s telling other people about these podcast shows.
Alex Osenenko: Yeah.
Steve Rozenberg: So, it’s resonating.
Alex Osenenko: I’ll tell you when in life. This is really good. This has been really, really, really good. And I think the takeaway for those that are listening is learn yourself and then invest in your kids and let them invest, not give-
Steve Rozenberg: Yeah.
Alex Osenenko: Invest. Invest, that’s very important. I really like your mindset young man. I think you’re going to go places, but for now to wrap it up, why don’t you and I show a trick.
Steve Rozenberg: I do not partake in these.
Alex Osenenko: And mind you, I just learned this today. Steve doesn’t know how to do any of it.
Steve Rozenberg: I do not. I’m waiting for the fingers to be cut. You could maybe get a job at Benihana.
Alex Osenenko: That’s big man.
Steve Rozenberg: Maybe Benihana, I’m not sure.
Alex Osenenko: Like Nations was where I grew up and that’s how-
Steve Rozenberg: I don’t know that-
Alex Osenenko: Nice burger spot.
Steve Rozenberg: You didn’t give him the sharp one did you?
Dan: No I did not. [crosstalk 00:00:38:41].
Steve Rozenberg: This is the practice knife.
Alex Osenenko: This is pretty cool.
Steve Rozenberg: So, if you want to find us on iTunes, we are there. We are on Spotify, we’re on YouTube, the Myndful Investor Podcast show. Also, you can find us on Facebook, the Mastermind Real Estate Investment Club. Make sure you find us on both, like us, join and subscribe. Everyone, thanks for watching today. Appreciate it, and we’ll talk to you guys later. Bye-bye.
Jett: See you.
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