control - Posted by Matt B

Posted by SusanL.–FL on December 20, 2000 at 12:22:59:

GREAT post, Matt!

Yes, ?downsizing? and layoffs SURE can catch a person off guard. Sometimes you see the ?handwriting on the wall?; sometimes you don?t. Unfortunately, we didn?t?

Kenny and I worked as independent contractors for years and were both cut loose from our companies pretty much within WEEKS of each other—and this was about two weeks after we had just closed on a commercial property (with a $2,000/month payment). :frowning: Debt up to our eyeballs and no income except for a couple rentals.

ONE fatal mistake I realized we had made on our rentals was any time the rentals needed a cash$ infusion (for repairs or whatever), we?d always just reach into our back pockets and pay for it with personal money. What we SHOULD have done was make SURE that the rentals were totally self-sufficient and were generating enough income to pay for themselves.

Boy, once that $well dried up, it was pretty much all over but the shouting.

With four plus years of ?reflecting? on past mistakes AND reading the CRE board, I have learned the RIGHT way to do ?things? the next time around.

?and in mid-January I hope to post a mini-success story called: ?Rising from the Ashes?! :slight_smile:

I?m happy to say that the light at the end of the tunnel has finally appeared! :slight_smile:

control - Posted by Matt B

Posted by Matt B on December 19, 2000 at 07:53:01:

I was reading an article on the internet about how people who are in control of their lives, or at least feel that way, tend to live longer, healthier lives. I started to think about that as I talked to a co-worker yesterday about the lease option deal that I just did. This guy is a highly paid expert in his field working for the state government.

After I finished excitedly talking about the deal and the great terms that I worked out, he told me that it just sounded too risky. Well, I thought about it and then wondered which of us was better off. He makes a very high salary, has plenty of cash, is buying a new Mercedes, and goes on lots of trips abroad. The guy’s got a great life, right?

A few weeks ago I was working with him on the weekend on a problem that we were having with our computer network. Since it was just us, he confided in me that he hated his job. He told me about the constant stress that he is under, dealing with his boss and other “higher-ups”. He complained that they just didn’t understand a lot of stuff about what he did. This was easy for me to understand since I know what he does, and see him struggle and fight every day with these people making decisions that affect him, going against his advice.

After we talked about my real estate deal yesterday and he told me how it sounded too risky, I thought about the article that I had read. Is he in control? He certainly doesn’t seem to think so. I actually felt a little sorry for him as he complained to me about the stress, and what it was doing to his health!

Then I thought about what happened to me a couple of years ago. I had quit my job and started a business to do real estate deals full time. I was so excited that I told my family about it, along with anyone else who would listen. I remember my mom telling me, “Matt, I hate to tell you this, but you’re foolish.” She went on to explain that it was ridiculous to quit a good paying job to do these “risky” real estate deals and expect to be able to live off of them!

Now, I love my parents, but last year they lost their home of 25 years to foreclosure, after having made 6 figure income for years. When I got my house, I invited my family over. My mom, after seeing the large 5 bedroom house asked, “How does someone without a job buy a house like this?” I told her that I had already explained to her what I was going to do months ago, back when she called me “foolish”.

I learned something very important about “control”. I realized that every time I put a tenant/buyer into a house, or every time I did an owner financing deal on a subject to deal, I was hiring an employee! That’s right, that buyer would get themselves out of bed every morning, take themselves to work, just so they could pay me that monthly payment! They were producing money for me! Who was in control then?

When my parents lost their home to foreclosure, who was in control then? They had been working hard for the past 25 years to provide a bank with an income stream! They were “bank employees”!!!

My point is simple. Using creative real estate techniques showed me how to get control, and stay in control. I was much happier with my life in general when I was doing that. When I tell people about my job, they are impressed that I work for the state making a high salary. However, I’m not in control. Is anyone working a job in control? Is anyone working a job safe from their employer one day realizing that they need to cut back on staff, and because your salary is one of the highest, you get cut first?

I also let my perception of a situation regarding my divorce make me lose control. I simply handed over control to someone else, got rid of my business and properties, and complained about how bad the situation was. Who was in control then? Sure as heck wasn’t me! I gave that control to someone else!

I had a tenant/buyer who was in a property of mine for a year and a half. She worked for the state also and made a very high salary. She worked hard at making improvements to the property and rebuilding her credit, since she had been through a rough divorce and had to declare bankruptcy. She had always made her payment on time, and had just qualified for a mortgage when her employer told her she was being transferred! She had been a good “employee” for me, giving me a $200 a month cash flow as well as $3,000 up front. I actually felt pretty bad that she couldn’t buy the place. She had put a lot of money into it. But again, who was in control? Within a month, I had another tenant/buyer in the house who had given me $4,000 as an option deposit, plus I had a slightly larger purchase price for them now due to appreciation that my “employee” had given the property!!

Now that I am starting to do deals again, I am beginning to feel “in control” again. It looks like I’m going to have a long life ahead of me!!!

Re: control - Posted by Garrison

Posted by Garrison on December 20, 2000 at 08:11:51:

Matt B,

Are you back at REI full time?


Re: control - Posted by Scott Az

Posted by Scott Az on December 19, 2000 at 18:09:21:

I hear u man…
I told a friend of mine and he laughed in my face. It was pretty discouraging but you know what. It bothered me so much to the point that I had the courage go after my first moblie deal. Im now on my why to living the good life.

Re: control - Posted by jay

Posted by jay on December 19, 2000 at 17:41:01:

Matt, you’re the man!!! I’m glad you’re doing deals again…very motivating!!

Re: control - Posted by mike

Posted by mike on December 19, 2000 at 15:35:52:

Excellent post!!!
I recently had a very dear friend of mine tell me " I have no respect for what your doing, you should get a real job". Altho I will never rub it in her face, I do hope that one day she will be able to tell me if she is about to be forclsoed on, I would die a quiet death if that happened to her or anyone close to me and I couldnt help coz I didnt know.

Merry X-mas all, and a very very prosperous New Year!!!

good one, matt :o) happy holidays!(nt) - Posted by jadair

Posted by jadair on December 19, 2000 at 15:19:11:


EXCELLENT POST, THANKS! (nt) - Posted by Carey_PA

Posted by Carey_PA on December 19, 2000 at 14:45:07:


Re: control - Posted by Tom Walker

Posted by Tom Walker on December 19, 2000 at 13:42:13:

I think I would have made sure my parents didn’t lose their house to foreclosure after 25 years

Great Post! (nt) - Posted by Tony-VA

Posted by Tony-VA on December 19, 2000 at 13:28:26:


Re: control - Posted by joebaysh

Posted by joebaysh on December 19, 2000 at 10:07:49:

I’m sorry, but how does a guy doing creative RE for a living allow his parents to be foreclosed.

Re: control - Posted by Lonnie

Posted by Lonnie on December 19, 2000 at 09:53:09:

Hi Matt,

Thanks for an excellent article. I hope everyone will not only read it, but fully understand the meaning of your message.

A couple of quotes.

“If you don’t understand money, you will spend your life working for people who do.”

“If you spend tomorrow’s earnings, for today’s toy’s and pleasure’s, you will always be broke.”

Happy holidays,


Thanks… - Posted by TRandle

Posted by TRandle on December 19, 2000 at 09:34:45:

Thanks for sharing. A slight focus on adjusting my perceptions was what I needed today. I’ve recently had an unintentional “hiring freeze”, although I’ve been marketing to expand the business. I need to create some more positions in order to hire some more “employees”. The benefits package sells itself, if I can just find a place for the new recruits. Thanks again…

Great post Matt - Posted by Rob FL

Posted by Rob FL on December 19, 2000 at 09:05:35:

One thing that you mentioned really caught my attention. Robert Kiyosaki has a whole chapter in one of his books about the difference between Risk and Risky.

Definitely for someone who knows little about real estate investing, to do some of the deals that you and many others on this board do would be very risky. The reason why is the lack of education and experience that your co-worker and parents have in this particular field. After being in this business for a while you learn what needs to be done to minimize your risks.

On the other hand, most RE investors would consider the computer field risky because of their lack of experience and education in that field, but at the same time you and your co-worker would have much less risk.

Happy holidays.

Re: control - Posted by Matt B

Posted by Matt B on December 20, 2000 at 08:45:01:

No. I have just started to work deals again on a part time basis. So far, in the past 2 and a half weeks, I did a quick flip and signed a lease option deal with a seller. I will have a little while to go before I build my cash flow back up from real estate, but I’m on my way.

Re: control - Posted by Shenesa

Posted by Shenesa on December 19, 2000 at 14:22:20:

He said he would have if he’d known they were facing foreclosure.

I know if my parents were facing foreclosure everything would have to wait to tend to them. Their the cream of my crop!!!



Re: control - Posted by Matt B

Posted by Matt B on December 19, 2000 at 14:19:50:

As I mentioned below, they never told me about it. They said that they were moving to a smaller rental house for “less hassle”. I found out too late by seeing the sheriff’s notice on the door after helping them move out. By the time I started looking into it, the bank owned it. I think they would have considered it too embarrassing to ask for help from their “foolish” son.

Re: control - Posted by Matt B

Posted by Matt B on December 19, 2000 at 10:15:39:

They never told me. I found out after helping them move and going back to the house to see the sheriff’s notice on the door. They had only told me that since they were getting older, they wanted to live in a smaller rented house for less hassle. I am guessing it would have been too embarrassing for them to ask me for help.

Re: control - Posted by don, sdca

Posted by don, sdca on December 19, 2000 at 12:52:26:

Hi Lonnie:

I’m glad you commented, Matt’s comments instantly reminded me of your books… and about getting a check every day (from someone else’s work)!!!

Good to hear from you,

don, sdca

It’s called being in alignment… - Posted by Carol

Posted by Carol on December 19, 2000 at 15:26:51:

Risky is related to the concept of loss… loss is related to scarcity, not abundance. When you are in alignment with what you are meant to be doing, risk becomes a growth-producing factor… not a potential loss - producer.

You sound like you are right on track - and isn’t it fun?!!

Happy holidays.