Deidre Woollard: Hello, Real estate investing Fools. Most of the interviews that I do are with people whose main job is real estate but I also like to talk to people for whom real estate is a side hustle because I think that's how most of us get started in real estate investing. Carolyn Aronson is the Founder and CEO of Bear 10 cosmetics and It's a 10 Haircare, which is one of the only female own professional haircare brands in the world. She started as a hairstylist and a salon owner. Her brand is now sold in thousands of professional independent salons and professional salons like Ulta and Regis. She also got a large family. She is a philanthropist, but real estate has been part of how she built wealth and that's why I wanted to talk to her today. Welcome.
Carolyn Aronson: Thank you for having me.
Deidre Woollard: You started in real estate pretty early on you bought your first condo, I believe in your early twenties?
Carolyn Aronson: I did. I was a starving hairdresser and my father said to me, "I will lend you some money, but you pay me back with 8 percent interest." He said, "You can use it to buy a little condo or something for yourself." Basically it was like converted apartments. That's what I did when I was 22 years old and that was my first little bit of investing in my first piece of real estate that I ever owned and really from that point on, I have just been flipping and flipping and flipping. I have so much to tell you. Obviously, I'm 54 years old now, it has allowed me so many things to be able to do financially, as well as turned into a massive conglomerate. I've also now gotten into commercial real estate, all different kinds of things. I will tell you more about it as we go along.
Deidre Woollard: I love that. Let's start with that because you said you flipped and flipped. A lot of people try a flip maybe two, they don't really like the experience. Why does it still appeal to you? How you've managed to stay consistent with flipping over decades?
Carolyn Aronson: You know what. It's funny, I was talking to our relative friend of mine today and I was telling her some of the pieces of properties that I was looking at and I'm still looking at. I was explaining to her, how I think it has good phones, I'm at the point where I would like to really invest in unique pieces of properties now. Really, I think what probably started it for me was very young, in my creative capacities not only obviously being within the hair world and the beauty world I also really had a passion for interior design. That's like my hobby. I have the ability to go into an environment and raise the bar, just like I do with haircare and the beauty industry. I raised the bar and I really find because I'm a self-made person, I find inexpensive ways to do it and I have an eye how to really make a place look amazing, but on a budget. That is how I started my first condo, I painted it really cute, I made it a really retro refi. I took a very plain cream-colored environment and just give it that little bit of twist. I changed the handles on the kitchen, cupboard slightly just little point. I think really made it very appealing for the next person to buy it. I made it young and fun. Obviously, that was your buyer of those type of units. I think that ability and I have a very conceptual mind where I can walk into a piece of real estate and really understand, if it has good bones, it's got good roads, it has potential. Having that ability and I looked itself, but it really gives you the freedom to be able to flip properties. It's fun for me. You have to have a natural knack and a natural passion for it because obviously, sometimes you open a wall and you find a true worms.
There's a lot that happens when you remodel. Over the years, I've just transition that went larger and larger. Eventually I ended up building a condo from scratch. When I did that, I went to the builders, I was the third being built and whole complex and these are more like townhouses, freestanding, tax garages. I went in on like, you know what? You really need to turn the trust this way. You'll get a much bigger bathroom. I want to huge jacuzzi tub. I love to say fast. I really challenged them to redesign parts of my condo and they did it for me and then from that point on, they built all the other condos like that. I sold that condo and made a lot of money. That's when I started flipping and making hundreds of thousands in my 30's. Then I moved to California and I doubled my money on a house there that is where I funded my first company. I started using real estate as a vehicle to fund my haircare brands and fund my ideas because obviously, it's not easy to start a company from scratch. It's just snowballed over the years as my husband said.
When my husband and I got married, we've been married almost seven years now. We each had about four pieces of real estate homes, just homes. He had 300, he was actually in more like commercial apartment buildings, but personal each head four different homes and I would sell my homes and I was always made on. I just know how to buy right because he would sit out as homes and he was like, I have the ones luck. Kevin and I for knowing how to buy right. It spend a fun journey and now I really expanded into a lot of different areas and I'm building a brand new home down in Miami. That's probably going to be one of the largest real estate challenges I've ever had but it's also going to be one of the most unique homes in all of Miami due to the type of property its on and the fact that now I have commissioned some of the most amazing architects in the world out of South Africa. They design in 80 countries, I have a Japanese gardener, does the entire landscaping. It's really going to be probably, I can't even describe it because it's going to be so unique.
Deidre Woollard: Is that going to be a personal residence or is that something you're doing as a spec home?
Carolyn Aronson: It is. I hope always moves like every two to four years because I can just make a spoke and a flip. This is the only one that we could stay in forever and I've already been offered more than double for the lot, just a lot because I tore down my house. I know obviously could be an immense investment if we choose to. What does that saying make me move? That's like the golden saying, makes me move. Even in the house I'm in right now in Fort Lauderdale, I can probably double my money and I bought it less than two years ago. I mean, we know the roller coaster ride is up right now. We also have to know how to buy right when the roller coaster has dipped. That's a big part of it too. Timing is everything, it's like the stock market, you know?
Deidre Woollard: Yeah. Very true. Let's talk about that because you bought a luxury forrclosure in Fort Lauderdale, right?
Carolyn Aronson: I did.When it dipped.
Deidre Woollard: Okay. Smart.
Carolyn Aronson: In 2009, when everything had crashed and there were a ton of foreclosures and people losing their homes, a lot of short sales and things like that, that's when I went shopping. I happen to like to shop on my own too, I don't use realtors a lot. I love investigating it on myself. I knew the area that I wanted to be in and I knew it was a hot spot, which is the intercoastal area of Fort Lauderdale, which is really yacht world of the most popular concentrated yachts in the world. There's these finger canals where everyone has these boats behind their homes, and I thought, I really can't afford this area but now it's time for me to go in there and try to snatch something up and I actually bought something that was in foreclosure. I bought it. I pulled it out of foreclosure and bought it through a short sale by going directly to the owner. It was a horrible house, as soon as I saw it I got so excited because you couldn't even see the house from the street, it was so engulfed in trees, it had sat for over two years empty, and literally it was like you could be two feet from it and you could barely see it because the trees had engulfed it. Then there was a homeless man living in it. It was about a 7,000 square foot home. I thought, oh gosh, this is the one for me. I went in there, and it was the ugliest thing I'd ever seen, but it had good bones.
It was a 1980-something home, it had black, and white, and teal, very '80s, I so needed to redo it. I started on my quest first to obtain it, which wasn't easy, and then went I actually close got it, I started working with a builder to remodel it. The remodel took me almost two years. We literally removed a barrier wall, we did all new plumbing, all new electrical. We took it all down to the cinder block and rebuild the entire house, and I tripled my money four years later when I sold it. I actually started the initial trend, back then a lot of the styles around here were very Mediterranean, I was one of the first houses to go this ultramodern. I almost did like a Feng Shui modern vibe, and I actually did it LEED certified. That was really my way of inspiring people. As you're buying these homes, be green conscious. You have the ability as you're remodeling, snatching up these short sales or foreclosures, you have the ability to really change how we consume at that point. I actually received an award from Broward County as being the only LEED certified remodeling all of Broward County. I don't even know if anyone's even done that sense. I'm pretty proud of that project, and it's still there, and the woman who owns it now writes to me and says, it's the most beautiful house I have ever lived in to this day, so is fun project for me.
Deidre Woollard: I love that. For getting LEED certified, did that add to the cost of the renovation and did you have to bring in a consultant in order to do that?
Carolyn Aronson: Yes, you do. You have stringent guidelines you actually have to follow. There are some things that obviously are going to be a little bit more expensive. The thing is that you have to realize that you actually can earn it back over time. Obviously having more expensive windows that have e coatings on them rather than just plain glass. I mean, there's things that actually are going to help your electrical bills be lower, more efficient AC units, even some of the materials you choose within your home that are not necessarily naturally made but are more man-made today. It is becoming easier to be LEED, and they look just as beautiful sometimes as real marble, if it's porcelain rather than using actual natural stones that come from the Earth. You get points for all of these and that's how you're certified, and they come and inspect and you tell them as you're going along. But really in the end it can really help save you money by getting some solar panels, things that actually can contribute to your pocket in the end. Not only are you doing a good thing, obviously for our environment, but in the long run you can really save money, and it's becoming more and more required actually. When you build in Miami now, they are requiring for you to be LEED certified. Of course, I'm going way off the charts with my Miami home because I have the room, it's 1.8 acres. I'm putting a cistern in. I have plenty of room for solar panel and things like that, but I'm going for the highest certification, and that in itself is pretty amazing and not always easy to do. I'm actually looking into a water turbine system to generate water as well. I'm really challenging the people that I'm working with to really raise the bar and be creative with their LEED techniques.
Deidre Woollard: What does the water turbine system do?
Carolyn Aronson: Actually it would be a pitch and it actually has a round circular system, a turbine type of where the water will flow through and that actually generates energy. Listen, Florida, we're in downpouring. We have some of the best storms [laughs] where you suddenly have three or four inches dumped on you, and we're used to that. We really obviously being in this tropical environment, we have these really great times of the year where every afternoon at about 3 o'clock, we just have a massive downpour, and I thought why not use that to our advantage and actually use that to generate energy as well as to continue to fill the cistern. We obviously have to water our grass all the time, that gets very expensive, so just really recycling water and using it in a better way than always consuming it.
Deidre Woollard: Interesting, I wanted to ask you, because you have a large family, you've got kids. What are you teaching your children about real estate and financial literacy? Obviously, they're seeing you be an entrepreneur and as well as a real estate mogul.
Carolyn Aronson: Wow. Well, one thing I've taught them is get ready to move. [laughs] Because they literally are like, "I think in the last five years we've been in four houses", and I'm like, "Yeah probably." [laughs] Yeah, I never get too attached? What do I teach them? I think that I'm living by the example that, real estate can really be a tool to raise your lifestyle. Because if you continue to buy and flip and buy and flip so many people, I think get almost afraid. They're afraid to take that risk and move on a little bit. Sometimes those risks are just like they bring you to such a jumping leap further in your real estate portfolio. That really, to me, real estate should be used as a stepping stone. If you ever drove down a street and thought, "Oh my God, I wish I could afford a house like that someday." Well you can, because if you know how to buy right, and then selling flip it's an amazing tool to obviously bring you to a better home each time because hey I made 100,000 on that, I made 300,000 on that one. Just keep using the sales to really, "Next time I go to buy a house, I could put $500,000 rather than barely scraping together for five percent. I also really think it's important to make sure that you fully understand mortgages, fully understand how to get the best rates. I refuse to pay points. I was always just nitty-gritty with it from day 1. Whenever I got a mortgage or loan, I really made sure that I got the best rates out there. Especially during those times where the arms remember those arms, I literally [OVERLAPPING] lived in a mansion for like $1,500 house a month at one point, [LAUGHTER] and I flipped that house, that house I bought for I think 650. I sold for 1.1 million and I paid $1,500 a month to live in it for two years. Soon as my arm was coming to fruition, I'd put them in the market and sold it. It's like a game and you have to learn how to play it and educate yourself. When you actually learn, it's exciting, it's sterling. I now learned how to bargain hunt and how to remodel, that's really important too. It's all interesting to me.
Deidre Woollard: You started as a hairstylist, do you think the hairstylists should own their own salons or get invested in commercial real estate? I know a lot of hairstylists are afraid of commercial because it seemed a little harder to understand the residential sometimes.
Carolyn Aronson: My condo that I built, that I described, I actually went to the bank. I put that on the line to buy my first business. I was just renting the space. It was an existing salon that I went and purchased, and I went to the bank and they made me put up my home, as equity and collateral for my business. That's another thing that real estate is great in. It's actually giving you the ability to take other loans out, maybe it's a business loan to help you build your business. I do believe that people should buy businesses, as far as actually owning a building, in the beginning with a salon, I would say no. Salons can be very transit, and my industry, obviously has roller coaster, as we saw with COVID. We saw a lot of people having to foreclose on their properties or even sometimes their leases. It can be a little bit risky. Obviously, I'm a firm believer in laying it on the line and risking, and that's the only way I've been able to grow and build what I have today. I have time and time even to this day, every day. I put my neck on the line under the chopping block and I just do it and I have more zeroes after it. That's the only difference, whether I was at one point gambling with maybe a $100,000, I hate to use word gambling. But it is, it's a form of risk anytime you're investing. Now it's millions instead. But it's all grown, I'm now 54 years old. As my life has grown and everything has compounded, my risks are bigger. But if you don't start by risking, you never get anywhere. I absolutely do believe that entrepreneurs, whatever business you are in, should take the risk.
Deidre Woollard: Interesting. You just do flips, have you ever done buy-and-hold? Are you holding onto properties or you're just strictly flipping them?
Carolyn Aronson: Yes, that's what I'm actually doing in the business and the commercial side. What I have done is I finally actually bought a office building down in Miami. In the area that it is in, I saw a lot of vision, it is definitely not the best area in the world. But I know it's not too far from Wynnewood and it's close to 95. I saw what happened in Wynnewood. I do believe that the area we're in will regentrify. What I did is I bought this building. It is a gorgeous building in a not-so-great area. What I did is I brought up seven parcels around my building and I'm starting to regentrify them myself. These particular seven pieces of property that are on a main street right by the expressway. One of them is even a laundromat than I'm rebuilding. I don't want to be in the laundromat business [laughs]. But can I tell you? I'm making it so cute, I'm inspiring the area, the only reason I'm keeping it is because I know how vital it is to the people that live there. I'm raising the barrow within the laundromat and I'm going to make it a destination for them. Rather than just a boring place to stay if we have some neat thing to do and I've cleaned it all up. It's my way of not only giving back, but it's my way of showing the area and all of Miami that this area can be re-gentrified. I think people of wealth have a responsibility to do things like that when they have the means, I think you have to be the catalyst to inspire people. That's really what I'm doing and the area is already starting to change. I've owned it two years now. All of [inaudible 00:22:10] area, I mean, an onto and not only because I'd probably have to because to me, it hasn't reached its full potential yet. But also, I want to create, I bought a triple lot across the street. I hope to build a high-riser someday. I'm really going to go big into commercial and our whole another level.
Deidre Woollard: Interesting, so for the office, are you keeping it as an office building, or are you converting it into something else?
Carolyn Aronson: No. It's A 10 headquarters runs out of it. It's a 16,000 square foot building that is just really safe and the way we have at all, we have a private parking lot, everything to it. Yeah, it's definitely our headquarters. [laughs]
Deidre Woollard: I love that. I want to ask you too about your beauty care business. How are you thinking about industrial real estate and the supply chain and things like that? Is that something that you think about as well?
Carolyn Aronson: Of course. But I'll tell you, as far as industrial real estate, I'm not quite there yet. It is a massive undertaking. I'm not saying I would never do it. I've already started investigating it. But it is a huge undertaking and sometimes you have to be careful what you asked for, especially in today's world, like you mentioned, supply-chain issues are major. Just because you're producing it does not necessarily mean you won't have equally as many headaches. Still, you have to get ingredients, you have to get the raws. There are major raw issues right now. Just owning the machinery to make the bottles, or just owning the machinery to actually fill the bottle. It doesn't necessarily matter because if you can't get the raw materials, because the whole world is out of them, then that is what it is. [laughs] Then you have a whole building sitting there that can even have the machines not working, or even people maybe, to run them. We're having a problem with finding people to work in these factories and things. A lot of them are becoming automated and that's a huge expense too. You have to be careful what you wish for in that department. I've done my research, but never say never [laughs].
Deidre Woollard: Right, exactly. Last question for you. You've invested in Florida, you've invested in California. Where are you putting your investment dollars now? It sounds like you're all-in on Florida, is that right?
Carolyn Aronson: Florida and Costa Rica actually, I'm starting to go a little bit worldwide.
Deidre Woollard: What are you building in Costa Rica?
Carolyn Aronson: Well, we actually have a home there that we're remodeling. That's our first thing that we're raising the bar with what we own there already. I'm not really sure exactly how I'm going to expand there, but I do believe I'll end up expanding some business there as well. I don't know. It's our place to go to, to relax. While I'm there, I might open something up [laughs].
Deidre Woollard: I love that, I get the feeling that you'll never stop.
Carolyn Aronson: No, it's so much fun. It's really interesting when you start exploring other countries too. It is interesting. Yeah. Who knows? I don't know, but right now, yeah it's mainly in Florida, it's where I spend most of my time.
Deidre Woollard: Excellent. Well, thank you so much for your time today.
Carolyn Aronson: Thank you for having me.
Deidre Woollard: I really appreciate it for listeners you can check out Carolyn's beauty empire at bea10.com and itsa10haircare.com