Welcome to My Blog

Allow me to introduce myself in this first blog post of my chronicled journey of embarking on a new career as a full time real estate investor after having served as a public school teacher for three decades.

My name is Brian Netzel. I live in San Jose, California. Yes, Silicon Valley for those familiar with California. Home of Apple Computers, EBay, Google, and a plethora of technology and bio-tech companies.

Although my background is that of being an educator for many years, I actually come from a family where real estate was both an investment and a lifestyle. I have fond memories of helping my father rehab houses in my youth, you know, “Let’s tear down this wall and make way for a grand open space kitchen.” Dad had a big vision for changing the lay-out of a home and was not afraid to get his hands dirty; although having a kid who liked to wield a sledge-hammer and stir up some dust made it a family project.

Dad worked as real estate broker for many years while he side-lined as a professional musician. Most weekends for him included evenings working at Rancho Santa Fe, a country club between San Diego and Los Angeles, playing in a quartet to entertain the well-to-do looking for a night out.

It was from him that I learned that real estate could enable one to enjoy other pursuits if done right. He not only put together transactions for his commercial property clients, but he invested in single family homes himself.

His primary tactic in those days was to find absentee owners through postcard campaigns. Being in an increasingly more “up” market in San Diego in the 70’s, he made the comment once that he found it difficult to list a property too high to get offers. It seemed that the sky was the limit.

He used this to his advantage on his personal investing as well. He would send letters to out of area owners and offer to buy their property. The inconvenience of out of area ownership and management eventually made them tired enough to sell the property to him. The fact that they usually lived far from the area that dad knew so well made them unaware of the increasingly crazy prices of the San Diego area, so they undoubtedly were unaware of just how high they could set the price of their rental property. So, dad was all too willing to offer them a price with built-in equity, coupled with the fact that the tired landlord simply had a property that was at best a headache to them.

So, it was in this manner that he slowly built quite a large portfolio of single family rental property. He would buy them with built-in equity, have positive cash flow from the rent, borrow on the built in equity, and repeat the process. Although I am not aware of how many of these he eventually had, I do know that it took all day collecting rent on the first day of the month as he took me around with him.
Yes, dad actually got in the car once a month and physically went from one rental to the next collecting rent personally. It was a normal part of his routine. He liked the personal contact with his renters, and seemed to have a great relationship with each one, stemming from the fact that they greeted him with a smile and were all too willing to hand over the rent check with no hesitation.

I recall one instance vividly when we came up to a house on the busy El Cajon Boulevard strip of El Cajon, California, east of San Diego. Being a commercial area dotted with small businesses, he intimated to me that he didn’t know exactly what type of business we were approaching that was housed in one of his rentals, but that it did include a large hot tub and all the Asian ladies seemed very friendly. I think it was purported to be a massage salon, but being so young it was not shared with me exactly what type of massage was going on there. I do recall a woman coming to the door in a very short mini-skirt and a big smile. Suffice it to say, he had little interest in the business model; what he did like was the regular, cash flowing rental income, whatever the source.

I at least learned from these monthly rent check visits that it is always better to find a way to increase the success rate of rent checks being actually delivered into our hands rather than hoping that we get paid. Dad made it easy for his renters to get that check into his hands. It was a pleasant and profitable exchange for him, one that he nurtured carefully. He saw his renters as clients, but he treated them in a positive and friendly way, with a sense of humor if possible. He knew these folks were a source of his monthly income, and so treated them with respect.  

And most of all, I learned that having a portfolio of cash flowing rental properties is a great way to free oneself to do what one would rather do. Yes, of course there was work involved for him in owning and managing those rentals, but nothing like a full time job. He had an office assistant who handled the day to day responsibilities of managing the rentals, so his role was more of setting up his office systems and then going around collecting rent checks once a month, managing the marketing program, buying more properties, and arranging the financing of the purchases. His primary role was that of the deal maker. And that is a good lesson for us real estate investors as well. Focus on deal making and hire others to do the rest.

Until next time. Now, go out and make some deals of your own!