The Secrets to Real Estate Success With Bruce M. Stachenfeld

Foreign this is Real Estate Investing Live from New York with James Nelson, the principal and head of Avis and Young's Tri State Investment Sales Group. In this program, you'll learn about the world of commercial real estate and find out why it's one of the largest investment opportunities in New York and around the world. Now here is your host, James Nelson.

Welcome to episode number 98 of Real Estate Investing Live from New York. This is your host, James Nelson. I'm principal and head of Tri State Investment Sales at Avison Young. Thank you as always for joining. We are getting dangerously close to our 100th episode and wow, what a great time this has been. And I've really enjoyed the process, learning from incredible speakers and sharing this information with all of you and just can't thank you enough for joining and spreading the word. Today's episode is no exception. With us we have Bruce Stachenfeld, who's been a great friend and mentor of mine. Bruce is not only the founder of Duval Stachenfeld, the only Pure Play real estate law firm in New York City, but he's also an author of two books including the Power Niche. If you want to get rich, build a Power Niche. And he's going to be talking today about his latest book, the the Real Estate Philosopher's Guide, the Secrets to Real Estate Success. And you got to check out his site, brucedeckenfeld.com he's got a lot of incredible information to share. He shares his keys to success, he talks about who he admires and his lessons can be applied to real estate investing. And that's what we're going to be talking about today. And and sometimes our episodes we interview real estate investors and talk about their stories. And then other times we talk to thought leaders out there who are gonna teach you practical skills to make you the best possible investor. So I know you're gonna get a lot out of this episode. We're gonna have a brief word from our sponsors. Before we do that, I just wanna remind you, if you have not already, please check out jamesnelson.com go in and subscribe to get the exclusive video series that's the 10 steps to edge to Real Estate Investing. That site that I created is for you. It is for your benefit, to make you the best possible investor. I know you're going to get a lot out of it. And as always, connect with me at James Nelson nyc. I love your feedback, any comments that you have on that new site. So, brief word from our sponsor. Be right back with that interview with Bruce Stackenbau. A Different Approach to Putting Our Clients First Avis and Young's Tri State Investment Sales Group sells multi family office, retail development and specialty sales throughout the New York metro area. As experienced thought leaders in our industry, our 35 member group is available to help you make informed investment decisions by advising you on your current holdings or identifying new opportunities in the marketplace. Our one unified team is built on an industry unique platform which promotes unparalleled collaboration and and teamwork. We share core values of hard work, integrity and expertise. We put our clients first providing tailor made strategies to achieve superior results. Please Visit us at aytristateinvestmentsales.com and follow us on Twitter LinkedIn and Instagram amesnelsonnyc to learn more. And now I'm thrilled to have with us today Bruce Stackenfeld, who is the chairman and founding partner of premier commercial real estate law firm Duvant and Stackenfeld as well as the founder of their high profile real estate practice group. Bruce is one of the nation's preeminent real estate attorneys and a thought leader in both commercial real estate law and marketing. Professional with over 30 years of real estate law experiencing encompassing tens of billions of dollars of real estate transactions of all kinds, as a real estate lawyer, Bruce distinguishes himself by seeking out areas of real estate law that are more difficult, in which he and his team can provide particular value. Bruce writes a monthly bi weekly column, excuse me, above the law, entitled Power Niche Marketing and he is also the recent author of the Real Estate Philosopher, which Bruce, if I'm not mistaken, has just hit number two on the Wall Street Journal. So thrilled to be talking to you today. Bruce and I have known each other for quite some time, so really looking forward to hearing your words of wisdom.

Thank you for the introduction and returning the, you know, the mutual admiration. I've always been a fan of you personally, James and Evans Young, and the extremely impressive group that you've built in the brokerage community in New York City. So I'm honored to be on the show and hope I can be of use to the listeners.

Thanks so much Bruce and I think for the first question and for our audience. I mean, you're one of the top real estate attorneys here in the city and I should note your power niche is that your firm is the only pure play real estate firm and I want to get to that. But you've got this incredibly successful practice. I'd love to know the why. And I know we're both Simon Sinek fans and talking about the why of the fact that you've written two incredible books. You know, what. What. What motivated you to do all this?

Well, you say all of this, so it's kind of like my whole career.

Well, the books. The book, Specifically the. The column. You know, Talk about the. You know. What inspired you to do this?

Well, all right. So talking about the law firm. The law firm. What. What inspired me there was at the beginning, to be really, really honest, I didn't have any inspiration whatsoever. I kind of hated my job. It was a disaster. And I was running away to do someplace where I could service my clients and stay alive. And that was how the law firm started. That's a fact. Then along the way, the inspiration came, and you would think it would be the other way around, that I always wanted something beautiful and wonderful, and that's what I did. But instead ended up with something a bit of a mess, and it turned into something beautiful. And there was reason why, a la Simon Sinek, as you mentioned. And over time, we had developed these firm values and things that we stood for, and we kind of wondered where that was taking us. And at first, we thought of ourselves as a law firm that should be all about our clients. And we stood for the proposition that we existed for the benefit of our clients. And then we started really spending a lot of time thinking about it. Is that really what we were? We said, well, wait a minute, maybe we're really for the benefit of our clients and the lawyers at the firm. And it was both of the things that was the magic ingredient. And we argued over this for, believe it, a year. We spent a ton of time trying to figure out who we were and answering the really good question, James, that she asked is, why? What are we doing? And after going back and forth, do we stand for the clients or the clients and ourselves? It became obvious that, no, it was neither firm exists for the benefit of its lawyers and to make the law firm a wonderful place for the lawyers to be where they could build their careers and, you know, I don't know, go off into the sunset with joy and happiness. And if you think about it, it's so obvious. And we got the idea kind of from Starbucks. And if you've ever seen Starbucks mission statement, it says employees first, customers second, shareholders third, because they realized if they treated their employees really well, then the employees would treat the customers even better. And if that happened, then the shareholders would make a lot of money. And we kind of figured this out. I guess it's close to 20 years ago. And it was kind of an explosive thought I think a lot of firms have figured this out. A lot of businesses have figured this out. This is a long time ago that if we made our law firm one that the. The lawyers just love to be at, everything else would. Would take care of itself, and it is. That's. That's what's really happened. And to make fun of myself a little bit, which is actually, everyone else makes fun of me as well. Why not? Why shouldn't I join the crowd? I came up with a great marketing jingle, which was Duvall and Stackenfeld, where the client is always number two. All right, My partners, they nixed that one. They won't let me use it. But. But, I mean, it did make the point that the firm is about the lawyers. And really, it has been. And we've been successful, amazing lawyers, amazing people. And we don't try to just do a good job for our clients, try to thrill them. And that's just not me alone. That's the whole firm. Anyway, that's the best I can.

No, that's a great intro and a way to set the stage. And, you know, our listeners encompass. We get a lot of college students who are thinking about how to get into the business on up to seasoned pros and many who are looking to grow their business. So I think that's really helpful advice for those who are looking really to scale their companies. Let's talk now a little bit about your first book, the power niche. Maybe if you could start by defining what that power niche is and then talk about why that's so important, and maybe you could relate that to an investor if they wanted to go out and invest in properties. How would you apply that?

Okay, so the power niche is something I come up with. And the idea is, when you really, you know, think about it, there's one of the first laws of marketing, okay? And it says this. Something like, if you're not number one in your category, create a new category in which you are number one. I mean, it's so kind of counterintuitive and intuitive at the same time. I'll give you a silly example that explains the power niche. And then I try to relate it more, more usefully. James is healing. I was driving through Florida with my wife, and we saw a sign on a billboard, and it said, divorces men only. And it gave the name of a law firm. And I remember turning my eyes, that's the stupidest thing I've ever heard. You know, they just got rid of, like, half their customers. And then I started thinking, whoa, wait, A minute. The stupid one is me. That's a brilliant thing. I mean, think about it. They probably arbitrarily, you know, cut the market in half and said men only. I mean, they could have said women only. They picked men only. But you start to think about what happens when you do that, when they niche themselves. They could have niched themselves a lot more. They could have said, you know, gay couples only. They could have done something even smaller, but they picked a niche, which was men. So you think, what happens when they do that? Well, at first it's baloney. Okay, I was going to use. Am I allowed to swear on this? A little bit like tiny. The sh. Word. Go for it.

Yeah. No, I don't think we're regulated here.

All right, good. So at first, I, you know, at first the parentage is a little kind of bullshitty, right? You. You almost arbitrarily, you know, pick a category. But you start thinking, what happened probably with this law firm? I don't know really what occurred. But mostly what happened was, you know, probably some men went over there and then, you know, the men started to, you know, think, well, this is probably a little bit better place to go is they're only focusing on men. But then when they start focusing on men, the bullshit disappears and reality starts to create something. Because as they think only about men, they start learning what the men really care about in a divorce, you know, which. All sorts of different things that they're very private about. It's a stressful situation for a man or a woman. And then they start learning different parties. Maybe there's support groups for men, maybe there's this, maybe there's that. Who knows? But all these things start to develop and it kind of takes on a bit of a life of its own until if the parentage really grows. If you think about it, if you're a man getting a divorce in Florida, you know, why wouldn't you call them? And suddenly they start to own their market. Because they created it. It wasn't anyone else that created that slice of. Of the market. That is the idea of a power niche. You don't find it. You don't look all over to find a niche. You don't. Because by definition, if the niche exists, somebody else has already created it. You create your own niche, and then you develop it and own it. Now, applying that to being an investor, it's really the same concept. Okay? If you're investing in real estate, most of the time you're thinking, well, I could do multi family, okay? Or I Could do retail, I could do office, or I could do, you know, whatever it happens to be. Those are existing niches and there's nothing immoral about that. I mean, there's a lot of people investing in those niches. But if you wish to outperform and create a power niche, you would have to come up with a way to slice that up in a different way. Perhaps it could be I'm making something off the top of my head. Ground lease financing for multifamily. Okay, it probably doesn't make any sense, but I just threw it out there. Okay, well, if you aimed at one little angle and you started to develop real expertise in that angle, after a while, everyone would start to identify you with this because you made it up, you created the niche. You didn't find it, you created it. And then as I was explaining, it takes on more of a life of its own until you own the niche. The last thing I'll say about it, and this is why a power niche is so wonderful. It's a niche that you own and you own it immediately because you created it. You're the world's expert. The second that you create it, you have a certain power in that niche. It's a monopoly. It's your niche, you own it. What is the best thing about a monopoly? Well, monopoly power gives you monopoly pricing power. If people really want that niche, you're the only game in town and you have the pricing power as an investor, people start coming to you because you're the real expert in this. If you're a lender, you maybe get a higher interest rate. If you're investor, you get a better deal. If you're a sponsor, you can cut a better deal. All because you own the specific niche. That's the heart of what my, My Power Niche book is about.

Yeah, I love that. And especially for the investors who are starting out and I mean, there's so many deals and so many different things that, that you can do out there. And I think that that makes it all the more important to differentiate yourself and to have that business plan. I know when I started in the my career 20 years ago, I had a territory at a geographic area that I covered. And by just specializing in that, that niche then, then I was able to become an expert at it. Whereas the generalists who were just running around trying to do everything, you know, what's the expression? You know, you get that, that master of all things. Yeah. Jack of all trades, master of none. I got it backwards, but I think it's great Advice, especially for the newer investors to think about.

One thing to jump in here. I know James, you always one of the things you liked in my book, I think I might have put it in my book or it might have been an article. I had created the business called Wacky Capital and the idea was that you're a lender, you would look at something, anything that no one else would look at, you would look at. It was Wacky Capital, had a great name, you can't forget it. It's a little silly sounding and it didn't mean you were an idiot, you would just throw money. But it meant that you wanted people to come to you with the thing that no one could finance. And if you think about it, one of the things you get in that situation is an incredible pricing power. You're the only one that would look at it. And then of course you try to figure out how to box the risks and turn. And maybe it's not wacky, maybe it's very, very intelligent capital because you own the market, because no one else will even listen to these crazy financing ideas. Anyway, back to you, James.

So let's stick with some of the newcomers to the business. And you've been such a great mentor to so many people. What advice do you give for someone looking to get out in the business? Where would be a good place for them to start?

So in other words, you're asking like.

If someone who's in college right now who wants to get into real estate, there's a lot of different things they could do. But what's some of the advice you would give to someone? Maybe determine what they they want to go do.

So if you thinking the real estate world is a place you want to go into, this is what I would tell you and it's I think I'm right. I would try to get a job at the most prestigious place possible in the biggest city possible. So if you can find a way, you know, a major institution in New York City, I'm not saying that because I'm from New York and I don't mean it ethnocentrically, but if you're at a top place in a top market, you're very mobile, you can kind of go anywhere you want. Step two, most likely your first job is not going to be your last job. It's extraordinarily unlikely that you'll have one spot in your whole career. You're going to change jobs. So if you're thinking that way, it's really nice to be at a really really impressive place that builds your resume. So that would be the first thing. Second thing I would be thinking about is where you're going to learn the most. Okay. I mean, at the beginning you're a bit, you know, you hopefully have a good brain and some eagerness. I mean, you're a blank slate to a large degree in terms of what you know about the real estate world. So I would also be thinking, if I could, to try to find a place where I'm going to learn a ton. I'm going to be exposed to the, to the thinkers, the creators, the doers, the sophisticated transactions and all of that stuff. And then finally, the third piece, if I could remember, there's things you're looking for, you probably won't get all of them. But the third thing I would be looking for is a place where you're going to meet as many of the movers, shakers in the real estate world as possible. With the theory that you don't know what's going to happen in your career, you have no way to really predict. You want to make your likelihood of your outcomes as good as possible. The more people that have influence in the industry that you meet that you get to know that you interact with, the better. So those are the three things I would stress. The most prestigious job and the most prestigious city place where you're going to learn a ton about the most sophisticated and difficult and creative real estate transactions. And then lastly, place where you'll meet as many of the cool people as possible in real estate along the way.

That's great advice and I can definitely relate and attest that this is a business where you learn by doing and you learn by being around smart people. And, you know, I was very lucky that I found a great company early on, and I learned most by just listening and just watching what other people were doing. So, you know, being at a place where you get exposure, where you can be on the front line or you can be in those meetings and you can listen to deals being negotiated. I think it's very important. So. And in a big city like New York, you just get that much more exposure, that much more opportunity. So, Bruce, I would like to now talk about your latest book and you've been writing this column and maybe you could give our audience a little background on the book and what you were, the message, what you were looking to accomplish in writing this.

So can I tell a little story to get started? Okay, so look, my hobby, I didn't realize it along the way, but my hobby has been Thinking. I like to think it's a hobby. And I remember when I started to think it was actually a little story was in high school, and I think it was eighth grade when I had this American history teacher. His name is Werner Feig. I always give him a plug because he changed my life. But when we got to class, we sat down like a bunch of little kiddies, like Everybody else. And Mr. Feig, I remember he walks into the room and he kind of struts around, and he said the following. He said, this country should be ruled by the elite, only the elite should vote, because they're the ones that are educated. And then he walked over this girl sitting next to me, and he planted his arms on the desk, slammed them down, and he looked her right in the eye and he said, what do you think about that? And this poor girl. And my heart suddenly started racing. I was like, oh, my God, what is going to happen in this class? And I still remember thinking, I'm so glad I'm not her, because I think I would have melted. But she sputtered. She sputtered and she said, fin, finally, but that's, that's wrong. And then he stood up and he looked at her and he laughed at her right in the face. What a great argument. Oh, you've convinced me. And he made fun of her the whole class. It was just horrible. Fast forward 60 days, okay? The class was, was the most exciting thing I've ever participated in my life. Still, you know, he would come up with the most outrageous, horrible, ridiculous things. And he was brilliant. He was crafty, a great orator. And you couldn't just shout at him. You had to have an intellectually coherent argument why he was incorrect. And there would be battles going back and forth in the class. Our brains woke up, we started to think, we started to learn. It was this most wonderful thing. So where does that answer your question? My hobby since then really has been thinking, Challenging, creating, trying to come up with things. So what? I've found my most useful place in the real estate world, has been doing that. I, I, you know, I'm a real estate junkie. I spend every minute of my life trying to do, you know, real estate. Thinking about it, dreaming about it, whatever. It's a passion as a hobby as well as a job. So I meet so many different people, I see so many different things. I read everything I possibly can, and then I try to think and try to create ideas that are not the mainstream. If it's mainstream, then, you know, there's nothing wrong with it. But that's not where I'm going. And then I try to write these things into these articles. Real estate philosophers, what I've called myself, because I'm philosophy kind of guy, a thinker. And I try to, you know, put it into the, into the real estate world. Often the most brilliant ideas don't come from me. They come from others, thinkers like Peter Drucker that are, you know, real genius types that come up with ideas. And I try to apply them to the real estate world. I mentioned earlier about Starbucks coming up with a brilliant idea to run a company. I was like, wow, what a great idea. Let's use that. So, Peter Drucker, I'll give you an example. This is possibly my favorite one. Peter Drucker, by the way, is one of the great thinkers. If you haven't read his stuff, he's sort of like the Albert Einstein of management. He created the whole real industry of management as a thing that people are supposed to do. One of the things he says is management is getting above average results from average people. Think about that. Anyway, if you read his stuff, it's very exciting intellectually. And he says in one of his major books, what are two things that every business must do? Everything else he says, that's not. Other things don't matter, but everything else is less important. What are the two things? And he asks you that. I remember reading the book thinking, what are they? What are they? You know, trying to figure it out before I read the next page. And of course, I didn't think of it, but he had probably 70 years, you know, philosophizing to thinking through. But he says two things. And as soon as I say it, if you're listening here, you're going to say, oh my God, of course it's right. The two things are innovate and market. If you think about it, duh, isn't that pretty obvious? If you don't innovate, you haven't come up with anything. You're just doing the same as everybody else. And if you don't market it and tell everybody about it, well, it doesn't go anywhere. Think of Apple, okay? Wozniak was a genius guy, tinkered around and created things. What would he have done without Steve Jobs? But probably no one would ever heard of him. Steve Jobs, the greatest marketer in the world. But if he didn't have Wozniak's products, what would he have done? Put them together, Boom, you have Apple. So Drucker says you have to innovate and market they asked one more question and James shut me up if I'm going on too long about this stuff. This is sort of what gets me excited. But he also asked another question, which is amazing question and if you're listening, I think is a beautiful one to ask yourself. He says, what is the purpose of a business? So this is another one. I was trying to get the answer before the next page. And if you think about it, I always think of things like, well, you know, to, you know, serve mankind, to make a lot of money, to, you know, make the place nice. I don't know, I kept thinking of all these things, but as soon as he said it, I realized, oh, my God, of course, said the purpose of a business is to create a customer and think about how powerful that is. It's not find a customer, create a customer. In other words, do something to create a customer. Like an iPhone. Getting back to Apple, right? Nobody knew they needed an iPhone until they created. They created basically billions of customers by doing that. So the lesson for myself, for anyone that's listening, is this. If your business should be doing this innovating and marketing to create customers, if you're doing that, the odds are your business is going to kill it and do fantastically. If it's not, there's a question maybe where is it going? Is it going anywhere? And is it really scheduled, you know, for eventual extinction? And hopefully not. But that's the kind of thing that I do in the Real Estate Philosopher. I think as much as I can. And I try to turn it into something that's useful for people in the real estate world. But not the way you read all the other articles, I hope. James, I gave the idea right there.

No, I'm a huge fan and it makes a tremendous amount of sense, but I really want to distill this and help our audience apply it to what they're looking to do. So for someone, and I was with a young man yesterday who is. He's at a big shop right now and he's thinking about going out and investing on his own. And I was giving him the advice that, look, you know, first of all, you know, you have to pick what your niche is, what are you going to be investing. And then, you know, you need to become the thought leader for that, right? You need to have content, you need to be putting out information to build your audience. Give, give, provide something of value. And, you know, as you were talking, I was thinking, you know, who is the customer? For a real estate investor, it's probably, you know, for that developer, it's going to be the people who are going to give them capital, Right? So does that make sense? So if your job is to, you know, if creating this real estate business, okay, unless if you're incredibly wealthy, you've won the lottery, you've inherited a huge sum of money. Most developers I know use other people's money. And so could you apply this thesis to someone looking to raise capital? Is the customer the investor? And if so, how do you go out and nurture that relationship?

That is a ridiculously good question. And the answer isn't probably the one you're expecting or want to hear. The irony is it doesn't really work very well on that specific spot. It's a weak spot you think about. Most investors want to invest in something that everyone else is invested in. You know, if you're raising a fund or you're putting things together. And if you say, I'm doing a multi family, that is like all the other multifamily, and you have projections and it's all exactly what, everything, the money is much more likely to flow than if you come up with something that's different. And you say, look, this is really different because one of the risks of it's different, it might flop. Okay, so the conundrum is, are you going to go mainstream? And yeah, you're more likely to get capital to do the mainstream thing. On the other hand, you're less likely to dramatically outperform or go the other way and stick to your guns and say, no, I'm trying to do something very different. But it's going to be hard to get the capital because it's different. You just created something new. Is there an answer to that? And the answer is probably no. There is no answer. It's one of those things. You have to just make a judgment call and there isn't a right or wrong. I'm not saying you should always do what's different. I'm not saying you should always do what the same you have to think about up front. What. What is the sort of best path to wherever you want to go. And that's a tough judgment call. And I think your friend that you were talking to, James, was asking the right question, as you just asked now. But that's my best answer to it.

Bruce, as we're talking, I'm thinking about one of. I know you've referenced this book as well. It's certainly one of my favorites, Blue Ocean strategy and the idea that if you want to go into business where you're Doing the same thing as everyone else. You're competing against margins, there's blood in the water, fees are compressed, whereas if you find truly a new business line, the competition is almost irrelevant. So I think it's really, I hope our listeners really think about how they want to approach the market and do something differently to really stand out. So really, really helpful.

Can I say something on that? It's another really good point you're making. Extremely good. You're getting right to the most difficult and really interesting questions. There's a fellow named, I think it's Howard Marks that started a group called Oaktree. It's a very well known investment company and he's a bit of a guru of investing strategies. One of the things he asks or he suggests is that, you know, you just mentioned outperformance. He says, the first thing that somebody should do in real estate, and it's sort of building on what you were asking a minute ago, is ask the question, do you wish to outperform in the first place? Now you could say, well, of course, I mean, what kind of idiot wouldn't? Whoa, whoa, whoa, whoa, wait a second. What does outperformance mean? Well, if you start really thinking about outperformance, okay, you've got the norm, like in the stock world, it's like an index fund. It is designed to be average. As soon as you say, I wish to outperform, this is all what Mark says in his article, and I give him credit for it. Since the second you decide to outperform, what do you have to do? You have to be different. You have to. That's the whole point, right? Or otherwise you'd be the same. The second you're different. There are only two possible results. You will outperform or underperform. That is mathematically tautological. And you have to sort of think yourself, I mean, your job, let's say, or the business that you're running or the investment business that you're doing. What happens if you underperform? You might not be able to tolerate underperformance because you might lose your job, your business might fold, awful things might happen. Whereas if your average performance, everything might be fine. And then you have to say, well, wait a minute, is it really worth it to try to outperform if the downside is so dramatic? And he suggests, and I think he's right, that one of the first things a business should do in real estate investing, as you're leading me here, James, is to determine, are you seeking out performance in the first place? And if you're not, then don't worry about it. Just try to be average and live with it and love it. Or you can say, no, I want to be outperforming. And I have thought through the implications of underperformance. I can tolerate that risk and then go for the gusto.

I love that answer because you're right. At the surface it seems so obvious, but it's not right because it's not a one size fits all. And I think you're really giving our listeners some incredible food for thought. And again, this all goes into what your strategy is and what you're looking to, to accomplish. So, Bruce, the other thing that I've been really and to read your latest book and you go back to, you know, over the last couple of years and some of your predictions, and I love that, first of all, you hold yourself accountable. So, you know, part of the book was, okay, I'm going to talk about what was going on at the time, why I made these predictions, and let's see if it happened or not. And I'm not going to sit here and just, you know, talk about all the times I was right. So but just the first of all, I'd love to know, how do you come up with these predictions? How do you, when you come up with your thesis, are you doing research? Is it talking to people? Because I would think the other part of being a great investor is to have a thesis, right, that this goes to the, you know, you talk about Wayne Gretzky and it's one of my favorite quotes as well, you know, skate to where the puck is going. So, you know, for our listeners, how would you encourage them to think about these future trends to make the best possible investments?

I mean, I can't give you one answer that this is always how I do it. But I'll give a couple of hints. One of them is the media. Okay? The media is an interesting creature. You know, I used to think it was bad and trying to do something, but it's not okay. The media is a creature like all other businesses, and it has to survive. In order to survive, a person writing an article, let's say, has to get people to read it, okay? It's not necessarily to trick people. I used to think that it's not. Occasionally it might be, but it's really to get people to read the article. Otherwise it's boring. And if it's boring, the media goes out of business or the guy gets fired and doesn't do well, okay? So you start thinking, well, what does it mean to get people to read an article? Well, it has to say something exciting and interesting, even if there really isn't anything exciting and interesting. So, for example, during the, you know, the, you know, horrible Covid downturn, there were, like, articles like, retail sales fall 70%. A record 70%. Oh, my God. Well, what do you think happens if you close the store? I mean. I mean, is this, like, news? I mean, of course it's going to fall. Stores close. You can't buy anything. I mean, how could retail sales not fall? This isn't news. Okay, so what does that have to do with predicting? Okay, so I try to divorce myself from the article's headlines. I try to look what's really going on, and then I try to reason for that. It's like, well, wait a minute. The stores are all closed. Nobody can buy anything. They used to want to buy things. Well, what will happen, you know, when the stores open? Well, probably there'll be a lot of people that are really eager to buy the things they couldn't buy for months. So there'll probably be a huge boom and everything will start to go in a positive way. So one of my predictions was that the recovery, whenever it happened, would be explosive to the upside. And that turned out to be right just about all the time in all the places. As soon as the demand came back, which was going to happen, some point, things would go up. So I try to look at what's written and not be fooled by it. One that I just saw a couple of days ago. I don't mean to make fun of the author, but it said something. I laughing at the article. It said something like, close to half of Office users wish to reduce their space. One of the things we're all wondering about now, what's the effect on Office of COVID Think about that article. Almost half of Office users want to reduce their space. Oh, my God. Think about it. That means close to half of Office will sink into the ocean. Whoa, whoa, whoa, wait. Take a step back for a second. But does that mean that more than half want to increase their space or stay the same? And doesn't everyone always want to reduce their office space? Like, what does this article actually mean? Well, no offense, but it means absolutely nothing whatsoever. But it sounds so draconian. And every single day you see another one. Everyone's leaving New York for Florida. Well, is that really true? And are they coming back? And is this just. People leave for Florida when they get old anyway, all of this stuff. So when I'm making a Prediction. What I'm trying to do is use my brain over my emotions as much as I can and then to filter out kind of the bullshit you said I could use that word from the chaff from the wheat, if you will. And I have found that the headlines often help you because they often lead you in the direction that is the exact opposite of where you should go. And if you really started thinking about it, the greatest time we buy New York was the last year, right. You know, it was ending and now it's booming again. And, you know, office is still the last piece to come back. But that I've been sticking my neck out of that, that's any day now, as soon as people, you know, find a way to be, you know, okay with dealing with the last vestiges of.

COVID Bruce, I love that answer. And so important, like you said to really, you know, look at the facts, look at the numbers, don't get caught up in the craze and, you know, the bandwagon. And I mean, I don't know if you're suggesting be a contrarian and try to go where others do not, but you're. Yes.

No, I'm not really. I'm not saying be a contrarian. You can, and that's up to you. I'm just saying try not to be. Try not to be tricked. Use your own brain. Rather than let the media use your brain and recognize what they're trying to do. They need to get you to read things or they're going out of business. And it doesn't mean there's really any news, you know, other than what you know, you can discern about, you know, the facts. Perfect.

So I'd love to talk about now one of your most popular and famous posts articles, which was that you're never going to find another good deal. And your response to that was that good deals need to be created. So talk a little bit about that for our audience.

Sure, surely. So if you think about what a lot of people do for a living, a lot of investors, I guess, they sit in their office and deals pass them by on their screen, if you will. I guess most of the time these are sent by brokerage community or otherwise that are sending them deals. They look at the deals and then they try to pick which one is the best. If you think about that, it seems almost mathematically ridiculous to think you could do anything other than average performance with that. I mean, think about, you're seeing the exact same thing that thousands of other people are seeing. Somehow magically, you are going to be able to evaluate that better than the other 999 because you're smarter, I don't know what, luckier, I don't know. And you're going to pick the winner better than everybody else. And not only that, you're going to keep doing it again and again and again and again. So I would say the answer, the chance of that are effectively zero. That is not going to happen. So what this means is you will be doing average at best. Okay? And remember before, as I was saying, there's nothing wrong with that. If that is the goal, to be average, there is nothing wrong with this. Fly and be free and do it. And if you're seeking to outperform, that is not going to work. Instead of finding deals, you're going to have to come up with some way to create value that makes what you're doing more likely than something else or more likely than just looking at the screen and having other people send them to you. This was the earlier conversation about a power niche where you're trying to create some intellectual capital around whatever it is that you've created that you only want to see a certain type of thing or certain type of party or slice of the real estate industry that you've created. And when you do that, the things start to come to you that are surrounding what it is you're creating. And as I was saying earlier, that creates a bit of a virtuous cycle that hopefully turns into a parentage. One way or another, you're creating what's going on rather than just sitting there finding it or looking at it. And I do think that's one of the few ways you can outperform rather than just looking at the screen and trying to pick the winners. And for what it's worth, James, I sometimes get feedback from people in the industry about my articles and, you know, sometimes. One guy called me clueless once. So, you know, it's not always positive feedback, which I like. I like people challenging what I'm saying because one thing I am 1000% sure of is I don't know everything or close to it. But this article got more positive feedback than anything else from people I respect as real talented people from high quality institutions. They've said a lot. You're totally right. This is important in building a career or successful investment strategy.

Fantastic. So, Bruce, we only have a couple more minutes left, but I do want to get your take on certainly the future of the New York City market. But we've got listeners who tune in from all over the world. And you made a very bold prediction in your book, which is Covid will have virtually no long term effect on real estate. So a lot of people out there still have their concerns this going to be with us in perpetuity. And so leaving us on hopefully a positive note here, what makes you believe that?

You're asking about real estate?

Yes, Covid will virtually have no long term effect on real estate. So I would assume you couldn't be more bullish on the future. Bullish on New York. So again, what makes you believe that?

I'm not sure if you're asking about New York or real estate in general, but I guess it's a pretty similar answer. I mean, Covid, the one I don't say good thing about it, but the one thing that was sort of different than the financial crisis we had 12 years ago, nobody knew if the financial crisis was going to destroy the economy forever and turn it into a depression. I think one thing we all realize with COVID is it is temporary in nature. It's still, they have more to run, as we all know, the effects on the world, et cetera, et cetera. But one way or another, as human beings, we adapt to it. Even if everyone has to wear a mask for the rest of their lives, they still have to do something. I don't foresee that people are going to want lives where they sit in their apartments or their houses and they don't go out for fear of COVID I don't think that that is a potential end game. So then I try to apply that to the real estate world. And I already see a lot of signs of it in certain locations and maybe not as much of others. But people have to do something, okay? Even if they're, you know, they have to go to the office, they have to do something with their lives. So you say what would be the effect on, on real estate? And I just don't really, I just don't see that much that that really can change. I mean, you know, there's still going to be malls with stores in it, there's still going to be buildings with, with offices in it. And maybe they're going to have to have like air scrubbers and things like that, but I just don't see any other outcome that makes any sense than that. I think it's a little bit of chicken egg. But with the office, I know I'm rambling a little bit with office. There's no reason to come back if there's nobody there. But once most people are There, there's no reason not to come back. In fact, if you don't come back, you're left out. Eventually your career ends. So anyway, I'm pretty comfortable with my prediction that the long term effect on real estate of COVID will be very close. I don't say to none, but closer to none than something significant.

I couldn't agree with you more. And you can already see the energy back in the city coming back to life and just the power of being there in person. So Bruce, just to close, I mean, you've such incredible advice and you've been so generous with your time. If you had to distill down really the keys to your own success, what would you say? And I'm curious if part of that, I mean, you're such a super connector and this is a relationship business and it's about the people. So I'm sure that that's one of the pieces to it. But what would you say to that? Especially for our listeners benefit, Try to emulate some of the things you've done throughout your career. What would you say is the key to your success?

There's really one thing, well, probably a whole bunch of things. But the thing I would say by far the most useful to your listeners and the thing that I think will key their success and my mind, although I stumbled to mine, it's four words. Four words. I write it all over the place. I try to remember every day. The four words are it's the network, stupid. Those are the four words that I think will, you know, change your life if you will. There's actually a book I really tout. It's called the Formula by a guy with a long name that I can't remember. But it's a formula of how to be successful. And if you really think about it, the thing I have learned is your ability to predict the future is zero. You can't really predict what's going to happen. Once you realize that you can't predict outcomes, your goal should be to put yourself in a place where there are the most possible ways to have good outcomes. If you think about it, the optimal way to do that is through a network. And that means trying to meet as many people as you can, trying to interact with them in as positive a way, trying to develop a reputation for yourself, whether you're the real estate philosopher or you're a parentage person or whatever it happens to be one way or another, interact with as many people as possible in as positive a way as possible. So if you're just Starting out your career, inventory who you know and make a list and make sure you don't let those people get away from you. And then when you meet more people, keep growing your network. And I've noticed, and you probably will, as you see your career development, the people that somehow rise to the top are the ones that just. They seem to know everybody. They're always out and about, they're always meeting people, they're doing things and they're constantly out growing their network because you never know what's going to happen. The guy you met in a bar that you were, you know, doing shots that you met one night, it's some silly thing, you know, and it finds out what you're good at, happens to be working another place, and somebody calls him and says they need someone to do this. You get a call the next day. You cannot predict the outcomes, but you can increase your chances by growing that network. So the four words that I would throw out for my success, which unfortunately I didn't realize until probably I was in my mid-50s and to yours is it's the network, stupid.

Wow, that is phenomenal. And what a great way to end. So, Bruce, how does our audience find out more about you? You put up such incredible content. Where can they find you online? Where can they find your book?

I know you said we're not live. I'm not sure I know the right answers to that. I probably should be better at it. But, you know, there's a website, Bruce Stackenfellow website. There's my law firm, Duvall and Stackenfeld. There's Amazon for the book itself. There's the real estate philosopher, which I do, you know, hope people subscribe to. You know, all the things I'm saying, at least some of them are of interest. All these places are talking about my book. I did hit number two on the Wall Street Journal bestseller list for a week. It's very exciting. And something I right or wrong, I'm going to stick my neck out and say, it's a really good book. There's nothing like it in the real estate industry. Nothing even remotely like it. There's some great books. I'm not saying they're not, but all my thinking, all my ideas, right or wrong, all my predictions, everything I can think of, including a whole section on how to succeed in real estate. Whether you're a little kitty just starting out or a super successful major investor, every single thing that I really thought of that I thought could be useful, it's in this book. And I think you'll benefit from it. So I do hope people buy it.

Absolutely. And you can check it out@brucestakenfeld.com aka the Real Estate philosopher. And I am certainly a huge fan. And Bruce, you're such a student to success and again, you read your books and you have so many references that you pull in from some of the greats. And so I've certainly taken a tremendous amount of way. So thank you again for joining us.

Today and thank you so much for having me. Best of wishes to you, James, and to Anderson Young and everything else you're doing.

Thank you again. This is James Nelson, your host of Real Estate Investing Live from New York. As always, appreciate your joining us. It means so much to me that when you subscribe and leave in your comments and if you have not already, please check out my Latest site, james nelson.com I built this site for you to help give you the insider's edge to real estate investing. Until next week, thank you again for joining.

Thank you for tuning in this week to Real Estate Investing Live from New York. Please join your host, James Nelson for another program next Tuesday at 7pm in York, New New York, 4pM Pacific Time on the Voice America Business Channel. All shows are rebroadcast on Wednesday mornings at 7aM Eastern Time and 4aM Pacific Time, as well as always on demand. We'll talk again next week.