California SB9 Explained: How to Split Lots and Build More Homes | Dave Rossi

Dave Rossi (00:00)
And this person really went after me because they felt really insulted that I didn’t want want their work. Now, someone who’s buying $45 million houses has a lot of resources. And so I had to pivot quickly and I basically walked away from maybe six hundred thousand dollars in fee just to keep them happy and move around. And I’d rather spend that money than get sued or ruin my reputation.

I gave them whatever they wanted for me just to get away. So one, I shouldn’t have taken the job. And two, I shouldn’t have left the way that I did. And I pivots I pivoted so fast and so hard.

Freddie Steen (02:01)
Hey everyone, welcome to the Investor Fuel podcast brought to you by Real Estate Pros. I’m your host, Freddie, and today I’m so excited for you all to get a chance to spend a wrinkle in time with none other than a real estate pro from CIQU Construction to self-help books, their own Dave Rossi. I think our listeners are really going to get a lot from how you’re approaching construction.

At a very large scale. To our real estate pro audience, just a quick tip. He’s in Silicon Valley. So, Dave, I’m glad to have you here. Let’s dive in. So, first off, for people who may not be familiar with your world, give us the short version. What’s your main focus these days? And what markets are you operating in?

Dave Rossi (02:44)
Freddie, thank you so much for having me. I hope I can deliver a lot of information and value to your to your listeners. I’m a high-end luxury performance home builder and remodeling company. I also changed my life about eight years ago and really want to help others, you know, look at themselves. And I think business and and personal lives go hand in hand. So I think they they work together.

We build for multi-billion dollar network clients. We build for smaller people as well. We build for people that want to build great things and like and appreciate transparency and service and honesty. We’re trying to take on the building industry in a whole new light, applying a lot of morality, principles, and values to our business. And that’s a little rare these days. We walk away from more jobs than we take. And we don’t walk away because we don’t like them. We walk away because it’s not the right project for us to be on.

Silicon Valley is pretty much San Francisco, north of San Francisco, to like the South Bay, San Jose, Saratoga, Los Gatos kind of area. It’s it’s growing as a word. It started, you know, maybe thirty or forty years ago, Silicon Valley. But you know, we’re talking about a high net worth area that’s really insulated from a lot of the economic issues the country or the state has. It’s very small and a very networked and very clicky community, so to speak.

Freddie Steen (03:52)
Dave, when you say clicky, I immediately have

Dave Rossi (03:55)
Yeah.

Freddie Steen (03:56)
to share with our audience about a problem that you’ve solved, which is rampant in multiple industries through your writing and through the ink that’s in your pen that never runs dry. You say alphas die early. Can you explain?

Dave Rossi (04:09)
Well, you know, the alpha mentality is is built around bravado and performance. It’s built around presentation. It’s built about, you know, the Darwinian belief that the eight hundred pound gorilla is the one that perpetuates our species. But that is changing. If the alpha model worked, then there wouldn’t be so many young men and men struggling to figure out what that means or what that looks like. Is it someone who’s fit? Is it someone with money?

Is it someone with promise? Is it someone that’s happy? Is it someone that’s emotionally stable? It’s it’s really confusing. And so, know, from a business perspective and investment perspective, nobody invol invokes and models the omega mindset that I talk about than Warren Buffett. He he he’s happy before he’s successful. He looks at data from an objective standpoint, not from a performative or bravado standpoint. He’s not doing things to look rich or look important or look like.

He’s doing it for currency. And so the model of doing things from a more intrinsic perspective than a veneer perspective or a bravado perspective, is a much more sustainable and winning combination. And I I speak from experience. A lot of choices I made were to be a real man, to be happy, to look big, to look like I was important, to have others look at me. Bigger house, bigger car. You know, those don’t do anything.

Now, if you’re in a business where image is important, that’s okay, but don’t let your image become identity. Don’t let the identity or the image prevent you from looking at things objectively. Know that they’re buying you for your car and not for you. You know, like in in nature, it’s the peacock. It’s their bright feathers that people buy from, but they’re not buying the bird. So in business, if you want to sell feathers and sell a veneer and sell a performance, it’s kind of a risky scenario because people are buying that.

Not the bird. And the second you can’t perform the veneer is the second you got a problem, both personally from a business relationship or a romantic relationship or an investment relationship. And I love Warren Buffett and the way he speaks and the he he exemplifies this so well. Someone to definitely to look after on that.

Freddie Steen (06:55)
Dave, thank you so much for your transparency from Peacocks to our real estate pros who are listening. Two things I know about you that are also peas. One is that you know how to pivot, and the other thing is you’re teaching us how to properly posture. So let’s begin. How did you bridge the gap from being such a great writer and writing while you’re still building a construction business? What nuggets from your literary career translated for our real estate pros that are listening now?

Dave Rossi (07:24)
That’s a tough question. You know, loss, failure, fear, collapse. I lost everything when I left my marriage and left that business and I had to pivot hard. Either I either I pivoted or I kept sinking. when you fall off the horse, you can walk with the horse for a while, but if you don’t get back on it again, you’re not you’re not gonna get back on it. It just is it just is what it is. The so the sooner you get back on, the sooner you can start riding. And I think you know, the thing about failure is

That we we take the fear and the pain of failure and we we layer it over many different aspects of our lives. And we really need to turn that mindset into failure is learning. And so instead of blaming a bad deal on the other person was a jerk or whatever, when you learn something from it, like I should I saw the science I should have done.

Or it really wasn’t the right person to get into business with, or they showed signs of not being trustworthy or early. I should have listened. You know, we can be bitter and blame, but you’re not going to learn anything about yourself and how you misunderstood data to pivot if you don’t get honest with yourself and and realize that the failure, there’s lots of things to learn from. And it might sound cliche, but I’m telling you, that was probably the biggest thing that pulled myself off off of the bankruptcy floor, although I didn’t follow bankruptcy and the bank took my house.

to secure the debt for the the loan of the business, not me personally. So I know what that feels like. I know what failure feels like. I’ve been there. And I know what success feels like. And so, you know, it’s a tough transition. It takes a lot of grit. It takes a lot of courage, courage to be honest with yourself and to and to realize, hey, I need to accept what I suck at. And I need to realize it is going to be hard to get back on that horse and don’t like throw away every stove because I bring my hand on one stove.

c compartmentalize it, learn what what what the metrics were that I missed that that was a hot stove and don’t throw all the stoves out because you burned your hand on one. That answers your question. That was a pretty tough question you asked there.

Freddie Steen (09:16)
Well well, Dave, I I understand who’s in the room and I know that you can knock it out the park as you did. Great answer. So here at Real Estate Pros Investor Fuel podcast, we agree with you. Dave, we don’t lose, we learn. And I think our listeners are really going to take something away from how you’re approaching with CIQU Construction, multi-million dollar developments that are in the public’s eye because you have a pretty high clientele. Can I give this quick nugget, Real Estate Pro audience?

Our crackpot research team tells us that Dave has worked with some of the top ten billionaires in the world. Is that true?

Dave Rossi (10:32)
It is true. Yeah. We’ve worked with some some top ten Forbes clients and some top fifty clients. We’ve worked with you know, we we take all kinds of clients. We like we like people, personalities, honesty, trustworthiness, morals more than than money and projects. we’re looking for projects that’ll go well, but we’ve we’ve amassed some really high end clients and not because they spend more, but because they spend less, because they they

They scrutinize and we’ve passed those tests. And we pass them because we want to deliver on honest product and we want to live it on and live it and breathe it and throw it out there and being completely open and honest with everything we do. We choose for morals, not money. And and if we have to walk away, we’ll walk away. When it’s right, it’s right. To walk in or to walk out, and that’s an important thing to do.

Freddie Steen (11:16)
Dave, for CIQU Construction, for your literary career, the books that you have coming, and those that are already out. I just love the way that you prioritize this spiritual piece, this righteous piece before you prioritize tokens and coins. What caught my attention about you was the way that you’ve been able to do this in multiple markets while also managing multiple facets of who Dave Rossi is. That’s not easy.

I mean, especially in this climate. What’s been the key keeping that machine running smoothly?

Dave Rossi (11:47)
Well, I think, you know, faith, objective faith plays a role. I don’t mean faith in a spiritual way or a or a religious way, but you know, to quickly see what spirituality is, if I’m running or lifting weights, my body might say you’re tired, you should stop. And something beyond my body says, No, no, no, no, no, no, keep going. That’s a spiritual act. That’s what I call spiritual. So if I’m afraid or I’m nervous or I’m anxious, and my body’s giving me feedback.

Something bigger than that feedback needs to step in and observe that and say, wait a minute, wait a Should you be afraid? Should you have anxiety? And and to slow down and grab that moment of reflection and to not lie to myself and rationalize my next step as being good or bad, but say, let’s focus on the data. And and to have faith that the system of self-reflection and slowing down,

is intrinsically valuable for my decision making for my business is how I how I stay above water and how I keep it going. I don’t worry about next deal. I don’t worry about all my financial goals because those goals can be ripped apart from me in one war or one massive tariff, you know, or one whatever. Those aren’t up to me. What is up to me is how I pivot and how I read the data and what I do with the data. And if I react to fear, and this is a great Warren Buffett quote, you know

When the market is greedy, be afraid. And when the market’s afraid, be greedy. And that’s all about self-sovereignty and self-mastery of your fear and your greed. And if you can manage your fear and your greed, you’re you’re gonna win in the long run. This is a marathon, not a sprint. Not to say you can’t pick up some money in the sprint, and that’s cool, do it. But as long as it doesn’t employ fear and greed or emotions that that misrepresent facts, misrepresent data, don’t use them.

But you can make quick buck. I’ve I’ve done insurance claims and made some quick money that didn’t involve fear of greed. And so we can do that. But keep in mind this is a marathon. We want sustainability. We want we want businesses and investments built on strong foundations. And that’s kind of kind of what I do.

Freddie Steen (13:40)
Now Dave, every operator I know has a moment where things got real. Maybe a deal that went sideways or time they had to pivot fast.

Dave Rossi (13:50)
well, I had a, you know, after I kind of reassessed my mindset for business, I had a client. It’s a $45 million house, and we did a three million dollar remodel in three months. Imagine spending a million dollars a month on a house, right? Fast. And I did not like this client. All the signs were there. I missed them. And so now they asked me to do more work, do an ADU and build a pool. And I said, you know, I don’t I don’t want to work for you.

No, I shouldn’t have said that. I should have said I’m too busy or something, but I was I you know, I didn’t master my emotions, I didn’t master what I said.

And this person really went after me because they felt really insulted that I didn’t want want their work. Now, someone who’s buying $45 million houses has a lot of resources. And so I had to pivot quickly and I basically walked away from maybe six hundred thousand dollars in fee just to keep them happy and move around. And I’d rather spend that money than get sued or ruin my reputation.

I gave them whatever they wanted for me just to get away. So one, I shouldn’t have taken the job. And two, I shouldn’t have left the way that I did. And I pivots I pivoted so fast and so hard.

Whatever you want, I made a mistake. You you think I made this mistake? Great. How much should it cost? Great. Here, take that much away. What else happened? I did this? Okay, great. I’m not saying I did, but I I agree that you did. Here what else do you need? I did that? Okay. I don’t I don’t with you, but sure. Whatever you want. And I, you know, four hundred to six hundred thousand dollars later.

Yeah. I walked away and and I didn’t have people going through my traffic trash and investigators digging me up and a lawsuit. You know, it was a very fast pivot and a very hard lesson that told me do not miss the signs of clients that you know can turn out badly.

Freddie Steen (15:30)
Dave, that’s the kind of stuff people don’t talk about enough. The pivot. And honestly, it’s what separates the folks who just dabble to the ones who stay in the game long term, like you have over the last three decades. Let me ask you this, Dave. What are you most focused on solving or scaling next? I mean, what’s the next real goal for Dave Rossi?

Dave Rossi (15:49)
Well, for me personally, that’s a lot of things, you know. I I family’s important. I think balance is important. When I started my company, I said I want to do this to have balance. My first companies, my first series of companies, I overworked. I I heard the f my phone ringing in my head when I took a shower. I was stressed, I was on high blood pressure medication, I was fifty pounds heavier.

And then when I lost everything and I started over again, I said, look, if I’m gonna rebuild a company, I’m gonna do it different. I’m gonna do it better. I’m gonna do it with all of my values and morals in place and every aspect. And part of that is balance. I want to work out and I want to see my family. And that’s not going to be compromised. So I need to set up a system that manages those things. And it it’s hard. I sacrifice monetary gain for that. So what’s next for me is maintaining that. And

not giving that up as I’m amass more success, not to let that success steer me away from the things that are still important to me. And I think that’s a great problem to have. I think I’m so grateful to even have that discussion. you know, one of the biggest cre creations of failure, the biggest causes of failure is success. We become successful and then we begin to read our own press and we begin to think that the things that got us here aren’t worth looking at anymore. So I’m constantly reminded of humility and gratitude.

and effort and always want to maintain the the the origins of my company and the origins of what made it successful is honesty, transparency, trust, values, morals, principles, gratitude and humility and and keep those things as very, very upfront, upfront aspects.

Freddie Steen (17:17)
Dave, let me ask you this as we hasten to the end. Are there any things you’re looking for heading into twenty twenty seven, twenty twenty-eight in the construction business? any market shifts, trends you’re looking at that you could kind of tip off to our real estate pros?

Dave Rossi (17:34)
Well, I know in California the S B nine thing I’m I’m looking at more and more. I think it’s very competitive and I’m working on some ideas of of a more comprehensive concierge kind of products related to submitting and converting SB nine to available land and then buying the land that I created and then selling a house that I build. So I’m trying to get more involved in in multiple transactions where

Like if a broker, you know, has one half of the deal, it’s kind of easy to broker the other half versus a broker that’s trying to broker two different sides that he has no control over. So I’m trying to get more involved in things at an earlier level. I’m noticing that designers are getting more into construction. They’re doing paint and Venetia plaster. I’m like, they don’t have a license, but they’re still doing it. And that’s okay, let them. So I’m noticing some some changes in the construction industry where contractors are doing are subcontracting too much.

and that designers and architects are beginning to catch on. So getting involved in the construction industry at an earlier stage is what I’m more interested in, maybe in a design from an architectural or a design perspective, and be looked at as a design build contractor, maybe a little bit more. I think those trends are shifting. I think the traditional contractor model is changing. I think we’re focused on building partnerships, not building vendors, and so.

That is an area that we see sets us apart is we want to be partners, not vendors. Being a vendor creates finger pointing and more litigation or more friction resistance. We want smooth, we want cohesive, we want coherent, high agency kinds of collaborative scenarios. So we’re trying to build that and stay. It’s of like I tell my clients, look, you wouldn’t tell a surgeon how to cut you and take out your appendix. Don’t tell us how to do construction.

It’s your house and you get the design, in terms of how it works, if I know it’s a system that inherently will not work, I won’t engage in it. And so I think the new a model for business is sticking to your model without, you know, rubbing down what makes it great for just to get a deal or to get a project.

Too much compromise on that.

Freddie Steen (19:33)
I love it, Dave. Can you go back, Dave, and just for some of our pros that may be on the East Coast and the South or even international, can you just please give us a 30,000 foot view on SB9, exactly what that is in California? Very important.

Dave Rossi (19:47)
Great question. So SB nine, so California is getting killed in its housing crisis. It’s kind of killing the state. Housing is massively expensive. in Atherton, where we do a lot of work, it’s fifteen million dollars to buy a teardown. A two-acre lot teardown is fifteen million dollars. So real estate has gone completely crazy in California. so SB nine, the state said if you have a lot that’s one acre and you’re allowed to build an eight thousand square foot house.

We’ll let you subdivide that and build two 4,000 square foot houses and let them subdivide and have different assessor parcel numbers. So you can sell one and live in one. Although the one acre can’t have more than 8,000 square feet, each half can’t have more than 4,000 square feet. And so if you have an existing house where you’re on an acre and you can do 8,000 square foot available and you have a 4,000, you can just cut cut your lot and build a house and sell it. And that’s really valuable here in California. And that process takes some time and

You know, we want to help with that process and then own that land and then use it to develop and sell. So we want to be involved from beginning to end.

Freddie Steen (20:46)
Dave, that’s big. I mean, especially when you’ve already got such a toe hole in this high end luxury construction, but can also do construction that the common person would understand and need. Plus what you have on the kind of coaching and self help in place. The next move can either compound things or create chaos depending on how you play it. I I know a lot of people listening, Dave.

are either earlier in their journey or looking to level up like you. I think they benefit from hearing this. When it comes to building relationships and growing your network, what’s made the biggest difference for you?

Dave Rossi (21:28)
There’s a difference between people that I I think there’s a difference in understanding. Some people are true champions and cheerleaders that I want as friends. And that’s and that’s a two-way streak. There’s some people that are worth networking. And I always tell my my people, every interaction we have, we want it to be positive. Not that it can be, but we try to make it positive from the labor to accounting to management, every single person.

We want everyone we run into to have a positive experience. The painter and his staff who want him to have a positive experience. The owner, a billionaire, want them to have a positive experience. The accountant for the billionaire, we want them to have a positive experience. Now it’s not up to us whether they do or they don’t, because they have their own things going on, but at least we try. And so some relationships are two way streets and their friends. Some relationships are business relationships that deserve the highest level of respect because we’re we’re in their lives and they’re in our lives. And I think the third is networking.

and and the fourth is everybody else. if nobody’s if someone’s not worth being a friend a very deep level, understand that. Then they’re then then they’re either someone you work with or they’re networking. But don’t misunderstand who these roles are. There’s a lot of people I network with, but I don’t want to do jobs for them. They may have others that they know that introduce me to them. And that is I’m being honest about that. And I think the most important thing is the honesty.

of how you treat these people is really, really important. First of all, everyone is res you between everyone with respect. Everyone with love and compassion. That doesn’t mean you do the job if you don’t think there’s someone that you would that fits your profile. There are people that I like. There are people that are actually friends. I still don’t want to be involved with them on a contract. And I think those those are really important things to understand.

Freddie Steen (23:03)
Yeah, you you can’t fake that. Dave relationships are everything in this space. Yeah. All right, before we wrap, before we wrap, if someone wanted to reach out, connect with you, maybe collaborate or learn more about what you’re doing, what’s the best way for them to reach you?

Dave Rossi (23:20)
Well, I’m really available. ciquconstruction.com is my website. It has more contact information. My personal website, daverossiglobal.com. You know, if someone wants to work with me, I really encourage them to maybe read some of my articles in CEO World magazine. I think I’ve done four or five now in leadership that really talks about my business model. CEO World likes that. Also, Young Upstarts has a couple of articles and maybe a few others. that’s a good way to know.

what I what I am and who I am and what I deal with. And I think any relationship and any deal is is a win win or no deal. And and I think both parties have to be mutually rewarded for that relationship. So understand who I am and and that someone wants to work with me and knows me is really helpful. And my books says all about who I am. It’s very personal, it’s very authentic, it’s very raw, it’s very vulnerable. There’s a lot in there. If somebody wants to work with me or collaborate or have ideas, send me an email.

I’m happy to happy to respond.

Freddie Steen (24:13)
Perfect. Well listen, I appreciate your time, your story, and your perspective. We need more people in this space who are doing it the right way. Thanks again for being here, Dave.

Dave Rossi (24:23)
Alright, he’s so happy to be here and I hope your listeners got every bit out of this as well.

Freddie Steen (24:26)
Absolutely. And on that note, for those of you tuning in, if you got value from this, make sure you’re subscribed. We got more conversations coming with operators just like Dave Rossi, who are out there building real businesses. We’ll see you on the next episode. Thank you, Dave.

Dave Rossi (24:43)
Thanks so much.