“The most important thing in the world is timing. I’d have to say that most of the wealth in real estate I have accumulated is because of good timing, and I would have to give credit for that wealth to the fact that I know when to get into a market and when to get out of one.”
Bold words from Bruce Norris, president of California’s The Norris Group (TNG) and a nearly 40-year industry veteran. Norris is neither shy with his skills nor selfish. TNG has been accurately forecasting the housing markets in California and elsewhere since 1997, when Norris released his “California Comeback” report and, when the controversial information proved accurate, first put his name on the board as a powerful seer in real estate.
“Dad doesn’t keep secrets very well, and he doesn’t want to,” observed his son, Aaron Norris, who works closely with Bruce at TNG and is responsible for the compelling presentation that propelled Bruce’s equally controversial report, “California Crash,” to the forefront of industry headlines at a time (2005) when few believed that the housing industry was so close to collapse. Few except for the Norrises, anyway, and those who listened to them.
Today, more investors are listening than ever, and the family is building a powerful legacy of real estate strategy, analysis, and education. TNG’s reach has expanded far beyond periodic market forecasts. Thanks to the combined forces of father and son (and an army of investors, private lenders, and educators working with them), the Norris Group now offers a vast array of educational materials providing direction on interpreting market data and then applying it in real-life scenarios to existing real estate deals. Between them, father and son also host podcasts, radio shows, seminars, workshops, and a number of charitable projects and legacy-building strategy sessions tailored to the needs of the entrepreneurial, independent real estate investor.
A Legacy Rooted in Family & Industry Strengths
Bruce credits his son with a great deal of this exponential growth. “He’s always been a team-builder. It’s just who he is. When Aaron was 10 years old, he was involved in acting and he always got leading roles. One day I heard him methodically calling his friends after landing one of these roles, and I thought I’d hear him start telling them that he had gotten the lead. Instead, he was asking what role they had gotten and then building it up, making sure they felt they were an important piece of the show even if they were just a tree.”
Far more recently, Aaron’s teambuilding resulted in TNG receiving “Small Business of the Year” recognition from the Greater Riverside Chambers of Commerce and Inland Empire Volunteer of the Year from The Community foundation thanks to similar behavior. “He helped put together about 150 nonprofits that normally do not work together,” explained Bruce. “Normally, they think of each other as competitors for the same funds. Aaron worked with a team and was able to get them to think of themselves as team members, and they went on to raise about almost a million dollars in three years.” TNG’s marquee nonprofit event, “I Survived Real Estate,” is also Aaron’s brainchild and has, thanks to TNG and the wider real estate community, raised nearly $1 million for Make-a-Wish OC/Inland Empire and St. Jude Children’s Hospital.
“We created that event in 2008 during the economic recession as a way to celebrate the successes and survival of the real estate industry during hard times. We wanted to bring together thought leaders from all over the real estate space to share insights. We never thought it would also have such a positive impact on our community,” said Aaron.
That event and other TNG projects are not just designed to support the community around real estate. They are designed to build up the real estate industry internally as well.
“When I first started in this industry in 2005, I think a lot of people saw real estate investors as sharks,” said Aaron. “Really, we didn’t have a very good image even though we provide really important services and do really important things in real estate and in the broader economy that no one else really can do.”
“Professional real estate investors bring tremendous value to the marketplace as residential redevelopment specialists, job creators, neighborhood beautifiers, tax-revenue builders, and vacant, blighted home transformers,” added Bruce. “We are an important partner and solution in every real estate cycle.”
Hondas, Hedge Funds, and Heading Home: How It All Began
The senior Norris had been investing for more than 10 years in 1995, when he began the research for his first major market report, “California Comeback.”
“In 1989, after about 10 years as a successful real estate investor, I came off a project where I had made about a million dollars in six months,” he said. “That was from buying 50 building lots, so I decided that next I would build seven custom homes and they would immediately sell because my name was on them,” he recalled ruefully.
“Unfortunately, I built all seven and nothing sold. I had seven custom homes that didn’t sell, $21,000 a month of overhead, and payments that I made for two-and-a-half years while I got rid of those houses one at a time.
“By the time I was out from under that mistake, Aaron was graduating from high school and I bought him a car, a Honda Civic. It cost $15,600, and the only reason I remember that is because I bought a three-bedroom house in Riverside, California, the next day for $13,300. It just struck me: Five or six years prior to that, I was so confident in the real estate market (and I was not alone) that I thought I couldn’t make a mistake. Just a short time later, I was buying a house for less than a Honda Civic.
“I thought to myself, ‘I have been doing this for 15 years and I have no idea what makes prices go up or down. I have no idea.’ So, I decided to study it on my own. I took 18 months and I put together a 25-year price chart going back to 1970. Then I got 25 years of data in every category I thought could influence price, which wasn’t easy back then. There was no Googling that information! It was literally going into libraries, pulling books with data, handwriting data on note pa
ges, making charts of that data, and then looking at all of it.
“I finally took it all on vacation with me and I just started playing with those charts to identify trends that happened during each boom cycle and bust cycle. I was looking for the initial event, if you will. It was repetitive, and I found it.
Once I found it, I wrote that first report, published in 1997, called ‘California Comeback: Why Prices Will Double in the Next Eight Years.’ That report would take us all the way to 2005, by which time prices had actually tripled, and The Norris Group was on the map for getting the direction correct, if not the intensity.”
In 2005, Bruce debuted his second major report. This time, his son was by his side. “I came to work at TNG with the intent of rebranding our company and to work on our education,” Aaron said. “‘California Crash’ was our first major project together, and it consisted of about 400 pages and 800 charts dealing with why Dad was telling California real estate investors to get out of the state in 2005: Our foreclosures were going to increase by more than 3,000 percent and our prices would go down by half. It was a pretty big deal.”
Aaron’s unique background made him perfect for the task at hand. After spending seven years in New York City as both a professional actor and a Wall Street temp creating acquisition and merger presentations for multimillion dollar hedge funds, Aaron’s keen eye for imagery and uniquely adept methods of communication were perfect for conveying a message that no one wanted to hear in California at the height of the housing boom.
“It took us two days just to produce the presentation after we had created the materials,” Aaron remembered. “Dad feels very responsible for conveying his insights and information to investors, and it was really important to be able to show people not just what we were saying, but also the rationale behind it. It was really important to him to provide the information as well as the outlook so that people could review those charts on their own and come up with their own solutions and thought processes. It was my job to produce the books and the presentation, so he could be free to really educate and inform. It was a huge project and a team effort for sure.” Bruce remembers the project fondly as well. “When Aaron came to work for the company and created the California Crash document, it was lights out,” he said proudly. “It was an unbelievable looking document. When the audience opened it, there were audible gasps. It was great. It looked like a Goldman Sachs presentation, and it was the start of a really effective outreach into the industry.”
More Than a Feeling: Meaningful Methodology
Today, the father and son continue to work closely to develop new educational materials for real estate investors. Their focus remains on informing the industry. TNG places high priority on keeping real estate investing accessible and actionable for industry participants at all levels, from the experienced investor with plenty of capital to work with to the new investor just getting started.
“You will always have people who want to just basically be told what to do,” observed Aaron, noting that his father steadfastly refuses to do this. “We actually held back the last three chapters of our February 2017 presentation and shrink wrapped them so that people could not skip to the predictions,” he laughed. “We had a 250-page book, 400 charts, and 3 shrink-wrapped chapters that you could not get to until the final break before the end of the presentation.”
“I want people to understand the process, to know how I get to my conclusions,” explained Bruce simply. “For example, in 2011, I thought I might just wantto liquidate everything I had and find something else to do, to be honest with you. A little bit prior to that, I’d written a seminar called ‘All in or Fold,’ and I was thinking about folding. Ultimately, I decided to go all-in. More recently I transferred a great deal of my wealth to Florida not because I was afraid California was going to go down, but because I could get two pieces of brand-new inventory for every one house I was holding in California.
“It had nothing to do with bad timing or good timing in California, and everything to do with good timing in Florida. If you just read my predictions or just copied what I did, that tactic might not have been the right thing for you. That’s why I want people to understand what I’m looking at and what it means to them.”
Aaron added, “Charts are not academic for my father. He knows what they feel like because he’s lived them. That’s why our work together is real, practical, and makes sense. I worry about design; he educates and helps people make and save millions of dollars.”
“Probably the hardest thing to do is stop what you’re doing when you’re having the time of your life.That’s why I need the charts,” observed Bruce. “I was having the time of my life in 2006, but I liquidated anyway because the charts gave me the discipline to do it. The hardest thing in the world is to do something different than what you are feeling while you are feeling it. My skill set is to see beyond the feeling, the success, or the failure in a market, and find the methodology to see when to get out and when to get back in.
“You can be a genius when the market needs your skill, but if you are doing the wrong thing at the wrong time, it’s no good,” he said. Fortunately for the real estate industry, Bruce and Aaron Norris’ skill sets are perfectly aligned and perennially suited for a long future in investing and forecasting.
Thanks for such a great story!