Planting Seeds of Wealth

A few days ago I mentioned my awesome experience in Phoenix AZ teaching my two day wholesale workshop. What I didn’t; mention was something which just came to mind.

In the audience were two young ladies, I mean one looked like a teenager the other a teeny-bopper. Both were brought by dear ole’dad. Dad’s explanation for bringing the girls was part humor, part serious, you know like seriously joking. He said he brought them to expose them to real estate so perhaps they pay their own college tuition in a few years.

No matter his true reason I thought it a great idea. Why not expose our kids to something they can use their entire lives? Planting that seed in a child’s mind early can result in unimaginable results years later.

I just read a book, a biography on J Paul Getty, America’s first billionaire. The richest man in the world during the 50’s to until his death in the 70’s. Mr. Getty regurgitated the story of how as a kid he wanted to be a writer and a diplomat. It was his father’s exposing him to the early Oklahoma oil fields during the turn of the 20th century is what planted that seed in young Getty’s mental garden.

Just a few years later at age 24 young Getty made his first MILLION as his own oilman in 1916!!!! He went on to become the Bill Gates of his time. Today Dec 15th would be J Paul Getty’s 114th birthday.

The same can be said of Donald Trump whose father developed small apartment buildings around NY and carried young Trump along to help inspect projects. We all know the rest of that story. The same can be said about many successful people, having been exposed, not forced, but exposed to an idea, a way of life which can have lasting financial effects.

Sadly enough most youngsters will never get that same real world exposure of business and finances. The public schools, although starting to realize the need, are still lacking in that area. Unfortunately, most kids are being exposed to scarcity minded, “me me me” ways of thinking about money.

A few years back when my son Marcel was in kindergarten his teacher Mrs. Meade asked me to come by and talk to the kids about what I did with houses. Man, that was one of the most rewarding experiences I’ve ever had teaching wholesaling. A room full of five year olds circled around me sitting legs pretzel styled on the floor.

They hung on every word I said, especially my slooooow, deliberately dragged out explanation of uuugg guulll-lee, sssstttiinkkky, houses. You know how kids do, eyes focused on your mouth as they mouthed your words at the same time? I had em hooked.

Going forward with using their new math skills we did some basic additions and subtractions to figure our profits. The kids loved it, hugging me after one by one saying thank you Mr. Wizard. Marcel beamed with pride; he wasted no time underscoring my description of the houses to his classmates by reminding me there was pigeon poop in one house that could make you sick.
Those kindergarteners got it! So did the teacher’s assistant who approached me later interested in being a private lender to my deals. Folks a seed was planted that day.

Marcel, I’m excited to report, is well on his way to thinking about real estate. He loves drawing houses. We watch the History channel’s Modern Marvels engineering documentaries. He understands load bearing walls, and attempts to figure which walls are holding up a roof in nearly every building we enter.

A good friend of mine Kenneth Edmonds has dedicated his real estate teachings to youth. Ken is out in LA and doing marvelous things with the youngsters. This past November he reported the progress of some of his young moguls. One report sticks out in my mind. A 16 year old young lady has amassed $2million worth of real estate (correct me if I’m wrong Ken) which is giving her positive cash flow. At 16!!!! Since she hasn’t reached the age of maturity her parent’s have to sign her docs. Hey! careful there now dad.

Another good friend, colleague and my favorite real estate guru Vena Jones Cox is also dedicated to exposing youth to this mighty business of real estate investing. Vena herself a 2nd generation investor was exposed early in life by her dad. At least once a year, she invites a bunch of gurus to spend a few hours with the youth aged 14 – 21years, during a multi day event, teaching their strategies.

I had the distinct pleasure of joining Vena and Ken, two years ago at such an event. It was one of my most worthwhile teaching experiences. Watching the slumped shoulders straighten up, sleepy rebellious eyes brighten up at the possibilities they just heard. What could be more rewarding?

The young people perk up when we start talking numbers and using the internet to search for owners. Driving for dollars also appeals to the newly licensed 16 year old. One kid said he could even ride his bike to find houses for his mom.

Sorry for my rant, but I get excited. I have the utmost faith in our youth. There’s much about them I don’t understand, but I assure you, they think differently than I as a PC generation. But they are more motivated than we realize.

The two young ladies in Phoenix, who looked resentful at the beginning of the day, lips poked out, heads in hand, straightened up when I got to the numbers and real world case studies. They acknowledged at the end they really enjoyed themselves.

Lets all plant those seeds of wealth. The mental garden doesn’t care what gets planted, be it the weeds of scarcity and limitations, or the seeds of positive possibilities. One thing is for sure, a weed and a rose can not occupy the same spot in a garden.

Much Success,

Go to www.thewholesalewizard.com for more information.

Why Do Sellers Discount Properties?

This past weekend I had the wonderful experience of teaching my favorite real estate topic “wholesaling” (www.TheWholesaleWizard.com) during a one day workshop in beautiful Phoenix Arizona. The majority of those in attendance hadn’t even done their first deal yet. Newbies!

I consider it a privilege to have the opportunity to transform minds and lives in mass. A privilege, mind you, I don’t take lightly. Oft times when I mount a platform to teach a workshop of beginners the majority have never heard of me. Many arrived with limited thoughts and ideas about the potential of real estate investing despite their paying to get in the door.

Call it lack of ideas from the lay person, cynicism from the pragmatic or just old fashion conventional wisdom casting a dark cloud of doubt over some. Nonetheless, it is my objective to not only convince, but prove without a shadow of a doubt that what I say is not only possible, but probable when the steps I provide are carried out.

My very survival as a trainer depends on my ability to do so. Personally, I enjoy the challenge, as I keep an eye on the most ardent cynic in the audience usually someone dragged there as guest against their better judgment. The arms folded, body tensed, nonchalant stares beaming my way, turns me on man!

After sharing many case studies of mine and my students success stories which are emphasized with HUGE figured, unbelievable to the layperson, checks as proof now come the gasps and looks of disbelief.

Ok, wait a minute says my skeptic. Hold on there Mr. Wholesale Wizard. “Why on earth would an owner of a property sell to you at such a huge discount if they know their property is worth much more?”

Casually and in a non defensive manner and tone, I simply ask everyone present to think back in their own lives. Have you ever owned something which overtime lost its value to you? Better yet, have you ever held a possession in your life where it became more painful to keep it than to let it go? Once when I asked this same question to a workshop group a lady shrieked “Yeah, my ex husband!”

Ok, in that case I ran with it. Sure your ex husband was the light of your eye at one point, until one day he became a burden in your life. Rather than keep the handsome dream hunk you were motivated to let him go to the next wholesale lover. “That’s it” she confirmed, with a few more inaudible mumblings.

It’s the same with houses. At some point in some people’s lives the American dream becomes a sleepless nightmare. Stress associated with the continued ownership can become unbearable until a time the person becomes extremely motivated to sell or just deed their property to the first savvy investor able to solve their problem.

I then follow up my statement with further proof with letters from sellers I and my students have helped out of a jam. Believe me, in many cases the sellers were happier to see us their savior at their door than we to see them.

This pain or frustration of ownership is NOT limited to the real estate world. Pawn shops have and still do thrive off this very concept. Today there are websites created for this very purpose to release steam from under the lid of a frustrated owner of a love lost possession.

I told my Phoenix audience to check out Craigslist.com to see all the ads from people selling cheap, while others are giving stuff away (no Craig is not giving me a cut). I have a friend who is self professed CS junkie, constantly selling, giving, buying and grabbing bargains weekly. Just this past weekend she scooped up a practically new box spring/mattress set from an owner whose back didn’t agree with the hard surface of the set. Both were happy about the outcome.
I think I changed the minds of most in that Phoenix audience. Those who cared to open their minds that is.

Let this be a reminder to you as you seek out motivated sellers, everyday there is another property owner looking, hoping, some praying that you find them to solve a problem they cant for themselves. As long as you treat em right, the money will flow into your life as a side affect.

Take action now to get started on your path as a real estate wholesaler.

Much Success to You

It’s the numbers, period!

This past week I decided to pull my offer on a huge Victorian single family house, with tons of potential here in Washington DC. It is an REO “Real Estate Owned” by a bank. For one, this listing comes as a sure sign that times have changed in the DC market. Over the past four or five years any foreclosure in DC was snapped up by frenzied speculators either before or during auction. Other times the banks themselves were the high bidders knowing all they had to do was give the property the once over, put back on the market over priced, to be scooped up by an overzealous buyer. Those days appear to be long gone.

Back to my deal. Agents, (can you believe it?) two real estate agents were fighting hard to convince the bank’s asset managers to accept my offer. That’s right, the listing agent knew this property which needed a ton of work would only appeal to a person like me who had the means to both purchase and rehab the property. My buyer’s agent whom I met recently was pushing hard to make the deal work as well. Much to her chagrin, I had my number and held tight to it.

I knew what I was comfortable with for a worse case scenario some five or six months later when the property would be ready for resale, I wasn’t willing to budge. I did at one point offer a little more than my initial price with a request for closing concessions, which really was a wash.

The bank’s asset manager had their number which wasn’t close to mine. The agents tried talking me into coming up a little higher to make it work. I sensed they both meant well, but surely their advice was driven by some self focused motivation of getting the sale. Nope! I wouldn’t budge. Either the bank came down to my price, or I walk.

My buyer’s agent, who is fairly knew, and never worked with an investor/developer didn’t quite get it. After verifying my private lender letter approving more funds than the bank’s asking price, I’m sure she thought that I could surely pay it.

Having the available funds wasn’t the point. There is no emotion for me when I make an offer. I learned this the hard way. It is the patient investor who waits for the low hanging fruit and the BIG bucks.

Finally, I pulled my offer, in the midst of the listing agent introducing other investors supposedly willing to pay more than my offer. God bless em!

As I drive around my downtown office neighborhood, I count many properties owned by investors who got caught up in the frenzied times. They over paid for properties which are now sitting like hulking brick ghosts. One nearby row house with gorgeous potential even has the dumpster and project fencing on the lot. The tell grass surrounding both dumpster and fence serve as a constant reminder of a real estate era gone by.

No surprise to me as I saw it coming 18 months ago as many of them were over paying for these now thorns in everyone’s side. I’d often scratch my head and wonder, “how in the heck does this guy think he’ll make money on that one he’s just over paid?”

This should come as no surprise to anyone, but real estate investing is all about the numbers. Period! Save your emotions for when buying your family’s dream house.

I can’t tell you how many times I’ve entertained investors during a Q&A session when someone utters out in frustration that they can’t find a buyer for their deal. I politely listen as long as possible as the person goes through a song and dance for why they believe their deal is not selling. All the while my inner voice is screaming “it’s the numbers.”

Finally, I share with the grieving investor that their problem is the numbers are wrong. That statement is usually met with immediate protest with emphasis on how nice the property is, the neighborhood, schools, huge back yard with picket fence, and so on and so on. All that stuff is great to know, however, they’re all emotional details. Important? Yes, but less so than the numbers.

Getting properties sold, assigned or rented boils down to one thing, and that is the numbers. Any property, anywhere, in any neighborhood will sell, in any economic cycle, if at the right price.

I have no love lost with the potentially elegant Victorian Queen. There’s nothing worse than being stuck holding a dead property you can’t move. I’ve had many sleepless nights in my days, counting not sheep, but carrying costs as I stared up at my ceiling.

My advice to you is to decide now, to tuck away all your emotions when it comes to making offers, place them on a rear shelf somewhere in your heart. Save those emotions for when you are deciding to build your dream house. Invest with your head not your heart.

Much Success