Mastering Partnerships, Exits, and New Beginnings in Real Estate with Pete Neubig

In this episode of the DealQuest Podcast, you’ll listen to Pete Neubig, co-founder and CEO of VPM Solutions, a platform that connects the real estate industry with virtual team members globally. Pete, also the former co-founder of Empire Industries Realty and current host of NARPM Radio, shares his journey from aspiring entrepreneur to industry leader, discussing the pivotal moments, challenges, and lessons learned along the way.

Pete’s early experiences—from delivering newspapers as a kid to navigating the complexities of business partnerships—shaped his unique approach to efficiency and resilience. He talks about his first real estate investment, a 100-unit apartment purchase, and the financial and legal missteps that taught him the importance of due diligence and operational efficiency. Pete recounts his time at Empire Industries, the property management company he co-founded, and how he and his business partner's diverging visions led them to sell the company. Post-sale, Pete faced unexpected challenges in adapting to a new role within a larger firm, a period that ultimately inspired his current venture, VPM Solutions.


EMBRACE EFFICIENCY AND SOLVE PROBLEMS TO DRIVE SUCCESS

Pete Neubig has some great memories from his early job as a paperboy. He had to deliver newspapers every single morning before school, come rain or shine. That experience really opened his eyes to the importance of efficiency and finding easier ways to get things done. For instance, collecting payments from customers was a bit of a hassle without modern tech. So, he got creative! He encouraged people to pay him on time by having them leave envelopes on their doorsteps.

This knack for efficiency turned out to be one of Neubig’s biggest strengths as an entrepreneur. When you recognize and tackle inefficiencies, it can give your business a real boost. Whether you’re delivering papers or running a big company, having a mindset that prioritizes problem-solving and efficiency can set you apart from the rest.

CREATIVE FINANCING CAN OPEN DOORS

Neubig has an interesting story about his first real estate deal that really shows the power of creative financing. When he was 31, he bought a duplex in Houston, but here's the catch—he didn’t have much money to invest at the time. So, to make the deal work, he came up with a clever strategy: he inflated the price of the duplex to secure a bigger loan, which meant he didn’t have to put as much money down upfront. Now, this approach might raise some ethical eyebrows, but it really highlights an important point for aspiring entrepreneurs: thinking outside the box can help you tackle financial hurdles.

In the world of real estate, there are often unconventional ways to finance your ventures. If you're feeling short on funds but have the drive to invest, consider exploring creative options like seller financing or teaming up with a partner. Of course, it’s crucial to handle financing ethically, but knowing that different avenues are available can give you the confidence to chase opportunities that might seem out of reach.

UNDERSTAND YOUR INVESTMENTS THOROUGHLY

Pete Neubig stresses how crucial it is to really understand the legal side of any investment you’re considering. He shares a challenging experience he had with a 100-unit apartment complex, where things didn’t go as smoothly as he’d hoped, even though he was a passive investor.

Neubig had put his money into this deal using his self-directed IRA, which was already a bit risky due to the complexities involved. He brought in an attorney to look over the investment documents, but unfortunately, the attorney wasn’t as thorough as he should have been. When Neubig signed the agreement, he accidentally checked a box that made him personally liable for the loan. This meant he could be on the hook for any remaining debt, even if the property sold for more than what was owed—something that would catch most investors off guard.

When the property lost value and eventually sold, Neubig ended up facing a pretty big financial liability of about $30,000. He did win the court case in the end, but this experience really drove home the importance of carefully reviewing legal documents with a solid attorney.

THINK GLOBALLY TO ENHANCE YOUR WORKFORCE

Pete Neubig came up with a clever way to tackle workforce challenges in his property management business by looking beyond local hires. He found it tough to find affordable employees in the U.S. who were willing to fully commit to their roles. Many of them treated their jobs as just that—jobs—rather than careers, which led to a drop in performance.

To solve this problem, Pete started hiring virtual assistants from countries like Mexico, the Philippines, and Costa Rica. He focused on bringing in bilingual, college-educated professionals who were eager to work for fair wages, and this move turned his struggling business around. Not only did it improve how efficiently things ran, but it also cut down on employee turnover significantly.

By tapping into a global talent pool, entrepreneurs can find dedicated and skilled workers who might not be on their radar otherwise. Plus, Pete made it a point to invest in training and support for his virtual assistants, which made his team even stronger.

FOLLOW YOUR STRENGTHS AND ADAPT YOUR BUSINESS MODEL

Neubig and his partner, Steve, dove into real estate because they were excited about buying properties, snagging 31 single-family homes between 2005 and 2007. But before long, they found themselves overwhelmed by the day-to-day management of those properties.

They soon realized that managing them wasn’t really their forte, so they decided to switch gears. Instead of continuing to acquire more properties, they took their experience and launched a property management company called Empire Industries. What started as a way to manage their own investments blossomed into a thriving business focused entirely on third-party property management by 2012. At the end of the day, investing isn’t just about the numbers; it’s about making smart decisions and knowing where you excel.

ALIGN YOUR VISIONS IN BUSINESS PARTNERSHIPS

Early on, he and his partner had different goals: Pete wanted to efficiently manage 1,500 units in one market, while his partner aimed to expand to 20,000 homes nationwide. This divergence eventually led to a breakdown in their partnership. Pete realized that their visions no longer aligned, but he hesitated to voice his concerns, worried it might jeopardize their friendship and business relationship. In hindsight, he recognized this was a mistake.

By not addressing their differing goals sooner, he let the business drift in a direction that didn’t match his vision. This situation underscores the need for open communication and tackling conflicts before they grow. In any business partnership, it’s vital for everyone involved to be on the same page about their objectives and to confront disagreements directly to avoid long-term issues.


RECOGNIZE WHAT HAPPENS AFTER SELLING YOUR BUSINESS

After selling his company, Pete found himself in a tough spot. Sure, his bank account looked great, but he was unhappy in his new role and struggled with the transition. He went through a period of depression, wrestling with the loss of control over his company and feeling frustrated about how his former team and clients were treated by his new employer.

This experience really drives home the point for entrepreneurs: it’s not just about the financial gain from selling a business; you also need to think about the emotional and professional impacts. It’s crucial to have a plan for what comes next after the sale. You should consider how you want to spend your time and energy once you step away from your business. For Pete, it took him 18 months to find his next purpose, which ended up being starting a new venture called VPM.


Tune in to this episode of DealQuest to hear Pete Neubig’s insights on entrepreneurship, partnership dynamics, and post-sale transitions, and learn how he’s using his experiences to build a successful global platform.

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FOR MORE ON PETE NEUBIG:
VPM Solutions
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Corey Kupfer is an expert strategist, negotiator, and dealmaker. He has more than 35 years of professional deal-making and negotiating experience. Corey is a successful entrepreneur, attorney, consultant, author, and professional speaker. He is deeply passionate about deal-driven growth. He is also the creator and host of the DealQuest Podcast.

Get deal-ready with the DealQuest Podcast with Corey Kupfer, where like-minded entrepreneurs and business leaders converge, share insights and challenges, and success stories. Equip yourself with the tools, resources, and support necessary to navigate the complex yet rewarding world of dealmaking. Dive into the world of deal-driven growth today!