Making A Smarter Agent Episode 7 – Steve Fishman


A real estate agent’s welcome to making the smarter agent. Your program to find out old tips and trends as told by the great ones in real estate. What’s a great one. Someone that’s able to make money and still keep their head on straight. Let’s face it this is a tough business. We interview tough people who seem to make it look easy.

Well hey everyone and welcome to making a smarter agent. This is the weekly podcast where I interview people in real estate about real estate.

It’s usually successful agents that are able to make the top 1 percent of what is going on in the industry. Today I’ve got a special guest. His name is Steve Fishman. He’s built a career finding flipping and selling homes and he’s got this great methodology for doing so. He’s originally from Boston. He’s a pretty interesting guy new friend. Steve welcome to the show.

Steve Fishman: Oh thank you.

Thank you. So. So first of all give us just a little bit of the history of YOU. HOW DID YOU GET STARTED.


Steve Fishman: I thought I kind of fell into real estate development to be honest with you. I went to school for and got my master’s in public affairs thought I wanted to be a public servant and when I got out well actually halfway through I realized that I wanted to work for myself. And when I got out of school I just started renovating stuff for a brother in law who had a project and you needed a project manager he says you want to project managers. And I said sure come a builder’s license. And I’ve been doing it ever since.

Sure. And what year was this.

Steve Fishman: 1996

I could see you’ve been at it for a long time and that and that is a you know there’s a lot of people that seem to jump into the business. I’ve got a book right behind you called Flip how to find fix and sell it. I’m getting a lot of that out there and as a real estate agent I avoid those folks like the plague because most aren’t doing anything. This is your business.

Steve Fishman:  This is my business. I don’t invest strictly Flipper. I’ve never invested. I mean I actually have had a couple projects but then they’ve turned into flips. So I like when I say that I had a warehouse in the warehouse wasn’t really making any money so I said to my name my wife was a finance person I said how do we we. Reverse engineer this. She says what you mean. I said Well if someone’s willing to pay a dollars a square foot what would they pay per year for if they put down a 20 percent deposit and then finance the rest or would that work out to be.

She said about one hundred and twenty five dollars square foot. So I said Okay let’s take our the product that we bought. We bought it at forty four forty dollars a square foot forty five thousand square foot warehouse. And I said let’s chop it up like a salami if you want a thousand square feet. It’s one hundred and twenty five dollars a square foot twenty five thousand. So I brought it to my partner and I said you know we want to sell this thing at one hundred twenty five dollars a square foot.

I said. He says How. I told them but my reverse engineering. And he says OK Done sold it out in six months.

So you sold it. So it was almost like a cooperative at that point.

It was a bunch of tenants that were buying into it wasn’t tenants

Steve Fishman:  It was it was buyers and sellers and buyers that were they were buying it. So I built it out. That was what it was really I could have rented it out to all these small little guys but the builder was the costs. So that’s why we got people who say you know they just saw it and said I’m 1000 square feet yet some guy by 3000 square feet. We cut it up like a salami and it sold off when you need it.

Sure. And that was the first one an only warehouse that you did.

Steve Fishman:  Well we look for others but we couldn’t find them. And the next one next project came around was a hotel condo. We did the same thing you know. You own you. I bought a whole hotel and we sold off each individual room. When you were using it we would rent it for you and then you get a share of the profits from that I say.

But at what point did it so did your focus turned primarily to houses.

Steve Fishman:  It’s always been I mean like those were just kind of side products. I mean I bought I bought the hotel to flip it. I mean like those were just kind of side projects. I mean I bought I bought the hotel to flip it and I didn’t buy that. To to ever run it. The only one I bought to to run was was the warehouse and that didn’t work out. And then I flipped it in pieces.

Good. Good. So in and in your career how many how many properties that be flipped.

Steve Fishman:  Probably a hundred more more more than a hundred. Yeah. Hundred two hundred hundred two.

OK. That’s a big range. But when we had lunch the other day was a great line open because it’s quote

Steve Fishman:  The reason why I said as does that hotel was under thirty six units.

Got it.

Steve Fishman:  I guess it depends upon how you can call that stuff out that would put it in single family homes and stuff like that. Like when I first came out of Florida four and a half years ago I did a lot of foreclosures. I flipped twenty five in a year. So you know it’s all over the place in terms of how many I’ve actually done. I haven’t really sat down and thought about it.

Got it. No no no worse. You know this this podcast is primarily for people in sales obviously my target is real estate agents across the United States and a lot of them would say wow I want to meet this guy Steve or people like him. Can you talk to me a little bit about the characteristics of the brokers that you’ve worked with the things that you liked and conversely the things that you didn’t like. I know you weren’t expecting that question so we could just ad lib here.

Steve Fishman:  Fine. One of the things that I as me as a developer I really don’t like is when a broker tries to tell me what I can do with property when they if they introduced me to property I just kind of want them to sit back and not tell me anything because I don’t want to do any of their their ideas of things you know like I really want to absorb it for us and come up with my own bases and then I’m happy to do here. But I really don’t like when when they are giving me the hard sell all you can do this view this view to this I’m not really for me the hard sell is a turnoff.

Sure. Sure it will. It’s a good piece of advice. So agents listening. You know the soft sell is speaks more speaks louder than the hard sell for free.

Steve Fishman:  Yeah for me I mean like you know I don’t get pressured. It’s all based on you know buying low enough that I can make money on the back end canyon I need in the brokers I liked working with. No they’re they’re back in numbers. So if I say to them how much is this house were at the back end meaning after I renovated and I do all this stuff how much am I going to be able to get on this on the backend. And you know I don’t rely on them solely but the better brokers are the ones and know what they’re talking about.

You know you you move down We’re gonna bounce around a little bit here. But you you you’re from Boston correct. Your voice says it all. You’re a Red Sox fan which is great. You moved down to Florida not too long ago.

Steve Fishman: Correct.

And you immediately went into the business yet you’re now doing this with a new variable within country clubs where I live and work as well. Was that a week for you. Was that something that was that a natural step in your career? Did you find that this was a stretch for you at some point?

Steve Fishman:  I didn’t find it as a stretch. You know my my strategy is to buy low and sell low. And there were some properties in these communities that you could buy low enough that I thought that they had enough margins on them.

You might sit on them longer because country clubs you know depending where and how much you’re going to sit longer but the margins seem to be have been there. Sure. So it wasn’t a stretch in terms of buying into a country club. And for me some of the advantages of buying into a country club not all countries clubs are the same in terms of why I would buy there.

Some of the ones that have built those programs make it more more desirable to buy in there.

Sure. Okay. So what we’ll focus in on that a little bit. Another thing that we discussed was the amount of times he could turn over the same money.

Steve Fishman: Right.

So you’re hoping to do within that but what were the words he used was the community you want to turn it over three times in a year. What does this tell us about that?

Steve Fishman:  So I tried to work on lower margins and for me to do that I had to flip a property to three flipped you use the same money two or three times a year.

So I tried to get into something where I’m not going to have a yen and I’m able to get a return on that quickly. So if you know if I buy like a condo I can turn it over in six weeks. You know buying it into finishing it in terms of the work and then selling it within six months or four months I mean a great four months but six months is kind of the time way.

So I’m I’m flipping my money twice to on six months or six weeks so that was a condo.

Steve Fishman:  No that the the work itself is six weeks but the time to by the time you put it back on the market and stage it and everything else it’s usually now four to six months that you can actually flip the property and take it out of your name.

Yeah. OK so four to six months so you’re doing it twice in here year

Steve Fishman: Twice three times. You know I think you’re lucky if you get lucky.

Yeah that’s really good. And again without telling us what you make what kind of returns are you seeing or you know by percentage over the port. Can we talk about that or am I getting too good.

Steve Fishman:It depends.

I can edit this you know

Steve Fishman:  I won’t buy anything unless I’m looking at a 20 percent margin so I have you know there’s there’s rules that you can look up on the Internet. Usually I use a 70 percent rule and I’m looking at stuff.

And what’s the 70 percent rule.

Steve Fishman:  So I take the end price and again that’s what I was saying that the price is so important. So if I can sell a property for two hundred thousand dollars I take 70 percent of that. Which is a hundred and forty thousand dollars and then whatever I have to put into it. So that’s when I’m thirty thousand dollars. I deduct that and then I can’t get I can’t buy anything anymore than one hundred ten thousand dollars buy that unit product and ten thousand dollars. I say there’s a standard 70 percent rule.

I mean you can buy it on the Internet anywhere else. Sure. No. And it seems to work. I mean I try to get way lower than that. I mean that’s you know that’s like the worst case scenario. I think it’s a good area of good property you know. And then I’ll use that rule. But I’ll try to get lower than that.

OK so I know that

Steve Fishman:  you’re usually working about a 20 percent margin because you know by the time you pay the commissions and all this other stuff and the tax stamps and all that that comes out to be you know 8 percent. So you were you working on a 20 percent

20 20 percent of the project margin on the project to annualized if it’s twice a year you’ve got 40 percent of of what’s invested.

Steve Fishman:  Correct. If I stay lower so it’s not like I’m buying at 3 million on the project and I’m getting you know full net twice in a year. So you know it’s on a lower higher volume and lower margins.

How many projects do you think you’ll do in let’s say by this time next year in the next 12 months.

Steve Fishman: Hopefully hopefully 12 to 18.

That’s amazing. That’s amazing.

Steve Fishman:  That’s all I mean it’s all you know I try to keep six on this table Yeah and six you know some of them those six like a project they have is a house account that has two because it’s it’s bigger than my you know just the condo or whatever. So I can’t that is to depends on how much money I have and so I try to keep that those in. So they’re all at different stages. Some of them may just be sitting there waiting for my crew to get over there and some of them might be done just waiting to be sold.

So I tend to have like six in the stable you know right now I’m in the in the buy stakes where they only have four in the stable.

Sure. Sure. So you know this is all really good stuff to the Douglas Elliman agents that are listening here. Keep in mind I’m going to be having a cocktail party in New York City in January. The date will be sent out to those that are down here February 18th. I rented the ballroom at St. Andrews Country Club. Yes indeed it’s sensational. We are going to have two great speakers one of them is Howard Lauber the chairman and CEO of Douglas Elliman Real Estate and the Vector Group as well as Bruce total CEO of Toll Brothers real estate. So for those that want to come the details will be in the show notes. Let me turn the direction you worked with your wife

Steve Fishman: correct.

How’s that.

Steve Fishman: It works out great. We have two very distinct skill sets and it works out great. You know sometimes not so great but most of the time it’s great. You know some of it is you know you’re working with your wife you know. Yeah. So she’s she’s giving you punch lists so she’s the stuff it doesn’t work out so great. But the other thing is it’s great. It’s a good recipe for us.

Sure. What vision does she bring to the table that you don’t have?

Steve Fishman:  She’s the inside person. So she’s taking care of following up with orders following up with vendors following up with just different small stuff inside. Paperwork bills you know and those type of things insurances and all the other stuff that is inside work. And I’m more of the big picture quality control management and being on site. I’m the one with the builder’s license and I’ve had the experience in terms of actually like if we go into a unit deciding you know. Most of the time and like is an architect it’s just there to draw it up I’ve already told the design because I’ve been doing it so long.

Aside from the experience which obviously is the biggest thing. Do you have an economy of scale that the one or two off flipper doesn’t have. You know if you’re doing 18 deals in a year you’re buying a lot of toilets. Are you getting that toilet cheaper than the guy that might want to do this on the weekends or in the agent that said you know I’m. I’m I’m sick of selling to guys like Steve. He makes all the money I could do what he does you know.

Talk to me a bit about that.

Steve Fishman: I am getting discounts some of it I’m getting discounts because of buying as a general contractor buying you know because we who work with a designer. She has discounts. Also there’s some pretty clever guys out there. I know that one of the guys that I work with basically said you know when you go into Home Depot you know you can go online and get a 20 percent off and you can you know you can even buy that. I mean that’s one of my son’s side businesses as he sells coupons you know that he gets from from us and he sells them and there’s a whole eBay site for that. But those things those little things count.

Of course. If you’re looking at the market you just had 20 percent margins. So whatever. Every dollar saved is huge. Yes. I mean that’s anyone’s basic math.

Steve Fishman:  That’s easily the biggest thing is the vendors and it’s not always the cheapest vendors that always use the cheapest vendors. I find that cheap is expensive.

And you’re gonna have headaches with these guys that find good guys and keep them

For the agent or anyone that’s listening here that’s saying yeah I’d like to get into flipping you know your the buyer’s luxury is your cost the buyer that when you get something that’s it’s subzero or gee profile obviously the subject Sub Zero fridge is going to cost more money. How does one go about striking the balance between what’s going to be marketable and fair vs. extravagance. Do you have any thoughts on that?

Steve Fishman:  It depends where I found that that Boston was much more brand conscious. I mean in terms of even like the faucets you know they had to be strictly hands grow or grow or you know rule or whatever it was because you know I did a lot of high end houses up there half glass house I saw there was for three point six. So in particular communities and they had to have all those bells and whistles and the brand names I find down here. It’s not so much. There’s some brand names but most of it is whether it looks good or not.

And there’s a lot of good brands out there that that have the nice design and don’t have the big huge name and the big huge price.

Sure. Where if I were just start flipping a house tomorrow where would you suggest I spend my money.

Steve Fishman:  Bathrooms Kitchens like everyone else now. OK.

So. So you sound like a realtor.

Steve Fishman: Yeah. That’s really where it’s at the bathrooms and kitchens. But for me I really like views I live I’ve lived on the water for the last 20 years so for me living on some sort of piece of water is is crucial.

I really like views and views are important you know and also how it’s viewed. So like I really like when I buy a property that when you walk in you say wow look at that view you know. So you know I’ve opened up things so that you can see like right through the house you can see out the back and see a view. But also there’s there’s defects in houses like if there if you’re renovating and I’m pretty much renovated because anyone can do a knock down. So I I I specialize in renovations.

And a lot of people don’t like them because there’s a lot of unknowns when you open up the walls. But that’s the challenge I like nuts.

That’s what I’ve been doing and that’s one professional that also for me when you’re talking about flipping houses it’s a lot quicker to flip.

So the House is already there and you can do some cosmetic changes you know the permitting and the other stuff doesn’t delay. You know if you’re knocking down a house the margins might be better. You know like even here at St. Andrews you know a lot of guys are coming and buying the house knocking it down and build it a big monstrosity and they have. A lot of margins on them. But you’re it’s a two year project. Sure. Have you seen any houses go up here quicker than two years.

Pretty it’s around that sometimes less but but no. But but but it brings me to the next question with this. Yes. Usually you’re right two years seems to be the timeframe. And then if you’re quite out of season where there’s all kinds of reasons like you’re coming out of the ground or you’re being developed right in-season. At what point do you decide to start marketing that. Do you ever take renderings and get it up on the MLS and say OK this is to be completed April 20 20 come by. Is that everything?

Steve Fishman:  It’s not my game. I bet because I’ve pre sold the house and it was it was it was a nightmare.

He could curse if you want this. We’re grownups here.

Steve Fishman: Yeah I know the guy was pleased. Yes and. You know nickel and diming you. I mean I just had a horror story and so I’ve never really done that because of that horror story.

I was like either I’m going to I’m going to build it spec either like you do you don’t like it if you want to come in there and change things afterwards or ask me to change things as part of your offer. Then then I’ll do that. But but I don’t typically want someone coming in and it is enticing and every time because you know there’s a buyer right there and it’s very enticing then you know you’re sold it and this and that but it just doesn’t seem worth it sometimes.

What’s the fastest time from the day that it went onto the market that you got something in your contract?

Steve Fishman:  Most of my stuff goes right away like right away like. I mean even I did one here at the Oaks I did a foreclosure here at the Oaks I put it in you know cleaned it up fixed it up in the first week and then my wife had it on was gone but but but having said that. It was all price.

Price. It was priced correctly.

OK. So explain to the agents what price correctly means to you.

Steve Fishman:  Price correctly means to me what the market is and you know take off a little bit under that so that the I can give it a little bit of a discount it doesn’t have to be much but a little bit under market so that would create that buzz and someone is going to come in and buy it right away.

Give her a bidding wars.

Steve Fishman:  I have. Even my house in Boston before we left. We priced it. Probably one hundred twenty five thousand dollars under market and we got in a bidding war over well over you know well over that amount because of that

 it’s genius and I’ll I’ll say this something that you might not know. Thirty five percent of the homes listed on the multiple listing service in Palm Beach County. And I think agents should hear this as well expire on sold. Thirty five percent that’s more than a third so that that’s an enormous number. And it always frustrates me because like anyone else I’ve had listings like this because we are slaves to what our clients tell us to do and I am a soldier.

I will do it but they list it with you for six months a year or whatever period of time it is. And then it comes off and the next guy that comes in gets the listing price is it where you thought it should be in the first place it sells it in a month. And this guy’s great and Edmond sucks. And so to hear you say this professionally I would invite agents to really use this quote to their clients because this is somethin you’re a seller.

Steve Fishman:  But but and also I’ve been around a while so I know that sometimes you know you price at high and you come down in the market’s gone lower than you. So where you said from the beginning to be priced now you have to go lower you’re chasing the market down. I’ve seen that. Sure. And every time you lower the price you’re still above the market. Well I think that’s a mistake.

I think that you really you know you really need to price it right from the get go. Yeah. And it will sell. You know I don’t think you can ever underpriced a property firm believer in that. And you know I.

Well hold on let’s slow down a second. You mean you can’t underprice the property so you can’t be so low that you end up hurting us. Explain what you mean by that.

Steve Fishman:  I found that in any market. If you priced the property too low. The market will tell you what the property is worth.

So I had a broker that came up to me and said you know you know you found me a house. And he said You know I know you’re into this thing. How much you know what’s your break even point on you know I want to work with that. And I was like you know it doesn’t really matter to you know whether I’m making money or losing money I want to sell the property and what the property is worth. And so if you price it too low you’ll get over asking price and the market will tell you what the price property’s worth.

Mm hmm. So I guess what I’m saying I don’t think you can ever price the property to low. Now you know it might be a timing thing. You know like if there’s no one down there like if you put a property in and st. Andrews too low in the middle of August when no one’s looking at the thing. Yes. Then you can price it to love what I’m saying like even in August the price of low. Someone’s going to see that a bargain and be able to pick it up and at least get you some offers at least get some movement towards that and you’re probably going to get a decent price for you get over. Or at what you’re asking for.

Sure it’s. Well look we see the same mistakes made over and over again. The difference between you and a residential owner guy who lives in the house is the emotions. You know what. Yeah. And so somebody walks in and says You’re ugly your babies ugly it’s fine it’s an opinion. And we say oh OK well well OK. Now I saw the audience he can’t see his reaction. He kind of grimaced a little bit I won’t. I’ll never see your baby is ugly.

Steve Fishman:  Well I mean I do take pride in the properties that I developed. So when you see my baby is ugly did you take offense.

Yeah. No I. OK. Duly noted. So agents if you ever do business Steve Fishman never tell him his baby’s ugly. But. What else what else you want people to know. We’ve only got a couple minutes left here. There’s been a lot of fun.

Steve Fishman:  I think that that you know flipping is you know I you know I tend to make it look easy because I’ve been doing it for so long. It’s like anything else. You know there’s a learning curve. I mean I went into a condo yesterday and the guy said at the nice job they I guess they were builders and whatever I wanted they did a nice job but they had a walk in shower and they put a six foot door on it. So you got to crouch down to get into the shower stall and they did it because they could just get it off the shelf from Home Depot instead of paying another 300 dollars to have a custom built

stupid laughs Stupid.

Steve Fishman:  And you know those type of things and this is the main thing that I keep you know like when I’m working with my wife and I keep telling her. People might not.

Recognize that when they buy the house consciously subconsciously registers and this is something a reason why I’m not going to buy that house.

And that happens a lot with mold. Mm hmm. It happens along with you know different smells different things. It might not register why they don’t like that house but they don’t like that house and not by someone else’s that is a reason. And that’s where I get my best bargains. This woman those mold and things like that simple things that I can fix. But but that’s why the house is solid.

There’s a house right by your house. I know one of the. To the audience I know one of the job sites that Steve is on and there’s a house right near you that was flipped and the shower and the Master is tiny. It’s a tiny shack. I mean when I mean tiny. I mean I’m a big man but tiny like my my my 14 year old petite daughter would have a hard time in that shower. And you know ultimately was sold but I know what held it back. I had another listing here at St. Andrew’s where it was listed for years. And I was one of the lucky later agents but I still had it for a couple of years as a listing and I said to the owner look you know I’ve asked you this before. Why don’t we make the bedroom slightly smaller. And make the closet bigger because everybody here in put a bathtub in there because people women want baths and they’re master baths. And let’s make the closet a little bit bigger because this room is big enough. And you know three months later we got it under contract. So there are certain things that can be done and it’s great to see.

I think that people should meet guys like you and walk through and see what is selling today. I’ve had some real. Issues where people have to have what they want and nobody else wants it after the fact.

Steve Fishman:  And to be honest with you I’d say the reverse goes true too.

I think a lot of builders and developers don’t listen to brokers enough of what people want. And they haven’t done their homework. Yeah.

So I mean I know that sometimes you know they’re even dealing with it with a broker they make a lot of suggestions you just like there’s no way I’m going to get my money back. I do that stuff. But but you get it and there’s some stuff that they say you know what that makes sense I don’t want to do that.

That’s great. That’s great. Well steam it has been great. Having you here.

You know definitely I’d love to get you back when we do some other events in the future I hope you can make it to my conference in February February 18th at St. Andrews Country Club. And again if you think you’d be great for the show do drop me an email. Edmund.Bogan@Elliman. com if you want to make some comments please feel free to do so. Thank you so much. Thank you. And we’ll see all of you next week for another episode of making a smarter agent.

Thank you. We’re listening to making a smarter agent to meet favor if you liked making a smarter agent please go to Apple podcast or any of the podcast services you might be listening through and give me five stars. I look forward to seeing you next time. And remember connect with rain nation at REIGNation win on Facebook. It’s part. Think tank part group therapy for realtors all coaching and it’s affordable. Please tune in again next week to listen to another exciting episode of making a smarter agent.