This past Wednesday, the now annual ReDeal real estate summit took place in the Venetian hall in New Jersey. The high-end conference was very well attended with over 1,000 people coming together for a day of networking and knowledge.
The ReDeal summit originally began four years ago with the Re-Boat conference, which took place on a boat. I had the privilege of hosting the only panel on that boat, whereas today ReDeal founders Joel Rosenberg and Chaim Lefkowitz have several panels throughout the day.
One of the highlights of the day was a candid conversation between industry giants Ralph Herzka of Meridian and David Lichtenstein of the Lightstone Group.
It was a candid and open conversation about David’s view on growing a business, acquiring real estate and how to balance a life of Torah and business.
Enjoy!
—Nesanel
Ralph Herzka: Welcome everyone, it’s nice to see so many familiar faces. After last year’s panel with Mr. Rubin Schron, many people came over to tell me how much they enjoyed it and that they were waiting for this year’s event.
I thank Shaya Zonnenshein for putting this together. I want to thank Chaim Lefkowitz and Joel Rosenberg of ReDeal. It’s a great group. We learn a lot from it, and we all know that for every response we see on the chat, there are three more off the chat. With ReDeal, you’ve accomplished more than a real estate conference; you’ve created a community, a sense of belonging.
I want to thank Shmuli Brudny for working so hard. He came up with a long list of potential interviewees, and when he suggested David Lichtenstein, I said, “He’s someone everyone will enjoy listening to.”
The objective today is not to impress everyone with how smart we are or how well we’ve done, baruch Hashem. It is, hopefully, to give over some lessons we’ve learned through our experiences and what the markets have done for us. I remember last year Rubin Schron told a story about buying two buildings and having the cash for a third, which he wasn’t going to offer to his partner. He asked Rav Moshe, I believe, and he was told that offering it to his partner was the right thing to do. Then someone in the audience approached me and said, “I’m faced with the same issue,” and we answered his question during our panel.
David and I went to yeshivah together and we’re still good friends. He still calls me Refoel and I call him Dovid, but we’re going to refer to each other today as David and Ralph. Dovid has a lot to be proud of. He’s had tremendous success and stayed Dovid, and I’d like to think that in certain ways I’ve stayed Refoel.
David is a legend in the business world. He has incredible business acumen, and like everyone else he’s gone through different cycles.
In addition to everything else David does, he has funded and runs many bikur cholim homes. I’ve called him myself on a Friday afternoon, two hours before Shabbos, saying I need to get someone in, and he personally handles it.
David, why don’t you share with us your early beginnings, how you got started, and give us a little bit of your history and life story?
David Lichtenstein: It’s an honor to be here. I learned in Stolin, Mir, Brisk and Lakewood.
One day, my wife and I sat down together, and she asked, “How are we going to pay the rent?”
We went to one gemach and then another. I asked my wife, “Maybe you want to apply for food stamps?” She said, “This is your idea, not mine.”
I went down to the food stamps office in Toms River and filled out an application, and I was waiting there in line with many different people, but it didn’t feel right. I looked outside, and it was a sunny day. I said, “I’m as sure as the sun is shining that I should not be here.”
I went home, and my wife asked me if I applied. I said, “No.” She said, “So what are we going to do?” I said, “I’m going to go to work.” I decided to start by buying houses.
I remember when I went to buy my first house, there was a lawyer in Lakewood, Marty Silverman. I didn’t know anything about closings or openings, so I was sitting there at the closing with Marty.
I once read in a book how one person gave someone money and the other guy ran away with the money and never signed over the house. I said, “Marty, do you think we should lock the door?” He says, “Why would we lock the door?” I said, “What happens if you give him the money and he runs out the door without signing the deed?” Marty looked at me like I was totally crazy. That was how much I knew.
But the truth is that not getting educated, not going to college, has some drawbacks but also some big benefits, such as that you don’t get stuck in the box of “this is the way things are done, this is the way we’re taught it’s done, this is how institutions do it.” We see this across the business world. Airbnb was started by two guys who had no hotel background.
I actually have an extensive hotel background. We are one of the larger hotel companies in the country. If those men had come to me and said, “What do you think about renting rooms in people’s houses?” I would have said, “Are you out of your minds? Do you know the liability? Do you know about insurance? What if somebody gets hurt? What about dirty linen?” I mean, it’s a terrible idea. But they had no hotel background, they had no idea that it was a terrible idea, and look how successful they were.
There’s a concept called “golden handcuffs.” Golden handcuffs could mean you went to college and got a really good job in an accounting firm or a law firm or a medical firm, and you were successful, but you’re a doctor for the rest of your life. I have nothing against doctors. We need doctors; klal Yisrael needs doctors. But it comes with a certain limitation, it comes with a label, and a label is kind of a curse.
One of the ways of saying “curse” in lashon kodesh is “kav,” as Bilam says, “Mah ekov lo kabo Keil—How can I curse if Hashem has not cursed?” The word kavo comes from the word for label, when Lavan tells Yaakov, “Nakvah secharcha alai v’eteinah—Tell me exactly what the price is and I’ll give it to you,” he was saying to write it out. Once that price is written down, it’s limited and isn’t going to grow. Once you’re labeled, you have a limit.
Not getting educated means you’re the one thinking out of the box, you’re the one who has no presuppositions, the rules don’t apply to you because you didn’t learn them, and you have the absolute ability to think fresh, to be original. Not getting educated, ironically, might be the biggest asset anyone could have leaving yeshivah. I could go on with this for hours.
Ralph Herzka: I know you can. If I remember correctly, that first house you bought, you actually came up with the down payment using credit cards.
David Lichtenstein: I’ll tell you what happened. I went to the bank. The banker’s name was Leo DeGioia. I said, “Leo, I found a house. I want to buy it.” He asked, “What’s your credit score?” I had no idea what a credit score was. I said, “Leo, between you and me, what’s a credit score?” He said, “Well, if you have credit cards and you pay them, you get a score. Do you have any credit cards?” Nobody in BMG or my chaburah had credit cards. I said, “No, I don’t have any credit cards.” He says, “So get your father to sign a card with you, and in a few months you’ll have good credit.” I said, “My father doesn’t have a credit card.” My father went to Beis Medrash Elyon and had no interest in money whatsoever.
Leo said, “Well, if your father can’t sign and you can’t sign, you don’t have credit, you can’t buy anything.” I went back home and locked myself in a room for about two days, then I went back to the bank and told Leo, “I have about $5,000 from my wedding”—we kept it in a drawer under some clothes—“can I open up a bank account? Can I get a passbook?”
I opened an account, and they gave me a passbook. A week later, I returned and said, “I have $5,000 in my account, can I get a loan secured by the passbook?” The guy tells me my passbook’s earning three percent, and the loan is going to cost me five percent—I’m going to lose two percent. I told him, “I’m not sure, but I think I know what I’m doing.”
He gave me the loan. I went to another bank, NatWest, and opened another account for $5,000. I came back a week later and took a loan on that. I did that in six or seven banks. I paid them all for two or three months, then I went back to the first bank and asked for a credit card. The guy checks his computer and says, “Apparently, you’re paying off your outstanding loans on time. What type of credit card would you want?” Klal Yisrael doesn’t think small, so I asked for a gold card. He couldn’t give me that, but he gave me a regular card. I got six cards from six banks. I took out the maximum cash on each one, and that was my down payment for my first building.
Ralph Herzka: Where was that building?
David Lichtenstein: It was on Ninth Street and Squankum Road in Lakewood, and it had a nice piece of land attached to it. I sold it years later for about seven or eight times the amount we paid. It was a good investment.
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