Recently on the BiggerPockets Podcast, I asked airline pilot and real estate investor Steve Rozenberg to tell listeners a story about his son that I thought was just fantastic. It’s so good, I want to share it here, too. The Importance of Teaching Your Kids About Real Estate Here’s what Steve had to say. There’s a great lesson that I learned from this that I really try to pass on to people now. It was never planned, I’ll say that from the beginning. Want more articles like this? Create an account today to get BiggerPocket's best blog articles delivered to your inbox Sign up for free So, I have a 15-year-old son. When he was 14, he came to me one day and said, “Dad, I want to buy a rental property.” It kind of took me by surprise. Now understand, I listen to a lot of radio shows and podcasts, and I’m always listening anytime I’m in the car. I’m listening to an audiobook or podcast, so he’s immersed in it without me even realizing he’s getting it. You think your kid’s just sitting there, staring out the window, but he’s actually listening, too. So I said, “OK, well you don’t have any money. How are you going to buy your own rental property?” And he said, “Well, I do have some money.” I asked him how much, and he said, “I’ve got $10,000.” My first thought was like, how did he get $10,000 without me even knowing?! But he said he’s been saving and he has this money and that money, and so he can buy a rental. I told him that’s not enough. You need more money. If you’re going to buy conventionally a standard deal, you’ll need more. He asked how much. I responded about $25,000. What he said back I thought was very interesting. He said, “Well, how do I do it?” Related: Ultimate Beginners Guide to Real Estate Investing I told him he has two options: he can either save the rest of it or try to get some creative deals—maybe partner with someone. He said OK. So, he comes back to me a couple days later and said, “If I save the money, I’m gonna be 28 by then, because it’s taken me 14 years to get this.” “Yeah, you’re right,” I said. “So, what’s your other option?” He brought up how I mentioned partnering with someone. He asked what that would mean. I said, “Well, you and somebody else can put in the money, and you can be 50/50 partners. Basically, you take on half the debt and he takes on half the debt, and you buy it together. Or you can do things where they run the property and you put up the cash, or vice versa. There are many ways to do it.” He asked if I’d go in half with him. I asked him what the terms were going to be. He looked through me like, come on, Dad. But I told him this is business, and this is how you’re going to learn. If you don’t know the answers, this is how you get burned and this is how people take advantage of you. I said, “So, this is a lesson: Don’t let me take advantage of you. Tell me the terms.” He went and did some more homework. You know what’s funny? About three months prior to that, he was asking me about real estate. I talked about appreciation and debt paydown and equity captured, and he asked me to explain it to him, which I did. I explained it to him and drew a map of the U.S. and what properties appreciate where and why people buy. And one day, I went into his room and it was up on his wall—like he was looking at it and studying it. It was just always up there on the wall, and I never said anything. And then, a couple months later is when he asked me this question. So, he said, “Well, how about if we did 50-50?” I said OK and asked who’s going to manage the property. He said it could be my company. I asked him if that was a good deal. He didn’t know. I said, “First, you need to work this backwards. You have to explain to me: What is a good deal? What kind of property would make sense with all the expenses taken out of it, what kind of property makes a good deal? What is your exit strategy on this deal?” No one ever talks about the exit strategy, which is one of the things that I’ve learned. Even if you don’t know what it is, you at least have to think about what it is. Is it a 1031? What are you going to do with it? So, we went through the gymnastics of it. He got a couple sample deals, and I told him, “We’re not going to go looking for a deal until you can tell me what is a good deal, because if you cannot identify a good deal or bad deal, there’s no way anyone else is going to tell you whether or not it is. They’re going to rip you off, so you have to know what a good deal is to you before you can go outside this realm.” We went through the cash flow, cash-on-cash return, and I forgot what exactly the numbers were, but we both decided, OK, this is the deal we’re looking for. So now, when this deal comes across our plate, we know it’s a good deal and there’s no question about it. It either fits our parameters or doesn’t. I didn’t want him to have to learn make-readies or big rehab jobs. I wanted him to get a cookie cutter-type property. I had some buddies that were flipping and all that stuff, so I told them what I was looking for—something pretty much done. Related: Help Me Analyze This Real-Life Deal That Just Came Across My Desk! Knowing we were going to pay more for this, I told him, listen, it’s done. You either pay now and do the rehab, or you just get it. This house, literally, we got the property, we closed on it. Four days later, we put a tenant in. It’s been rented ever since. Never hear about it. My son gets the cash flow. My wife makes him put 40 percent back in to reinvest to buy another property, and he gets to keep 60 himself. So, now he’s understanding. I told him, “Listen, Jet, if you had 10 of these, think of the cash flow coming in.” He’s like, “Yeah, I wouldn’t have to work.” I said, “Or you could work and exponentially speed this up.” He said that was a good point. His goal now is to own five before he gets out of high school. I’m thinking, man, I didn’t own my first house until I was 30. So, I just think the one thing I’ve learned is that we all work so hard to get wealthy, and we never want to see our kids suffer. But giving our kids a portfolio of properties is not actually helping, ya know? Teaching them the legacy of how to keep building that is key. I’m realizing how many people out there are trying to be successful, but they never teach it to their kids. They’re not building a legacy for their family, because giving them that money, it’s like giving someone a good deal. They can lose it just as easy if they don’t understand the fundamentals. I think it is very important to take this education that we’re all working so hard grinding, trying to get better, and actually sit down with our kids—or whoever—and just showing them how they can carry on that legacy. I don’t think many people do that, and I think it’s something we should be doing. Otherwise, it’s going to stop, right? It’s not going to keep passing through generations if we don’t keep doing that. They’re going to say, “My dad made a lot of money. I got the inheritance, and I spent it.” That’s not really doing them any favors, in my opinion. I told Steve that people often ask me if I’m going to homeschool Rosie (my daughter) or send her to public school. I say, yeah, I am going to homeschool her. She might go to public school, too, but either way, school doesn’t end at 3. She will know more about cash flow and financial freedom and wealth and all that when she’s seven than most people know when they’re 30. “By doing that, just think of what they’re learning,” Steve said. “They’re learning a skill that I don’t think they’re going to learn in school.” I agreed. No, they’re not. Do you have kids (or plan to)? Have you spoken to them about investing (or do you intend to)? Let’s talk in the comment section below.