How One Rental Business Became Five Vertically Integrated Real Estate Companies

Oscar Setiawan (00:00)
our clients will also get financial clarity much, much better than what the tools that used to be. Because now we can simply talk right to the AI agent.

or the the t the tools that we provide our clients to be able to simply say, How much did I make on my last flip? As easy as that, right? Versus relying on a bookkeeper, versus relying on a tool to go to different settings and create this P&L, which a lot of people they don’t know how to do.

Issa Hanna (02:05)
Welcome back to the Real Estate Pros Show. I’m your host, Issa Hanna, and today I have Oscar Setiawan with me, a single family investor here to share his knowledge with us. Oscar, welcome to the show.

Oscar Setiawan (02:15)
Thank you, thank you. I appreciate you, Issa.

Issa Hanna (02:18)
I appreciate having you. I appreciate you coming on the show, sharing your knowledge with our viewers. we talked a little bit before. You have a wealth of knowledge. So with that, can you kind of run down your day-to-day operations for us?

Oscar Setiawan (02:31)
Yeah, basically I run a few different businesses in real estate. so you know, if we’re talking about a day to day, I usually have a quick dashboard view of like a founder’s dashboard views of all my businesses to see, you know, what is the red flag that I need to resolve. and then afterwards I go on to see my meetings, you know, the you know, I I live in the sales and marketing department of our company.

you know, as the as the founders, right? So I always, you know, meet with people to see what they needs, to meet with new clients and obviously market our our companies, right, to to get that the growth, right? So a lot of my I would say calendar would be busy with you know I would say discovery calls, client meetings, while you know we have a a great team members that you know greatly execute on the fulfillment departments.

Issa Hanna (03:28)
Definitely. And one thing you told me is you’re good at at delegating and you’re good at team building. Can you share with us how how you became so good at that?

Oscar Setiawan (03:37)
Yeah, I think it’s it’s because of us just being a visionary and us being putting multiple hats. it’s it’s really a lesson in entrepreneurship that at the end of the day, you know, you want as you grow, you have to rely on other people. and you have to, you know, if you wanna eventually grow and work on the business, you have to rely on the right people in the right seat. And we because of that I learned a lot of times in the hard way.

That you know, you need to hire right, you need to create system and processes, you need to create SOPs before you start delegating. but you know, after many, many years of different businesses, especially in real estate, I believe right now, you know, every time I start a new business, which we call like vertical integration in terms of real estate businesses, we always start with you know, system and process, which whichever that we need to do first and

who that we need to hire first to be able to take on the role as what we call an integrator in the in in the business before, you know, before I get involved even in in the business.

Issa Hanna (05:36)
Definitely. So you have a process in place and like you said, you own multiple different businesses and they’re vertically integrated. So they all center around one thing and you were able to branch out like a tree almost. can you tell people a little bit more about the different businesses and what the root business actually is?

Oscar Setiawan (05:54)
Hundred percent. So I started investing in real estate about twenty fifteen. at that point I was actually I own a small family restaurant. And so while operating the restaurant, I also accumulate rental properties. Right. I wasn’t really active in real estate, I was just being a landlord’s, right? like most people. but then COVID happens, twenty twenty, COVID happens, I had to shut down my restaurant, so I literally lost

twenty five K a month active income to zero, literally overnight. Right. So I had to pivot. I doubled down on on real estate, whatever rentals I still have. even with that, people were not paying and and all of those issues that we have. So I had to s I have to pivot in terms of my construction and everything. But those are blessing in disguise, right? We you know, when when one door closes, the other door opens, right? So that’s kinda like the start of me building businesses in in real estate. I started

as we all know, as landlord, but if you’re a landlord, I always say if you’re a landlord with multiple properties, at that point I have 25 plus doors, you’re actually property management. Right? So I start building the property management correctly. And at that point, you know, a lot of the people from out of town, they felt the COVID pain too. They asked me to also help them manage the properties. So that’s how I grow quote unquote my first real estate business as a property manager to manage my own properties and also other people’s properties.

But then from there, we also know that all of these needs construction. Right? So instead of keep hiring handyman and subcontractors, I start naturally building a handyman business. Right. And when I say handyman business, it would be like people who would actually do turnover, people who would actually do, you know, basic landlording stuff, right? Changing your toilets,

painting, repairing, you know, all of this, you know, just really handyman stuff. But from there, because now I need my active income, I quote unquote accidentally grow into a flipping business where now I I have my crew to start doing my own construction instead of hiring from outside. Right. So really overnight in like thirty days, right, I became

A general contraction, right? A general contractor, because now I can handle my own flips, I can get licenses and all of the stuff with different villages so I can start my active income again in twenty twenty. Right? And from there I I understand that people need leads. Right. And we all need leads if we wanna do, you know, we wanna flip properties because we can’t just go all fight on the MLS, on the on market properties, right? So that’s when I go into wholesaling, you know, like most people do.

So now I heard I I started learning how to market. I start learning how to obtain properties off market. And you know, now I also have an engine, right, to create to create a lead management and lead generation and lead conversion company. Right. So those are mostly for me because now I need houses to flip for to replace my active income. All right. So those those are the things that what to what we call a vertical integration, right? It grows from one another, from

The problems that you need to solve for your own businesses. All right. But the most interesting part is like I accidentally created a bookkeeping and accounting firm because I’m not an accountant, right? I’m not at all. Like I’m I’m actually I I to be honest, I’m I’m bad at numbers. Right? I know how to underwrite, you know, but those are it, right? I hate P&L, I hate balance sheet. But what happened was after we take all the massive actions.

My books and financial was a mess. Right. And I tried to find someone who’s really good at bookkeeping for real estate especially, and I couldn’t find one, right? Not not something that I can I can really rely on. So again, to solve my own problems, I know I’m good at real estate and underwriting and and breaking down deals and everything like this. So I just hired a a really good bookkeeper and I I trained him in all things real estate. And before you know it, you know, we solve our own problems.

We have good financials now. I know my profit and I know how to grow companies because I I have financial clarity. And now all my colleagues start asking the same thing. Right? All of a sudden I have like one, two, three people who say like, ask her, who’s your bookkeeper? Like, my book’s as a mess. So, like, well, I can kind of help you. Right? So, from there, we grow from one, two, three, four, and now we have a serving about forty plus people. And now as we grow that part of business.

We became fractional CFO, we become outsourced financial department because that’s what I do too in my business. Right. So now we have offshore and onshore team members that helps me run all of these businesses and all of these companies that I created. Some and most of them are to be honest, accidentals, so that I can now, you know, serve myself as grow as companies and also serve people.

Issa Hanna (11:35)
Wow, wow. And what a business mind you have. You know, a lot of people they get overwhelmed. And I say real estate investors, we’re experts at putting out fires and even putting out fires before they start. You’ve even managed to to literally plan for all these problems and and every problem you had, you solved it with going into business for yourself and paying yourself. I mean

Truly remarkable, Oscar. I mean, one of a kind investor, never getting overwhelmed. Now you wear so many hats, you’ve got all these streams of income coming in. And and and it all started in 2015 and then, you know, 2020, COVID happened. You know, you thought one of the worst things that could possibly happen, your restaurant closing, no income, you turned it into a a you know, a f a huge business booming. So wow, I definitely want to commend you on that.

truly, truly remarkable. with that, do you have and I know you kinda told us the COVID nightmare, do you have a real estate nightmare, a landlord nightmare, maybe one of your tenants or some you know, condition your property was left in, that you want to share with our viewers?

Oscar Setiawan (12:49)
Yeah, yeah. I think I think what what people say is that you’re you’re not a true landlord if you never experience an eviction, you never experienced tenant destroying your property, you never you know, if if you never experience that, you’re not a true landlord or you’re not a true real estate investors. Right? So so I experienced all that. I think one of the worst one would be, you know

Again, during COVID, a lot of things happened during COVID, right? And and we understand people lost their business, people lost their job, everything changed and with with families, everything also changed. People move around and things like that, but some people couldn’t move. So one of the one of the things that the challenge was to stabilize the rental properties back in twenty twenty, right? How do you work with your current tenant so you are a responsible landlord, but at the same time, you’re not bleeding and you’re not going bankrupt, right? So

The the challenges was, you know, for people that need to move on, how do we do that with dignity? Right? And some people, you know, unfortunately we have to evict. And, you know, with with that they would also leave the house in shambles and sometimes they even just leave overnight and without any notice, without anything like that, the day before the sheriff comes. and, you know, we found out because, you know, the next door neighbor kind of like, Hey, you know, guess what? Your your front door’s open.

Right? And you find out it’s like, okay, well now I would rush in and found out that you know all of these all the doors are open, you know, and and and everything was left and and nothing was was you know was was clean, right? So you you you get those. Right? another part is you know when when you try to flip properties, which I I start doing a lot in 2020, you have to work with contractors, and contractors as we know.

Have their own sets of problems, right? Quote unquote problems, right? Because you you may hire a bad contractors, you may hire, you know, contractors that’s not responsible, who’s overwork and things like that, right? It’s part of the business. But that’s where I learn how to deal with people, how to deal with contractors, how to deal with scope of work and how to do pro system and process and SOP you know. You know, I’ve had contractors that didn’t pay subcontractors. And what happened was those subcontractors would come in.

Even though we pay the G C we the support they didn’t get paid and they would come in and they would ruin the whole kitchen. And that happened to me. Right? And that’s the worst part because you would come to the general contractor and be like, Hey, I paid you. And and guess what? The general contractor, yeah, I’m sorry. I I you know, I had to use your money for for a different project, so I didn’t pay them and they just you know, one of had one too many beers, came in to get their their tools and decided to play around with a hammer. Right? Things happen.

Issa Hanna (15:29)
Mm-hmm. Right? Definitely.

Oscar Setiawan (16:12)
You know, and so, that’s those are part of business to me. Right? That’s why you have insurance, that’s why that’s why you have system and process, you put in alarm, you you know who comes in and out, and and all of those stuff. Those are all I think business lessons that we learn and I learned specially, so that now I have a a a better way to handle people with the team members, everything that’s that’s more responsible, better contractors, better ref you know, better team members too.

Issa Hanna (16:39)
Definitely. And to to newer landlords or people just thinking about getting into it and and the property game, I ask this question on every show. give me your real estate nightmare because we all have real estate nightmares. you know, what Oscar just mentioned, definitely a nightmare. and when it first happens, you’re gonna freak out. but you learn to roll with the punches. and and from this contractor busting up the kitchen or whatever.

Oscar grew a G C company out of it. So something might be bad, but you know you can turn it into a good if you think about it. And then now you know the exit process, or if you ever encounter that problem again again, you know exactly what to do. So lessons learned, definitely, man. You’re you’re giving us great knowledge today. and with that, in our conversation earlier, we talked about how you have an AI opportunity that you’re building.

But also how AI could be a threat if we don’t embrace it right away in our industry. So could you elaborate on on what we talked about earlier?

Oscar Setiawan (17:49)
Yeah, yeah. So as we as we all know, right, AI is coming, AI is here, right? Everyone’s, you know, everyone’s their media, social media post is like AI that AI this, right? So and I think those create a lot of confusion and a lot of fear also, right? So what what happens in my business is obviously I’m always looking for opportunity to mo be more efficient, to save costs, to do automation and things like that, right? So what this is where

know, we put on our you know our hat as an operator, right? To see like what can we do with the technology that we’ve given, right? So in the past two years, I would say, we’ve been trying to see where we can start getting more efficient, right? And that starts with you know one issue at a time. Right. So, like for example, in the property management, in you know, we would choose now

A property management tool or PMS, right? Property management software that would have an AI component, for example. And what does that mean? That AI component would be able to, let’s say, talk to the tenant, for example, that’s asking simple questions, right? It’s like, hey, can I do this? And you know, with the basic set of instructions, they were able to be able to respond at any time of the day, right? Imagine not being able and not needing, right, to answer, hey,

My water heater doesn’t work. Right. And there would be an automated response and there would be simple conversation to say, don’t worry. we’ll get someone first thing in the morning, 8 a.m. and then the AI agent would then call our handyman, right? Or our property manager, and everything the ticket would be open all of a sudden, right? I think the most disruptive, I would say, and in the real estate industry now is

Tools that we’re using to project manage, right? To property manage. and especially in my bookkeeping and fractional CFO, the ability to do the bookkeeping, right? This is what we are, I think, experiencing the most disruption. Because with AI, they’re good at numbers, right? They’re good at one plus one equals two, right? So that you know, with with bookkeeping is basically, you know, you have your debit and you have your credit, right? You have bank statements, you have, you know, you can see what comes in and what comes out.

Right. So AI is really good at that. Right. So that’s what we’ve been trying to implement. We’ve been trying to now move into a what we call an AI self driving bookkeeping tool that we are able to migrate and give to our clients. And what does that do? That means that

our clients will also get financial clarity much, much better than what the tools that used to be. Because now we can simply talk right to the AI agent.

or the the t the tools that we provide our clients to be able to simply say, How much did I make on my last flip? As easy as that, right? Versus relying on a bookkeeper, versus relying on a tool to go to different settings and create this P&L, which a lot of people they don’t know how to do.

Right. So there’s a lot of these that’s going on and you know, I I would say to the accountant out there, to the bookkeeper out there that served real estate industry or even any anything at all, you gotta you gotta you gotta pay attention. Right? To the project manager that’s been doing things without an a tool, right? That’s been writing everything’s on a paper, right? Without a tool to get a better scope of work. Right? This is your time to catch up and to really

Get more efficient. All right. Because that’s also freedom for your time if you’re able to leverage the tools and the AI and the technology that we’ve been given. Right. And that’s what we’ve been doing. You know, we’ve been doing just providing these solutions to our clienteles, right? And that would be the f the integration that we we start doing based on what our clients need. All right. So we provide them clarity in terms of that, instead of confusion, like what tools should I use first? Well, what is it in the in your business that we need to solve first?

And that’s what we provide them.

Issa Hanna (22:06)
Oscar, you’re a true master of vertical integration to the point where you’re vertically a integrating AI into all your businesses. Yeah. Yeah, that’s that’s amazing. And Oscar is right, you guys, to the property managers, to the professionals that are not using AI, you need to embrace it because excuse me, you need to embrace it because in i you know, in a few years, all your competitors are gonna use it and they’re gonna have an edge on you. So

Oscar Setiawan (22:13)
We try.

Issa Hanna (22:34)
Wow, like I said, we’re rolling on the advice today. We’re getting so much knowledge from you. Oscar, what does the future hold? Where am I going to see you in five years?

Oscar Setiawan (22:44)
Ooh, five years. I would say in five years, hopefully we can meet somewhere in Bali. We can meet somewhere, you know, where it’s tropical and we’re sipping margaritas, whatever you drink of choice, and we can talk, you know, how to create better businesses and how to help people more and more and more efficient. Right. So but that’s what that’s what I’m trying to do, right? I’m trying to create for myself, right? It’s not about also.

generating revenue, but it’s also freeing up my time. Right. And freeing up my time doesn’t mean like I’ll be just you know sleeping all the time and not doing anything. But it it gives me opportunity to help more people and tailor more solutions to help the industry grow better. Right? Because we we need this time we as as visionaries, we as entrepreneurs, we need this time to not always putting out fires in the companies.

But to think about new solutions, about new business opportunities, right? What about hiring better people to do the job that we can’t do efficiently. There’s a lot of people that can do a lot of our jobs that we do better. Right? We just we just sometimes as entrepreneurs we don’t realize that. We think that we can do everything. Right? And this is where some people get stuck.

Right. And I think one of the things that is is humbling for me is to be able to rely on my team members so that I can I’m free to do what I love to do. Right. but that’s a struggle for a lot of people, and that’s what we’re trying to build. Right. We’re trying to create either I help a lot of people hire their first team members, right? I I help a lot of people create their first

core processes to become S SOP that can now they can teach someone in their company to be able to do so if you use up their time. Right? But at the end of the day, we all wanna go and meet and become true owners of companies. Right. To be able to talk about how to grow our business, to how to help more people, versus being on a call and trying to, you know, like we said, put up put out put out fires in our company every single day.

Issa Hanna (25:02)
Exactly. you want to free up your time? Time is the one thing you can’t buy with all the money in the world. Hundred percent. And and I I definitely will will be at that party over there in Bali sipping Mai Tais on the beach. So exactly I’m I’m all for that, Oscar, a hundred percent. and I and I do not doubt that in five years you’re gonna be right there, brother, with the with your knowledge and and truly remarkable person, very smart, smart man.

and with that, you’ve been able to build, you’re a great team builder. You built all these businesses, you met all these people. for people just getting started, maybe struggling to establish business relationships, what advice would you have for them on how to connect?

Oscar Setiawan (25:48)
Yeah. Now most people will just say network, right? But what is network at this point? You know, and a lot of people just equate that to like going to your local meetups or REIA meeting and things like that and just shake hands with people. So I would say, understand your skills and your behavior. And when I say that is understand what is your zone of genius, right? especially when you just started.

Because that everyone has a skill that they can implement in real estate. Everyone does have that. You just have to figure it out. And using that one skill, now you have opportunity to give values for people, to people, right? So I would say, after you understand that and what values you can give, start advertising it all over. Right? Anytime you go to a meetup, anytime you meet with people.

Just start advertising yourself as someone who can give that one value. Right? Because when you start giving to people, that’s when you start the true networking. Right? You give first, or you give like this set of skill that you can offer people. So people remember you by your behavior and by your skill. Right? You you don’t want people to remember you as an investor.

A typical investor, because there’s so many people out there as a typical investor. But people want to know you if you are able to solve their problems. Right? I remember Oscar, he can find me properties. I remember Oscar because he can his team can help me with my books. I remember Oscar if he can help me underwrite this deal. Right? Or something, right? Whatever is your skill that you have obtained in your career, even though you just started in real estate.

Right? You’re good with numbers. Okay, well that means you probably need to learn how to do underwriting better than people, better better than others. Right? you’re good at talking with people. so maybe you can be a bird dog, or you can start you know talking to off-market opportunities and you can become a wholesaler and that that provides properties for investors like us. Right? So there’s all of these that

opportunity that people don’t realize. And I, you know, this is why I love the position I’m in right now because I get to break this down to the community that I have to, right? The surrounding people that come to me and be like, I need help. Right. I’m I’m still a hustler, but I know that real estate is, you know, is a great industry to be in. Right? Where do I start? And and before I

Before I give the typical, you gotta network, you gotta go do wholesaling, you gotta like, you know, all the typical advice that a lot of people out there is giving. I start with what do you enjoy doing? What what is it, the skill that you have? What is this what is your behavior? Are you more extrovert or are you an introvert? What is the skill, your genius that you can offer people? And you know, and and and and you’ll be successful in whatever that you’re doing in real estate if you start from

Issa Hanna (28:53)
Definitely.

One hundred percent. such great advice. So in other words, y’all, add value to people, find a skill that you’re good at, find something you’re good at, cultivate it, put it out there for people. don’t come to expecting something at first. You know, nobody’s just gonna throw a dog a bone, right? You gotta put it out there and you gotta bring value to somebody’s business and life. so man, Oscar, great advice, great advice. Now

If people are getting excited about what they’re hearing, your property management, such great expertise and knowledge in the real estate field, and they want to get a hold of you, how could they get a hold of you?

Oscar Setiawan (29:41)
I I’m very active in Facebook, so you can look me up. on Facebook I go by @profitwithoscar. so that you know you can find me. ’cause no one can spell my last name. Right? I would be the guy with this hat right here, you can see it. You know, that’s kinda like my brand. I serve a lot of faith driven investors or people too, so they they get to know me. but then just just as a handle I go with @profitwithoscar.

Issa Hanna (30:07)
Make sure you guys check out Profit With Oscar and you can profit with Oscar. And I love your brand. and you definitely strike me as a guy with the utmost integrity and who wants to help everybody, anybody. So you’re definitely the right type of guy to be in the position you’re in. And I am a hundred percent sure I will see you in Bali in five years. and with that, Oscar, it was a

Such a pleasure talking to you on the show today. like I said, you’re a true visionary and you just brought a wealth of knowledge to us that I’m forever, forever thankful for. So thank you so much.

Oscar Setiawan (30:45)
No, thank you. I appreciate the opportunity, Issa

Issa Hanna (30:48)
Thank you. And to our viewers, if you guys enjoyed my conversation with Oscar and want to see more just like it, make sure to hit like and subscribe. I talk to people every day that can bring us different knowledge on every aspect of the real estate industry. Until the next time, the Real Estate Pros are out.