176: Building Your Own Business with Phil Cefaratti

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This is heroic investing episode 176 today I interview Phil Seffarotti. Phil served 14 years rising to the rank of lieutenant commander in the United States Navy. He served on surface ships, the USS Austin LPD4 during the first Gulf War in the early 90s. He also did a joint tour with the Defense Logistics Agency and that helped him springboard in some of the stuff that he has done after his time in the military. He's sixth generation of individuals living in Washington D.C. and Northern Virginia and he currently has a realty office there in Old Town Alexandria, just south of Washington D.C. on the Potomac. Beautiful, beautiful area. His company specializes in commercial real estate, office space, large, multifamily, as well as, you know, single family or smaller buildings used for both rentals and for people looking for their residences. So he's a, he's an expert in the Washington D.C. northern Virginia area and he offers a lot of advice on how to make transitions from the military, how to be successful in real estate, and then also given that many members of our audience will Travel through Washington D.C. or Northern Virginia during their tours. He offers his services to help you find a place either to live in or help rent that place after you move on to your next duty station. He previously worked as Director of Business Development for Santoria Software and services provider in the wireless industry and then has transitioned from there into working in real estate. And he talks about during our interview with what he learned from his early times in business and then having transitioned into being a full time Realtor and commission only individual operating his own businesses as President and Principal broker of Potomac River Realtors. He's leading the charge, I should say, in the D.C. area as a real estate professional best versed in contract knowledge, negotiation skills, local market knowledge, and in depth understanding of business modeling and finance. So please enjoy this interview with Navy Lieutenant Commander retired Phil Seffirotti. Well everybody, thank you and welcome back to the Heroic Investing Show. As I mentioned in the introduction, we have a great call coming up here today with Phil, our Naval officer veteran and somebody who's got a lot of experience in real estate and business world. They'll talk all about all of that in a second. And there was a little bit in the bio. Phil, thank you so much for joining us and imparting a little bit of your experience and wisdom.

I really appreciate the opportunity to be here and help.

So Phil hails from the D.C. area. You had quite a naval career before launching into the private sector. So could you maybe just go back as far as you want, but tell us a little bit about your background and kind of how you ended up where you are.

Well, I've ended up where I started, so I actually grew up in the District. I'm a sixth generation Washingtonian going way, way back. And actually that's in the District, not the surrounding suburbs, though I live in the suburbs now. Went to join the Navy a year out of college. I wasn't smart enough to do ROTC or anything like that. And I was on active duty for seven years, served during Desert Storm and I was in the Navy Supply Corps. So did a couple deployments on board my ship, the USS Austin. Did a shore tour at Defense Contract Management Command, which sort of brought me into the defense contract world obviously. And from there I decided to it was time to get out of the Navy. I stayed in the reserves for a couple of years but felt like I was stealing from the government foolishly and decided to drop the reserves. I should have stayed in and I regret that decision every day. Got out of the Navy, hooked up with Lockheed Martin doing contracts for a short while, got my MBA from Georgetown, went into the high tech world for about 10 or 11 years doing a mixture of things, finance, consulting, business development, things contracts. And then just sort of decided I was done with the corporate world. I hadn't, you know, it's not like I'm a millionaire or anything at all, but decided to get into the real estate world. And I got in at the best time, worst time it was 2007, right as the real estate market was crashing. And I learned very quickly that it's very much a get your hands dirty kind of job, getting out and about. It's not really what you know, but it is who you know and who knows you. And the more people you can meet, the better off you are. And I always knew at some point that I was going to start my own business. Even when I was in the Navy, I had been thinking about what sort of business would I want to start. I never thought it would be real estate back then, but certainly when I got into real estate I knew that while each agent is an Individual business. I knew that I would want to start my own brokerage firm at some point and so I started that at the beginning of 2014 and just celebrated. Potomac River Realtors just celebrated our fifth anniversary and it's just been a great experience. Been in real estate now for 12 years and it's always something new and there's lots of opportunity.

So when you were in the high tech world, were you still in the D.C. area? You've been basically there your whole life.

Well, I'm in the Navy, obviously. I was in various places. Norfolk and Dayton, Ohio of all places. Now in high tech, I actually, I went out to Silicon Valley for a couple years and then with some family issues, I came back to D.C. but I actually was did a lot of commuting. I was going up to Boston for a while every week and then I was going into Manhattan every week doing various things, basically finance and business development type consulting jobs.

Got it. Okay. So the transition to your own brokerage, always wanting your own brokerage in the real estate world and for you personally, was that driven by just better economy of scale or being able to kind of control your own destiny? What was the big driver there for that?

It's really a couple things. Number one is I feel I'm a strong leader and I just always have a very independent streak and knew that again at some point that I wanted to start my own business. And the way it happened was I had moved to run an office for one of the local firms and it was just the commute was God awful. I had to wear a suit. And I have to tell you, I what I tell all my clients when I first meet them, I say I dress casually. It doesn't affect what's in my head and what I know. But I never know where I'm going to end up. I could end up in the nastiest basement in the entire world and I don't want to be wearing a, you know, a nice suit down there. So I generally wear jeans and a polo shirt. And I was having to get dressed up when I was going running the office out there. So I came back to my. The office I had been in in Old Town Alexandria and our broker left and they decided to pull somebody from the outside. And in the interim they brought in the regional vice president who really wasn't in touch with what's going on in today's world. And so everybody started coming back to me and asking me questions and I wasn't getting compensated for it. So I said, well, you know what? Now's the perfect time for me to leverage what I know and to start off on my own.

That's a very, I think a very story that will resonate with anyone out there listening who's in corporate world today and really in the military. Right. My wife used to say, why are you doing that job? Like that's not your job? And I said, I know, but in the military when you do a good job, you get everybody else's his job too sometimes, because in the end the mission's got to get done.

Right.

And I think that it's similar to that probably in the corporate world. But it sounds like you ran into familiar territory for yourself there when you were doing the break.

Ridge, you're absolutely right. You know, it's the military and the corporate world are very similar in the fact that you find the guy that's going to get the job done and you ride that horse until he drops.

That's a great phrase. I think some of the listeners probably are not well versed in the real estate world with respect to brokerages and the fact you can't just start one right. So you have to have some experience. Could you just cover that real quick?

It's very easy to get a license. It's a very inexpensive way to start a business because you're really becoming. You're an independent contractor to a larger brokerage. You as the agent are there to market yourself to buyers and sellers and landlords and tenants and get clients. But the brokerage has the overarching liability and responsibility over you. They're ultimately responsible for everything. So everything has to flow through a larger brokerage or, you know, somebody like me who's a small brokerage. And you have to. In, in the D.C. maryland, Virginia area, you have to work full time as an agent and have performed and done X number of sales for three years prior to having the ability to even take a broker's test. You've taken the salesperson's test when you first get. First get in the business and then you go forward, take more classes and you can take the broker's test after three years. But I will tell you, I had done contracts for. I've been doing contracts since the late 80s when I first got in the Navy, whether it was shipboard and then obviously after the fact. And I know a lot about contracts, but there are things that you run into in the real estate world that just don't make any sense and you just have to be. It takes a couple of years of experience to understand, well, this might happen and this might happen. And this might happen, and it's not necessarily going to go, but things are not necessarily going to go by the letter of the contract, understanding how to handle that as well as obviously managing the fiduciary responsibility you have for your client.

Yeah. So bottom line is it's, it's a system that it has some barriers you have to jump over and some experience you have to have. But it makes a lot of sense to do that.

It does. When I, when I first got in the business, I thought, why do I need all this? I've got all this experience and as I was going through things over the first three to four years, I realized, wow, if I had been on my own from the get go, there would have been problems.

Yeah, interesting. As far as starting your own business as a military veteran or as, you know, first responder that I lumped together with military members, service provider, used to, you know, having a very rigorous, I'm not a very, I wouldn't say so much, I don't mean to say rigorous. I mean more very structured life kind of set out there for you. Any challenges you saw, you kind of stayed in the corporate world. You didn't go immediately to owning your own business. But any lessons you've learned that you think would be helpful for the audience.

I think the biggest hurdle that you need to get through in your mind is that the job you have right now, if you're still active, either as a first responder or somebody who's active in the military, there are things we do in the military and as first responders that very few people do. And we're held to some pretty high standards of both personal propriety as well as our ability to do things at God knows what hour and God knows what place and God knows what environment. So it's getting yourself ready to say, I've done a whole bunch of stuff in this world, I can do pretty much whatever is thrown at me in the private sector and I can succeed because I have all this experience and it's just trusting yourself. And, you know, when you're starting your own business, you're not getting a paycheck, whether it be every two weeks or, you know, on the 1st and the 15th. In real estate, I recently went six months without a paycheck. Just a crazy, crazy stretch with no paycheck. And then the following six months, I did more in six months than I had done like any 12 month period. So there are, it's managing the ebbs and the flows of business and recognizing that Everything's going to even out and you're going to have sort of an average income and you start recognizing what that's going to be. And again, it's just trusting yourself and trusting your processes, which is really one of the most important things, because you don't have necessarily a set schedule and you don't have anybody really over you saying, you need to do this, you need to do this. It's you telling yourself, I need to put processes in place about things I need to do in order to be successful.

Yeah. And one piece of advice that I've given to people is that I believe it's a good idea to set some structure, even if you don't really need it. Like my business, I started it immediately from home and have operated in a home office. But I learned some crazy things because I had spent 30 years thinking that when I was at my house, it was my time. I mean, it wasn't always true as a, you know, as commanding officer of a submarine, I would get phone calls at home, as you can imagine. But other than unless I'm on a phone or something, it was my time to do with what I wanted. And I had challenges with structure, as crazy as that seems. I would be out mowing the lawn when I was supposed to be preparing for a meeting just because I would get distracted. So I think had I to do it again, I might find an office somewhere else and rent an office for a while to develop that structure that's just not there on your own because you don't need it while you're more in the service providing, active world. And your points there about what's needed for entrepreneurship to run your own business is the confidence to operate without a parachute, a financial parachute, with respect to paycheck and getting paid, and then the persistence to keep going when others are going to quit, because that's super important when you start a new business. Would you agree kind of with that assessment?

Absolutely. It's very much. It is. You have to think positively. And I mean, attitude is so very important in real estate because you could go to an appointment with a new customer that you want to sign on as a client. And if you don't have a positive attitude, that customer is not going to become a client. And it's all about being confident in yourself, confident what you know, confident what you're doing. And we all have our ups and downs. And it's trying to also manage, saying, I'm really not up today. Maybe we can change that appointment to tomorrow or some other time Or I've got to turn myself on to make sure that I'm up.

Yeah. The 247 commitment that is an expectation in your industry is daunting, and I don't think anybody should take that lightly.

It very much is a 24 7. The great thing with today's electronic world is I negotiated a contract when I was overseas, and you can do a lot with email and phone calls. You can't show houses when you're overseas, but you can conduct a lot of business. And, you know, you are still effectively beholden to your clients because they're. They're your life's blood, and they're gonna provide you with your business, your current business, as well as your referral and repeat business. But it very much is a 247.

Business, and the social accountability is there for that and any other business. You know, I think today I teach my kids that everything you do is being recorded. I mean, it may not actually be. It may not be something that's gonna get shown today or even 20 years from now, but I think President Trump would agree that, you know, things that are recorded a long time ago come back to haunt you sometimes. And so the world of social accountability, I think it's not just about real estate, but it's been in the Realtor world for a really long time. I can remember 20 years ago when I was. My wife and I were getting our home. Our agent was 24 7, and evaluations was her lifeblood. And so, you know, the rest of the world is just kind of coming around to that. But your industry's been there forever.

Yeah.

Incredible. That's a tough industry. But I think your. I mean, your advice is. Our listeners have heard this from numerous veterans who have been running their own businesses. And so I'm starting to pull common threads together, and I see it in my own business. And I really appreciate you reinforcing, you know, the confidence side. The fact that you bring a lot, even if it's not specific industry knowledge, the fact that you get up and dust yourself off one more time than everybody else means a whole lot. And the fact that you are somebody that your boss or your customers can count on to be there regardless of the conditions is a really valuable thing. We've learned. Regardless of what you did in the military or what branch you're in, that was. Yeah, very.

In real estate, there really are many different types of real estate agents. There's the. Well, number one, you have to be willing. I'm not. I'm sort of on in the middle of the introvert, extrovert spectrum. So there are times when I have to push myself to go out and meet new people and that sort of thing. But as long as you can communicate with somebody, you can do business. It's basically boils down to you can do as much business as you want. It's a function of how you go about doing it. There are people out there who are the social butterflies who may not know anything about contracts or real estate really when push comes to shove, but they can connect with somebody and get them to believe in them. And they might hire an assistant to do all the back office work for them and they're going to do tons of business. They're people like me. I have a steady stream of business. I'm not out there glad handing everybody at every cocktail hour or anything like that because that's just not me. But I trust that the people that are going to affiliate with me are the people that trust my business sense and my knowledge and the fact that I'm available 247 and I represent them and I'm not out there just looking for the next client.

Yeah, that is really, really good advice, I think. And my bottom line is that the veterans from military or first responder world, whether you consider yourself an introvert or an extrovert. I consider myself an introvert from the definition that if going to cocktail parties and glad handing, as you, as you mentioned, drains you at the end of the night as opposed to making you super wound up and you can't sleep, then I'm an introvert because I get drained after going to an event like that. I enjoy doing it. I really enjoy the stories that I get from people. I'm not that nervous at doing it, but it does drain me. So that makes me an introvert as far as I understand it. But whether you're an introvert or an extrovert, you're going to do well. Confidence should not be the thing that prevents you from going out on your own or going for that really big job when you come out, whatever your dream is, because you're gonna just kill it, in my opinion.

Well, I agree. I mean, again, again, you know, think about, for all the veterans and first responders, think about what you've done. Think about the jobs you've done. 99% of the people out there have not done anything close to that. You can do it.

Yeah, awesome, awesome advice, Phil. So you do both commercial and residential. A little bit about your specific practice. A lot of the people who are listening to this show in the D.C. area or travel through there on assignment. Do you offer? And I know that you show properties and you do business with people who are going to live in the property and also investors, I think. Is that true?

Oh, sure. I pretty much do everything. I even have people who are going to live in a property for just one or two years and then plan on like especially I had a.2 Air Force officers separate, separate couples coming to town a little over a year ago. They both plan on. They're going to be stationed here, one's in grad school, one's at the Pentagon and they're going to be here for a couple of years. And they're, they've already asked me right away saying you do property management too, because we're going to be out of here, but we want to hold it as a rental property either whether we come back or, you know, for just financial gain long term.

The answer to that was yes.

Oh, absolutely, yeah. Yeah. You know, I don't take, I don't actively seek property management, but for, you know, my personal clients that I help buy houses, I'll absolutely do that for them.

What does the commercial world look like? Is it apartment space that you're involved with or is it small like strip malls or a little bit of everything?

Primarily the commercial real estate that I've done is clients looking to buy or lease small places to start their own businesses. And occasionally I'll lease small office space for people who are looking to lease their space. I've got a client right now, I have two clients actually actively looking to do sort of small, medium sized startup restaurants. So I'm in the process. Both of them are in dc, One looking in Georgetown, one looking in Cleveland Park. And so it's just a function of finding the space that's really going to fit their clientele as well as obviously their budget and working through those deals.

Those are exciting. Those are some people who don't have confidence problems. When you're going to start a restaurant in the D.C. area. That's awesome.

Exactly. Yeah.

So Phil, how do the listeners find you and your website and any material that you think would be helpful?

Sure. My website is Potomac RiverRealTors.com and it's just like Potomac river and then Realtors R E A L T O R s dot com. They can Google my name because I've done a whole bunch of stuff. I got a bunch of stuff on the web. Phil Ceffaretti C E F A R A T T I. You'll Google me and you'll find that I ran for political office twice in Alexandria, never won, but that's life and we'll never run again. Politics is just a little too dirty and ugly for my taste.

Yeah.

And my cell phone, you know, I always list my office number, but my cell phone is the way to get me, and that's 703-371-7601. And I've got it on me 98% of the day, so I'm always available.

That's awesome. Well, thanks, Phil, for your time with this audience. And I have no doubt that you'll hear from some of them because as I said, they're always traveling through that area. I went there four times, so even in the Navy, finding D.C. wasn't very hard. Thank you, man, for all you've inspiring words you've given our audience. And I look forward to personally staying connected much longer.

That sounds great. And Gary, the one thing I would also say is simply if somebody wants to talk, call me and just talk about going out on their own and starting their own business. I'm happy to do that, too. Obviously.

There you go, guys. A mentor waiting. Ready to go. Thanks, Phil. Appreciate it, buddy.

Thank you, Gary. Take care.

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