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Sunday, September 18, 2011

Coaching, Mentoring, & Mastermind Groups

I have been involved in no less than 8 mastermind groups thus far in my career. Some of these I facilitated. Others, I was a participant / member. Some were free. Others were very, very expensive. Each has given me an opportunity to surround myself with like-minded people willing to open up and share knowledge about their business, strategies they use, fresh new ideas they have picked up on their journey. The most important facets of these groups has been the 'how to implement' discussions. One can certainly discover new ideas everywhere; YouTube videos, Facebook posts, books, meetings, and social encounters. However, rarely will you get the hands on details of implementation like you get from being involved in mastermind groups. The members of my many mastermind groups have to gone to great lengths to SHOW me how to do things. They have mailed me information, given me books, paid my way into conferences, the list goes on and on.

I recently attended one of two annual meetings where I discovered that I should be teaching what I so easily do to those who struggle. I have struggles too. At that same conference, I learned a great saying, "Pay those who play at what you work at." After that conference, the thought of running a real estate investing mastermind/mentoring program constantly nagged me. How could I do it without feeling guilty? Would people sign up? At what price would it be worth it for me to take on such responsibility and still be fair?

Recently, I did launch my mastermind / mentoring program. It is not a coaching program. I think there is a significant difference. A coach sits on the sidelines and tweaks what you are already doing. A mentor takes you down into the mine, shows you where the gold is, teaches you how to dig it out, then shows you how to sell it for a profit. As for it being a mastermind group, I expect all students to help each other. We learn and grow as a group. I am very excited about this next evolution in my business. If you are interested in applying, please fill out our online application.

Good luck to you and I hope you are on track to exceed your 1 year goals for this year and more than 20% of the way toward accomplishing your 5 year goals. You do have written goals don't you?...

Saturday, September 17, 2011

My Video Channel

From time to time I upload videos to my YouTube Channel. Here is the latest one I uploaded where I go through a rental house we are currently rehabbing.

If you'd like to learn more about the types of deals we do out here in sunny Southern California, please subscribe to my channel. Also, I always appreciate any comments, questions, or requests!

Thursday, September 15, 2011

Cash for Keys?

Just finished one of 2 evictions I have going. Thanks to California's extremely liberal view of tenant's rights, it only took me a few months and about $800 in legal fees to get the tenant out of my property.

I had the Sheriff show up yesterday and the tenant was already moved out so I did not need his services. On a side note, if you know the tenant is gone and you let yourself in instead of waiting for the Sheriff to get you in, they will refund most of your money. I bet you didn't know that did you?

I got inside and the house was what I expected. The carpets are ruined, the walls need to be painted, and the house is generally filthy. No major damage at least. Of course, the tenant will not be getting a dime of his security deposit back. However, I think next time around, I am going to just pay them to move out. If I could have gotten him to take $1000 to move out and leave the place clean, I would have saved about $4,000 in lost rent and rehab. I will post a video at my YouTube Channel this weekend.

I have used this method very successfully in the past, but I stopped doing it for some reason. Have any of you tried this before?

Tuesday, September 6, 2011

If You Have Eight Hours to Cut Down a Tree...

Down at my gym, some of the guys don't care much to spar me. It is not because I am quicker, stronger, or a better fighter than them. It is because of my method of attack. To jab, one needs to get within striking range of the opponent which means you are also within their striking range. A cross requires a fighter to get in even closer. My Sensei actually took me aside one day during a sparring session with another gym and told me to get in there and jab more. I didn't take his advice because, quite frankly, I don't much care to get punched in the face. I prefer to attack the legs. One of them is always sticking out there, way in front of the rest of the body. It's an easy target. Why attack the head when a leg is such easy prey? With just a few well placed chops of my shin, your leg will suddenly start to feel amazingly just like Jello. Small muscle spasms will eat away at your ability to lunge forward stripping away the power behind your punches. If I see an opportunity to strike the head, I take it, but I like to end my combination with another solid strike to the leg. An opponent can be disarmed very quickly if he doesn't have legs to stand on. However, it takes a lot of strong or one very accurate punch to the head to render an opponent defenseless. I approach my investing the same way I fight.

If you are a lumber jack and you head out into the forest to harvest a tree do you start at the top? Trimming away the leaves, then the twigs, next the small branches, the larger branches, and finally leaving behind a single log jutting up from the Earth like a giant toothpick? Do you cut that toothpick into 8' sections so you have ready made 2 x 4s? No! You get as close to the ground as possible and chop the whole damn thing down in one go. Then you drag it out of there and harvest as much of it as you can.

Why wouldn't you approach investing in real estate any other way? Monday through Friday there are countless fools, yes, I called them all fools, standing around the courthouse steps, pockets loaded with cashier's checks, exposing themselves to the risk of skin cancer, wasting their day getting up early, comping dozens of houses, driving (or sending some other fool) around to see if the structure is still even standing, all for the privileged of competing with each other to see who can pay too much for a piece of crap property and do it in the riskiest and laziest possible way; paying all cash. I like going down there sometimes just to watch the circus! (To be fair, a few select individuals have the system figured out and they stay in their offices and send buyers to the auctions. Still not sustainable, but definitely smarter!)

The banks have these fools by the neck. They are totally collared! Why would you ever let a bank put the screws to you like that? The banks borrowed the money to make those horribly risky loans, then sold them off to some other schmuck for a profit, only to continue making more money servicing the notes, and finally made a sweet heart deal with the Fed to line their pockets with even more money! I hope this isn't new news to you?! You can learn more Here. And people are happy to go down to the court house steps and bid against each other to buy these houses? It just doesn't make any sense to me. I have heard horror stories of investors realizing anywhere from 6-15% returns for doing this kind of business. Wow! A whopping 15%! I can barely contain myself....

I prefer to deal with the MILLIONS of private sellers out there. While the fools are picking the leaves off the trees, I am sharping my ax. They can spend their days, weeks, months picking and picking those leaves. I spend mine at home, relaxing, reading books, training at the gym, and when I am ready, I take one solid whack at the private seller's equity and drop the whole tree.

I don't settle for 6%. I think 15% is a joke. It makes me laugh thinking about it. The deal I am working right now has a 54% return and that is not over a 12 month period. I prefer to do one of these a month over the 3, 4, do I hear a 5? 6 going once. Twice. 7 in the back corner! I don't know how many deals they have to do to match my one, but I am sure it is a few. I have been buying from private sellers since 2005. Even in 2006, 2007, 2008, and 2009 when the market was sliding and nobody new where it would end up. I ripped some serous equity back then.

I am the Pawn Shop of Real Estate. I have decided to rename my blog this. It is what I do. If you have a $150,000 house and there is $30,000 owed on it, I don't offer 70% - repairs - wholesale fee -, -, - whatever that lame formula is they teach at real estate investing principals. I offer $30,000. I tell sellers up front not to talk to me if they expect retail. I'm not that guy. There ain't none of that nonsense around here. If they want retail, go forth into the World and gamble with the market. When it doesn't work out, I'll be waiting, relaxing at home, training at the gym, or fly fishing on some pristine river. I've got time.

See, I have been the seller with that house that made me lose sleep. A house that infected my every waking thought. Oh, how I wished someone would have just made me an offer and made me even. I didn't care about the profit any longer. I didn't want the cheese. You can have the cheese. All of it. I just wanted out of the trap. Even though the banks should be feeling this way now, they are not. Have you ever wondered why? If so, you probably didn't click that link above.

When my ax swings, the seller's equity shall fall in my direction. I will get the cheese because I deserve it. But, Mr. & Mrs. Seller, you will be out of the trap. However, please don't ask me to pay your closing costs. I get all the cheese. You need to find Mr. 70% - repairs for that kind of nonsense offer.

I will be attending CRE Super Conference October 7~9. I will be surrounded by investors who know the meaning of building a sustainable investing business. These are the investors I have seen around through the last cycle and I expect to see them still making money when the circus has packed up and left town. This isn't a Short Sale Super Star or an REO Get Rich Quick seminar. You do know those are all a load of crap right?

This is an educational event taught by investors with DECADES of experience. And that experience all points back to dealing with real sellers who have real equity. If you are not at the event, I fully expect you not to be in business in the future. Don't take it personal. It is just the way it will be. I don't care how many deals you are doing now and how much money you have squirreled away in the bank. I've seen it before and those that didn't change with the market lost their houses (and even mansions) to foreclosure and have disappeared from my life. Mike Cantu wrote a whole course just to help those same investors out because he knew it would happen to them. He saw it happen before and he didn't want to have to go out and make new friends. He even makes a list of who he thinks will be out of business when the market changes. Very similar to Howard Stern and his dead celebrity list he makes every year.

If you are not at CRE Super Conference, there is a good chance you'll make that list someday. I know I'll never be on it. Do you, Mr. & Mrs. REO, Short Sale, Trustee Sale, my income depends on a bank providing me with inventory and providing my buyer with a loan?

Friday, September 2, 2011

Doing Deals When You Have No Money!

The last thing I would do would be to drive around looking for properties. The first thing I would do is head out to my local print shop or craft store such as Michael’s (if they are still in business). Look for chloroplast stock. This is the material that bandit signs are made of. While you are there pick up a stack of Post Its if you don’t have some at home and a ½” wide construction style black magic market. You may need to run over to Home Depot to pick one of these up and that is OK because while you are there, grab a staple hammer and a box of staples.

While you are out, drive by any local liquor stores. I am not talking about the high end liquor stores. I mean the ones where the parking lot is more gum than asphalt and the creepy dude with the skull cap hangs out all night leaning against the front wall chain smoking cigarettes. Out front, there are typically lots of racks with free classified ad sheets. Grab all the ones that have ads for rental houses or houses for sale.

Once you have acquired all your materials, go to Google and sign up for a Google phone number. You may consider using a cell phone number, however, I don’t know if they are traceable or not. You want to avoid being harassed by the sign police so do not use your home phone number.

Using your black marker, write “I BUY HOUSES” or “SELL YOUR HOUSE THIS WEEKEND!” on the signs. Then put your phone number down below. Notice the flutes (holes) on the ends of the chloroplast. You want to make your signs so the flutes are horizontal. That way, the wind won’t wrap them around the telephone poles you put them up on.

If you need help learning how to hang bandit signs, go to Youtube and type in “how to hang bandit signs.” There are dozens of videos and you will get a great education on how to hang them up. You will see some guys use the roofing nails with the plastic washers on them. I don’t care much for those. The staple hammer is fast and very effective. Once it gets way past bedtime, head out and hang up those bandit signs.

Early the next morning, get out the all the classified ad sheets you picked up and start looking at the For Rent, For Sale, and definitely the For Sale By Owners, or what they call Fisbos (FSBO). One thing I specifically look for under the For Rent category is the rentals that are in one area and have a phone number with an area code to a different area. We already know those people live away from their rental and they may consider selling. It is especially painful when an out of town owner has a vacant property. Start calling these ads and inquire about their house for sale. If they say it isn’t for sale, tell them you must have misread the ad, but since they are on the phone, would they consider selling it. Any owner who is ready to receive monthly payments is primed for seller financing.

When you are done ripping through the print ads, head to the internet and start searching Craigs List . You can search Google for any online classified ad pages or FSBO websites as well. Start sending out emails to everybody. Pay particular attention to anyone with a listing stating the property is available now. That means the property is vacant and if they are losing money on the mortgage, they could be a perfect candidate for seller financing, lease options, sandwich leasing, or a straight sale at a discount. Even if they don’t want to sell today, ask if they might consider selling at some point in the future.

Once you have gone through the online ads, hop in the car and head out to do some good old fashioned door knocking. Hit up your favorite neighborhood and start at one end of the street and work your way down both sides. Knock on the door. Take a few steps back and hold your hands folded in front of you to give off a non-threatening appearance. Don’t wear articles of clothing that cover your face like a hat and sunglasses. Don’t carry a clip board or anything that would give the appearance of a sales person. When someone comes to the door, great them kindly and tell them you are very interested in buying a house in the neighborhood. Then ask if they know anyone that might be interested in selling. When they point out the listed house down the street, tell them you are not looking for that kind of seller. You would prefer to deal with someone directly, someone who tried to sell in the past and it didn’t work out or someone who has had a change in their living situation such as a new baby, a divorce, or someone with a job transfer or loss. You will be surprised how much people know about their neighbors.

If nobody is home, pull out the Post It and write “I am interested in buying a house in this neighborhood.” Put your name and your Google phone number on it. If you have more time, go online and find a printer that sells custom made Post Its and get yellow ones that say NOTICE on it bold black letters. Stick your Post It on the front door or somewhere it will be visible especially if they have a garage they use that allows them to get into the house without going through the front door.

Happy Investing!