A Passion for Property
October 1, 2007
By Mark Barna
Forget about business models, MBAs and going for the money rather than the passion. A high school dropout whose first job was at a McDonald’s, Stephen Siegel didn’t worry about any of those things. And today his company, the Seigel Group, is on track to generate $200 million in revenue this year.
Inc. magazine named the Siegel Group as one of the top 500 fastest growing companies. The six-year-old business generated $77 million in 2006 and has 200 employees on its payroll.
“First you have to have the passion,” Siegel said of his Studio City-based company, which buys, renovates and sells commercial real estate in four states, including California. “I never do it for the money. When you do it and do it right, the money will always come.”
Siegel, 36, has bought and sold since his teens. The Los Angeles native began his business career by combing the Recycler, a print listing of goods for sale, for deals, bought them, fixed them, then sold them for a profit. He started by selling cars, and remembers buying a 1984 Volkswagen for $4,000, adding accessories to give it a sporty look, then re-selling it six months later for $6,000.
He was hooked.
When he started buying and selling commercial property in 2001, the Siegel Group was born. The company’s portfolio includes apartment buildings, office complexes, hotels and a Valley auto body shop called McAllister’s Collision Centers.
Siegel recalls buying three years ago a 132-unit apartment in Las Vegas riddled with structural problems and brimming with drug users and prostitutes. But Siegel liked the location — right next door to the Las Vegas Convention Center. He cleaned things up and sold the property a year later to the convention center for a $4.2 million profit.
Besides California and Nevada, Siegel also owns property in Texas and Arizona. The company has offices in Studio City and Las Vegas.
In an interview at his Studio City office, Siegel was a bundle of energy and enthusiasm as he spoke of how he hires employees, sniffs out a deal, and of his sixth sense for buying commercial real estate.
How would you describe what the Siegel Group does?
We acquire struggling commercial real estate assets, which could be a shopping center, apartment building or a business. We acquire companies that are struggling or have bad management. We go in there and manage it or sell it off to another company for a profit.
How do you find these businesses?
We have people from all over the country bringing us deals. We have people who work for the company and shop around and look for stuff.
Why has the company grown so fast?
I think it’s my aggressive nature, my passion for doing business. I’m an overachiever kind of guy. People call me an entrepreneur. To me it’s something I’ve always done.
There must be more to your success.
Some might not call me conservative, but I think I’m super conservative. I am super aggressive but I make accurate moves and I’m on top on the moves I make. I’m super hands-on.
What do you look for when hiring people?
Smart, creative people with a good work ethic. And people who bring different things to the table. I also give them incentives. I tell them, If you’re the right person, you’ll never have to look for another job again; I give certain key employees pieces of deals that we do to make them feel they are part of the company. It’s like a super 401(k).
What is your strong point?
Taking something that needs help and fixing it. When it comes to managing it once it’s running, that’s when I get kind of bored. Then I’m on to the next thing. That’s when I have people in the company take over and run things.
What mistakes do struggling businesses typically make?
Poor management. Under capitalized. Not so hands on. A property with third-party management is not going to do as well as you would managing the property.
What are some keys to turning a business around?
Advertising and marketing. Being aggressive. Creating hype. Making people aware that you are there.
How do you choose what commercial properties to buy?
It’s that gut feeling, or I look at it and it’s new or it seems challenging to me. I don’t have a formula. There’s no business plan. There’s no, Let’s write it down. It’s trial by error. Whatever it takes to get it done, we’ll do.
SNAPSHOT – Stephen Siegel
Title: President and CEO of the Siegel Group Inc.
Education: High school drop out
Most Admired: Donald Trump
Career Turning Point: Sale of first real-estate property in 2001