Escaping Abandonment and Criminal Charges to Running $100 Million Multifamily Funds with Entrepreneur Steven Libman

Speaker 1

00:00

 Hey everyone. This is Jamie Bateman. I just had a chance to have an awesome chat with Steven Libman of Integrity Holdings Group and Steven is a successful real estate investor, and they manage a couple of very large multifamily funds, and he's done a lot more than that. He's done a lot of flipping wholesaling and ground up construction on Self Storage. But needless to say he's Making a large impact and doing very well in real estate investing, but we focus a lot on Stevens, upbringing and some of the instability, he unfortunately, dealt with as a child with regard to numerous divorces and abandonment and just a lack of stability. Overall at a young age in his formative years. And then also, we talked about An incident where Stephen got arrested in college. And spent a couple days in, in, in jail, talk about the lessons. He's learned through all this adversity and a lot of the focus a lot on impact and growth mindset. I think it's a very relatable episode for people who maybe, you know, gotten out of college, you're working your job. And you don't have Necessarily that support system to feed into that growth that personal growth. And that impact moving toward that impact on the world. Well, this one is for you, Steven is very active with nonprofits through his business, and so he's clearly focused on making an impact positive impact on the world, and he's a shining example frankly of Entrepreneurship being a Force for good and business being a Force for good. So I really enjoyed this conversation. And I know you well to inspiring stories of real people. Overcoming incredible odds to live life to the fullest. We are all guaranteed to face. Hardships, how will we handle the adversity?

Speaker 2

02:16

 Join us to be moved by every day, people who have turned poverty and prosperity, and weakness into.

Speaker 1

02:22

 Wealth Be Inspired as these relatable.

Speaker 2

02:25

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Speaker 1

02:25

 Vulnerable and former counterintelligence investigator Jamie Bateman puts his He's interviewing skills to the test, restore your.

Speaker 2

02:33

 Faith in humanity as you experience. True Cinderella stories of average people turning.

Speaker 1

02:38

 Surreal struggle and deep despair into booming, businesses and financial Fortune. Take ownership of the life. You are destined to live and turn your adversity into abundance. All right, here's the deal. You work hard for your money. Isn't it about time? You put your money to work for you if you are an accredited investor check out Labrador Lending.com Our integrity income fund provides monthly cash flow from an investment backed by hard. Physical real estate, our income fund which is uncorrelated to publicly traded stocks and bonds invests. In first lien, mortgage notes Diversified by geography property value and borrower type. So you're not investing in one project. You're investing in a diversified portfolio of first lien mortgage notes. Our integrity income fund aims to pay its investors monthly distributions at a preferred rate of return of 8% annually. Possibly, the best part though, the fun showcases, a short 12-month commitment. So you can invest your Capital today and have access to that capital in one year. Check it out today. Labrador Lending.com Welcome everybody to another episode of the form adversity, to abundance podcast. I am your host Jamie Bateman, and I am super excited. Today, we have a special guest on Steven Libman. He's a managing partner of Integrity Holdings Group. Steven, how are you doing today?

Speaker 2

04:18

 Yeah, Jamie. Thanks for having me on, man, appreciate it.

Speaker 1

04:20

 At. Absolutely, I know you're got your own show, so you're a pro at this and should be a, you know. She's hoping you. I think you will make it easy on me, so I will take it. Easy.

Speaker 2

04:32

 No worries. Now I actually really appreciate the title and the concept behind this because I think all the time we're so results-focused. We're so in this results-focused culture of oh look here's the result of all this hard work, but we don't talk about is the ad, you know, the adversity that you're overcoming the day-to-day, the daily in and out. And then we get this hyper results-focused mentality when people start out, or they try to do something, and they're not immediately. Be successful to get discouraged and that's just not reality. So.

Speaker 1

05:06

 Pretty, she absolutely. Yeah, I mean, I don't believe in Overnight successes. I mean, so I think you're absolutely right and you know, we're going to highlight a good bit of that adversity that you have been through. But before we get there let us talk about some of the results just to understand For The Listener out there, so they can understand who you are and what you're up to today and you know why we should listen to.

Speaker 2

05:31

 You. Yeah, so I mean my real estate career has spanned just about 12 years before that I was actually a real estate broker. So a little bit longer but the Investing side of the business of Integrity Holdings Group has been about 12 years, and we did not have two nickels to rub together when we started, and we started wholesaling some property. So if you don't know what that is, it's essentially putting a property under contract selling that contract to someone who's going to go and do the work and you make a small Arbitrage fee. So whether that be five, ten fifteen thousand, we have made 250,000 on those deals. But so we started wholesaling, and then we started building a business that would take the top 20% of those deals and flip them and over seven, or eight year period of time. We flipped about 1,000 houses and building those systems was interesting and brutal in their own, right? The first five years we didn't get over 15 deals a year. So, you know, it was a slow building process and learning in the first couple of years, and then we got into a rhythm where we were doing 10 15, 20 deals a month. And getting killed in taxes, highly transactional business. Sure very expensive. In terms of marketing and this is.

Speaker 1

06:48

 Just flipping. You're talking about, not.

Speaker 2

06:49

 Just selling, but.

Speaker 1

06:50

 Wholesales again, flipping got ya.

Speaker 2

06:52

 And, you know, between federal and state where pans upwards of 50 percent in taxes and a buddy of mine said, hey, you know, you should do a multi-family deal or a commercial project because there's some significant tax benefits to doing commercial projects. And I said, well, I don't know if that's true. So let me go read the tax code and find out. Sure enough. Right, yeah. So we have killed off, I told him it was right, you were right, but he already knew that because his tax returns were already showing him that he was right. So that year we did some whole salesman flips, and we built about three hundred and ninety thousand square feet of Self Storage in Orlando. So three facilities. She is managed by Cube smart ground up construction and the year after that, after they all got brought into service, we paid zero taxes right man. Taxi terms like — four hundred thirty thousand dollars and I said, wow there's something to this. Sure. And then we bought about 1,000 units in various markets, the smallest one being 66 units. The largest one being in that time frame about three hundred eighty-four units. Okay.

Speaker 1

08:09

 These are all multifamily.

Speaker 2

08:10

 All multifamily. Yep. And so, apartment complex is we have done some student housing as well? So a couple of those are student housing and then, yeah, so we launched a hundred million dollar Equity Fund after funding. A bunch of those deals on a deal by deal basis, syndication wise. And recently, we launched a hundred million dollar fund. And just in December, we closed just about another thousand. And 50 doors or so. So we closed the 984 unit complex and December, and another 85, or unit complex as well. So, yeah, that deal was a 257 million dollar project. Wow. So very low, very large institutional style type projects that we're focusing on now Equity checks, between 10 and 40 million is really The Sweet Spot that we're in now. Wow.

Speaker 1

09:02

 That's quite a quite different from being a realtor and maybe doing a couple of wholesale deals. Here and there. So, yeah, I would love to dive into that as we get back to this. This toward the end of the show. I forgot to mention one reason. I wanted to have you on was you and I separately chose the part that are fun name as Integrity is very similar. So we have I have got too much smaller funds, mortgage note funds, both named Integrity mortgage, no fund and the integrity and Income fund, very different from what you have going on. But that was one thing I think I pointed out to you a few months ago, I was one thing that attracted me to you. I like your choice in naming of your company's is the fund called Integrity. Or is it is that just a larger Holding?

Speaker 2

09:58

 Group? Yeah. So the it's the investing with purpose opportunity fund, right? Okay, we talked about investing with purpose a lot in terms of how Utilize the wealth from that business to fund nonprofits. I think that's what it's about. There's a couple like different funds, right? The Donor, advised fund, I think might be investing with purpose and then this is integrity Holdings. Opportunity fund one God. Okay, I am sure we will have a dozen or so different funds. Yeah. How'd you come up with your name? The entire I.

Speaker 1

10:28

 Just you know what it was. So the first one was the non-performing note fund and I started had some help from business. Ermine to it was my first fund but it was his sixth or seventh fund, Chris 70. And really, it was just a matter of thinking, of what's a principle or value. That's, it's very important to both of us, both Crescent and me, and that was it. I mean, now come to find out, you know, I am not the only one who thought of it.

Speaker 2

11:00

 Obviously, but interesting, I don't know if this is true for you, but we took some heat when we named our.

Speaker 1

11:04

 Condos at right now. I didn't.

Speaker 2

11:07

 Know how so goes. Well, I think people thought we were doing it, kind of To make us seem like we had integrity and so people would be like, oh, you know, that's kind of you don't need to say, you have integrity if you actually have it.

Speaker 1

11:23

 I have heard that too.

Speaker 2

11:24

 Yeah. And for me what? My response was always been. Well it just it's not there for you, it's there for me it's find me who we are and who work for, right? So the absolutely basis of that was based on proverbs 10 9, which says whoever walks in and Integrity walks securely, but whoever takes crooked, paths will be found out and that has that. That's the scripture for us. That's attached to the, the word integrity. And, you know, I think it's a heavy burden to bear when you point to yourself as being a person of integrity and that's the description have to live by, right? So yeah. And I and.

Speaker 1

12:03

 A couple things come to mind but, and then we will jump into your back story. But you know, one is if you're growing in and having enough success, You're going to have some haters. So you know, that's probably a good sign that you got, people that were upset with you about the name and then secondly, certainly in the mortgage note space. And I know in the law the broader real estate investing space. You know, you can't trust everybody. And we have got some unfortunately, some bad apples. And, so I think the world writ large could use more Integrity. I will just put it that way. Way. So let us jump into your backstory and obviously focus on, you know, some of the adversity that you have been through in a personal and or business level. And then we will try to pull out some lessons learned and bring it back up to today. So where would you like to start?

Speaker 2

13:01

 I mean, I think it's always good to start at the beginning and kind of figure out what fuels that fire in most of us as entrepreneurs, right? Or people that are looking for a Financial Freedom or other Freedom, maybe that's attached to it. So I was born, I turned 40 this year. So born in 82, and I was born to essentially an absent father. He left when I was just a couple months old and was raised by a single Mother. So my mom had already been divorced at that time. So, I had a half-brother that lived with me and, and then I was born, and she got divorced again, unfortunately. So, when I was five, I got adopted. So it's interesting. If you guys are watching the video, you probably can't tell some of my beard has turned white, but I have a Jewish last name and it was.

Speaker 1

13:57

 This is what Jerry look forward to. I know.

Speaker 2

14:01

 No, very Irish look to me, right? But I have a Jewish last name. And, and the reason for that is that I was adopted when I was five or six. Okay, so that's how I got my last name. So my mom was still in the picture. My parents got married, and eventually, they got divorced as well. So three divorces in my lifetime. By the time I was 12 from July, my mom's side, that's a lot. My dad. Mmm. Who adopted me, who I consider my father, right? The other guy who was kind of checked out and gone by the time, I was just a baby. So my dad who raised me, he was previously married as well, right? So you're talking, you know, 5 divorce is essentially, by the time, I was 12 between these two.

Speaker 1

14:52

 Parents, five divorces in adoption and biological father, who Abandoned you I mean for yeah right exact, so I mean that's a ton of instability in a very vulnerable time period for.

Speaker 2

15:09

 You Yan, in your formative years you don't know that's unstable, right? That's all you tell. Sure. So what's interesting about that is you kind of just think that okay. This happens other people's parents Stay Together, other people's parents get divorced too, but this is just kind of the life. The blessing that came out of that is that my dad provided us with more Financial Security than we ever had in the past, which gave us the security of stay and 21 home throughout my entire life. Going to similar school districts. My entire life growing up similar friends. So I wasn't moved around a bunch. So that was the stability that I needed or that I got from that situation. And you know, so I say all that because Does during that time my grandfather on my dad's side was the only entrepreneur in the family. So my dad was one of five. My mom was one of five as wells, and they only had one entrepreneur in the family, and he started a tire business and ended up selling that to a large. National conglomerate did very well, and we'd go visit them down in Florida and see them living on the golf course and going to the club for lunch and kind of piqued my interest a little bit to figure out, how, how does life look so different between Generations, right? My dad, God, Rest his soul. He never had that entrepreneurial Spirit. He would always do jobs, that were pretty safe and held onto money pretty tight. Because I think he was afraid of losing it because he didn't know how to earn it. So, you know, even at a young age, I was sitting here going, man. How do you go from one generation of Entrepreneurship? Let us start this. Let us go after it to the next level, which is not really entrepreneurial. And there was one or two that were entrepreneurial but overwhelmingly, they weren't then going. All right, so what was the difference there and then how do we want our life to look right? So, Even after my dad left, when I was 12 or 13, I saw some Financial instability for my mom, right? She had to work full time and take care of the kids and the house and I stayed with her and you know, she was a rock star essentially, having to go out and be the breadwinner, and I am sure she got support. But I 12 years old, you don't see that, right? You see, one parent working and everything that was provided for you. And for me it was like, man, I don't want that, I don't want her, this level of stress when bills come in and, you know, I think that's kind of what started planting the seed. So, you know, as we talk about adversity, I don't think you could talk about adversity without what, what benefit comes out of it and what lessons we learned from it. And I think that for me was what planted the seed of Entrepreneurship is those kind of that whole formative year experience, all those years going. I am okay, so there is this other way of life that I see, right? And then there's this struggle and instability over here. But how do we avoid that and is that just purely by chance or is that tactical and intentional and I get to determine what path? I take.

Speaker 1

18:38

 Sure it makes a lot of sense and yeah, it's been a common theme with many of the guests on the show. So far as just being able to pull out those the blessings that came along with The adversity and you know, maybe you I think, I think what you're alluding to is, maybe you wouldn't be a successful real estate investor and entrepreneur today. Had you not seen at dealt with adversity Financial adversity firsthand and also kind of seen both sides of it. So had you been born into a wealthy family, maybe you, maybe you would have been Or like your dad and played it safe, right? I mean I don't know maybe I don't think anyone.

Speaker 2

19:28

 Tell the story backwards, right? We just know kind of how the Domino's all started to fall and absolutely yeah, I think all of those things, a culmination of all of those things tourist intend to lead you towards the path that we all end up.

Speaker 1

19:41

 Taking. Yeah, so 12 years old, your father at that point and left through divorce and then if I And correctly and walk us through from there on what, what were some of the challenges you dealt with after 12 years old?

Speaker 2

20:02

 Yeah. So my brother at the time, was six years older than me. So he moved out of the house, it was just me and my mom and, you know, playing Pop Warner football and going into high school, and I was, I was really buttoned up kid, I was playing hockey and tennis and football and was a straight-A student was In theater and school paper. And, and I think in hindsight, right? I am sure if you interview a bunch of entrepreneurs, we could probably tend to agree that you become this overachiever because you feel maybe a little less than a little bit less like you have to prove it to somebody, right? Especially I think going through the abandonment issues that I was still mentally going through as a child going. Okay, so what is it that I Do to make myself feel better. Like I am achieving to this level that gives me this validity or yeah. Yeah, right. So the to yeah, exactly. I think that validation that you're looking for externally sure. And I think you know, I have heard a couple of our investors who are very successful talk about this where they have this crippling insecurity and that's what's made them. Supremely successful, right? So I think there's a couple of things that make that are like precursors to success and one is this. I think I can do it better than you. Just kind of Pride for way to look at it but you do kind of need a certain level of I think I can do it better and then conversely which is very interesting. The I have this crippling insecurity that I will never be enough, right? And the dichotomy of those two things kind of present a level of success that I think most entrepreneurs have not all, but if you read a lot of psychological studies, that is kind of one of the few predictors of what makes people massively successful. So I think going through both of those things at the same time made me go into high school and say, okay, I am going to go do really well right and you know so Didn't a bunch of Varsity Sports with a straight, A student got into Boston University, which was kind of my reach school at the time and then I went away and fell apart, essentially had no real guardrails, had no real friends and I would say my freshman year of college, I did, okay. It was a big shock to the system going from being top of your class at some no-name Suburban High School. Cool to now being in a very affluent and you know, very high achieving School status. We're sure. I think the average SAT when I got into bu was like 14 and a half or 1450 or something like that and wow it was like the first day they told us hey you were all straight A students everybody in this class, right? So just by definition, somebody's going to start to be average and somebody's going to be below average. So if You think about that? If you'd have all of these top achieving students that all come in and now you have a new bell curve that's created. There's going to be really high Achievers and there's going to be middle-of-the-pack teams going to be. I tended to fall that first semester into the lower probably quarter of that got everything.

Speaker 1

23:30

 Now, let me ask you this. Did you have, were you playing sports in college?

Speaker 2

23:35

 No. So I actually did go out and try and, you know, to play hockey at Boston University is very, very slow level. So sure I did walk on and tried to go skate those kids, but they're the best of the best so that didn't work.

Speaker 1

23:49

 Out. So reason I asked was not to point out, you know, failure but just to point out that, that I am correct me if I am wrong, but a lot of kids get to college. And now they have got all this free time especially if they don't have Athletics like they were used to having sounds like in high school didn't have a lot of free. Time to go screw things up, exactly right? And that's right. And so the new College, you didn't make the team, right? And that wasn't the point, but you don't. Now you have got all this free time.

Speaker 2

24:22

 Right? And then, what do we do? We decided I am going to take all these college courses. I had to work full-time. So okay, Works through school and then I partied like a rock star, right? I joined a fraternity and I Did that, you know? Now I can rip the wheels off and my first year didn't get good grades was put on probation academically and then pulled it together. My sophomore, junior year would still, you know, and worked full time. So I mean there's a lot of good that came out of college. I worked full time. I had dedication. I got I ended up graduating with like a 34 GPA and no student loans, right? So I would I worked Full time and paid the second, most expensive School in the country at the time along the way. So, so there was there, is that, right? I also figured out how to do that while partying pretty hard, and I say that would probably lead me to Stage 2 of like the life mapping moments of adversity, which was I called shotgun on the way home from a bar late at night, from a guy that I knew Notably. Well, but my buddy got in the back seat. I got in the front seat and as he dropped us off bunch of cop, cars drop down on us, I mean, from every direction that you could think of the whole. So in Boston, all the lights are blue right heading on where you are in the country. Some so this was all blue. So the whole street lit up in blue, and I was like, what is going on here? And sure enough. This guy had a car full of all kinds of illegal narcotics. My buddy, who's actually going to come and visit me this week. I haven't seen him in a while, but he was in the back seat, they let him go home, and they charged me with everything. They charge the driver with which ended up being six or seven felonies and about 15 misdemeanors, and they Send me to the drunk tank. They put me in Nashua State penitentiary in Boston and at 22 that was the scariest.

Speaker 1

26:38

 Moment. Okay? Can only imagine and this it was strictly been the reason for the difference in treatment between you and your buddy. In the back was simply that you'd called shotgun and you were sitting in the front seat.

Speaker 2

26:50

  so I could reach all the things in his glove box and that's kind of what they determined to be the reason that I could get charged. And he was in the back, and he had no access. So they determine hey. So needless to say, I don't call shotgun anymore regardless of where we're going, or who's driving? But I ended up spending a couple of days in, you know, essentially a State Penitentiary like full Brown jumpsuit with d.o.c. Printed on the back like you. No, no, no shoelaces know like you know, strip searched the whole thing and I didn't come out of that jail cell. It was the guard took pity on me as we were going up stairs and did not put me with a cellmate, which I am eternally grateful for because the guys that were in there, they're serving real time. They weren't, you know, this was a county jail. So you had some hardened criminals in their 20, 25 years sentences.

Speaker 1

27:52

 So what? Anyway, they ended up happening in the through the.

Speaker 2

27:54

 Legal system, long story short, everything got dropped, right? I mean, we had spent a couple thousand dollars on a put on a decent attorney, who could go and say, hey this is nonsense during all of that though, I almost got kicked out of school because the police report read, but the police report read. So, they were waiting to see what happened in the legal system before, allowing me to walk and graduate so stressful time, right? Sure. And it was one of those kind of moments of, man, I really screwed up in a way and not say that, you know, we weren't selling the drugs that were in the guys car, but put myself in enough positions to take a ride home at 2:00 in the morning from the wrong guy, right? Sure hindsight. When your mom says nothing good happens after.

Speaker 1

28:43

 Midnight, it's a lot of Truths to that.

Speaker 2

28:46

 There's a lot of truth to it.

Speaker 1

28:47

 Yeah, I can really appreciate that, you know, look, you didn't put the drugs there you there was a lot, you didn't cause happening, right? As far as the, the circumstances with that but Sounds to me, like you're taking ownership of placing yourself in that situation and owning your part of it, right? Of course.

Speaker 2

29:09

 So I think that how to growth is to recognize and I think initially I was pointing the finger, right? Like well, look, what happened to this guy and look what happened to this and look shortly position and, you know, it will probably wasn't until a couple of years later that I really sat down and recognize that I put myself in that position.

Speaker 1

29:26

 Yeah, I know that's, I think that's what I do. Want to move on too quickly because that's a critical piece as far as just a lesson learned. And you know the show is our show is all about how to overcome adversity and get to abundance, and we don't pretend that happens overnight we don't pretend that you snap your fingers and all your problems go away. But as far as getting to that place mentally, It could take years, right? And so but I think it's for me it's important that the people understand that you know, that you it was a process but you got there and that you kind of take ownership of your situation. It's just something I want to highlight. So, how did those years ago after that incident?

Speaker 2

30:13

 Yes, I think what's interesting is after you come out of college, especially or even after you just finish high school, a lot of us think that we just continue to grow automatically, right? Because since you go to school from New Year's 5222, your quote growing right? Because you're going to class, you're learning new things, you're doing new experiences. So, I feel like you have this innate belief that you are growing automatically and then that stops, right? So now you have to go get a job. You Have bills. And maybe the growth just turns into work training, right, right, there's no real personal growth. So growth is one of the five core values of our company now, and we hire fire promote and demote based on your adherence to those core values and growth being one of them means we have to have a growth plan. Right, what are you doing? Internally for yourself not just for the business, right? But for your marriage, for your health, for all these different things, are you drawing and how Are you doing that? So, the first couple of years after school, you know, I was just, I was in New York. In sales job selling apparel and tax filing services. And then I, you know, I bounced around to probably two or three different sales jobs and recognized very quickly that I didn't really want to work for myself. I was unemployable in the sense that I thought I could do a better job than my managers typically, and that doesn't lead itself to being the best employee, right? Yes.

Speaker 1

31:46

 So you say you did just to clarify, you did want to work for yourself. You realized right? Yep. Got.

Speaker 2

31:52

 It after about a year or two, I realize her and I don't matter where I go. Yes. There's this drive and desire to just be my own boss.

Speaker 1

32:01

 Absolutely. No. And I think this is a critical stage in life for a lot of people who are listening to this show is where you were at that point. I know I got out of college and I have been playing lacrosse in school. And I have talked about this on some other podcast, but I You know, my whole identity was wrapped up in school and sports and things and now what you don't have that built-in structured to provide the growth, so you have got a kind of, it's on you, right? So that point in time, I think it's very easy for people to kind of drift or just settle. Maybe is a better way to say it and just accept that I work my 9 to 5 and I there's no other option and all of a sudden you're 40 as you just heard. And you didn't go down that, you know, it's quite possible. You wouldn't have gone down the entrepreneurial path, but so you learned fairly quickly, it sounds like you realize that you weren't a good employee and that you had more potential in life to make an impact and to grow if you tapped into kind of that drive to achieve and work for yourself, is that fair to say.

Speaker 2

33:17

 Yeah, and I was good at my sales jobs. I mean, I was hitting quota by month seven. So I knew I could do it right there. And then the last 5 months, I get to goof off because I wasn't getting paid significantly more to get over quota. What's interesting about what you just said is most people will live their life that way. Most people will spend that time of Coast for the rest of their lives, and that, that's the real tragedy, right? Is that? It was probably a desire that keeps people held On and whether its golden handcuffs of a 9 to 5 jobs or just fear of stepping out into the unknown. I teach an entrepreneurial class at this home school Co-op for kids that are 12 to 18. Okay. And I at school one of the things that we talk about is the LIE of the world that they try to get you to believe is that it's more risky, to start your own business than it is to go work for somebody else, right? I just try to ingrain it into these kids that there is no, More inherent risk. To go into work for yourself. Then there is to go work for a company. I mean, I know some, the guy who is the, you know, head of purchasing for Toys R Us didn't see it coming. Right. When Toys R Us went out of business, right? I have friends of biomedical engineering degrees. They can't get a job because that became completely obsolete for one reason or the other. So sure. You know I think it's important to teach our kids that there is no real inherent. It's perceived.

Speaker 1

34:47

 Yeah I love that, it's great. Yeah, I just said I will just throw in. I, one of the recent episodes that just came out on our show was with a guy named James Harold web and it was one of my favorite episodes we have done so far. And he had many crazy stories, but highly recommend the listener, go back and check that one out, but one of the things that happened to him, which almost got glossed over, in his, in his whole story was that he got laid off when he was doing very well, and he was sitting pretty. I mean, in the thing is The company it was doing fantastic so it but what happened was his company got bought out by a bigger much bigger company that had their systems and their scale all, you know, they, they didn't need his position anymore. So it wasn't a matter of, oh, I can see the writing on the wall. The company starting to go down, you know, down the drain. And I will just jump ship. No, he had no warning. You got a phone call and said, you're done. And so, you never know right. There really is no. I mean, there's risk. Let us face it, there's risk in entrepreneurship, there's fist risk in working. A nine-to-five. Personally, I like to speak to the fact that I would much rather wear out than rust out. I would rather take a risk or start a business, have it failed, and then look back and have a lot of regret in my life. So yes. So you decided you're going to Branch out on your own and that and then what?

Speaker 2

36:19

 Happened in the first thing I did was my sister-in-law was opening a real estate brokerage, so she said, hey why don't you come over here, you basically work for yourself, right? So that was the move from a W-2, a 1099. I get to control my own destiny, my hours and things like that. Yeah. And the, the franchise that she brought bought into was specifically selling bank-owned properties for banks, right? So they were getting list support closures in two thousand, six, seven, eight, and we were selling them on the open market. So I got a real good flavor of how I was selling these properties to Real Estate Investors and seeing the profits that they were turning, and I was making a commission and essentially still working for them. Right? And you know, doing a good job of coming up with valuations and finding off-market deal flow and doing all these things and supporting their business. And It was at a closing table that I made this guy, he probably bought four or five houses for me that year you probably made seven or eight hundred thousand dollars in profit from the deals that I presented to him that year. And we were sitting at the closing table. And he said, hey, you know, somebody took the pool ladder out of the pool. I said it's a bank-owned property like you know all right. Whatever like who cares? Yeah. Sure. And he held my feet to the fire, and he would not close until I took the two hundred fifty dollars out of my commission. To pay him back for a pool ladder. And I went home that day, and that was the day that I decided, I am gonna go flip houses. I am gonna burn the boats, and I am gonna go. And I am gonna do what these guys all-in. Yeah, I have the ability to find deals on the MLS. I know that I could, you know, get this many deals to support my lifestyle and, and that was so.

Speaker 1

38:03

 You're pointing to your strengths and your experience already. And then the thing is, like, if you tried Couldn't you have gone back to becoming an agent? Again if you tried ever failed to do you're flipping business and that didn't work. Yeah, and I come in.

Speaker 2

38:20

 I think I finally let my lap, my agents license laps like three or four years ago. So I kept it for seven or eight years not because I thought I would go back but because I needed access to the MLS to find easier. It's.

Speaker 1

38:33

 Supported, you're investing your adventure. But again, you know, It's not like this is the end, all be all, and if you're flipping business, just dries up, you have no other options.

Speaker 2

38:46

 Yeah, you could still do what you're doing this question a lot, right? I think a lot of people ask, well how did you go about do it? And I have friends in this business that have done it completely opposite of me and the same as me but to say that it's All or Nothing is a personality trait, I think thing. So I have some friends who worked a W-2 and slugged away a bunch of money until they had a year. Nerves in the bank. And then they knew that they could go and start investing and doing these other things. That is not how we did it. Right. Travis and I my business partner and I flipped we also have one house. We made sixteen thousand dollars on it. We recognize that this could work. Sure took eight thousand dollars. Each went to Costa Rica this was before we had kids, he wasn't married yet, I was married. My wife and I went down there to meet. He went to Costa Rica for a month to Surf and I went for a week. To hang out. And it was that on that trip, that we decided Life's too short to work for anybody else. Let us go home and burn the boats. We had no safety net, we had no savings. That's not for everybody, but I don't, I don't guess that for everybody, but for us we knew that there was no plan B right? Which is what we mean. When we say we burn the boats. Yeah, we weren't going back to anything else. This was going to work, and we were going to figure out a way to make it work. Well, thankfully we made that happen. And.

Speaker 1

40:10

 Probably won't be okay. Yeah, I know, you know, for my for me, I was able to just we have different circumstances, and I was able to, I went part-time, I worked for the Department of Defense because I would been in the Army before, and it just kind of one thing led to another. I ended up going part-time and 2015 was able to, for seven years to work part-time. As I built up my real estate business, as I built up, my mortgage note business, because that made sense. Given the circumstances. Yeah, so I think that's great. I mean you know, people like to argue what should I have a side, hustle, should I go, all depends, depends on your personality, depends on your circumstances, pens on the goals, you know, all that stuff. So.

Speaker 2

40:53

 And I mean if I had to do it all over again with three kids and a mortgage and you know it would be different right? But absolutely had a wife who fully supported me, we had a one-bedroom apartment, not a lot of bills, and we were like, look I am in the beginning, we in the My wife and I would even go and do like brand ambassador type things. Right. We're if you have ever gone to a place and you have like the girl passing out beer or the girl like Taking pictures with guys and giving out samples and stuff like that. Like we would go and do that. I would get paid like 17 bucks an hour. They paid her 30 bucks an hour, but we'd be together. And we'd go do these things on the weekend just to pay the bills if it wasn't working with it. Like, you know, you figure out stuff to do when you don't have overwhelming responsibility.

Speaker 1

41:40

 Absolutely resourceful. So then I do have a some questions. I am going to fire off but take us from kind of that point up through today before we get to the.

Speaker 2

41:51

 Questions. Yeah. So when we started the business we started wholesaling and, you know, it took four or five years to ramp that business 215 deals a year, which was a lot of work for just the two of us and not a lot of money. We frankly took a pretty significant pay cut, and we just really didn't know what we were doing wrong. I mean, so we started listening to some podcasts and started listening to some guys who were saying that they were doing 100 flips a year, and I was like, that's baloney, I don't believe. That's all because I know how hard we were working. Sure and we weren't getting to scale. So we called those guys, and we said, hey how are you doing that? And then one of them had a mastermind group that I don't know. I think we paid twenty-two thousand dollars for that. First year, we couldn't afford it. We convinced them to take it on four separate six thousand dollar payments across the year. But we just new that getting in this room of other people that were doing this, high-level business would be.

Speaker 1

42:54

 Beneficial. Sure.

Speaker 2

42:57

 So that next year we did, 78 deals while and then the year after that we broke 120. And then we were doing 15, 20 a month. And that's where we started the story, which was. Okay. Now, we are paying a lot in taxes. It's highly transactional. There's a lot of turnover in the business and essentially built what I now, consider the, the wrong widget, Just for our personalities, and we wanted to do so, you know, it was her who is a good business, we learned a lot about how to create and start and frame a business. And then, once we started paying significantly, Less in taxes, and getting passive cash flow. We were like.

Speaker 1

43:43

 Let us just do this. Absolutely. Now, as far as the Mastermind group, I know you and I are in an another Mastermind as well, you know, people some people like to sit on the outside of these groups and say it's a waste of money and I think it can be depending on the group, but you probably made up for your twenty-two thousand dollars in one deal. I would guess, right? And so, what I have .

Speaker 2

44:09

 Never sat down to quantify how much we have spent in these Mastermind groups, and what it's done for our return on investment because now it's almost infinite. Hmm, you can't even quantify it because one really strong relationship can change the trajectory of your entire business. I mean, I can Tell you that multiple times at these events, I have sat around and gone and grabbed another cup of coffee and somebody will give me a million dollar idea and passing, that's normal for them. But we haven't applied our life yet and still join my book because there's so it's pretty nonchalant lie about this. And it's like no, that's wait. Say that again. Tell me again. How that.

Speaker 1

44:50

 Looks? So can you point to? I know we're not can't quantify it, but how did that particular Mastermind group improve? You're flipping.

Speaker 2

44:59

 Business. So one, I think it's getting around, like, you know, people always talk about the four-minute mile, right? Nobody broke the four-minute mile and then all of a sudden, one guy did and like three other people broke the four-minute mile that year because the mental barrier was broken, that wasn't unachievable goal. Well, similarly, when you get her into these Mastermind, when you're starting out, you see all these other people getting the results that you want to get, and they can give you the blueprint of how to get They're in a much shorter period of time. So, you know, I the people that never join these Mastermind groups and have something — it's interesting because you will never find those people inside the group that are right in the 25 or 50 or 100 thousand dollar checks, right? You're only finding those naysayers on the outside and I decided a long time ago to stop taking money advice from my broke friends, so I don't it's great, I.

Speaker 1

45:54

 Love it, that's really good. So I am going to fire off some questions now We can talk more about your current business at the end of the episode. What's one thing that people misunderstand about you?

Speaker 2

46:10

 I think because I am a Visionary, I think so. Thank God. I have an operator business partner because I am a, I am a Visionary guy and I think it could come sometimes off as aloof as because we're not super tactical in the operations, at least. That's not how my brain processes things. My whole team does that right? So that this process is very succinct and tight, but I think about me personally, I think people here, big Vision, Big Dreams, big goals, and they think tactically, it's difficult to execute on that because operationally, it's not how my brain works.

Speaker 1

46:50

 Sure. But makes sense.

Speaker 2

46:53

 You know, I think that I have done a really good job of surrounding myself with the people that are really good at that, to make sure that it doesn't fall through the cracks.

Speaker 1

47:00

 Kind of the. The who not how and the reality is, you probably wouldn't be if you were drawn into those tactical all those in the weeds decisions. You Likely wouldn't have the mental space to excel where you should be excelling, where you are excelling, that's just a guess. If you could go back and give your 18 year old self some advice, what would it be? Besides don't call shotgun.

Speaker 2

47:28

 I will call shotgun. Well, I accepted Christ into my life about 17 years ago and I think that has made a huge difference in my life having a real relationship with God. So I think I would say the first thing that's important to tell my 18 year old self is that God is real, and he loves you and that will make all the difference when you find out why the Drill to you?

Speaker 1

47:57

 Sure that's really good. If you could have coffee with any historical figure, who would it be?

Speaker 2

48:04

 I love have you watched The Men Who Built America now? It's okay history. History channel like miniseries, okay? And it goes through, the Rockefellers and Carnegie's and like the oil, boom, and all that stuff. And then I will tell you, I think the entrepreneurship in The Men Who literally built this country, Tree wood would really make me inspired and I have a ton of questions as to why some of them failed and why some of them really succeeded. So probably the Rockefeller Carnegie era type entrepreneurs. But I think my answer for that used to be Jesus but I get to meet him when I am dead. So I don't need.

Speaker 1

48:46

 To go back coffee. Yeah, well, and it looks, it's just one person. It doesn't have to be your favorite. That's a good answer. So now how about if you were given 10 million dollars? Not for your fund. But for you personally tomorrow, what would you do with it?

Speaker 2

49:04

 So our big hairy audacious goal in the business and personally, is to give 80 percent of our income away.

Speaker 1

49:10

 Okay?

Speaker 2

49:11

 And that means that we'd have to give a lot of it away, but I think strategically more than just giving 80% away, it would be to find a way to invest that money through a Donor, advised fund, or a non-profit so that it would continually kick. Goff cash in the future for a Hundred-Year Legacy plan. So, outside of me if I am dead, how does the Donor, advised fund continue to give money away? So, I think that would be the first thing. I would really try to figure out how to do is, how do we create that 10 million, and make it a hundred million so that we could continually give in perpetuity after we're.

Speaker 1

49:48

 Gone. Hello, that's great. What are some of the nonprofit's that you give to you.

Speaker 2

49:53

 Now? So, I think there's at this point over 70,000 lives, affected, through 23, or 24, different nonprofits, that we have supported, and they vary from the Field of Dreams, which is an amazing handicapped accessible Park in New Jersey that, you know, was partially funded by Todd Frazier for a baseball field from the Mets and there's Bocce and basketball and handicap accessible everything there. So, my late brother was severely mentally handicapped and in a group home for most of his life. So that was a big cool project that we got to support. It's cool. We have pulled girls at a sex trafficking in Ukraine, you know, living in a basement with special forces guys that we were able to fund. We filled a 757 on Bagram Air, Force Base. The day that the Afghan Air Force Base, got shut down of Afghani. Geez that we're going to be political prisoners and assassinated likely, so we were able to send the fuel to that plane. We have dug some wells in Africa. We have done some things here you know to support moms with unplanned pregnancies and to give them the support and some baby showers and like a Year's worth of baby Goods in the beginning of the their babies lives. And so a lot of different things. That's great. There's no shortage in the world. So.

Speaker 1

51:24

 Yeah, absolutely. And so yeah, I just love getting that type of message out there that entrepreneurship and small business can actually be a force for good and I believe that it should be in that it is in general. But you know, so it's fantastic to hear that you're not some successful greedy, you know, small business owner, real estate investor who just sits back and council is his pennies. I had.

Speaker 2

51:53

 Scrooge McDuck.

Speaker 1

51:54

 Hank. Exactly. I had a Brittany Turner on the show, and she would, she actually bought an island recently in the British Virgin Islands, and she did. A lot of that is things. I just frankly, never even thought to do. But you know rescuing you know, females from sex trafficking operations in the Ukraine and other parts of the world her I guess her husband. It is a former special forces guy, and they have a network where they can go in and do that and it's like that. That's amazing. So it's it is kudos to you for doing that and it sounds like you're not stopping and you have a much, you know, you want to grow what you have got so that you can make an even bigger impact. So I think it's fantastic. Let us how about more industry-related. What's one struggle that you're dealing with in your business right?

Speaker 2

52:52

 Now? You know, I think finding good deals that pencil is always an issue in a retraction, right? Which were clearly in. So as has been a fund, and we fund other operators experienced operators, I think the biggest challenge right now is to make sure that the underwriting is on point which is why we only invest in operators that have at least 10 years experience at least a billion under management. Like we're not funding newer operators and there's Shortage of them. No sir. Which I wish them all the best. That's just not something that we can fund because in this interest rate environment and this inflationary season, you have to be pretty dialed in as to how to hedge against those downside risks. Absolutely. So that's, that's been our biggest Focus right now, got it.

Speaker 1

53:42

 And so, just to be clear, you because you mentioned, you have your partner's more operational focused, you inside your fun. Don't operate directly you. You raise capital and then find well seasoned and experienced successful operators to place that Capital with is that.

Speaker 2

54:01

 Correct? Yes, we have an in-house asset management team, and we manage the managers to the plan essentially. So we don't deal with the day-to-day property management issues, but we managed the asset management team. Okay.

Speaker 1

54:15

 That's great. Yeah, I do think that the operator is the key. I mean find Doing your due diligence. I am not speaking to you. I am speaking to the listener out there, if you're going to place Capital with someone finding someone who knows what they're doing is so much is the number one key piece because they're going to make the day-to-day decisions and there's an element of trust. And you, you can't control everything. So, to me, that's the most important factor even when compared to Martha conditions and the deal itself and that kind of thing. So, What's one thing in your field of expertise or your business that almost no one agrees with you.

Speaker 2

55:02

 About?

Speaker 1

55:05

 I don't think I have asked this one before, so I am trying it out.

Speaker 2

55:08

 Yeah well I think first is that overwhelmingly we compete with Wall Street because Wall Street is typically used writing the check to the institutional operator that we partner with and I would That they don't agree with us on much in terms of how the investor needs to take priority. So reads, historically return, five six to eight percent on Wall Street. And the reason is, is that they're actually getting sick 15 to 20 percent per annum returns from the operator. But they Arbitrage, all of that income back into quote, the cost of the fund. So there's just a lot of pork in it, right? There's a lot of fat, and we were on a real lean mean team are fund actually She isn't a profit Center for us, so unlike most funds that operate, we don't take any income from it. We take income by partnering on the general partnership side, which means our preferred investors. Get paid first. And we don't make any money until they make that obligated return, which is different from I think a lot of the industry does it. There's always a preferred return in some level of the limited partnership but it's usually at like the four to eight percent range. And Then everything over that is kind of your risk capital. And we structure it for accredited investors at a 12 floor and go up from there. Okay. We don't eat until after that is achieved and because we're not arbitraging with the fun does it's really Our obligation to make sure that us and the manager are outperforming or performing to pro forma to make sure that we're hitting our own metrics because we're the ones at most risk.

Speaker 1

56:51

 I gotcha and your it helps align the interests of your interest with the passive accredited. Esther's.

Speaker 2

56:57

 Interests. Yeah, most of the time. It's like hey, if we only make You know a million dollars, right? And you have 800,000 in, will usually go 800,000 back to you and then we will split the profits, dollar-for-dollar, right? A dollar, a dollar to me a dollar to you a dollar to me until the money's gone. So if we were projecting 15% and you only made 11 that's on you, right? Our fund actually has a clawback provision in it to where you make. If I make money and you haven't achieved your 12, you can claw back from another deal inside the fund from me, right? So that's okay. It's very different in terms of and it puts more risk and more onus on us, but that's why we wanted to create it that way. Sure, that.

Speaker 1

57:40

 Makes a lot of sense, what's a book or two that you could recommend for our.

Speaker 2

57:45

 Listener January 3rd, Atomic habits has to be one of them, love it. That's a great king to do the new year, new you thing, it's not about the result, it's about the habit. I do this because my alarm went off at 5:00 and I went to the gym, and I was like, yeah. Yes, I am awesome. So James, James.

Speaker 1

58:04

 Clear is great. I need to reread that.

Speaker 2

58:06

 One. Yeah, and he was just on School of greatness to on the podcast School of greatness that he did a great job with ice, how just talking about, you know, how those things intertwine into the new year and then entrusted is frankly a great book. It's about Legacy planning and how to incorporate your children into Legacy planning. So one of my quarterly rocks last year and it's going to bleed into this year, as the Hundred-Year Legacy plan for my family, for my business and for my Donor, advised fund. And I think a lot of people are, you know, we talked about it a little bit in this episode to like do wealthy kids I have problems of their own in terms of being lazy or being entitled and my buddy. Yeah, and that's how we That's my son. He's joining us for this one.

Speaker 1

59:02

 So yeah, absolutely. I love it. And speaking of your legacy and kids rights perfect timing, I actually have that book on my right next to my bed. Ready, trusted. Yeah, I just haven't started. Oh man, it's gonna get through some others.

Speaker 2

59:18

 Yeah, I said, I would say that in terms of Legacy planning, that really helps, you figure out how to pass that stuff onto your kids in a healthy way. Absolutely, I love it.

Speaker 1

59:29

 So as we wrap up here, Steven Libman, how can our listeners reach out to you? Where can they find you online?

Speaker 2

59:37

 Yes. So if you go to investing with purpose dot-org, you can see the nonprofit's that were helping you can partner with us you know, as an investor you're partnered with us, right? Because the money that we give away through the website or through the Donor. Advised fund is not its after the investor returns. So that comes out of our pocket, but you get to partner and take ownership of that blessing as well. So, Go to investing with purpose dot-org, you can find us on any of the social media sites but that's the easiest way to partner with us.

Speaker 1

01:00:08

 Love it. And what's the name of your podcast?

Speaker 2

01:00:12

 Investing with purpose, you can find us on anything that podcast platform based on. Yeah.

Speaker 1

01:00:18

 Awesome. Well Steven, I am not going to review everything that we have talked about, but it was a lot of it was a lot. We covered a lot of ground covered a lot of instability and in the formative years and then You know, taking ownership of your own decisions and, you know, you have certainly dealt with adversity for sure and you have found a way to abundance, and we appreciate the I really appreciate. There's just the fact that you are out there making a positive impact on the world and you know, operating with integrity and making a positive name for entrepreneurship and small business and Real estate investing. So, thank you so much for joining us. I appreciate.

Speaker 2

01:01:04

 It. Thanks, Jamie.

Speaker 1

01:01:06

 And to The Listener out there, please give us a positive rating and review. If you can, if you enjoy the show, feel free to reach out to me. Bateman James at Labrador lending.com, and we appreciate you for spending your most valuable resource with us and that is your time. Thanks everyone. Take care.

Speaker 2

01:01:26

 Thanks so much for tuning in to this episode of the form adversity to abundance podcast. If you're enjoying the show, please feel free to rate, subscribe and leave a review wherever.

Speaker 1

01:01:36

 You listen to your podcast that helps others find the show.

Speaker 2

01:01:39

 And we greatly appreciate it. Thanks again.

Speaker 1

01:01:41

 For listening, and we will catch you in the next episode.