John has prospered during three recessions, four tax law changes and interest rates ranging from 6-16% in his 45 years as a real estate investor. His 2016 best selling book Building Wealth One House at a Time, 2nd edition, assisted more than 100,000 real estate enthusiasts on their way to successful investÂing. John recommends buying better well-located houses rather than cheaper houses and other management-intensive properties.
Better houses are more profitable and far less trouble. He advocates paying off debt, owning properties free and clear, and renting only to long-term, high-quality tenants. John buys, sells and manages his own properties, and enjoys providing quality housing at fair prices for working families in his community. He teaches one Building Wealth One House at a Time seminar each year where students learn how to identify the best investment property in their town, how to buy it at below-market prices, and how to negotiate terms that guarantee a profit.
John also invests his time helping those who cannot afford to buy a home through conventional sources through his work with Habitat for Humanity and the Fuller Center for Housing. John has served for more than 20 years on the board of Sarasota Habitat, 7 years on Habitat’s International Board and currently serves as the past chair of the board of the Fuller Center for Housing. John, a Florida native, is a proud graduate of the University of Florida, where he earned his B.A. from the College of Business Administration in 1970. He is an accomplished boat captain (power and sail), fisherman, skier (snow and water) and an instrument-rated pilot. John loves to travel, especially with his wife Valerie and their young adult children.
In this episode:
- John’s life before real estate
- Real Estate investing and Volunteer work
- Impacts of interest rates on real estate
- Importance of Work-life balance
- Quality vs Quantity: One House at a Time
Episode:
Narrator  Welcome to The Norris Group real estate podcast, a show committed to bringing you insights from thought leaders shaping the real estate industry. In each episode, we’ll dive into conversations with industry experts and local insiders, all aimed at helping you thrive in an ever-changing real estate market. continuing the legacy that Bruce Norris created, sharing valuable knowledge, and empowering you on your real estate journey. Whether you’re a seasoned pro or a newcomer, this is your go-to source for insider tips, market trends and success strategies. Here’s your host, Craig Evans.
Craig Evans  Good afternoon, everyone. We are excited to be on today. We have got a great, great show today. I’m excited. We’ve got John Schaub with us. John is a real estate investor and a mentor. John has prospered during three recessions, four tax law changes, and interest rates ranging from six to 16% in his 35 years as a real estate investor. His 2016 best selling book Building Wealth One House At A Time, Second Edition assisted more than 100,000 Real Estate enthusiasts on their way to successful investing. John recommends buying better well located houses rather than cheaper houses and other management intensive properties. Better houses are more profitable and far less trouble. He advocates paying off debt, owning properties free and clear and renting only to long term, high quality tenants. John buys, sells and manages his own properties and enjoys providing quality housing at fair prices for working families in his community. He teaches Building Wealth One House At A Time Seminar each year where students learn how to identify the best investment property in their town, how to buy it at below market prices and how to negotiate terms that guarantee a profit. John also invests his time helping those who cannot afford to buy a home through conventional sources, through his work with Habitat for Humanity and the Fuller Center for Housing. John has served for more than 20 years on the board of Sarasota Habitat, 7 years on Habitat’s International Board and currently serves as the past chair of the board of the Fuller Center for Housing. John a Florida native, is a proud graduate of the University of Florida, where he earned his BA from the College of Business Administration in 1970. He’s an accomplished boat captain, power and sail, a fisherman, a skier and an instrument rated pilot. John loves to travel, especially with his wife, Valerie, and their young adult children. John, again, we talked a little bit before we started, but man, I am really appreciative to have you on and just to get the opportunity to talk with you today, my friend.
John Schaub  Hey, always a pleasure to be here. Thanks. Thanks, Craig.
Craig Evans  Well, listen you are, no, you are a favorite of The Norris group. You’ve been on with Bruce a lot. Everybody knows you, you know you’ve been on the show many times, but it’s your first time with me as the CEO of The Norris group now. So you know, we’ve been working hard on how we build a bi coastal audience, some of which is very new. So if it’s okay, what I’d like to do is just touch on your life before real estate for you and what led you kind of into real estate, first off, you know, if that’s okay with you.
John Schaub  Sure, sure. Something I need to do is update my biography. So you know, I’ve been around more than 35 years, although 35 sounds like a good age to me. I started uh, I graduated from college 1970 and I jumped into the real estate business right out of college, and actually, I sold an apartment building while I was going to college, I was managing this building in Gainesville, Florida, where I went to school and fell came along one day and wanted to buy it. So I called the owner and asked him if he’d sell. He said, Sure. And so I put that deal together and made a commission while I was still in college, and I took that money and learned how to fly. That’s where I got found my love for flying is right there, until I ran out of money. Then I had to do something else. But I jumped, I jumped right into the real estate business. Right after that. My first job was selling houses because I didn’t have a license. And then I got my license, I started selling land lots to build on. And then I had a couple really good years doing that, then I started buying stuff. So I’ve been buying pretty much full time since the early 70s.
Craig Evans  Well, so let me, let me back up, because you’re, you’re in Sarasota now, right? So, where were you originally from?
John Schaub  Right here, right here.
Craig Evans  Okay.
John Schaub  …when I was six years old. I mean, I was born, I was born up north in Saint Petersburg, about 30 miles away. But I’ve been here since I was 6.
Craig Evans  So you’re one of the Florida unicorns, one of the ones that’s actually from Florida.
John Schaub  Yeah, so are all my children and all my grandchildren.
Craig Evans  Well, so you started touching on, you know, early on in college, things like that, finding ways to be entrepreneurial. Were you that way as a kid? I mean, where do you think that came from? Like, growing up, where did that start for you? Yeah, I’m
John Schaub  Not sure. You know. I, you know, I used to paper route, I used to rake leaves and mow grass, but, you know, I didn’t get serious about work, I think, until probably into college. And I did a lot of manual labor in college, and learned that I didn’t want to do that when I grew up, you know, I worked in some restaurants, washing dishes, and worked at Sears for a while selling hardware. And there are a lot of jobs that I had there were all short term. And I learned I didn’t want to do any of that stuff, you know, I wanted to do something much more exciting than that. And I got a ride one day with a fellow who had a beach Bonanza, which is the type of an airplane some people would know about it. And I said, you know, I grow up. I want one of these, and I want to do what this guy does. And he was a real estate developer, and then I watched him go broke, and I said, huh, maybe, maybe I don’t want to do that, you know, maybe I just want the airplane, but not go broke. And I had another fellow who was my mentor. His name was Warren Hardy, and Warren took me around town one time, and he showed me all the properties he used to own. And I said, Warren, why didn’t you keep it? And he said, Well, I wish I had so I started learning that the people who were successful and had money bought something and held on to it. You know, they just didn’t buy it and sell it and have a story. They bought something and held on to it. So I started buying things and holding on to them, and I had all sorts of stuff. I bought a motel and apartment buildings and bunch of duplexes and houses, and a restaurant, a wine and cheese store. So I had a lot of plates spinning when I was getting started here, trying to figure it out. And I evolved after a while, I ran into my buddy, Jack Miller, who had just been buying houses, and I said, You know what he’s doing makes sense. At that time, I had 13 or 14 houses, I guess. So I started buying more houses. And over time, we upgraded our portfolio. You know, I started off like most people do buy them cheap houses on with low down payments, trying to get some squeeze, some cash flow out of them, but they were a lot of work, and higher high maintenance took a lot of my time. So I wanted to be more passive. You know. I looked around at my banker friends who went to work at nine, left work at four and played golf three days a week. I wanted to be like the Dell, you know, not work so much. So, we got into better and better houses, and then we went through several recessions. The first one was rough on me, because I’ve never seen one before. You know, I thought I knew I was doing then we had a recession. But by the time we had the second one, which is back in the early 80s, I was ready. I bought a whole bunch of property in the early 80s, and I still had most of it, and I kept buying, and they’ve been buying ever since, and still bought, and I haven’t bought anything in a couple years that our prices just went nuts here over the last two years, but they’re settling down now, and a lot more at property on the market today than there was a couple years ago, a lot more rentals on the market than a couple years ago. So we’re back to kind of a normal market, I think, more normal than it has been, for sure. And even with interest rates at 6% people are starting to get used to that. And I’m really used to that, because all my life interest rates were more than 6% now, I never saw 6% interest till recently. So a lot of the houses we bought had 10, 12, even 14% loans on them, and we made it work. So I know you can make it work at 6% or higher, and people who are waiting for it to go back to 3% may have a very long wait. I’m not sure that’s going to happen anytime soon, if ever.
Craig Evans  Well, and that just comes back to how you’re buying that product, what you’re buying, and how you’re buying because there’s so many people for me as a builder that I’m coming in they, you know, they want to do a build to rent situation right now, like you say that, with the cost of building, where it’s at, it just doesn’t pencil out. You know, at the end of the day, there’s not enough meat on the bone to make that work, you know.
John Schaub  Well, meat on the bone, if the builders have a lot of inventory and they can’t sell it, because that price will get better. And I’m seeing a lot of that in this town. I see people doing spec houses, and they’ve got spec houses up. They’ve been sitting there now for, you know, 90 days, 120 days, and that’s not what they’re used to. They’re used to having those houses sold before they finish them. Well, that may change. And back in the 80s and 90s and 2000s when I bought a number of properties, typically they were markets where builders had a lot of inventory. Because I bought a lot of new houses. I like new houses. I’m not hoping the builders get in trouble. I all the best wishes for you, Craig. But you know, when they do get in trouble, the problem I have around here is the inventory that are building is more expensive. Nobody’s building the house like my houses. You know, my houses are three bedroom, two bath, double car garages on a quarter acre lots, and they’re all about 14, 15, 1600 per square feet. And you know that house, you could still build that house, but people aren’t building it because lots are more expensive now.
Craig Evans  Right.
John Schaub  Yeah, and I’ve been telling people this for a long time. I said, you know, when you buy real estate, it’s really the lot that’s going up in value more than the house. Houses wear out. You know, a 50 year old house, it’s not as good as a brand new house. It’s a different design. People much rather have a brand new house, just because it’s just kitchens are so different than they were 50 years ago. So if you’re, if you’re looking to buy a house today, they’re going to be new, modern, bigger, more expensive, and it’ll be more expensive, but you can still make the numbers work if you finance it, right?
Craig Evans  Well, so let me jump back into something that you know, because I’m from Georgia originally.
John Schaub  I’m sorry.
Craig Evans  And, well, I wouldn’t go say anything when I heard you were that you graduated from Florida. I mean, you know you’re…
John Schaub  …beating up on us really well now, so.
Craig Evans  That’s right, we changed that mantle. Everybody rides that mantle for a little while, right? We’re getting to carry the mantle right now. I’ll take it, but you know, in your bio, we talked about the volunteer aspects that you take on and obviously, being from Georgia, you know, Habitat’s a big thing in Georgia, and everybody knows Habitat for Humanity, for especially in the state of Georgia and all over the country. You know, Carter did a great thing with what he was doing with that. But I guess my question is, you had done so much with that. Did you ever get to work with President Carter?
John Schaub  Yeah. Habitat was started by Millard Fuller and his wife back in the 70s, and he got Carter involved after he retired as president in the 80s, early 80s, and I was involved with Carter quite a bit. I chaired the development committee for the habitat International Board, which is a fundraising committee. So we work together, raising money every year President Carter and Mrs. Carter would come out and build houses for us. We have a one week blitz week, uh, Carter week. And I often worked on the same house of President Carter. The most interesting year we had, I was working on on the house, and Newt Gingrich showed up. So they put Newt with me and President Carter and rose like rider, stayed on the porch. They had nothing to talk about. Caught my ear off for a whole day. He didn’t hammer many nails, but he talked a lot. But yeah, the thing about Habitat was it did bring people together. You know, everybody could agree on a couple simple things. That is, people need a place to live and to be build it efficiently and then and make it affordable for them. It’s good for people. You know, it helps in the way I looked at it, I tried to get the government out of the housing business. I think it’s the government does a miserable job most of the time. So by building houses. And we started off here, when I was president in Sarasota, we started off, you know, just building two houses. And we thought, maybe that’s all we do. And now we’ve built almost 200 houses here in Sarasota, another 200 in town next to us, another 200 in the county, other way. So we’ve got almost 600 houses right around here now. And that’s fantastic. That’s 600 families. And you multiply that times three kids each, that’s 1800 kids living in decent houses. And then they don’t get evicted. They, you know, if they take care of the house, the house will last forever. They’ll pass it down to their kids. So it does make a difference, right? And there’s a lot of charities that make a difference, Habitat serving one of them, The Fuller Center for Housing, which is another one we started, is doing the same thing, a little, reaching down to people who make even less money than habitat people most of time.
Craig Evans  Yep. Well, so you know, you’ve also listed a bunch of stuff that you and do that you enjoy doing. You know, boating, fishing, skiing, flying, all of that. So I guess on the personal side, for our listeners, you know, you’re in a great place in Sarasota, there water is great. Do you get out on the water often?
John Schaub  All the time? My backyard. I’m looking right now, backyard of two boats right now. I’m itching to get on. So going for a boat ride this afternoon. I’m going flying tomorrow morning. So, you know, I have a great life. I can’t complain about a darn thing. My health is good. We’ve had success. And part of that success, of course, is the nonprofit work, which I got, got into at least halftime back in the 80s and still involved. My kids grew up here in town. Now I have five grandkids, so I have absolutely nothing to complain about, and real estate has been very good to all of us.
Craig Evans  So, you know, one of the things that I we’ve got a lot of employees in our companies and that I own and stuff, and one of the things, while we work hard, I try to really stress to our team that you’ve got to have a balance of what you do with your work life and your family. And you know, there’s nothing more important to me than my family, you know. So I guess the question is, you know, I hear you talking about the balance of stuff that you’re doing between, you know just playing and and still being involved in real estate. I know you still teach and so, but has work kind of a work life balance, if you want to, has that always been a big part of the makeup of you? Or have you, if you had the phase where you’re like, come hell or high water, I’m going hard, or walk me through that process of your life?
John Schaub  Yeah, well, I mean, it’s interesting. I started teaching back in the mid 70s, and my buddy Jack Miller, and back then, we own a bunch of properties. I had a staff, and I would leave town and teach a class, sometimes two classes come back. And I found it just in a maybe an hour or so after coming back, after be gone, being gone for a while, I’d get all caught up. So I learned that it doesn’t take a lot of time to do what I do, if you’re efficient, you know, if you just get at it. And so real estate investing is very much like that, that you can, you, can you be a full time investor. We had one time close to 100 properties. Now, I had a staff, you know, I have full time bookkeeper and Secretary by Andy man and but I still managed everything. I did all the tenant selection. You know, if there’s a problem, I take care of it, and you can do that and still have a real life. Now we’re down to fewer properties and so, and I’ve encouraged people, if you’ve read my book, and by the way, I’ve rewrote it two years ago, there’s a new out, new edition out. There’s a third edition out. So if you buy one, get the new edition. Because the first book was written before a recession, it was written before covid. So this one, this one got a lot more information, and we learned a lot during the covid years, during the recession, back 14 years ago. So I’ve always encouraged people, though, in the book and in my classes, not to buy too much stuff. You know, people go out and they have somebody who have one guy go out all day his name, but he went out and bought 100 houses in a year. Well, that’s a big year. And I know a lot of people have bought 100 houses a year, not a lot, but few have. But the end of the year, you know, he had done nothing else. And the sad part of the story is he wasn’t able to keep them. Because managing 100 houses is a whole bunch different than buying 100 houses. You know, the mind is actually the easy part. People don’t understand this, but the bind is the easy part, taking care of them, making sure they work, paying the bills, making sure you have cash flow to pay the bills, that’s the challenging part. So I teach people and encourage people just to buy one house at a time, and that’s why the name of my book is Building Wealth One House At A Time. You don’t need to go out buy 20 houses your first year. In fact, if you do, you’re making a big mistake, because you’re not as smart as you think you are. But if you buy one house, and then you study what you did and learn from that experience, and then next time you buy a house, do a little bit better job, maybe, you know, maybe a little better price, maybe better terms, maybe a better neighborhood, maybe a better house, but you keep getting a little bit better at it. So at the end of five years or so, maybe you’ve bought a half a dozen houses, but everyone you’ve bought, you’ve made a little bit better deal and bought a little bit better house. That way you end up a portfolio of good properties, and you learn how to manage them one at a time. You know, if somebody dumped six houses on you, and you’ve never rented a house before in your life, you probably won’t get six good tenants. You know, if you end up with half good and half bad and three bad tenants, that that’ll drive you crazy. So the key to success in this business is, first of all, it’s perseverance. It’s been around for 10 years. You know, hanging on properties. They’re in good areas for a while, because the the government will take care of you if you hold on to stuff, and they’ll take care of you, because we’re going to have inflation. We’ve had inflation ever since I’ve started this operation, and I put a chart my book back in 1975 showing what 5% inflation would do with prices and rents and costs of everything. And you can go back and look at that 1975 chart, it is spot off. We’ve averaged 5% inflation since 1975 and maybe that’ll change now, but I’m not sure. I’m pretty sure that we’re going to have inflation. And you can come back at 20 more years, and you’re going to find that everything costs more, and it’s not that it’s more valuable, but it’s going to be denominated in dollars differently. You know the dollar is going down in value. So if you can buy an asset, and Warren Buffett is and I are certainly in agreement on this one, if you buy an asset like a house with a fixed rate mortgage and fixed payments and hold on to it for a long time, your rents will go up, your prices will go up. And you know, you don’t have to be a genius to make a lot of money at this business, but you do, but you do have to buy a few houses. And some of my most successful students have just bought three or four houses. I mean, they didn’t buy a whole bunch. They just bought a couple, and they held on to them. And my most successful students are in Southern California, you know, they’re, they’re in Orange County, they’re in San Diego. Some of them are in San Francisco, and they’ve only bought four or five houses, but those houses that they paid, you know, 100,000 for are now worth $2 million well, you got 5000 2 million a piece you got, you’ve got some change. And so it doesn’t take a whole bunch. If you live in Georgia or Mississippi or North Florida, it takes more. That’s right starting and they’re not. Going to go up as much, but you’ll get more cash flow. And you know, I’m really not making fun of anybody, but it’s cheaper to live here, cheaper to live in Florida and Georgia and North and South Carolina, Mississippi and than it is in California or Washington or Washington, DC or Boston. The big cities are a lot more expensive. So you know, you can get by with just a few houses no matter where you are, and have a very comfortable lifestyle and not be working 40 hours a week or 80 hours a week, like you’d have to, if you’re running McDonald’s or a Pizza Hut, or, you know, go out and had a real job, you’d have to work a lot more than I do.
Craig Evans  All right, that’s going to do it for part one with John Shaw today. We’ll see you next time.
Narrator  For more information on hard money loans, trust deed investing, and upcoming events with The Norris group. Check out thenorrisgroup.com. For more information on passive investing through the DBL Capital Real Estate Investment Fund, please visit dblapital.com.
Joey Romero  The Norris group originates and services loans in California and Florida under California DRE license 01219911. Florida mortgage lender license 1577 and NMLS license 1623669. For more information on hard money lending go to thenorrisgroup.com and click the hard money tab.