On today’s show we’re coming to you live from Multi Family Conference in Toronto.
There were a number of great speakers at the conference, but I want to focus on one speaker in particular. Our North American culture can be celebrity obsessed and I don’t buy into that. However, I believe that success leaves clues and that success is rarely accidental.
That speaker was Alex Rodriguez. He is known as a baseball player, first for the Seattle Mariners, then the Texas Rangers and finally the NY Yankees. He played a total of 22 seasons in MLB, an industry in which the average tenure is 5.5 years.
Most recently he is known as one of the Sharks on the TV Show Shark Tank. Naturally, most people believe that he made his money in baseball. There is no doubt that baseball helped. But baseball did not come close to affording the growth that Alex has experienced.
I’m here today to talk about none of the celebrity stuff that most people focus on. Alex Rodriguez is a real estate investor. He started like all of us, with a small single family rental, duplexes, triplexes and eventually moved up to small multi-family buildings 10 units, 12 units and so on. He started investing early during his baseball career. In the early days, his baseball salary was used to cover the negative cash flow in his real estate portfolio and there were many times when he was at risk of running out of cash.
Today, ARC has a portfolio of over 20,000 units. He is not known as a real estate investor. But he is a real estate investor at a very high level.
A portfolio of that size is operating at an institutional level. Here are some of ARod’s key take-away’s.
- He has been investing in real estate for over 22 years. This looks to me like one of those 20 year overnight success stories.
- He continues to grow the ARC companies by having hired A players. He has had the good fortune of developing a friendship with Warren Buffet who counselled him to only hire A players. A players tend to hire other A players. B players tend to hire C players which can poison an organization. He’s better off maintaining a smaller organization of higher quality people than having an organization of mediocre players.
- While ARod had an impressive 696 HR in his 22 year major league career, ARod also holds the title of having the fifth most number of strike outs in the history of major league baseball. It was this fact that trained Alex to approach the plate to a clear head each time he went at bat. It didn’t matter if he had just struck out. It was this quality that meant he could simply never quit. He was unaffected by setbacks and failures along the way. In his experience, most people can’t handle the emotional pain of failure and quit far too early. He has tried to bring some other professional athletes into real estate investing only to see them quit after a short period when they discover that it’s difficult.
- When A rod is hiring people into the organization, he always looks for people who have that emotional stability in the face of adversity. It’s the one thing he looks for that he considers to be a super-power in business.
Host: Victor Menasce