Steve Jordan
Steve Jordan, founder of The Art of Creating Wealth workshop, has been in the “rebuilding, remodeling, and recycling” business almost his entire life. His father was a remodeling contractor in Colorado, and from a very young age he helped his dad with remodeling projects — from hauling trash to cleaning up after the jobs were complete.
His father also owned an appliance store long before the days of Home Depot and Lowe’s. Steve delivered appliances and cleaned up the “trade-ins,” learning the business from the bottom up.
Steve knew the value of a dollar at a very young age. He started working full time after school at the age of 11. He was married at 17 and is still married to the same wonderful woman today. By the time he was 21, they had designed and built their first house together.
Like most people, Steve’s had a number of different careers. At the young age of 27, he started a new career in the scrap metal business. This business became a public company and he traveled all over the world for almost 20 years buying gold and silver in all forms of scrap.
An Economic Downturn
In 1983, Steve left the scrap business and started a company buying and selling distressed houses in Orange County, CA. Business was good and at one point he had over 35 employees. He was making a lot of money, but he was working over 70 to 80 hours a week, and always worried about making payroll.
Because he thought he could do anything, Steve decided to purchase an old hotel and converted the hotel rooms into luxury condos.
Unfortunately, he didn’t see the Savings and Loan meltdown coming. In 1990, California witnessed a housing market collapse, and Steve couldn’t sell his condo inventory amounting to over $7,000,000. The bank came in, took his property, and he lost everything.
Steve had to declare bankruptcy.
After "having it all”, he lost everything. Steve and his wife were forced to move in with his daughter and son-in-law. He had to give up his Mercedes, a million dollar home, and all of his other luxury items. At the age of 50, he bought a used Volkswagen bug and started over.
Prior to his bankruptcy, Steve had earned a nice annual income, but like the majority of Americans, he had not saved much money. After losing everything, he knew he needed to change his orientation immediately or he would never be able to retire…much less retire rich. This period was one of the most difficult periods of Steve’s life. But as the old adage goes, “when one door closes, another one opens."
A New Idea is Born
In 1991, he started a specialized remodeling company (Dirty Work Construction Company), and started remodeling and re-building foreclosed houses owned by banks. He worked directly for large banks (Fannie Mae and Freddie Mac, among others) and over a 10 year period renovated over 5,000 homes in San Diego County.
In 1995, Steve and several other investors started buying distressed single family houses, and by 1996 had purchased 10 rental houses. In 1997 they purchased 15 more and in 1998 they bought a small office building, a commercial building with a bar and 15 more rental houses. Steve learned a lot about purchasing, financing and the re-building of rental properties, along with property management.
He continued working for banks, remodeling foreclosed properties until 1999. He then decided to concentrate all of the company’s efforts in rebuilding their own properties and formed a new company called Rebuilding America, Inc™.
By the end of 2004, Rebuilding America, Inc. had purchased and sold 45 million dollars-worth of property in San Diego County for their own account. More importantly, after suffering through personal bankruptcy at age 50, he had reached a point where he was now financially independent. Steve had a net worth of over 5 million dollars, and the passive cash flow from the real estate investments was more than enough to support himself and his family.
By 2004, the real estate market in Southern California had become very expensive, to say the least. Houses purchased in 1995 for $75,000 were now selling for over $450,000. Their equities were huge but Steve and his partners found it impossible to buy additional properties for their portfolio at prices that made any sense. They sold most of the properties in California, and through the “1031 Tax Deferred Exchanges” tax law provisions began purchasing single family houses and historic office buildings in Pensacola, Florida.
Steve and his LLC partners now own over $26 million in real estate in Pensacola and continue to buy more properties. Steve has created nine LLC partnerships and four corporations. In his LLC partnerships, their equity position has grown over 30 percent over the past two years, and they are now managing over 150 rental units. Their return on investment (ROI) is over 20 percent annually. Their overall cash flow from rents is positive, as they never borrow more than 50 percent, loan to value, on any property.
Steve is now 67 years old and is excited and challenged by the recent sub-prime and national mortgage lending crisis. At this point in time, the U.S. government has taken control of several large brokerage houses in New York, several large banks, and the two largest mortgage lending institutions in the world, Fannie Mae and Freddy Mac.
Fannie and Freddy have mortgages on fully half of all of the residential mortgages in America, amounting to 5.3 TRILLION dollars. It is estimated that over 100 additional regional and local banks will go broke due to the failure of mortgage lending during the next 12 months.
Over TWO MILLION residential houses are now in foreclosure throughout the United States of America. Somewhere between $500 BILLION and 1 TRILLION dollars in real estate equities will be wiped out during the next 12 months to three years. Values for residential real estate have plummeted. In some cases by 25 to 50 percent or more.
The rental market for houses has also dropped due to the over supply of housing that have not sold on the open market, and are now being rented. All costs, including property taxes, property insurance, utilities and gasoline have gone up, further hampering profitability of the real estate market. New home builders, realtors, brokers, and sub-contractors are going broke by the tens-of-thousands.
The overall real estate and financial markets have never experienced such a crisis, even during the Great Depression of 1929.
Where does this leave Steve Jordan, Rebuilding America and his LLC investor partners?
During the last 12 months, Rebuilding America has cut its overhead by 60 percent. The 20 MILLION DOLLAR plus real estate portfolio has been refinanced through our local bank, much of it at 5.75 percent interest, saving over $300,000 annually in mortgage payments. Cost saving strategies such as reduction of property taxes and property insurance have been installed and completed. Energy efficient, cost saving devices of all kinds have been developed, and are now in use. Rebuilding costs have been reduced by 15 to 25 percent, in every area from roofing to blinds for windows.
Our property management team works seven days a week, 12 hours a day, answering phone calls personally, viewing and showing our properties seven days a week. Every penny is counted, every day of vacancy is recorded. Our month end financial reports for all LLCs and Corporations are delivered no later than the five days after the last day of the previous month. We deal in real time. Our relationship with our bank is solid. We pay all mortgages on time. Our sub-contractors are loyal to us because we respect them, and keep them busy during tough times. We pay them, every week, as promised.
Rebuilding America, Inc.™ consists of top notch professional associates. We will continue to purchase, finance, rebuild, and manage additional properties every year in Pensacola, Florida.
Rebuilding America, its employees and its LLC partners will not only SURVIVE this housing Depression, we will THRIVE because of it. What we have learned from this experience can not be purchased at any price. We will share our experience, strength and hope with all who are included in our process of daily living and business enterprise.