Robert Rivani (03:25):

Seeing that possibility turned out to, if I could do this 10 times, 20 times, 30 times a month, it could be a real business if I’m making 5, 10 grand a month. I think that was 15, 16 at the time. But you can’t get much better than that and doing something you love to do. I got to the point where one person approached me, because I would be like one of those sneaker heads where I’d have all my shoes stacked on each other in my bedroom. I’d lick the bottom of the shoes and I would have that whole hype going on behind it. Then one person I’d look, I just love your collection. It’s too hard for me to buy this many at one time. So one person just wrote me a check and he’s like, “I want to take them all off your hands.” That was the end of the business and the game.

Robert Leonard (03:57):

Wow. And how did you transition from kind of that business eventually, as you got a little bit older into real estate? Did you use that money to start investing in real estate?

Robert Rivani (04:05):

Yeah, for sure. I was doing property management in my younger teens as well. So I had a fundamental, basic idea of how real estate worked from that gig. It taught me a lot of the important things that you look out for when you come to buy a property. But like everybody else, when you see other people doing what you’re doing or transitioning from property management to being the developer, I see some people are making half a million dollars, a million bucks on transaction at the time. I’m like, “Why am I in this to make 3% for management fees?”

Robert Rivani (04:33):

There’s nothing wrong with a management fee company. But if you’re really trying to equity build, having that kind of income stream’s never going to make you a 100 millionaire or billionaire. That’s where that transition or that light bulb hit. I’m like, “Okay, it’s time to pivot. It’s time to get into the redevelopment game.” I did use the majority of my money into the first couple properties that I bought in Georgia. This was during the great recession time when properties were actually affordable, not like today.

Robert Leonard (04:59):

Before we talk about what kind of properties they were, how were you able to start investing in one of the worst real estate markets that we’ve ever seen? You mentioned the prices were a lot better than today, but just from a psychological perspective, you see all of these really quote, unquote “successful and experienced people” running out of the fire and you were running in. So talk to us a bit about what your thoughts were going into that.

Robert Rivani (05:21):

Yes, at least the mentality that worked for me was, let’s say for example, the property I bought was one sold for $2.1 or $2.2 million at its peak. And went through a foreclosure, REO. The bank said, “Hey, we just want to get rid of this property. We were trying to sell for around $600,000.” In the back of my mind. I’m like, “Okay, if it was once worth 2.1, 2.2,” whatever the number was, “And I’m buying it for 600 grand, I’m buying it 33 cents on the dollar. How much lower can a property of that magnitude with income go?” There’s a point.

Robert Rivani (05:55):

It’s like saying when I bought that property, it was 1.5. No, because even if the market does turn and things are really great, my spread is very minimal. It’s 25, 30%. That’s what normal people will make in a redevelopment. But if I could bring this back to 2.1, 2.2 and I’m buying it for 600, having a 350% return, that’s exciting for me. Was I fearful? For sure. Was it good that I was a little bit ignorant and young too and I didn’t really know or understand the full grasp of what was happening? Everyone in the great recession knew, “Hey, look stuff’s really bad. Market’s tough. Things are really scary, foreclosures or REO.”

Robert Rivani (06:25):

But I was kind of young and naive to be honest. And part of it worked to my favor. I was the dumbest thing. I’m like, “I could lease up the property. I’m capable of doing it. I could do it.” I just had that mentality and it worked for me.

Robert Leonard (06:35):

How did you go for, or why did you go right for that type of property? A lot of people that are younger or even just inexperience with real estate, they’ll start with a much smaller deal. They’ll start residential or they’ll start with a single family or a duplex. They won’t go for these larger commercial properties. What made you want to go for those?

Robert Rivani (06:53):

The good thing was like I mentioned, I had some experience when it came to the commercial side, through the property management part. So it wasn’t as scary for me. Also, this building was only 6,000 square feet. So again, it’s similar to what somebody would have for a triplex or kind of development, so it wasn’t huge. I would never recommend for somebody to go into their first project or first property redevelopment into a big one. Because you just need to learn the nitty gritty of it before you get into that.

Robert Rivani (07:15):

It wasn’t really that scary just because of its sheer size. I had experience in the retail part of it. So the good thing about this property was there was only three tenant suites. They already had a Dunkin Donuts in one suite, had a dentist tenant in another suite and there was one vacant suite. So for me it was like, “Okay, if I could least have one space, have the potential to make three times my money. I’m going to go knock on every single door in the entire city if I have to, until I find that right tenant to take the space.”

Robert Rivani (07:37):

Luckily I had it. I was able to grab Jimmy John’s to do a Jimmy John’s drive thru there. They were excited. Even though the recession hurt them, they were still doing business. They’re still wanting to expand. I got lucky slash hard work in pounding the pavement and knocking the doors versus a lot of other people just put up the lease sign and then they hope and pray that a tenant will come to them. For me, that never worked.

Robert Leonard (08:00):

My camera that I’m using for this makes the background nice and blurry. So it makes it look a little fancy. But if you could read it, the sign behind me says, “The harder you work, the luckier you get.” It’s one of my favorite sayings. That’s exactly what you just explained.

Robert Rivani (08:12):

Yeah. Look, I took the Jordan shoe mentality of never giving up, sleeping on pavement overnight for shoes to go knock on every single door and not be ashamed. And say, “Look, this is the kind of stuff I have.” During those times, everyone was struggling. The tough part for a lot of these businesses when the market was on fire, not to get too much into detail of rent, some of these people were paying mid $30 a foot rent. Versus I was offering a similar product for like $18 foot rent. But the only reason I could do that was because my cost basis was so much lower than that other guy. So the tenants were excited saying, “I’m almost saving 50% on rent.” And I get a newer looking property that the owner’s going to put money into. So it’s win-win for both sides in that sense as well.

Robert Leonard (08:48):

We’re talking about the great recession. Now I want to talk about another time period that might not have been as difficult as then, but was still been difficult for a lot of people, nonetheless. And that’s COVID. If you go to your website, the very first thing you see is a short video clip that says, “Delivering best in class retail, dining and nightlife experiences.” The first thing that popped in my head when I saw that was, “Wow, this is a really great website for a real estate company.” But two, “Wow, those businesses must really have struggled during COVID.”

Robert Leonard (09:17):

Talk to us a bit about your experience with your business in real estate through the pandemic.

Robert Rivani (09:21):

That’s a fantastic question. COVID was a shock obviously for everybody and it wasn’t what anyone could have imagined. With the restrictions, the regulations and what made it more difficult was different markets and different governments. And those local markets had different rules. So I had a portfolio in probably 10 states two years ago. You’d have California, which was ultra conservative when it came to COVID. They didn’t force tenants to pay rent. There was delays on that. They wouldn’t allow our tenants to open for business versus Florida. The beginning of the pandemic was worried and concerned and had some restrictions. But after a while they decided to open up and a lot of businesses and a lot of people, owners like myself saw that and said, “Okay, I respect California. Some of these other governments are a little bit more strict.”

Robert Rivani (10:04):

Florida’s flourishing. A lot of people are moving there. A lot of people made that their new vacation spot to get away from their homes or wanting to have the ability to live a normal life, even though they understood the risk. Believe it or not my entire portfolio, we had 98 or 99% collection. But we worked with tenants to help them on obtaining their PPP loans. We helped delay their rent. And said, “Look, if you can’t afford it, obviously show us proof that your business is struggling. Then we’ll work with you guys. We’ll do a payment plan. We’ll defer your rent and then let you pay it back next to you over a period of 12 months or whatever it is.”

Robert Rivani (10:36):

Or there was some tenants that’d say, “Hey, look, I’ve been a great tenant for 10 years. Times are tough. Do you mind giving me a couple of months free rent? Let’s see while I’m getting through this. Then I’ll extend my lease for a longer term period.” So I’d say the key to our success through going through the pandemic was the ability to maneuver and work with our tenants and understand their perspective of what’s going on and figure out the best solution for both sides.

Robert Rivani (10:55):

That was mutually beneficial because a lot of people sit there and say, “Look, the landlord should flip the bill. The landlord this, the landlord that.” At the end of the day, we have bills too. Property tax, insurance, got to pay our lender. Our lender never came to us and said, “Hey, Robert, don’t pay interest for three months. Don’t even worry about it. We got you.” That wasn’t the case. They understood the hardships we had. We understood the hardships they had. We just found a happy medium for everyone to survive through it. Thankfully everybody did.

Robert Rivani (11:19):

Like you mentioned on our website, restaurants, nightlife, hospitality, our tenants flourished. After the couple rough months, we ended up leasing up our entire Miami portfolio a 100% and have all these new nightlife, hospitality groups coming in from all over the country, all over from the world now. Because Miami’s becoming that new hotspot for United States.

Robert Leonard (11:37):

This is not to say that the pandemic is over. But as things related to COVID have seemed to slow down a little bit, lately we get hit with inflation and increasing interest rates pretty dramatically. How have rising interest rates impacted your real estate business and acquisitions process?

Robert Rivani (11:54):

Yeah. It’s a great question. It’s something I’m actually talking about daily. Even today, the 10-year and 5-year creeped over 3%. I think what’s scary is not so much what the rate is because myself, I’ve been used to 4%, 5% rates when I first started. It’s how fast they’re moving. You typically don’t see a 100 basis points spread in 30 or 60 days. It’s going up extremely quickly in order to fight off the inflation and try to slow down the economy.

Robert Rivani (12:18):

A lot of people say, “Robert, interest rates, oh my God, it’s a game changer for the business.” I say, “Look, at the end of the day, if you’re in real estate redevelopment and if 1% higher interest makes or breaks your deal, you’re doing the wrong deal. Just stop doing what you’re doing.” That’s not to say be okay with higher interest rates. But it’s just the cost of doing business. It is what it is.

Robert Rivani (12:37):

So yeah, has it affected me? Yes. In the sense that I don’t want to keep paying more money. But does it make or break my business? Absolutely not. It’s another growing expense like everything else.

Robert Leonard (12:47):

Are you changing anything about how you’re approaching deals, the debt markets or anything like that in the next 6 to 12 months? Are you just really being crucial and conservative with your underwriting?

Robert Rivani (12:58):

Yeah. Typically myself, I don’t ever leverage my portfolio at more than 50%. That’s just not something I’ve ever been comfortable with. So for people that are highly leveraged or take outside money and they’re making money off interest rates, spreads, or stuff like that, I’m sure it affects their business a lot more. But since I own my company myself and I don’t pay outside investors, it really does not affect me in the sense of when it comes to new property purchases.

Robert Rivani (13:19):

I take advantage in the sense that if a seller is trying to sell a property in the ultra aggressive cap rate range, that the market has allowed us to do since rates have been so low over the past three to four years, I say, “Look, rates are now 4 1/2, 5%. I’m no longer buying your 5 cap deal. I’m buying your deal at 5 1/2 or 6.” So I’m using that to my advantage to try to push spreads on cap rates when it comes to buying a new property.

Robert Leonard (13:42):

Explain for somebody listening that doesn’t know or hasn’t heard of the spread between cap rates and interest rates, why that’s important and what it means.

Robert Rivani (13:50):

Why it’s important in the sense that if you’re borrowing at, let’s say 5% is probably the new rate that’s going around for these commercial loans, it doesn’t make sense for you to buy a property at a 4 1/2 cap because you’re leveraged. You typically want to take out leverage. So you can make the spread between your loan interest rate and the property’s income stream. So you want to get your loan at 4% and you cap rate at 5%. So you have that a 100 basis point delta. But now if your interest rates are higher than your cap rate, then what’s the point of buying the property if you’re just buying it for cash for purposes? There’s probably other investments at that point that you can get better returns than going and buying a single tenant.

Robert Leonard (14:25):

What is your capital structure or your capital stack for most of your deals? You just briefly mentioned it, but are you the sole owner of all your properties? Obviously, you probably have some debt for those properties as well. Like you said, at 50% loan to value. But you don’t take any outside investors.

Robert Rivani (14:40):

No, I never have. It’s not that I don’t like partners or whatnot, but I have a very specific style to the way I like doing things and have been pretty successful at it. For now, there’s no plan to bring on investors. In the next couple years, the thought’s been thrown around internally of doing a fund and raising money to grow exponentially. But I have a very big saying that pigs get fat, hogs get slaughtered. So I don’t like to get too greedy, too fast. I’m just taking my time to build a pyramid of the company from ground up, especially since we’ve evolved so much from small mom and pop shop got bigger real estate company. I’m taking things slow. I don’t want to get ahead of myself per se.

Robert Leonard (15:14):

I mentioned it before, but your website is one of the best that I’ve seen for a real…

Robert Rivani (15:17):

Thank you.

Robert Leonard (15:18):

You’re welcome. For a real estate company. What role do you think your website and the media presence that you have play in your deals? Does it make any impact?

Robert Rivani (15:27):

Yeah, for sure. Look, up until God, 12 months ago, I had a private Instagram account. I didn’t have much on social media. I didn’t really think much of it because when you’re trying to lease properties in a suburb of Atlanta, it’s not really going to make or break you bringing in a tenant. But now that I’ve gone into this higher profile, food and beverage and hospitality scene and the major anchor players in these power centers, a lot of people are tracking social media and a lot more companies are seeing the value in TikTok and Instagram to be able to express their company’s brand and message similar to mine.

Robert Rivani (15:57):

I bought a property in South Beach a month ago or so. We pretty much leased it within the first couple weeks, just because of social media and that presence. It’s making a huge impact. The website’s definitely edgy and different like myself obviously. And it’s important to me because real estate has been such a cookie cutter, mundane business for such a long time. While it worked for some people, that’s great. I wanted to bring the revolution and the difference of there could be a new generation of real estate investors, a new way to look at things.

Robert Rivani (16:26):

If you can have a beard and not wear a suit and go to the office and be okay with that. There’s nothing wrong with that. There’s nothing wrong on the other side, but this is just my way of doing it in a way I want people to see our brand going forward.

Robert Leonard (16:38):

I have to say, that’s one of the things that I liked most about your social media presence. When you guys reached out to come on the show, it really stood out to me that you have that edgier brand. It’s not necessarily my personal style, but what I do resonate with, is that it’s not the suit and tie kind of style. I’m wearing a backwards hat right now. That’s more my style. I feel the exact same way that you do when it comes to, you don’t need a suit and tie to be successful in real estate. That’s something that I’m trying to push with my personal brand as well. So I really, really like that you do that.

Robert Rivani (17:06):

Appreciate it. Thank you.

Robert Leonard (17:08):

A few of the properties that your firm, Black Lion, owns are strip malls or properties that are heavily dominated by retail businesses. With what seem to be a general consensus over the past five years or so, that Amazon and e-commerce businesses were going to destroy physical retail, what interested you in these types of specific properties?

Robert Rivani (17:28):

That’s a fantastic question. Something I battled around in my head during the pandemic significantly. There’s some shopping centers on our website, they’ve been sold and we no longer own them. But what our focus went from was let’s not invest in the smaller strip centers. Those could potentially be more susceptible. Because if you’re a new business coming into a market, it’s called a mom and pop business or a regional chain, you’re typically want to go near the big anchors that bring the big draws. Walmart, Lowe’s, Home Depot, et cetera, et cetera.

Robert Rivani (17:58):

So I said, “Okay, if we’re going to invest in this category, that without a doubt has been heavily affected by all the things you mentioned, it’s best to go on the best of class in that asset class.” So if I’m going to buy a shopping center, like the one I just bought in New Jersey for $50 million, it’s got Lowe’s. It’s got Walmart. It’s got Michaels. It’s got Five Below. It’s got Bed Bath. It’s got every national chain, PetSmart, Wells Fargo, FedEx. It’s got them all.

Robert Rivani (18:22):

So if a customer wants to go to our property, more likely than not, they’re going to come to mind because that’s so many options. Versus if you go to a strip center with six tenants, they may or may not need that. Or they may say, “Hey, I don’t want to go to this hair salon. I want to go to this other hair salon that’s part of the Lowe’s property because I can go get something from the hardware store. Or I can go to my hair salon. I can go pick up groceries.” You have all what we call synergy in shopping centers.

Robert Rivani (18:41):

Naturally, those bigger shopping centers have that synergy. So that’s why it started shifting from, “Okay, if we’re going to be in the real estate game, if we’re going to be in the retail game that has these effects, we’re going to go best in class.” Which is exactly where we pivoted in buying a couple of these large power centers from these institutional reeds.

Robert Rivani (18:56):

Then the other part of the business, just so I can not have all my eggs in one basket, like you mentioned, was the high profile restaurant, food and beverage where a customer spending $125, $550 a person and wants that experience of going in person versus buying it online. You want to take a date out, you’re taking them to a restaurant. Now you could probably date in the metaverse, but if you want the personal experience, that’s where you would probably be going.

Robert Leonard (19:19):

When I look at the states you’re investing in, Arizona, California, Florida, Illinois, New Jersey and Texas. I don’t see a pattern of looking for landlord-friendly states. How do you consider the general legal favorability towards landlords or tenants when you’re entering a market? How do you analyze a market in general?

Robert Rivani (19:39):

Yeah. That’s another great question. You always hear from everybody it’s best to invest in Texas and Florida. They’re more landlord-friendly, the estate income tax at the other and that’s great. Don’t get me wrong. A lot of my properties are now there. The issue when you’re talking about making serious money and equity, if everybody is looking in the same market like yourself or a landlord-friendly market, what opportunities are going to be left for me if everybody in the country’s looking in the same areas?

Robert Rivani (20:03):

So while I’ve been lucky and great at finding great properties and great markets, there was a while where you have to go against the grain. A lot of the properties I bought were in Milwaukee or in the suburbs of Chicago and markets that were depressed or heavily affected still from the recession years ago. It’s that balance of going against the grain and saying, “Look, if I’m into this property for a year or 18 months, which was my typical [inaudible 00:20:26] when it came to these deals,” it wasn’t as big of a proponent for me because I’m not holding this property for 10 to 20 years.

Robert Rivani (20:32):

So I have to think of headwinds and oh my God, what’s this market going to turn into in 10 years from now? How’s the government going to affect it? I’m thinking, “Hey, what’s my business plan for this local demographic? Can I execute my business plan in 18 months? And if so, what’s the next steps?” That’s how I think of it more than thinking about it from a longer perspective where a lot of these investors do think about it like that.

Robert Leonard (20:51):

What’s a bit different about commercial real estate than residential is that you often have businesses as tenants rather than individual people, which means their business needs to succeed in order for you to get rent each month. What can you do as a landlord to help set up your business tenants for success?

Robert Rivani (21:09):

That’s actually something that’s on my mind every single time I redevelop a property. Because like you said, it’s not, “Hey, if I don’t pay my rent,” typically what you said for residential, that’s where they live. They’re going to pay the rent. If not, they’re going to be sleeping on the street. Commercial’s not the case. It’s almost a luxury in the sense that if you don’t provide a quality product, there will be 50 other property owners that will take your lunch and take your tenant.

Robert Rivani (21:30):

So what’s super important for me is like the things I mentioned. Synergy within the property is super important for tenants to vibe with each other and to generate business and revenues off each other. Making sure your property’s looking good all the time. I don’t know if you see on my website, like this one wood jungle project that we’re currently redeveloping. I spent half a million dollars on fake florals on this property for the pure reason of it looking badass. But at the same time, it’s an Instagram moment where I probably get 15 to 20 photos a day or tags a day at this property because they’re so excited to go see the artwork.

Robert Rivani (22:00):

And what happens is when they go see the artwork and they go see the florals and they go see the new design, “Oh, I want to grab a smoothie. Oh, I want to grab a donut at a donut shop. Oh, I want to grab this.” And it helps provide more business and attraction. Every project we’re developing now it’s going to be an attraction or an experience. So that way it’s not just hand coming here for business, but it’s an ambiance as well.

Robert Rivani (22:20):

I think that’s super important, especially now when you have so many options in Amazon where it’s easy to get delivered to your house. If you’re not creating an experience, you’re not going to be standing out. So Black Lion, my look, my hair, my beard standing out is important. I think it helps out a lot.

Robert Leonard (22:35):

You mentioned that you’re relatively new to social media. But you did post a video on social media recently where you talked about purchasing real estate with a focus on cash flow or a focus on appreciation and equity. Talk to us a bit about this dynamic. And which way you think is the right approach?

Robert Rivani (22:50):

So this is an argument I had with Jalal, Grant Cardone, a bunch of people. Look, there’s no right or wrong answer to cash flow or equity bill. It depends where you are in your life and where you are in your career. For example, when I developed my first project, the one in Atlanta. I think my net operating income on that property was like 130,000, 140,000. If I had the mentality of a lot of these people where it’s like refinance and whole, $10,000 a month in net income was not going to pay it. It doesn’t even cover my property tax for my home today. I’ve had that mentality at a really young age. I’m like, “Look, cash flow is great whenever you have enough of equity to benefit off that cash flow.”

Robert Rivani (23:28):

For example, if my net worth is a billion dollars and I’m making 5%, I can survive off $4 million a month. Perfectly fine if I have a billion dollars. If I have a $2 million net worth and I’m making 5%, that’s a hundred grand a year. What kind of lifestyle am I going to have by living off a hundred grand a year when 30 to 50% goes to the IRS? So for me, it was like, “Hey, look, I want to keep building my equity.” Keep building, building, building my equity to the point where it’s like, “Okay, I’ve retired. I’ve hit my number,” which I’m sure all of us have a number. But when I hit that number, then I’ll put it in all cash flowing assets and then I’ll live off that income for the rest of my life.

Robert Rivani (24:03):

Some people like to do the plan of leveraging, leveraging, leveraging at every step and cash-out refi. I’m not opposed to that. The reason I don’t like it is sometimes people get a little too excited over leverage. Keep doing it. And then one time when… Especially commercials are little bit more volatile than residential. But if you lose three, four tenants, if your cash flow’s trap, if a COVID situation happens and you can’t afford to pay the bills and you have that kind of leverage, guess what? You’re going to be handing those properties back to the bank. So that’s why I shied away from that cash-out refinance. I just focused on equity building as much as I could.

Robert Leonard (24:32):

What is your number?

Robert Rivani (24:34):

It changes. I’ve already hit my number 10 times to be honest. And it keeps growing. I think every entrepreneur and every real estate person has that same drive. That’s like, “I hit my number. I can do more. I could do more.” Next number’s a billion.

Robert Leonard (24:48):

That moving goal post, is that good? Or is that bad? Some people talk about it’s good. You have that increased motivation that keeps coming every time you hit a goal. Some people talk about it being bad because it’s like, “You never have enough.” So where do you fall?

Robert Rivani (25:00):

It’s funny because I thought when I hit my first number, I would be running around screaming, jumping up and down. Being the entrepreneur that I am, I’m like, “Okay, I could do more. Let’s do more. Let’s try the next one.” I think it’s good to understand a healthy balance between if you’re building the money for a reason, whatever your individual reason is. One of my reasons was I love traveling around the world. I love to give back. I love being able to buy the things I want to buy and throw parties every single year and enjoy my life to the best of my abilities. That you enjoy your wins throughout the process. If you’re just going to be making the money to have a number up on a wall, it means nothing.

Robert Rivani (25:32):

So for me, I’ve always lived by the mentality of working hard and playing hard. So having that healthy balance between the two, the numbers just become after a certain point and I’ll be guilty of this, it’s just a number. There’s more important things to life than trying to go after that billion dollars. Do I mind getting there? No, absolutely not. But if you’re not enjoying life throughout the process and you’re just going to sit there and look back after 20 years and be like, “Oh, I hit my number. But I lost, I don’t know, my 20s and 30s.” That for me would be more disappointing. So I try having the balance of a lifestyle that I want as well as trying to make as much money as I possibly can.

Robert Leonard (26:03):

I did see the most recent videos and photos that you had from your party recently. It did look pretty awesome.

Robert Rivani (26:10):

Thank you. I appreciate it. So we have a twice a year theme. I like a big Harry Potter, fantasy, Alice in Wonderland. So yeah. That for me, makes it all worth it. Then we had this event for autistic kids last week where we had a magician that went for 40 kids. And then we’re throwing them a Harry Potter carnival. That’s my way of giving back to the community and trying to help out. Because as kids and I’m sure like yourself, you had some fantasy growing up with some type of whether it was Harry Potter or this or that. All the kids in us need to appreciate that and love ourselves. If not again, what’s the point?

Robert Rivani (26:41):

I want to do whatever I could to give back to kids. That’s a big thing for me. Helping out kids, especially ones that unfortunately have a tougher time growing up. To give them that excitement because growing up, I didn’t grow up with much money. But Harry Potter and that kind of excitement in fantasy really was like something I hung my hat on and really enjoy.

Robert Leonard (26:58):

Yeah. I think all of that stuff is awesome. Having seen what you’re doing is really cool. Do you think money buys happiness? There’s a lot of talking around that. I’m curious what you think.

Robert Rivani (27:08):

Absolutely not. No, it doesn’t. Look, they’re grass and I’ve gone through these iterations every year as my net worth has increased more and more and more. It doesn’t. It doesn’t. Because for example, I deal with a myriad of health issues and I couldn’t spend $10 million tomorrow to cure them all. So for me, that was one of the biggest lessons in life that money’s not everything. Because there’s been enough money for tenfold and I can’t cure my health problems.

Robert Rivani (27:32):

I can’t go buy a wife. I’ve been with my wife for 10 years. I’m as happy as can be. But then I see my boys that are single and all they’re saying is, “Oh, I’m so sick of being with all these different girls. I want to find a wife.” It’s like, “The grass has always been on the other side I think.” If you can’t be content with what you have… And don’t get me wrong.

Robert Rivani (27:50):

There are certain numbers that you want to get to. Whenever I was selling Jordan shoes, I was obviously, “Oh yeah, I’m fully happy out. I want to make money. I want to be able to fly first class.” I’m saying, there’s a healthy difference between look, if you’ve got a 100 million versus a billion, your life’s not going to be that much different is what I’m trying to say. But if your net worth is a million versus 50 million, significantly different. There’s a point of a less appreciation, I guess, is what I’m trying to say.

Robert Leonard (28:15):

That’s exactly what I was going to ask next. I think there’s a big difference. Like you said, even to make those numbers smaller between say 100,000 and a million or even a 100,000 being 75 to a 100,000 a year versus making 250 to 300,000 a year. I think there is a point where a scale where it does make a big difference in terms of life quality and happiness and things like that. It’s not that the money itself buys the happiness, but it’s what the money can get you or even remove from you for the stress. But then, like you said, there is a point of diminishing return where anything above that doesn’t really make a difference.

Robert Rivani (28:43):

For sure. Yeah. We always talking like, “Oh, Robert, do you want a private jet?” And I’m like, “No, the cost that goes into a private jet, whether I have the money or not is ridiculous.” I can go donate the money or help people out. I’m not going to spend $60,000 on a round trip flight to Miami. I’ll just go buy first class for $3,000. Call me cheap, but there’s better ways to spend money. I’m not one of those guys that I’m just going to blow off money just because I can.

Robert Rivani (29:08):

So for me, that was one of the things that that’s why I said like there’s a point of diminishing return. Do I want to fly first class to Europe and enjoy nice, fine dining hotels? Absolutely. Do I want to be able to own my own home and not have to rent like I did for seven, eight years? For sure. There’s things that you want to get in your life for yourself and for your family. Then after that, it’s like, “Okay. What else do I need? I’m going to go buy a jewelry for $10 million. Not doing that.” I guess it just depends on each individual person and what matters to them.

Robert Leonard (29:32):

What are some of the mistakes that you’ve made in your investing journey over the past decade?

Robert Rivani (29:36):

That’s a good question. Look, it’s knowledge. For me, it’s not being knowledgeable enough about certain situations and being a gunslinger. And just thinking I may or may not know everything. And it’s led to mistakes. Also, not scaling up fast enough. Like I said, I was very conservative growing up. And when I had opportunities like in Miami where I could have invested more, I took the cautious route and said, “Look, it’s better to be safe than sorry.” And the whole pigs get fat, hogs get slaughtered mentality.

Robert Rivani (30:05):

I wish I would’ve scaled up a little faster. I wish that I would’ve expanded my team a little bit faster in the earlier years. But any small business owner, you’re always fearful, right? If I’m going to shell out a quarter of a million dollars for an attorney on salary, I’m worried because I have to pay that. So I think it was growing pains.

Robert Rivani (30:19):

It wasn’t so much mistakes, but just growing pains and understanding things and the amount of time it took me to understand things on my own. I know a lot of people now get mentors and maybe that could have been a route that I went. But I never had a mentor. I’ve never read a book. I just winged things on my own and learned throughout the year. So maybe getting a better knowledge base from the get go or 10 years, 12 years ago, you didn’t see this huge influx like you see now with these podcasts and these Instagram things where people are signing up for courses. It didn’t really exist 15 years ago. So maybe having a little bit more of that is what I would say.

Robert Leonard (30:49):

As we near the end of the show and we wrap up, I like to turn the tables and let the guests actually become the host for a second. And ask me a question. So Robert, what question do you have for me?

Robert Rivani (30:59):

How did I do? No, I’m kidding.

Robert Rivani (31:01):

Yeah. Look, I would want to hear your perspective on some of the things I mentioned from your side. How do things in your business day-to-day run in comparison to how mine does?

Robert Leonard (31:11):

What’s interesting to me is I had a podcast. We’re recording this. We started about 12:30 Eastern time. And I had a podcast that ended at 12:15, 12:20, right before this. We chatted for about an hour and 20 minutes. What’s interesting is he had an entirely different philosophy than you. You’re sticking a little bit more conservative, a little bit more 50% loan to value type approaches to real estate, it sounds like.

Robert Leonard (31:35):

He is more along the lines of do that cash-out refinance. Anytime you have equity, leverage, leverage, leverage, leverage to 100%, take that money and reinvest it in another property. If you have any equity in a property, take out a HELOC or a cash-out refi and put that money into more investment properties and scale that way. It’s really interesting to be able to hear.

Robert Leonard (31:53):

I’m not saying your strategy is right or his is right. I don’t know whose is right. It’s probably right for different people. But I’m just really interested in being able to learn from people like yourself and him. It’s great to be able to hear the different perspectives.

Robert Rivani (32:05):

Like I’ve said, there’s no right or wrong in either position. One’s just more risk adverse versus the other. Don’t get me wrong. I’ve leveraged. There’s been properties where I’ve hard money loaned on top of my hard money loan, because I did not want to lose out on an opportunity. There was a deal that I knew I could buy for I think it was $6 million and I could sell for 15 million in 18 months. I did not have the money. So I went and literally got a hard money loan off my property, maxed it out.

Robert Rivani (32:32):

Then the new property I bought, I used that equity I hard money from. And then I got another hard money loan at 75% [inaudible 00:32:38] just to buy that deal. So I double our hard money. While I don’t recommend it because I was sitting there cringing every night, making sure that property went well, there’s times where you have to make that push. I think it’s a 100% right to do it. What I don’t think is right, is to do it in your entire portfolio. That’s what scares the crap out of me.

Robert Leonard (32:56):

Not even just your entire portfolio, which I do agree with, but it’s also depending on where you are. You’ve already built substantial wealth. You don’t necessarily need to take those risks. You might be trying to preserve wealth a little bit more, but people that are just getting started, they might need to take that risk in order to hit the goals and levels that they want to achieve.

Robert Rivani (33:12):

Right. No, that’s very well said. Because when I was younger, whenever I had less of a hag worth, I was significantly less risk adverse. I was like, “Oh, whatever.” Because you don’t have anything. So it’s like, “What am I losing? I just started with this.” Now you get to a point, especially with the bigger dollar, it’s like my recent property that I just got. I have a $25 million plus loan on it. And when I was younger, it’d be more scary. Now with the income that I have, it supports it and whatnot. But it’s scary.

Robert Rivani (33:38):

You start getting loans that can hurt. If I have to pay a 25 million loan back, it can hurt. But if you got a 2, 300,000 loan you could borrow it from a friend. If you have a friend, your banks will work it. It’s a different beast. So as you start building more net worth and you’re used to certain lifestyle, it’s tough to go back and lose it. You don’t want to lose it. So that’s always for sure, a lot more in your mind than in the beginning.

Robert Leonard (34:01):

As we wrap up the show here, I want to give you a chance to tell the audience where the best place is to connect with you, learn more about you if they’re interested.

Robert Rivani (34:10):

Yeah. So the best place to connect with me is definitely Instagram. My Instagram handle will probably be posted up here. I’m sure it’s the best way to get in contact with me or through the website as well.

Robert Leonard (34:20):

I will be sure to put a link to Robert’s resources in the show notes below for anybody that’s interested in checking them out. Robert, thanks so much for joining me.

Robert Rivani (34:29):

Thank you. I appreciate the time. Thank you for having me.

Robert Leonard (34:32):

All right, guys. That’s all I had for this week’s episode of Real Estate Investing. I’ll see you again next week.

Outro (34:38):

Thank you for listening to TIP. Make sure to subscribe to We Study Billionaires by The Investor’s Podcast Network. Every Wednesday, we teach you about Bitcoin. And every Saturday we study billionaires and the financial markets. To access our show notes, transcripts or courses, go to theinvestorspodcast.com. This show is for entertainment purposes only. Before making any decision, consult a professional. This show is copyrighted by The Investor’s Podcast Network. Written permission must be granted before syndication or rebroadcasting.