Money Rehab with Nicole Lapin - Change Maker - Ryan Serhant, Real Estate Mogul, on Investment Properties, Sales Tips and Hand Modeling
Episode Date: October 1, 2021Ryan Serhant, real estate mogul and star of Million Dollar Listing New York, tells Nicole his best advice for making sales and buying houses. Plus, Ryan gives us the scoop on hand-modeling that we did...n’t know we needed. This episode has something for everyone: homebuyers, real estate brokers, aspiring salespeople and anyone looking for some inspo on leveling up at work.
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Hey guys, are you ready for some money rehab?
Wall Street has been completely upended by an unlikely player game stop
and should i have a 401k because you don't do it no i know
you think the whole world revolves around you and your money well it doesn't
charge for wasting our time i will take a check
you recognize her from anchoring on CNN, CNBC, and Bloomberg.
The only financial expert you don't need a dictionary to understand.
Nicole Lappin.
As you know, here on Money Rehab, we feature changemakers, public figures making change in every sense of the word,
and along the way have been in, or might still be, in Money Rehab.
Today, I'm talking to Ryan Serhant, hand model turned real estate mogul. On Money Rehab,
we've talked a lot about best practices around renting versus buying and how to find a home
you love at a price you can afford. I have my own opinions on these topics, as you know,
but I was really interested to hear how someone who is so deep in the real estate
world would think about these big questions. Of course, Ryan is an expert on selling houses and
apartments, which means he is more pro-buying than I am across the board. But if buying is right for
you, Ryan has some great advice. Plus, I also want to ask Ryan about what the other side of things
is like, selling. What suggestions does he have for people who work in sales and want to step up their game?
Let's find out.
Ryan, welcome to Money Rehab.
So we start the show with a fun game of Never Have I Ever.
Have you played Never Have I Ever?
I got.
Sure.
Yes.
Okay.
So unfortunately, we don't have actual cocktails for this or any alcohol, but this is the money
version of Never
Have I Ever. So if you've done something, say I have. And if you haven't, just say I have it.
Cool. Yeah. All right. Never have I ever split the bill on a first date. I have not. I don't
think I've ever done that. Never have I ever played the lottery. I have.
Never have I ever attended business school.
Have not.
Are you bummed about that?
Nope.
No way.
Me neither.
Never have I ever lost a credit card.
Knock on all the wood, but I have not lost a credit card.
Good. Never have I ever taken a mental health day.
I should in the future, but I have not taken a mental health day.
Never have I ever disputed a charge on a credit card.
I have.
Never have I ever bought a used car.
Never.
Oh, wait, actually, you know what?
We were going to be in our first fight.
Yeah, that's not true.
We were going to be in our first fight.
Yeah, that's not true.
My current car right now is a G-Wagon Brabus.
And I was not expecting to buy that one when I went.
I was just looking at new cars.
And that car guy totally sold me. He's like, hey, listen, this guy in New Jersey bought this G-Wagon.
He sent it to Brabus in California.
It's the whole package.
It's insane. You drive this thing sent it to Brabus in California. It's the whole package. It's insane.
You drive this thing and it sounds like a freaking dinosaur in like a good, crazy way.
It's all souped up. He brought it home and his wife made him get rid of it. It has like seven
miles on it and now he just needs to sell it. And what do you think? And I just, I got it for like
half what it would cost me to recreate that car.
And so that's that's the car that we have, like that personal car.
Never have I ever sold a multimillion dollar house.
I have.
Lay off.
OK, so let's start at the beginning.
How you started doing that.
I read that the first day in real estate for you was the day the subprime mortgage industry collapsed in 08. Is that true?
That is 100% true.
That was day one.
I said, I was born in Texas.
I grew up outside Boston, really.
I lived on Long Island for a little bit, but really kind of my formative year.
So, you know, junior high, high school was outside Boston on
the North Shore. And the only thing I was good at or had any interest in was theater.
I was terrible at all sports. My parents made me play every single one of them for at least one
season so I could get out of my system. They made me take every single class so I could see what I
would be good at. I wasn't really great at any of them, but theater was the one thing that
like made sense to me for some reason. And so when I graduated college, I went to college in
New York and this, I graduated 2006. I was like, listen, I got a little bit of money saved up from
summer work. And my grandfather had died and left us all like a little bit of money, but not like a
lot. I, you know, I probably had like 20 grand saved. It's like, you know what? I'm going to,
I'm going to take this time that I have, or I'm still young, 21, and I'm going to move to New lot i you know i probably had like 20 grand saved it's like you know what i'm gonna i'm gonna take
this time that i have where i'm still young 21 and i'm gonna move to new york city and i'm gonna
try this theater thing and this acting thing because if i don't do it now when am i gonna do
it like in 20 years when i have a family and then i have a nervous breakdown that i never did that
thing i always wanted to do i'm gonna do that and so uh so I moved to New York City and I tried it and I got
onto a soap opera pretty quickly. It was an Ezra Returns for a while. And then I quickly got killed
off and just had a hard time making money. And so I just tried to do weird odd jobs to make
ends meet. I was hand modeling. I was a lot of hand modeling, actually.
Can we stop on that for one moment?
Sure.
a lot of hand modeling actually can we stop on that for one moment sure what goes into hand modeling your hands are gorgeous they're so stunning i i just need a moment to catch my
breath so i had a from the soap right i got out of the soap and so i had to get all these headshots
done and i had a headshot where i was like this like holding my chin you know holding my face
classic model leaf face uh and then i got an agent after that because
i was like ah this is my big brick i'm the tom cruise you better watch out kind of thing um
and that never happened but you know the soap ended and he called me his name is rich he's like
hey i don't know if you want to do this but there's a casting at&t um they're looking for a
hand model i was like what no you're like he said they're gonna pay
you 150 bucks an hour guaranteed 10 hours a day for five days it's like wait wait wait wait
that's like it's like six or seven thousand dollars per week to do what like you just have
to hold phones and let them take pictures of your hands like um sign me up my rent was 1100 bucks
i could live on like 100 bucks a week with food and stuff at that time, you know, because
it was just super cheap and I didn't go out or do anything.
And I went to this hand modeling audition and, you know, in Midtown, just thinking I
was going to show up and show my hands.
And I had no idea there was a, there's like this underground hand modeling, uh, like like a union of people who that's what they do.
They sleep with gloves on. They walk around with their hands elevated so that the blood drains out of their hands.
So they never have veins. They have freckles and little things surgically removed.
So their hands can look like a man's or a woman's. And it's a big business for a handful of people there's hand
models that get flown around the world just for that hand to hold like the new iphone or to hold
something and so i don't have any marks on my hands and not a whole lot of veins and um i played
piano a lot when i was a little kid and so my fingers are pretty long not like freaky long but
i have big hands and my fingers are long and so i went in
there and people were all like sitting around like this with their hands up i was like what the
fuck where am i and they called me in and they asked me they're like could you please show us
your book like a model like you'd have a book of all your different jobs before and i was like i
don't have a book of hand jobs i'm sorry um so they took they had me hold a a phone and they did move my arm in a bunch of different
ways. It was like uncomfortable and all that. And they were like, thank you. And I left. And
then my agent calls me the next day and he's like, Ryan, you're not going to believe this.
Guido, who is the Italian photographer, right? Guido said your hands are the most fantastic he's ever seen. And he must have your hands in this campaign.
And that campaign went on for a year and a half and paid all of my bills.
Even when I started real estate, my first year of real estate, I made $9,000.
But it meant nothing to me because I was booking handjob after handjob after handjob. Like I was holding phones for AT&T
and then like Samsung and then, uh, sorry, no AT&T. It was like singular at the time before
they were, uh, combined. Um, uh, and it was like Sprint Nespresso hired me to hold all the Nespresso
capsules because I could put my fingers really far apart while trying to bend the metatarsal,
the middle finger, just a little bit. I like a hand hand masseuse. I wore a Luperderm glove, so I would never get calluses or hangnails.
Like it was like, for me, it paid significant real money. They would fly me around the country.
I know this is not what your podcast is about, but you asked.
Oh, there are people who want to know.
But I couldn't just, you know, do hand modeling my whole life.
I had to do something with my brain.
And I basically then at the end of 2008 kind of just run out of money.
And hand modeling wasn't like super consistent, you know, like it would be every couple of months.
There'd be a big job and that would pay for things for a while.
And a friend of mine said, listen, you can you can do all your your handy your handiness on your own.
So many puns, all the puns. But you can't you your handiness on your own time. So many puns.
All the puns.
But you should get your real estate license.
It's just like theater.
Memorize information about buildings and streets and people.
It's an improv.
You're just going to meet people.
Get to know them real fast.
You show them places that they would see by themselves anyway.
And then just ask them which one they want.
And then they just take one.
And this was the summer of 08 before the world fell apart.
And then I got my real estate license September 15th, 2008, the day Lehman Brothers filed
for bankruptcy.
And I only know that because that was my first day.
No suit, no nothing.
Went into the office that my friend told me to come to.
And everyone was around the conference table watching CNBC.
And I was like, I had no idea.
Like, I didn't watch Squawk Box. You know, I had no idea. I didn't watch Squawk Box.
You know, I had no money. I was a hand model. I was, you know, a soap opera. I didn't have a
financial portfolio. I barely had a checking account. So it didn't mean anything to me,
other than real estate was real hard. And that's the market that I had to learn in.
Yeah, it's like you decided you wanted to be a football player and
wanted to practice at the Super Bowl.
Hold on to your wallets, boys and girls. Money rehab will be right back.
One of the most stressful periods of my life was when I was in credit card debt. I got to a point
where I just knew that I had to get it under control for my financial future and also for
my mental health. We've all hit a point where we've realized it was time to make
some serious money moves. So take control of your finances by using a Chime checking account with
features like no maintenance fees, fee-free overdraft up to $200, or getting paid up to
two days early with direct deposit. Learn more at Chime.com slash MNN. When you check out Chime,
you'll see that you can overdraft up to $200 with no fees. If you're an OG listener, you know about my infamous $35 overdraft fee that I got from
buying a $7 latte and how I am still very fired up about it.
If I had Chime back then, that wouldn't even be a story.
Make your fall finances a little greener by working toward your financial goals with Chime.
Open your account in just two minutes at Chime.com slash MNN.
That's Chime.com slash MNN. That's Chime.com slash MNN.
Chime. enrolled in Spot Me and are subject to monthly limits. Terms and conditions apply.
Go to Chime.com slash disclosures for details.
Now for some more money rehab.
Since then, you built this massive company with, what is it, more than $4 billion in sales
and a whole TV franchise around your then savvy improv theater, everything you learned about real estate. How many streams of
income do you have now? I guess we have real estate sales and real estate brokerage and all
things that are real estate, physical real estate and the movement of that. We have online education,
which is a significant business where we teach people to sell all over the world
and help them build their sales careers, help them build personal brands,
all that. We have an in-house film production studio that creates content, all real estate,
so real estate content for developers, agents, real estate story content, social. Actually,
one of our first national television commercials started airing yesterday, which is pretty cool for them. I didn't have television, which I guess is a separate income
stream. I then have, let's say, like all the miscellaneous media. So like the like hard
podcasts, you know, the different deals with Facebook, all the licensing deals, all like the
random media deals and stuff.
And then I would say then there are investments, right?
I have investments that have, you know, passive income and real estate investments.
I think that's about it.
Yeah.
Seven-ish.
Like average millionaire has about seven streams of income.
That makes sense.
It sounds like the foundation of a lot of them are selling, though. And you had mentioned that you have hired non-real estate people as salespeople because they
were so good at it. If folks are listening and they want to sell, whether it's real estate or
something else, what do you think is the thing they must know? I mean, there's a lot of things,
but I would say if I break it down real simply, first, you have to know your product and you have to know your people.
If you know your product really, really well, but you don't know your people, then who are you going to sell to?
And if you just know people, you're good with people, but then you don't know your product, then no one's going to trust you to spend money with you.
So the first thing you have to do is you have to really learn the product.
learn the product. So as an example, one of my first sale deals was a woman coming over from China to buy an investment property in New York City for her daughter, who was not born yet
as an investment. She wanted to spend, and I quote, a couple million. And I had no idea what
I was doing. Never done that before, ever. I was only doing little rentals at the time.
But I figured, you know what?
All the agents that I see who do deals like that,
the only difference between them and me is they just have been doing it a lot longer.
And so they just are able to talk way more confidently.
They just know a lot more.
This woman's coming from China.
She doesn't know that I've barely been doing this.
I'm just going to know everything.
And just like I did in theater,
I'm going to memorize everything I possibly can. That way, if she has any question, I'll have an answer, or at least I'll have a significant amount of facts so that she'll never second guess me.
And that way I'll never say, um, or never say, I don't know. And it'll make me feel more
comfortable with her because I'll know so much. I'll be so confident. And I did that deal for
$2.1 million and paid my rent for the, for two years at the time. Cause my rent was 1100 bucks
a month, like I said. And that really, really showed me like, okay, I know how to do this,
whether I'm selling something cheap or something expensive, I got to know my product and I got to
find and then know my people. So it's a mixture of learning your stuff right running around understanding what
it is you're selling what you want to sell on top of then going out and trying
to find leads finding people prospecting and some of my first people aside from
her China randomly you know our initial office in 2008 and 9 was on 49th and madison okay so we were above a burger
heaven um and i would always smell like fries and so i didn't know anybody i'm not from here
i gotta go to school in new york city um and i didn't get into real estate to make it my career
i got into real estate really to pay my bills so i could keep doing like acting in theater and all
that but then i just got kind of addicted to it. But I would find two types of clients or three guys.
One is just on the internet, cold leads.
The other was if you walked out of Saks Fifth Avenue
on 49th or 50th and between Fifth and Madison
with more than two shopping bags,
I would profile the shit out of you.
And that meant that you could afford a new apartment.
And so you should at least have my card.
And if you were in the Starbucks of 49th and Madison ever, and you were a woman and you were pregnant, that meant that you probably needed more space. And those were
some of my first new clients. You know, if I did that a hundred times, say like six or seven of them actually
worked and turned into clients that I otherwise never would have had. It turned into long-term
clients that were just in that moment saying, you know what, we've been totally procrastinating,
but yeah, I'm with my husband in a one bedroom and we've got to figure this out,
but we've just been so busy at work. You know, it's been always like a lot of that.
And like, it's amazing what you can do
by just talking to strangers.
And if you think about it,
like your best friend was a stranger at some point.
And then what?
You met them in school,
you met them on the street,
you met them at a play,
like you met them somehow
and they were total strangers,
but you talked because you had something in common.
Maybe you were at the same event,
same school, somewhere.
So if you can go up to anyone on the street, compliment them, so you break the ice that way,
and then find something in common, you can be friends with absolutely anybody.
And then people hate being sold, but they love shopping with friends.
And so then anyone on the planet can be your client.
I love that.
And you had these
beautiful manicured hands as you were handing out cards. Who wouldn't want to accept from an
award-winning hand model? So I'd love to get your perspective on some common real estate questions
that we get asked a lot. And the first one is if someone asked you how they know whether or not
they're ready to buy a house, what are some of the first things you tell them?
If they're ready to buy a house and they don't know what house they're looking for, the first thing you have to do is figure out how you're going to pay for it.
Do you have all the cash in the bank with enough reserves?
Then great, you're a cash buyer.
If you don't, like most people, then you're going to get a loan.
So before you even go out there and start looking for houses, you probably really have no idea what you can afford.
So you should talk to a banker and a pre-approved lender
and figure out what you can afford
and get a pre-approval letter.
That's gonna be incredibly, incredibly, incredibly important.
And so that's step one.
And you can oftentimes find people,
like a big part of my job as a real estate agent
is meeting with people who know they wanna buy something,
but have no idea what the next steps are.
And so I walk them through this process and I introduce them to the best lenders that
we work with who will absolutely get the job done and get them the greatest financing so
we can take care of that part.
And from there, I honestly would say, like, you can do this on your own.
You can go try to buy a house on your own.
But this is the lowest inventory market right now in the world, not just the United States, that we've ever seen. And if you go at it alone, you're basically like
going into battle with no armor and no weapons. Just because you're a cash buyer, just because
you're not represented does not make you special. What it means is that you're by yourself and
you're either going to be taken advantage of, you're not going to know what to do,
or you're going to bring your father-in-law who bought a house once in Kansas, and he's going to
pretend like he knows what to do, but he's just going to screw it up. You want to align yourself
with an army. You do that by hiring a real estate agent. As a buyer, you don't have to pay,
so don't worry about it. The sell side pays it, and they're either going to pay it to one agent,
or they're going to pay it to two, and it's just part of the deal. And you want that
real estate agent to really help guide you. Because remember, your real estate agent, if
they're involved in a transaction and they take a commission from it, they have a fiduciary
responsibility to you. So they can't sell you crap. They can't sell you something that's going
to fall down the next day. They want to make sure that you're buying the right thing and a good
thing because they don't want to have any liability issues with you. So you want to align yourself then with a great realtor who can
really help you figure out where to get financing and where to look. Like you might think you
definitely want to be by the lake, but for what you do and how you live your life and where you
want to go in the future and all these other things and taxes and access to the waterline
and sewage, all these things that you probably don't think about, you definitely don't want to
be by the lake. And they're the ones who have that expert advice. And then from there, it's about finding,
I'd say from there, it's a process of elimination, not a process of selection.
People can shock themselves to death, but you don't want to do that. You want to figure out
exactly what you want, see a handful of things, and then start eliminating options that don't
work for your needs. And then when you're ready to go, because you got that free approval, you know exactly what you can afford,
you're ready to pull the trigger and jump on the first option that you love.
Hold on to your wallets, boys and girls. Money rehab will be right back.
Now for some more money rehab. And you said that this is the lowest inventory
in the United States and in the world. So would you still say it's a good time to buy for folks in the market? Yeah. I mean, at the same time,
it's also probably the worst time to be a renter because there is nothing to rent.
Like if you're in New York City, you good luck. I've got clients right now that are looking for a house in Brooklyn. Zero.
Never in my entire career have there been zero options where like the system comes up and says, sorry, nothing found.
It's never happened to me in the 13 years I've been doing this.
And it is happening right now.
It's crazy because everyone is focusing on the temporary.
They're nervous.
And so they're just renting.
So it's not a great time to be a renter. That is for sure. And the buy side,
you have to remember you're not buying today, right? You're buying for the future. Unless you're an investor and you're just looking for the deal because you're going to try to flip it.
You are incentivized to buy something for where the marketplace is going to be in the next five
to 10 years. And so I do still
think it's a great time to buy, in part because the market's so great. Guess what? If you hate it,
you can sell it tomorrow. There's enough people out there.
If people are looking to invest in real estate, would you not just recommend having your own home,
but buying investment properties or even investing in REITs?
your own home, but buying investment properties or even investing in REITs?
Sure. REITs or kind of general real estate index funds can be a very safe way or safer, I'll say,
and diversified way to put passive income that you've made to work in the real estate space.
You can also buy investment properties. You can Airbnb them. There's a lot of people who do that. They're small kind of fixer uppers. They fix them up and then they
rent them for a significant amount of money. It's amazing what you can do in the short-term
market. You can't do it in a lot of cities. You can't do short-term Airbnbs in New York City
because it takes away from hotels and New York City makes way too much money from hotel tax to ever allow us to do that.
But I'm a big fan of real estate investments, obviously.
You just want to make sure
that you're not biting off more than you can chew.
If it's purely for investment,
look under the bar.
It doesn't need to be the greatest property ever.
It needs to be something that's got value add,
maybe in an area that is gentrifying or changing where,
oh, there's a huge grocery store coming up
just a couple minutes away.
Eventually this area will be worth more
because areas around grocery stores
end up being very expensive
because people want easy access to food.
You know, things like that are what you should think about.
But I'm also a big, you know, multifamily in the South,
multifamily in the Midwest. They can pay
some really great caps. And then you can also look at AAA net leases, commercial properties.
There's a lot of different options out there. And I think the real estate market will be pretty good
for a while now. I think we've had a tough real estate market for 12 years. So it's about time
people like buying and selling real estate again. What do you think about looking at foreclosed homes? Would you advise against that
because you don't see a lot of those bigger issues? No, I'm all for foreclosed homes and
short sales. You can find good deals anywhere. Those are great, great opportunities. And it's
oftentimes not has nothing to do with the house. It's everything to do with the current owner,
borrower. And they just can't keep up with the payments. And so all the bank's looking to do then is just recoup their investment.
So you're going to buy it. You're basically just buying the note with no premium attached,
unless it's a really hot market. And then you go to those auctions and then you just
blow up through the roof. What's the piece of advice you would
give your former self for finances? Scared money don't make money tell me more meaning like it's nice to
have savings and to look at that bank account every day and to pull up mint and see you know
what you got going and it's fine but if it's not working for you then it's dead money and guess
what it's working for someone else Like if you have a hundred thousand
dollars in the bank, it's not sitting in some like vault waiting for you. I wasn't imagining it like
that. It's not like that, right? It's a number in the computer. It doesn't exist anywhere. You're
only FDIC insured up to a hundred grand. Okay. And that money that you've given in that's sitting
there is being used by someone else. The bank.
The bank has used it to lend out to somebody else buying their investment property.
So have your savings ready to go.
But if you're young, you're under 30, you're under 35, right?
You, scared money doesn't make money.
You want to invest.
You want to put your money to work.
You want to be smart.
Don't be stupid.
Don't be smart about your investments. And it's want to invest. You want to put your money to work. You want to be smart. Don't be stupid. You want to be smart about your investments. And it's OK to save. But you should invest back into yourself. Like that's in my position. That's what I should have done sooner than when I learned
it. But for today's tip, you can take straight to the bank. If you're thinking about an investment
property, make sure you're thinking about an investment property,
make sure you're looking at a neighborhood where there are concrete signs that the value and desirability of the area is going up.
In our interview, Ryan mentions how neighborhoods with new grocery stores
typically signal that property prices will increase in the near future.
Same goes with neighborhoods that have announced new schools or public transportation stops.
With investment
properties, just like stock investments, you want to make sure that there's growth so you get that
sweet ROI. Money Rehab is a production of iHeartRadio. I'm your host, Nicole Lappin. Our
producers are Morgan Lavoie and Mike Coscarelli. Executive producers are Nikki Etor and Will Pearson.
Our mascots are Penny and Mimsy.
Huge thanks to OG Money Rehab team Michelle Lanz for her development work,
Catherine Law for her production and writing magic,
and Brandon Dickert for his editing, engineering, and sound design.
And as always, thanks to you for finally investing in yourself so that you can
get it together and get it all.