Adaptive Investing in Real Estate

Bob and I have been friends and business associates for 20, 25 years, probably. We’ve actually gotten to do a fair amount of play together, too. We’ve gone heli skiing a few times. He introduced me to that ailment. I think as soon as you do it once, it’s going to be a part of you forever. I don’t know if I’ll get that million foot suit ever, but I’d sure aspire to have that.

Robert Zink: It’d be nice.

David Moore: Yeah, definitely. One of the great things, and the reason I’ve worked with Bob, known him so long, is he’s just not somebody that’s going to look at real estate straight up and, you know, what it says. He’s going to have a tendency to look at things and see what he can do with it.

But, Bob, why don’t you tell us a little bit about yourself, how you got started in the whole thing, and what you like about real estate? I do want you to mention … I want you to tell the helicopter story. It’s my favorite.

Robert Zink: Well, good morning, David. Thank you.

Robert Zink: I started in real estate quite a while ago in Eugene, Oregon. My dad had been in real estate, and as a retirement plan in the summer. He was a school teacher, so he had summers off, and worked on that, and suggested that maybe that would be a way for me to go. Not having to punch a clock at an office, eight hours or nine hours a day, and being on my own appealed to me.

So, I had a lot of friends and clients and all, young attorneys and accountants and just people that we just went out and bought rental houses and duplexes and real estate’s a very creative vehicle. You can kinda do things. You mentioned the helicopter story. Twenty-five years ago when it was a down market in Eugene, I worked for the nation’s largest land syndicator in Dallas, Texas and bought pre-development land. And we flew investors around showing them path of progress land in helicopters and we dropped off the investor, we’re going back to the heliport and the money raiser in the helicopter said, “You know, I’d love to find a house that I could afford in the market.” We’re flying over and I looked out the window and I said, “Well there’s one you can buy cheap.” And he goes, “What do you mean?” I says, “The pool’s green. Which means that the owner isn’t there and there’s a good chance in that economy that a lender owned it.”

Robert Zink: So we actually put the helicopter down in a cul-de-sac, went over, got an address. The pool was in terrible shape and bought a pool with the house attached from a lender that wasn’t taking care of it. It’s a very creative, fun way and kind of, as you’ve noticed expanding, that is you can change the use on real estate. You buy an old warehouse and turn it into a commercial building.

David Moore: As best use, it might be obsolete for someone else and you can make it work.

Robert Zink: I and some partners years ago owned a warehouse in downtown Eugene that today, the federal courthouse is on that sight, so. Things change over time.

David Moore: Funny how all those nice spaces, those nice buildings, they’re owned by what, the banks or the government it seems like.

Robert Zink: Yes. They could afford it because they’re buying it with our money.

David Moore: I was in Hollywood actually in L.A. over the weekend and downtown you’ve got a fair number of new buildings that have just been built and I was looking at them and atop every building there, it was like a bank or it was interesting. We had financial services. You had banks or actually accounting firms which really surprised me in that economy. But anyway.

So the bottom line is I love real estate because we’re not betting that stuff’s going to go up and your background is one that you’re going to take and look at something and make it better and if you’re not having to bank on appreciation, that’s always a great thing.

Robert Zink: Well and you’re right, you can change the use, you could improve real estate and also not just depreciation, but we have debt reduction. We often times forget this component of over time, the tenants are paying off your loan. I mentioned to you when we were talking, there was a book when I started, a little paperback called “Making Money While You Sleep,” and it was about that it is your tenants actually paying off the loan on your rental property and that by itself is a lot of money over time.

David Moore: Oh definitely, definitely. Well thank you and appreciate the introduction here. We’re going to take a little break and come back and we’re going to continue the conversation with Bob on some other topics, thank you.