the only way to really get rich in RE is... - Posted by StevenS(CPA)

import · July 25, 2007, 12:25pm

If you were… - Posted by David Alexander

Posted by David Alexander on July 25, 2007 at 12:25:57:

(although, I’m not gerald, I had to answer)

If you were to fly out and watch me work… You’d be sorely dissapointed… You’d find out I work in my businesses about 2 - 5 hours a week…

And on them maybe about 10 - 12 or so… when I’m not playing holdem’…

Mostly just thinking of new ideas to implement or ways to improve systems…

And another 5 - 10 hours a week or so… chasing shiny objects of the next great venture I want to start…

import · July 25, 2007, 12:18pm

Now we have… (bring a sack lunch) - Posted by David Alexander

Posted by David Alexander on July 25, 2007 at 12:18:26:

the making of a good thread… It’s been along time since I’ve seen contrarian view points on worthy topics around here… Back in the day it was nice to see Piper swingin’ it out with whoever… with a chime in or two from Alcorn and Garcia… (not that this post is anywhere near that type of caliber)

Ok,…

The thinking that no one can do it better than I is the thinking that keeps most from building a successful buisness beyond themselves… RE or otherwise.

It’s actually an emotional line of thinking to fullfil your own self gratification and protect your self worth… and serves no puropose to build what I call a real business, one that runs itself… while you (the owner) monitor and create more systems… from at times a remote location… whilst enjoying some of what life has to offer.

If not… you just have a job… Albiet a highly paid one when doing real estate deals… but, nonetheless a J O B… and eventually all jobs wear you out, and you get burned out… imagine if you get burned out after being highly successful in real estate and don’t want to do more deals or talk to more sellers… Your income stops… That sucks…

Building a bonafide business (one that works for you) is one of the best ways to create a cashflow stream. Building a business that buys your investments is taking it to the the next level…

Building a business that both creates income, buys your investments and then becomes an investment in and of itself is taking it to an even higher level… You can’t do that by wroking in the business.

Ok, on the point about credibility, trust… Again, not true… That’s why your work with with truly motivated sellers… They just want a solution… and they will work with anyone that provides that solution… In fact, back at my office as we speak… We have deals working that I’ll never see the properties… and I’ll never meet with the homeowner… He’s dealing with my people and he’s signing off on everything that’s needed… simply because he’s motivated…

If we were worried about that credibility thing… could log testimonials from deals as we do them… record conversations… take pictures of the successes… sure… the business should take a life of it’s own.

The point is I doesn’t have to be you… and if you ever want to grow your RE business or any business for that matter… You have to get your entreprenurial butt outta the way.

Over the long haul “a business” that markets will crush a business that doesn’t… referral type business is not something you count on solely as your only type of marketing… Real marketing systems is what should create the business and the refferal stuff is a residual effect of doing good business, of treating people right…

So, the business that markets will continually outdo the business that doesn’t… exponentially… especially because if the business preforms as it’s supposed to… the referrals become that residual reward… exponentially as well…

This business is a hard one to build referral deals… as typically homeowner that are motivated are in a situation that’s embarassing… and they aren’t going to talk to their next door neighbor and have a conversation that goes…

Oh yeah… I just talked to Steve and he’s going to save my house from foreclosure, man he’s great… you know…

And the nieghbor says… you know I’m getting behind on my house… and I’m gonna be facing foreclosure as well you think that steve guy might buy our house too…

It ain’t gonna happen… It’s hopefully a once in life time type of situation happening to them… and they ain’t talking about it if they can avoid it.

And steve… I know you’d like to believe that they’ll refer someone to you… but, they don’t remember you from adam…

And if you talking about referrals from partnerships deals… with that 40/60 type split thing… How much money are you losing by being lazy and not creating a solid marketing machine and system…

In the real estate industry it costs us less than 3%… and usually less than 1% when niched… to market compared to a minimum of 10% for most industries…

So, on a deal that you get from a referral partner… that your going to make 25k on… it cost you $10,500…

If you doing just a meazly 6 deals a year… that’s over 60k…

For 60k… You could hire one or two bad to the bone employees and fire up your marketing… (throw some money at it) and they would make you 10 times that amount back while freeing up your time…

Ok, Now I gotta disagree with you…

I’m from the group… that goes… “Fire, Fire… Ready… Aim… Fire… Fire”

For getting started, I rarely have any kind of business plan…

Heck… that’s how ended up with BanditSigns… it was a just a whim to pay for my marketing… now it’s a multimillion dollar thing… that adds more to my overal plan… had I stopped to create a business plan, I assure you it wouldn’t be so…

Instead, however, I have strong commitment to my written and life goals…

And I know that each biz I build fits into the overall plan…

And as we do deals they fit into the plan for the business…

Or for the personal portfolio… for the overall life plan…

I did, however have a small stint in the beginning where I did deals… just for the sake of doing them… That’s a huge trap to avoid…

David Alexander

P.S. I’d rather make $1,000 a month with none of my time than $5,000 a month with even some of my time involved.

The former is repeatable, the latter cost you time and money.

P.P.S. We all have our own plans and ways to get there… and ain’t none of us wrong…

import · July 27, 2007, 1:41pm

Re: OK I’m done being flamed - Posted by dannj

Posted by dannj on July 27, 2007 at 13:41:07:

“Like I said, I was just posting my feelings and thoughts about REI. Mostly to help new investors with what a little insight on what has helped me over the years”.

I’ve done only deal so as a newbie I am included in your target audience. Personally, I think it was a great post. I even copied it into my notes (along with a ton of other stuff I’ve collected from this great site).

Keep it up,

Dan

import · July 25, 2007, 7:24pm

Re: OK I’m done being flamed - Posted by John Behle

Posted by John Behle on July 25, 2007 at 19:24:35:

Sometimes on this site you can say “nice day isn’t it” and have someone argue about it or get offended. You can try the most helpful post and somehow end up with enemies. It just takes a thick skin. I’ve almost quit posting several times because it wasn’t worth the aggravation. Seems like right at that point though that someone says “thanks” and that balances the scales and makes it worthwhile.

At times, others have puposely tried to drive people away. I’ve had a couple attacks that were for that very purpose. Sadly, some valuable contributors have been driven away. I thought your post was meant to be helpful and educational.

Seems to me like you have some valuable things to contibute. I’d hate to see that end.

import · July 25, 2007, 2:09pm

Re: Not necessarily - Posted by StevenS(CPA)

Posted by StevenS(CPA) on July 25, 2007 at 14:09:37:

I know I may be in the minority here on this board and with what RE gurus try to sell on tv, but put it this way if you only work 10 hours per week now, how much more money would you make working 40 hours? That is a valid question.

Sure I could work 10 hours a week and make money, but I’m not satisfied with just making enough to pay bills.

I love this business. To me, you have to find a niche that you love and then do what you love. So it’s not a job to me.

About the firm you used to work for you said, “They knew how to find money and investment
partners. But most importantly they were creative. They knew how to
find the very best help: legal, financial, engineering, consultants. They
knew how to work with the county like nobody’s business.” and that is what I’m saying.

This is a people business. By networking with investors, developers, city planners and players in the industry you will make so much more money than with one house here and another house there. But that takes work and time to develop those relationships but its not impossible.

But like a said in my first post most investors I have met are lazy, its not a knock against anyone because I know a lot of people would be happy working ten hours a week and making 300k+ a year but I love what I do and I would be bored sitting at home doing nothing. Just a personal perference I guess.

import · July 25, 2007, 2:16pm

Re: Not necessarily - Posted by StevenS(CPA)

Posted by StevenS(CPA) on July 25, 2007 at 14:16:31:

gerald

I am not trying to argue with you at all. I agree with a lot of what you are saying, like I said before I do not profess to know everything or have all the answers, my post is just what works for me and my situation.

There are a lot of different creative and not so creative ways to make in in and out of RE.

I was just posting what works for me.

import · July 25, 2007, 4:08pm

You still using that abacus? - Posted by John Behle

Posted by John Behle on July 25, 2007 at 16:08:46:

or was it a slide rule? I can still picture you busily crunching numbers on that three dollar calculator you brought to class. The thing that jumps out at me is that practice exercise we did and the deal you structured that you plucked from air. You seemed to have a knack for knowing it would be profitable without having to crunch the numbers. I seem to remember it took us some time to figure the actual yield and it was very good.

Don’t know why that came to mind, but we sure had a good time mocking your calculator!

How’s it going? Where do you focus your efforts these days, etc? Hope to connect with you at another seminar someday. John

import · July 25, 2007, 1:33pm

Re: If you were… - Posted by Kristine-CA

Posted by Kristine-CA on July 25, 2007 at 13:33:46:

I always forget to include those hours that I’m spending chasing/
researching/brainstorming about my next great venture…because I
don’t think it’s work!

import · July 26, 2007, 8:50pm

Ditto John! - Posted by Todd (AZ)

Posted by Todd (AZ) on July 26, 2007 at 20:50:39:

Exactly.

That’s one problem here, there are many that feel threatened, or want
to stroke their ego and insist that they are right and everyone else is
wrong. You come on and try to help, and end up in a mindless childish
debate over people trying to discredit you, rather than appreciate that
we all have different experiences and knowledge.

Todd

import · July 25, 2007, 4:55pm

Re: Not necessarily - Posted by Kristine-CA

Posted by Kristine-CA on July 25, 2007 at 16:55:00:

You said if someone is making 6 figures and working a few hours a
week you want to see how to do that. In this post you say 300K a year
and 10 hours a week doesn’t sound good to you. So which is it?
Maybe you could figure out your personal preference before posting
conflicting comments.

I love what I do too. REI is just one of many things that I love to do.

import · July 25, 2007, 3:01pm

Re: Not necessarily - Posted by gerald(tx)

Posted by gerald(tx) on July 25, 2007 at 15:01:32:

Why do we work so few hours?

In my case, it has to do with the availability of super bargains. You can’t just dial up and say “send me over a super bargain” round the clock. I may wait a month or two to find that great deal that will translate into a huge chunk of cash. Then I go to work and put in 20 hrs/wk for a couple of weeks. This averages out to a low hours/wk.

And it doesn’t take many deals to make six figures. I only buy 5 or six houses a year.

gerald

import · July 25, 2007, 2:49pm

Actually,… - Posted by michaela-CA

Posted by michaela-CA on July 25, 2007 at 14:49:54:

You say now, that you were just posting what works for you, but your original post said :‘the only way to get rich…’, That’s why you’re getting responses telling you that that is not so.

Michaela

import · July 25, 2007, 10:16pm

Re: You still using that abacus? - Posted by David Alexander

Posted by David Alexander on July 25, 2007 at 22:16:20:

Just still out here creating wraps… moving toward some bigger projects… trying to make my into some developments… and a commercial deal or two…

All while building internet businesses…

That calc was that old TI-BA solar… they quit making them…

Yes… miss hangin’ out in Utah greatly… anytime you create a reason… I know me and Nate (Roos) are there…

You ever get back to skiing… ?? I remember you missed it.

import · July 25, 2007, 10:17pm

Re: If you were… - Posted by David Alexander

Posted by David Alexander on July 25, 2007 at 22:17:31:

I don’t count it either…

Cause to me that’s what makes it all worthwhile… being able to do those things and chase those shiny objects…

The pursuit…

import · July 26, 2007, 6:40am

So True about Hard work - Posted by Ben

Posted by Ben on July 26, 2007 at 06:40:14:

It is true what Gerald and Kristene are espousing. As a newbie hard work gets you over the top, so to speak. It is the process of ‘earning your stripes’ that open doors for super deals. It is about working smarter, not harder.

I might add success also comes to the determined and persistent investor. Too often a deal is passed because it is deemed too much work. The key is to be persistent in tracking down that deal that looks like a winner, especially if you are the only horse in the race. In other words DON’T QUIT.

My best deal was a year in the making. It was an hour or so a month; a short pay gone bad; a fire; an insurance claim dispute with Lloyds of London; a tainted survey; a fraudulent front end loan; a recalcitrant seller; a mortgage lien holder who had tried to double dip when hey had already been made whole from the insurance company, yet still had attempted to foreclose–a clear fraud. In the end a $15,000 investment will net over a million dollars when it is done. While my competition had long ago quit, I had employed what I had learned from books and tapes long ago, stick-to-it-ivness.

import · July 25, 2007, 11:00pm

Re: You still using that abacus? - Posted by John Behle

Posted by John Behle on July 25, 2007 at 23:00:33:

Still dealing with the back problems, so skiing is a very remote possibility. Fixed the heart which is cool. No problems anymore that way, but I have about a hundred thousand too many miles on my lower back from the pro freestyle days. I’m much closer to a wheelchair than a chairlift these days.

I’ll let you know if we do any seminars. With you, Nate and Dennis’s rib fest, I’m very tempted. It’s kind of sad. This is the week of the annual five day that I used to teach. Haven’t done one since 2000 now.