Chad Kaltenbach is the founder and CEO of Kaltenbach Real Estate. This is a real estate company based in Columbus Ohio. Through this company, Chad has built a real estate portfolio that is worth over $100 million. In its 25-years of existence, the company has also sold tens of millions of dollars’ worth of property. Chad’s journey to success in real estate is anchored on skills and a deep-rooted passion for entrepreneurship. His father was an entrepreneur and by the time Chad was 15, he was quite conversant with most of the principles of running a business. However, his ambitions were a little bigger than running the small family business with his father. Upon completing his high school studies, he decided to pursue a degree in business management and graduated with high honors. He went further to study for an MBA and deepened his understanding of strategic management in business. Chad then worked in several financial institutions before finally jumping into entrepreneurship. Chad is also a philanthropist and regularly gives to charities that help children from disadvantaged backgrounds. His goal is to give them the leverage to grow into successful people like himself. When not working, Chad loves spending time with his family, and regularly takes them for holidays to exotic destinations.
How did you get started in this business?
I started my business after a five-year stint in the finance world. I already had my mindset on real estate all through though, so when I felt like I had enough capital and the research was right, I dived in. I had already laid a firm ground before venturing in though. With an academic background in business management, and an experience helping my father run his businesses, I was more than set to start my own. I had also prior to starting been studying a lot about real estate. Being an industry with numerous avenues, I had to establish the angle with which I was to venture into the industry. With that knowledge, business skills and capital, I then started of small and grew slowly over time. Now I have a portfolio worth millions, and it’s still growing.
How do you make money?
My company makes money by selling and also by renting property. It is a pretty straightforward business model, but it has worked for us for over two decades. I began by acquiring, renovating and selling low cost property to grow my capital base. Please note I said acquiring. That is different from buying. Acquiring in this case means approaching individual owners who need to sell off their property for whatever reason, and then getting into a deal with them whereby I spend my money to renovate their properties, and then sell the same at higher price than their quote, and still get a commission from the sale. This way, you do not have to have the money to buy the entire property, but you still make a handsome profit from the same. After growing my capital base, it reached a point where now I could buy entire properties, and develop others, then sell at a profit. This method has slowly grown into a point whereby I am now able to keep some property and get rental income from the properties. So, I earn from both buying and selling property, as well as from collecting rent.
How long did it take for you to become profitable?
It took about a year and a half to turn profitable. Real estate is capital intensive and can take quite a while to break even, but we pulled it off in a reasonable time. I have to say we had a lucky break to become profitable in just a year and a half. It is possible to break-even even in six months, depending on what you are investing in. As I mentioned earlier, mine was to acquire, renovate and sell properties. It takes less time to do that than it would to develop properties from scratch. I also sold a few properties as a middle man, where I would identify developed properties, then just look for clients and earn commissions from the same. So, it all depends on the angle with which you approach this business. If you are to develop rental properties, it might take you close to ten years to realize any profits, since you will first have to get the initial capital back. However, when you finally break even, rental income is one of the best ways of earning a passive income. You can always venture into other businesses as you get rent from your properties.
When you were starting out, was there ever a time you doubted it would work? If so, how did you handle that?
The idea of questioning the viability of my business has never crossed my mind. I just love what I do and failure was never an option. I was very confident of the business going well considering the foundation I had set in place. Even though there have been some hiccups here and there as is common with all business ventures, I have never had doubts that the business would be a success. It is this positive outlook that has been my driving force even when faced with challenges. I would encourage those venturing into this business to have the same outlook since it is not a get rich quick scheme. You’ve got to have confidence in your abilities, and then make the best use of those abilities to succeed not only in real estate, but also in other businesses as well.
How did you get your first customer?
I got my first client through my ex-colleagues at work. I remember that phone call to date. It gave me the motivation to keep going. While still employed, I was already advertising properties at work. I had very helpful and supportive colleagues that urged me to give it a shot. When I first opened my office after resigning, I never expected that it would be these same colleagues that would send me my first client.
What is one marketing strategy (other than referrals) that you’re using that works really well to generate new business?
We use social media a lot. It is one of the most powerful advertisement tools in the 21st century. I like the fact that we can use it for highly targeted marketing. Platforms such as Instagram and Twitter have been beneficial in our advertising strategy. We also have a dedicated Facebook page and a website. Many people now are on these social media platforms as a means of communication and as a source of entertainment. It makes sense, therefore, to put our business out there for this massive audience. To top it all up, social media advertising is a lot cheaper than conventional media advertising.
What is the toughest decision you’ve had to make in the last few months?
We are laying off some staff due to the pandemic. It felt bad breaking the news to them, but we had to do it. I intend to bring them back once things stabilize.Covid-19 has had a lot of businesses facing financial difficulties, but we are recovering slowly. Letting go off of these hard-working individuals was not my intention at all. We have been supporting them to keep them afloat, and I intend to have them all back once we stabilize the business.
What do you think it is that makes you successful?
That would be my investment in customer service. We have lots of long term customers due to our good services. We know that one customer treated well could mean three or more other customers as a referral. So, I have always encouraged my staff to serve clients in the best way possible. Another trick to a successful business is taking care of your staff. A motivated team is a prerequisite to good customer service. Individuals in my company are treated with fairness and respect irrespective of their position. We consider each other family, and that is why we help each other to grow.
What has been your most satisfying moment in business?
Twenty-five years ago, I received a call from my first ever client. That call gave me the strength to keep going and get where I am today. I have never forgotten how one single moment can change your course of life entirely. For this reason, I also try my best to help those I can either get the home of their dreams or venture into this business.
What does the future hold for your business? What are you most excited about?
The future looks promising. Interest rates are quite low and are likely to remain so for some time. This spells good times ahead for the real estate industry.
What business books have inspired you?
I am most inspired by the book, Creativity Inc: Overcoming the unseen forces that stand in the way of true inspiration by Amy Wallace and Edwin Catmull. It is a book that has helped me make more innovative decisions over the years.
What advice would you give to your younger self?
I would advise my younger self to be focused on one goal at a time. That is the trick to excellence.
Are you willing to be a mentor? If so, how should someone contact you?
Yes, I am willing to mentor young people looking to get into real estate. So far, I have mentored more than 20 and they are doing well.