I purchased my first property in 2001. I made $100,000 on that house. By 2003 I was a full time real estate investor. In the past 15 years I have purchased, fixed and flipped more than 1,000 houses.
Many people know that story.
However many people do not know what I am about to share with you.
I never ever intended to go into the coaching business.
That was never my intention.
I had attended boot camps as a beginner before I got started in this business.
But I never ever imagined that I would be the guy teaching other people how to invest.
It happened completely randomly (by chance) like most things in my life.
My intention was to buy houses, fix them up, rent them out and retire. As prices moved up in 2003 and 2004 I realized that I needed to find more houses and I needed help finding these houses. I thought it would be a good idea to hire people to locate deals for me. My motivation was to hire bird dogs and teach them how to locate deals.
I didn’t realize what a challenge this would turn out to be. I didn’t know how many people just want a JOB (which stands for just over broke). It seems like as long as an employer is willing to pay $30,000 a year and advertise that job, there are a lot of people out there who will do almost anything just to have that job.
It seems that most people simply have no clue how to pay their bills other than having a job.
That is sad. And a real pity.
$30,000 just isn’t very much money to live on. Ask any college graduate who is in the job market right now how hard it is to find a job. The average college graduate spends more than one year looking for a job!
So back to bird dogs.
I posted a classified ad in the newspaper for a job for a property locator. In the ad I stated that you would be paid $1,000 for every deal that you located. And I would provide the training.
I had a few people respond to the ad and I interviewed them and picked one guy who seemed nice enough and intelligent enough for the job.
His name was Ed. He needed training because he didn’t know what to do. So in order to teach him how to locate deals, I had him drive with me in the car for a few weeks.
Ed sat in the passenger seat of my car and I drove around looking for properties, checking vacant and abandoned houses, and calling wholesalers looking for houses to fix and flip or fix and rent.
Ed drove around with me for a couple of weeks. When I think back, I can’t believe that I did that for free. You see here is the catch. Most people think they should be paid for their time. They think that if they are driving around learning then you should be paying them. And when they find out that they only get paid when they close a deal…… well then they start falling like dominoes.
A few reasons. The first reason I said above. Most people are just looking for a job. They need to pay their bills and if you can give them something to do and they can pay their bills they are happy. They don’t want to be rich or financially secure. They just want to get off work, order a pizza and watch the next “Game of Thrones” or “House of Cards” episode.
Do you think I am oversimplifying?
If you do then let me ask you this.
How many hours did you watch TV last month?
Now how many hours did you spend reading about financial freedom, making money, investing, business, motivation etc. last month?
Do you get my point?
Nobody wants to be broke. Nobody plans for it.
But what most people don’t realize is that it is their actions that keep them broke.. Their daily habits (like watching too much TV).
Now if you are reading this and you think you ain’t broke because you have a job and you can pay your bills well then – how is this for a sobering statistic.
Habits like spending way too much time watching too much TV do not create financial freedom.
If you have a job you need to understand that JOB stands for Just Over Broke.
If you need your next pay check to pay your bills then you are broke
If you would be in a real bind if you lost your job then you are living paycheck to paycheck and you are broke.
And you will never create financial freedom for yourself and your family living like that.
But Ed didn’t understand this. He was looking for a job. As he drove around with me hearing stories about how I purchased all of these houses without using any of my own cash he was more interested in “shooting the shit” or talking about other topics.
After a few weeks of training I turned him loose.
He found one house which was a For Sale By Owner deal. It wasn’t an amazing deal and I should have probably passed on it but I wanted him to make some money and I purchased the house. I paid him $2,000 for finding that house and I kept the house as a rental.
A few weeks after that he quit his job. He got a job working for All State Insurance for a sum total of $2,000 per month. He felt bad about quitting. He told me so. But he said you know I get a check every two weeks it’s guaranteed and I have bills to pay.
He thought looking for deals was “hard and time consuming”.
So is having a job. Way more hard and way more time consuming.
But he didn’t get that part. I like to call jobs indentured servitude.
You work for someone and you do what they tell you to do from this hour to that hour until they tell you to leave.
That is not a way to live.
So now that my bird dog has quit I go back to doing what I do – which is looking for houses to buy, fix and flip or buy, fix and rent.
As friends and associates saw that I was making more money buying, fixing and flipping houses (without using any of my own capital) they started asking me if they could join me when I went out to look at properties.
After my experience of having a bird dog sitting in the car with me for a few weeks my answer was always an emphatic no.
My car was like my mobile office. I had my laptop computer, my notepad and my calculator on the passenger seat. I made many many calls to realtors and wholesalers. I called For Sale by Owners, bandit signs and real estate agent signs. I wrote down every vacant and boarded up house I could find. I located opportunities to advertise for motivated sellers.
It was work. Looking for properties is hard. And you don’t come home every day with a pay check.
In fact, most days you come back with nothing. Driving around looking for houses that could be good deals to fix and flip is time consuming. Their is no guarantee that when you come home you will have found a house.
On most days you will find nothing. You will come home empty handed.
But as you get better.
As you know what you are looking for, you will begin to identify opportunities.
And the more you do it, the more opportunities you will find.
And when you start fixing and flipping these houses and you see how much money you can make I guarantee you that you will want to quit your job.
And the better you get at it, the more houses you will flip, the more money you will make and the more people will want to give you money.
Before long you will have more money from lenders than houses to buy.
And then at that point YOU will need to hire bird dogs to locate deals for you.
That is my work. I don’t have a 9 to 5 job. I get paid based on the houses that I fix and flip or buy, fix and rent.
If I find zero deals. I make zero money. I don’t rely on a paycheck or a job. I really on myself and my ability to find great deals that will make a lot of money.
And that is way more rewarding that having a job.
In this business, you need to search through many houses to find the ones that make sense. And you must look at them individually which takes up a lot of time. Some of the properties I see are a few hours away. In some cases I have to stay overnight in cities where there are properties that I am working on.
After you factor in the drive it’s a long day of work.
As you grow you can hire people to do that work. You can hire property managers and project managers – and you can just sit in your office or home office and supervise all of the work that is being done.
It is at that point that real estate begins to become extremely rewarding financially.
When you can wake up in the morning, go out to breakfast, and do absolutely nothing and houses are being purchased, repaired, and sold (without your effort) then you have arrived. That is when you are entering the financial freedom zone. From that point on, your financial freedom is dependent on how you invest not how you work. You increase your net worth by investing. Not by working hard at your job or having two jobs. So instead of focusing on getting a job, focus on learning how to invest. And real estate is the perfect vehicle since when you learn there are people like me who will pay you to find deals for them. Your education is free. Your only commitment is time. and according to statistics the average american watches 5 hours of TV every day. So time is not really a problem – unless you think it is.
So after that experience with my first bird dog you would think that I would be done with bird dogs. But I wasn’t. One day a good friend introduced me to a guy that had just sold his Vitamin Store Business. He was looking for new business ideas and this friend mentioned that the two of us should meet.
When we met for lunch, he told me how he could be a good lender for me and how he was interested in contributing capital and partnering with me on deals. (this was back in 2004). He wanted to “feel out the business” so he drove around with me in the car for three days.
And at the end of the three days he told me he did not think the business of flipping houses was for him. I guess he envisioned we would be visiting properties like he saw on the TV shows about flipping houses. Instead we were driving around looking at hurricane damaged houses with mold and water damage from Hurricane Frances which was quite different to the glitzy reality TV shows that he was watching on TV.
I needed more deals. I needed more houses. I now had more investors who were literally throwing money at me. It’s a funny thing. When you start out as a real estate investors it is so hard to find money. It took me two full years of working full time as an investor before I found my first private lender. But once those lenders start getting used to those 10% returns month after month they become addicted to it.
When they see that you know what you are doing.
When they see that they get their money back in less than a year…
They want to invest more!
And they tell their friends and relatives about you.
And suddenly THEY are taking YOU to lunch.
When you make other people money everyone wants to be your friend.
I needed more houses and I needed more bird dogs. But I knew that having someone in the car driving around with me was not a good use of my time.
I started to educate myself. I read a book that changed how I thought about business and Investing (and life). The book was called “The Emyth Revisited by Michael Gerber”. You can check it out on Amazon Here
I decided I needed a system for finding houses like the book spoke about.
I rented out a conference room at a hotel in Port St Lucie (which was where the hurricane damaged houses were). I placed a small classified ad in the newspaper advertising for property locators (bird dogs). I stated in the classified ad that I will pay $1,000 for any house that I buy from a lead that they find. When people called I gave them the time and location of the meeting at the hotel. I gave them a presentation on how to find houses. I did this for free. I also provided a free lunch to everyone that attended.
I had 11 people show up. Two of them, a young couple listened to the information, ate the free sandwiches and left (without saying anything).
In the presentation I showed them how to locate vacant properties. Today I would charge for this information. But back then I didn’t know that.
All they had to do was send me the information on the property and the address of the vacant house. If I purchased the house I would pay them a finders fee of $1,000. I showed them how to drive around looking for vacant, abandoned and boarded up properties. I taught them classic signs like overgrown grass, code violation notices and boarded up windows. A great sign was blue tarps. If there was a blue tarp then it meant someone was taking care of the property. If there was no blue tarp and the lawn was overgrown then I knew that the house was vacant.
Hurricane Frances in August of 2004 had created a lot of hurricane damaged houses. FEMA was giving out free blue tarps at the time, so it was an obvious telltale sign of vacant houses. Hurricane damaged houses are an excellent opportunity for real estate investors. When you see a hurricane hit, if you can go to that area within a week or two and start marketing for properties.
Of the 9 people that watched that presentation, 7 said they were interested in being property locators. All of them were unemployed. One was an insurance agent. One was a mechanic. Just random people who had answered my classified ad and shown up.
Two days later, 2 of the bird dogs had quit. We were down to five people. One of the guys that quit told me on the phone “I am not driving around all day without getting paid”. Clearly, he did not understand the concept. Today people pay me a lot of money to teach that information.
What he should have been asking himself is this:
How is this guy willing to pay me $1,000 for a vacant house address?
What is he doing with that information?
If he had dug a little deeper then he would have realized that I was buying these houses, fixing them up and creating $30,000 in equity from each house.
And he would have realized that he wasn’t driving around without getting paid. He was getting paid in education and training.
When I started out my mentor Ben told me that there are two ways to learn. You can learn with time or you can learn with money. Being a bird dog is learning with time. Writing a big check for coaching is learning with money. I don’t know of any other way for a new investor to learn this business. If you spend hours trying to piece together bits and pieces of free information from the internet and from free webinars, and online forums then you will NOT get good results. That is a good way to confuse yourself with information overload and a bunch of differing opinions. Worse is that you will have other beginners on these real estate forums giving you potentially bad advice. If you want to learn how to do something(anything) then go and find someone who is already doing it very well. Then offer to either work for them for free (or very low wages) or pay them to teach you. It’s that simple.
If you want to create wealth you will need to learn how to stop trading your time for a paycheck. I have a t-shirt that I give out at my boot camps with that quote on it (my quote). If you think that to make money you need to show up at a job and work from 9 to 5 then you have it all wrong. If you want to make real money, increase your net worth and create passive income and financial freedom then you will need to learn how to invest. You will never make a million dollars working hard at your job and saving for a rainy day (unless you are a dentist or doctor).
It is what you do with those savings and how you invest that will determine your future net worth and income.
And I know of no better investing vehicle than real estate. With real estate you can use borrowed money which gives you massive leverage and huge tax advantages.
Ok, let’s go back to the story of the bird dogs from that conference room.
By the end of the second week there was only one bird dog left. Her name was Patricia.
Shortly thereafter I went on a trip to Spain. I remember being in a hotel in Madrid when I received an email from Patricia that she had found a house. She had also located the owner (from the neighbor) and she already had a price that the owner wanted for the house. I drew up a contract on my computer and had it printed and faxed from the lobby of my hotel in Madrid. They charged me 7 euros per page. It cost me almost $100 to fax that contract to the seller.
When I returned from Spain I closed on that house and I paid Patricia her $2,000 finder’s fee.
Now Patricia, the thing about her is that she did get it. She understood the value of the information she had learned. She realized what I was doing with those vacant and abandoned houses.
She was smart. She thought past the driving around and not getting paid attitude of the others.
And she happened to have a brother who was a general contractor. And armed with the little information she learned from that experience with me she went on to buy, fix and flip many houses.
It wasn’t difficult for her. All she had to do is go by the house and watch the repairs that our crew were doing and then see what we listed and sold the house for. Since she knew what we paid and her brother could estimate the repairs they figured it out really quickly.
What is interesting is that ANY bird dog can figure out that information.
Patricia quit her job and went into real estate investing full time with her brother.
I saw her name on many comparable sales reports when I was looking at properties. She did very well for herself.
For me, the part that was really life changing was that I had developed a system.
It was not very refined. But while I was out of the country on vacation I had managed to have someone else find a house for me to buy that would create around $30,000 in profit. I had made more money on that house than my entire vacation cost me. And that vacation cost me $23,000!.
It was one of the best vacations of my life (if not the best). I went with my wife and two children all over Spain including Madrid, Seville, Marbella, Malaga, Nerja(my favorite beach town), Rhonda, and the white Andalusian villages.
We spent almost a month in Spain laying out on the Mediterannean.
And while we were enjoying our vacation (and the blistering summer heat of Spain), Patricia was out there looking for houses!
I made note of that. I realized that a system of property locators was very important in order to grow and scale my business.
I decided that I needed to find more bird dogs. I needed to have huge rooms full of bird dogs. I needed ten times more people than I had on that first day in that conference room. So I could create 10 Patricia’s all locating houses that I could buy, fix and flip.
And that is how the idea of the Distressed Real Estate Boot Camp was born.
A couple of months later, after sharing this story with a few friends (it’s funny how making money attracts people) a friend of mine asked me if I would teach him. I said no, I am not interested in doing that.
He said I will pay you $5,000. I thought about it.
I told him that I would spend one week with him – Monday to Friday. And all questions would be via email. No phone calls. No texts. He agreed to those terms. I had him sign an agreement. I told him there would be no refunds under any circumstances. He thought $5,000 for 5 days was a lot. I told him that if he applied what I showed him he could make $500,000. And if he didn’t… well then that was not my problem since I was showing him the same information that I used it was up to him to apply that information.
Six months later a friend of his asked me to teach him.
I told him it was too time consuming and that I didn’t have the time (it was and I didn’t).
I also told him it was not worth $5,000 for me to train him.
He offered me $10,000.
I made the same agreement as the first guy.
Five days only.
That guy quit his job and became a full time real estate investor.
I often wonder why some people do so well with this information and others do not.
I am not 100% sure what the answer is but I have some interesting observations.
Most people who take the information and run are very positive people (not negative).
They are fun to be around. That makes it easier to work with them and easier to help them.
Most people who do well with the information I give them are NOT set in their ways. They are willing to explore and they do not have pre-conceived notions about real estate or anything else.
Hands down the hardest group to train are realtors. They have an idea about real estate and unfortunately everything they have learned about real estate hurts their understanding instead of helping it.
The easiest people to train are the ones that know nothing. I trained a 20 year old kid who worked at Wendy’s making $6.75 an hour how to flip houses. He flipped 17 houses.
I can train anyone on one condition. They have to be willing to empty their cup. They have to empty their head of every conceived notion that they know about money and investing. And when they are willing to learn then they will.
There is an old zen saying. “The teacher appears when the student is ready”.
If the student is not ready then the teacher cannot help them. EVER.
Paying $10,000, $20,000, $30,000 (or more) for real estate coaching is a lot of money.
If you are going to do that then you better be willing to commit yourself.
You better be willing to burn your ships. Like Cortes did in his conquest of Mexico in 1519.
Cortes had to make it work. He had no other options
When I started as a real estate investor I had to make it work too!
In March of 2000, after being a financial advisor for 12 years, I lost my business, my life savings, and my dignity when my brokerage business collapsed from the Nasdaq Tech Bubble Collapse.
I had to make real estate work. I had no other options. When I started working for Ben as a bird dog, I told myself that I was willing to make him coffee if he asked me to do so. I was willing to do anything to learn. I would do anything he told me to do. And I would listen to everything. I felt like a failure. I felt humiliated. And I was going to make this real estate thing work. I had no other options.
And you know what?
I made it work.
And if you were to ask me Lex what is the one thing that you think contributed to your success (other than persistence and hard work) I would say it was without a doubt being willing and able to LISTEN to instruction from Ben.
Along the way I improved my system.
When I started out we were door knocking foreclosure leads.
My first deal came from a classified ad in the newspaper. So I refined what I had learned. I enhanced upon it. And my knowledge grew.
So the first thing I think you need to have is you need to be really desperate to succeed. You need to be almost at a situation where you have no other options. That is the one common thread that I see. I don’t have too many wealthy doctors and dentists signing up for my program.
I have people who WANT TO MAKE MORE MONEY signing up.
The same goes for students and coaching payments.
I realized that the more I charged for coaching, the more serious the student would be. I have since come to question that theory since if you have a few hundred thousand dollars, then you won’t feel that much pain from spending a few thousand dollars on coaching.
Swiping your credit card will not make you a wholesaler. Hanging out with me will not make you a wholesaler either if you are not willing to put in the hard work and the time to learn how this business works and to educate yourself on your target market, prices, etc.
Since 2004 I have coached thousands of students through my boot camps and Advanced Inner Circle Training. Along the way, the price for my coaching has doubled almost every year. I began to realize the true value of teaching someone how to quit their job and make six figures in real estate. I began to see how this was more valuable than a college degree to many of them. And they were willing to pay $100,000 (or more) for a college degree. I also realized that I was the only guy in the country who was coaching his students (who didn’t hire coaches). My prices for coaching went up. And the demand for my coaching went up. I became more selective about who I would work with. I began turning more students away than I accepted.
And without even having a sales floor, or having a single individual in our company even follow up on incoming leads we have managed to sell out every single boot camp we have had in 9 years!
Clearly we were on to something. We had a system that worked.
I knew I was on to something big when the big national real estate gurus starting using my name in their “pay per click” campaigns on Google. When I noticed that my website traffic was outranking some of the biggest names in the business it finally dawned on me that I was getting national attention and exposure. That exposure turned into articles in magazines, interviews on radio and even a picture of me on the front page of two different national newspapers on stories about flipping houses.
So that is how my boot camps and coaching programs came about. Like I said, I never intended to start a coaching program.
So how did my Home Study Course come about?
When the market peaked in 2006 I figured I would kick back for a year or two, and wait for real estate prices to come down. It made no sense to keep on buying if prices were going to go down. I sold the fix and flips that I had on my books (barely), saved up some cash and waited for the storm to hit. I kept some of my high cash flowing rentals.
I decided I would wait at least two years until I purchased another house.
After I had made that decision, I had a lot of free time on my hands.
I had always wanted to write a book.
I wanted to write a book about my first few years investing in real estate. I wanted to share with people the incredible wealth building potential of real estate. I wanted to show people how I had received the down payment money for my beautiful home in Boca Raton from only one hurricane damaged house (which made me $88,000).
And mostly I wanted to show people how I did this with someone else’s money.
Writing a book seemed like the best way to share that story.
I asked a friend of mine who had authored a book what the best way to go about doing it was.
His answer was to try and write just one page a day.
In 2006, I sat down and began to write.
I never realized it would take me 2 years to finish writing.
And that it would be an 800-page word document which would be the equivalent to the content of almost 4 books (800 pages of a size 10 arial font).
If you have ever purchased a real estate “Guru” program then you are familiar with what they look like. With few exceptions, most of them use a large font and double or triple space between lines. Many of the courses have lines for notes on alternating pages. The lines for notes is a way to fill up the number of pages of the book. They want to make their book (or course) look bigger than it really is.
Along the way I learned that most real estate gurus did not even write their own material. They paid “ghost writers” to write their books. They admitted this openly to me. In fact one of the biggest Real Estate Gurus on the planet introduced me to his writer when she joined us at dinner (she was his employee).
My Home Study Course was not like that.
Yes I am the idiot that actually sat down and spent two years writing it.
And I don’t have an infomercial.
That became the blue print for my Home Study Course.
After it was complete I realized that it was basically a How to Study Guide on How to Buy, Fix and Flip Real Estate without using any of your own money.
I spent two years writing that Home Study Course.
Do you have any idea how time consuming that is?
To wake up every morning and spend a few hours writing?
I wrote for 2 years.
And then I edited it for another six months.
I gave the first manuscript to my dad to read. We went on a cruise together and it was the last trip that we had together before he passed. And I am glad and honored that he was the first person to read my Home Study Course.
I called it “Millions in Real Estate with No Cash and No Credit”.
Now that I had a course I had to figure out how to sell it.
I already knew that this could be a valuable study guide for potential bird dogs. But I also knew based on my experience with bird dogs in the past that I was not going to train anyone for free. My time was valuable. I estimated that if I focused on finding deals my time could be worth as much as $1,000 an hour (or more). If I was going to train someone I would have to get paid at least that amount or it would not be a good use of my time.
Having a Home Study Course and a seminar seemed like the best, easiest and cheapest way to teach as many bird dogs as possible at the same time.
I decided that I needed to hold a boot camp for bird dogs. That was actually the original name.
I knew that many of the students that I trained would go on to become full time wholesalers (and they have). And I knew that I would be adding value to other peoples lives. I would also be making money in the process. It seemed like a win win to me (and it is). I was concerned a bit about the competition in my local market. But I have an abundance mindset. I don’t believe in scarcity.
A few years later, one large well known wholesaler in South Florida called me to yell at me that I was ruining it for all of the wholesalers by teaching people how to wholesale and bid on properties. I laughed at him. Although before my training, no one was teaching students how to bid on Hubzu.com and Auction.Com. I trained these topics 5 years before anyone else did. I unleashed an army of students on Hubzu.com and collectively those students wholesaled more than 500 houses on that platform alone! Most of those students are full time wholesalers now. And they make $100,000 or more. Some wholesalers I know make more than seven figures. Wholesaling can be VERY lucrative if you know what you are doing.
I decided that attendees at my boot camp would get three days of training and the Home Study Course as a guide book. At the end of the boot camp they would have a basic understanding of wholesale real estate and locating deals. It was basically a bird dog training boot camp. This evolved into “how to be a wholesaler” training over the years.
I have always contended that being a bird dog and being a wholesaler are one and the same thing. Most wholesalers disagree with me. Bird dog is really just an entry level wholesalers. If you can locate deals, people will pay you for those deals. Whether the person paying you is one investor or multiple investors, either way you are locating deals and getting paid a fee. That is what a bird dog does. And that is what a wholesaler does. If you get good at finding deals at some point you are going to want to make more money than the finders fee. At that point you start building your cash buyers list and then you are no longer a bird dog and can call yourself a wholesaler.
But never ever forget this one important point.
That it all boils down to one thing.
Your ability to find good deals.
I knew I wanted to do a boot camp and teach as many people as possible. But how do I let people know about this event? I needed an audience.
After attending a local REIA meeting and watching a speaker do a presentation about real estate I noticed that he sold a program at the end for $997. As i watched this, an idea began to take shape in my mind. I signed up. And I went to his boot camp. And I observed and paid attention and took notes. While all of the attendees were thinking about the material I was thinking “How am I going to do a boot camp?”
I realized that I could start a real estate investment club.
I could teach other investors how to invest in real estate. I was certain that some of those investors would want to be bird dogs. And I loved teaching. I already knew that I loved teaching.
And the Home Study Course would be a perfect study guide for them. And from that I could transition to the Boot Camp. I figured I would start small with a few bird dogs at a time.
Maybe 5 or 10 people.
In October of 2008 I opened my real estate investor’s club. I called it the Distressed Real Estate Investor’s Association. At my first meeting I had only one attendee (I am not kidding). I had $500 worth of pizza and salad and only one guy showed up.
I decided to scale it down a notch, and I found a coffee shop that would let me host my meetings for free. I charged $5 to anyone who wanted to attend. I advertised my meeting on meetup.com.
Ten years later we are the largest meetup real estate group in the U.S (we have 12 Meetups).
Persistence pays off. Ten years of hosting a monthly meeting pays off. Showing up is 90% of the battle. Remember that. Trust me when I tell you that it wasn’t always easy to show up. I had the flu, a cold, you name it. But I always hosted my meeting. I never ever cancelled. I have held 142 meetings. In the first week in November I will host my 143rd meeting.
Consistency, Honesty, Integrity and Persistence. I call it the “CHIP” principle. You would be amazed what you can do if you are consistent and persistent. Even water can shape a rock.
$5 covered your door fee at the meeting and got you a drink and admittance to the event. I sold nothing at my meetings. All I did was teach. If someone wanted to be a bird dog then I sold them my Home Study Course. I did that for 2 years. Pure education. I built a loyal following of people that would come to my meetings. My meeting grew from 3 people to 5 people to 15 people to 30 people. I relied on word of mouth advertising, meetup and social media to promote our meetings.
When our meeting grew to 65 people, the coffee shop that was hosting us told us that we were exceeding their capacity and needed to move locations. That is when we committed to hosting our meetings at a hotel which is where we have been ever since. The door fee went up to $20. And our meetings were packed. We had some meetings with more than 100 attendees. Our typical meeting had 60 to 70 people.
The same day that I opened my Investment Club (in 2008) I also set up a new company called the Distressed Real Estate Institute. The goal of this company was to teach new investors how to make money investing in distressed real estate. The focus was foreclosures, short sales and bank owned properties.
It was the middle of the financial crisis of 2008. Banks were failing left and right. People were panicking. There were runs on banks. This was when Bear Stearns and Lehman Brothers failed. This is when the government stepped in to bail out the banks.
And all I could think was what an incredible opportunity to buy real estate. And I had a how-to manual that was ready to go. I was ready to do my first boot camp. I guess circumstance and chance met at the right time for me. Here we were, in the bottom of the market in 2009 and I was thinking about doing my first boot camp and I already had the study guide.
Or maybe fortune favors the bold. Either way, whether it was luck or instinct, I would rather be lucky than smart. And I had gotten very lucky with real estate. And I was certain that it was an amazing opportunity to buy. Everyone around me was pessimistic about real estate. But all I saw was opportunity. Think for yourself. Be original. Make up your own mind about what you believe.
I coined a phrase that I used at every real estate meeting. I started every meeting with this quote: “This is the best time in your life time to be buying real estate”.
And it was. I didn’t believe what the media was saying about real estate. I believed in the American dream. I believed that people from all over the world are literally dying to come to the U.S. And I believe that the population will keep growing. I still believe that. I always will. Real estate will keep going up long term. We will have bubbles. And we will have crashes. But long term real estate will keep going up. And buying and holding real estate long term will make you very wealthy.
In March of 2009 I purchased 7 houses. All the houses that I purchased were 3-bedroom 2-bathroom houses in a city called Port St Lucie. At the time Port St Lucie was the 7th fastest growing city in the U.S. The price for those houses was just $35,000.
I remember discussing with friends about what an incredible opportunity to invest in real estate this was. I was eager and enthusiastic. I had a Home Study Course and I was preparing for my first boot camp. I wanted to put my money where my mouth was. I purchased these houses just before the boot camp so I could show students HUD’s and pictures so that they could see that this was really happening. This was before Hubzu.com and Auction.com existed. I was finding these houses on realtor.com.
I was not a licensed real estate agent. Yes, these houses were sitting on realtor.com. Every day the banks were literally dumping more inventory of bank owned properties on the market. and I was literally begging my friends to buy these houses.
That is why I coined the phrase “this is the best time in your life time to be buying real estate”. I also had a crasser way of saying the same quote which I often mentioned right after the first one. The quote was, “From now until the day you die, you will never get another opportunity to buy real estate at these prices. I believed that then and I believe it now. We will never see $35,000 houses in Port St Lucie again. It was an opportunity that needed to be seized.
I set up my first boot camp for May of 2009. I tried to hustle to get people to pay $997 to attend the boot camp and get the Home Study Course. I thought it would be smart to start with people I knew and business associates (it wasn’t).
The response I got from people that I personally knew was very tepid.
I heard things like I understand you can buy a house for $35,000. But what if house decreases in value to $25,000?” I never understood that question. Why would you care if the house was rented out for $950 a month? That is crazy sick returns. If you don’t understand that then you have no business investing. Keep your money in a CD and wait for a rainy day.
I was shocked that I was getting such an unenthusiastic response. I realized that these doctors and lawyers and PHD’s were as spooked about real estate as the media and the articles in the newspapers.
My response to their question was that if those houses went down to $25,000 then Wall Street would start buying real estate. They laughed at me.
But loud bellicose laughs. Like I was an idiot.
And that is when I knew that I was right. When no one else believed it.
There was “blood in the streets” to use an expression coined by Barron Rothschild. It seemed that my earlier years of losing everything in the stock market in 2000 had prepared me well for this very moment. It was a do or die moment. I recognized the fear and the panic and I knew it was the time to buy real estate. And I was right. I somehow luckily purchased the bottom of the market.
In 2012, Warren Buffet the world’s most famous investor appearing live on CNBC’s Squawk Box, said “He would buy up a couple hundred thousand single family homes if it were practical to do so. He also said, “If held for a long period of time and purchased at low rates, houses are even better than stocks”.
Keep in mind that Buffet said this 3 years AFTER the market had bottomed. He said this 3 years AFTER I had purchased those houses. The market had already moved up a lot. The market bottomed in 2009. He said this in 2012.
That same year Black Stone Capital, one of the largest Private Equity Firms in the world entered the residential real estate market. It was the first time in U.S. history that Wall Street and Private Equity would enter the single family residential market.
Blackstone spent billions to buy nearly 50,000 homes nationwide, building the largest private portfolio of single family homes in the country. They were not alone. Other major players like Colony American Homes, Starwood Waypoint, American Homes 4 Rent and American Residential Properties purchased billions of dollars’ worth of single family homes.
An interesting side note is that those same firms are now effectively selling by going public. The smart money has made its move. I learned a lot by watching how major players operate. You don’t have to be early you just have to be right. Don’t be afraid to overpay when you want to scale and buy massive amounts of properties. My mentor Ben told me “if it is a deal at $35,000 then it is a deal at $38,000 too”. Don’t nickel and dime the bottom of a market. Just get inventory. Just buy. Buy everything that you can. Borrow until your eye balls bleed.
I learned the value of cost of capital. A term I had barely thought about since graduating with my major in Finance. If you can borrow enough money at really low interest rates and if you are right you can make billions of dollars. That is essentially what hedge funds and private equity do. I watched Black Stone Capital do it. And it was an amazing lesson. A brilliant move. A ballsy move but not as courageous as buying the bottom. But maybe smarter. Momentum at your back is better than a falling knife. When markets collapse people always rush in too quickly. It takes time for things to settle. Be patient. Watch, read, learn and wait. like waiting for the whites of their eyeballs in one of those old cowboy and indian movies. You have to pull the trigger just right. If you do your life will be changed forever.
Another real estate bust will come eventually. And when it does I will be patient. And when I think it is the right time to buy I will buy massively in scale with borrowed bank money. I already own the domain name that I will use. It will be called the Distressed Real Estate Fund. The minimum investment will be $1 million dollars. My goal will be to make 100 million. I haven’t even set it up and I already have my first two investors. I like BHAG’s (big hairy audacious goals). As Nelson Mandela says, “There is no passion to be found playing small – in settling for a life that is less than the one you are capable of living”. But the next time around I am not relying on mom and pop money. I am going private equity all the way. Rather have 5% of something huge than 100% of something small.
Those houses that I purchased in 2009 for $35,000 are now worth $160,000. We have made in my estimation around 75% of the up move in real estate in those markets. We are probably in the sixth or seventh inning. In any bull market, the final innings are where the biggest moves are made. In some markets like the Miami Condo market I believe we may have already peaked. But most markets are at around 75% with notable exceptions like San Francisco, New York, etc. The market that I play in, which is middle America single family homes is at 75% of the prior highs. And I anticipate that barring any major market shocks like a currency crisis or bond market crash (which can and will eventually happen) that the market can keep humming along. Inventory is tight. Rates are low. And if rates don’t go up dramatically the market might just keep humming along for a few more years.
Since 2009 I have trained over 2,000 students in my Partnership Program. We now hold 8 live training events per year. We have the Distressed Real Estate Boot Camp (which teaches wholesaling) twice a year and we also have the Fixing and Flipping Boot Camp (which teaches fixing and flipping) twice a year. We also have 4 Inner Circle Training Events per year for coaching students who want to learn how to wholesale and fix and flip. I personally teach all the events myself. I have no other speakers at my events.
From working with so many students, I have learned how to teach others how to do what I do. I have done it well – even if I say so myself because I am basing it on their progress and their results not mine. I now have a handful of students that are multi-millionaires from investing in real estate. Meaning their net worth has increased by more than two million dollars. And I have many students that have made low to mid six figures investing in real estate. My program has been a huge success. It has been far more successful than I ever imagined.
Over the years I have refined my training program.
I added to the Home Study Course a 6 Disc Audio CD Set and forms disc and Partnership Program forms. I added an online training site with more than 1,000 hours of training videos.
We listened to our students and our staff and we refined our teaching methods at the boot camps to make them better and better for our students. We created custom proof of funds letter sites so that our students could create their own proof of funds letters. We created custom offer generating sites so that our students could create their own purchase contract. We created sites for submitting deals and sites for partnering with us and other wholesalers on deals.
We have trained many wholesalers. I get all the local wholesaler’s emails and I keep them in a separate gmail folder. One day, I went through the emails in this folder. I was shocked when I realized that 40% of the local wholesalers sending out those emails had never been wholesalers until they attended my boot camp. I was creating my own competition. And I turned some of them into partners. I funded their deals and I found them buyers for their deals. And I marketed their deals for them and they marketed my deals to their buyers. Wholesaling is synergy at its finest. One of the best local wholesalers that I know has synergy with everyone. Do that. You will make a lot of money.
So, after that entire story of how I got into teaching other people how to invest in real estate, if you are a new real estate investor. I would like you to read this.
Before you get started. Before you whip out your credit card – I want you to read this.
If you are thinking about signing up for my real estate program please read this first.
I want you to understand that I wrote a Home Study Course that took me 2 years to write. Humor me and read it. All of it. That might take you ten hours.
I wrote a book about wholesaling called “Wholesaling Bank Owned Properties”. It teaches you wholesaling, bank owned properties, double closings and many other things you need to know. You could probably read that book in 2 hours.
I also co-wrote a book with the owner of the title company we do many of our closings with called “Title Insurance Tips and Secrets”. We cover transactional funding, land trusts, double closings, lien searches and more in that book. You could read that in 2 hours as well.
Your total time invested at this point would be only 14 hours.
Listen to the six audio CD’s. I will give you the benefit of the doubt and say that will take you 6 hours. You could listen to these in the car on your way to work. Or you could listen to them when you are at the gym or taking a walk or run.
Total time invested is now 20 hours.
Attend the boot camp in person or watch the videos on our training site. Watch all of the videos or attend the entire event. Don’t be on your laptop or on Facebook at the event. Pay attention. You might miss something important.
That is 3 days at 8 hours per day for a total of 24 hours. Add that to time spent and you are now at 44 hours total.
Watch the getting started training videos. That will take you another 6 hours.
Total time invested 50 hours.
Then watch the following videos in this order:
• Target Markets
• Hud Homestore
That will be another 20 hours or so.
At this point your total investment of time would be 70 hours.
Assuming you spent one hour a day you could do this in two months. If you spent a few hours a day you could be done in as little as one month.
After you have completed those 70 hours is when your real estate training will begin.
You will need to begin looking for properties and making offers.
You will have lots of questions and you will want to contact our support desk very often. That is fine. We are there to help you. You will need to learn about after repair value, repair estimates and what a house would be worth once it is repaired. You will need to learn how to calculate how much to offer. And you will need to do it fast. You will need to speak to realtor’s, listing agents and buyers and wholesalers. You will need to constantly make offers online and offline. You will have to register on online auction sites and bid on properties daily. You will need to mail out postcards and yellow letters. You will need to put out bandit signs. You will need to post deals on your blog.
You will think about quitting.
You will think about quitting often.
The people that are dearest to you will tell you to quit.
They told me to quit. I never listened. Remember the people who try and give you advice didn’t go to the boot camp. They didn’t read the training materials. They don’t understand the endeavor you are undertaking.
Only you understand it. The enemy is within you.
Your own fear is what is stopping you.
Fear of failure.
Fear of ridicule.
Fear of loss of money.
Many beginners quit.
How many? I would wager to guess that north of 90% of new investors quit.
Are you in the other 10%?
You may not be.
You may not have what it takes.
And that is okay.
This business is not for everyone. If you don’t really hate your job. If you don’t really have a burning passion to make a go of it then it will be way too easy to just quit.
The students who have the most success are the ones who have their backs against the wall. The ones who have no choice but to make this work. They are hungry. And they will out hustle everyone around them. Is this you? Or are you passive?
If you are content making $30,000, $40,000 or $50,000 a year then this is not you. It just isn’t.
If you are hungry and you spend your spare time looking at pictures of Lamborghini’s and yachts then maybe this is you.
If you are set in your ways and have given up on your childhood dreams then this is probably not for you.
If you want to live a life of financial independence with more financial security for yourself, your children and your grandchildren then maybe this is a fit for you.
But don’t expect it to be easy.
You will need to want it bad.
Bad enough that you don’t quit. Because quitting is easy.
Sticking it out is hard.
Like I said 90% of the game is just hanging in there and not quitting.
The other 10% is not being lazy and being willing to learn and being consistent and being persistent.
If you are willing to commit your time and energy. If you are willing to put in the time to learn and educate yourself. If you are willing to make offers every single day.
If you are willing to hustle like you have never ever hustled before in your life.
If you have an awesome work ethic and you are willing to work hard and not be lazy. If you are willing to listen to my advice and not be set in your ways.
If you can do all of these things then sign up for my boot camp by clicking here.
If you are not willing to commit your time and energy. If you are lazy or if you think that swiping your credit card will somehow by osmosis teach you real estate investing then save your money. If you are an existing student and you are not getting the results that you want then you should read the training material again. Read all of it. Don’t skip parts of it. Don’t skim through it and think to yourself that “you already know that”. If you are not doing deals, if you have yet to flip a house then read the material again. Watch the training videos again. Attend the boot camp again.
Log in to the training site often. Watch all the training videos. We add new material every week to our training site. When was the last time you logged in?
We know the answer.
We see the stats. And we are shocked at what we see.
If you come up to me at a boot camp and you tell me that you are really trying, you know what I do?
I ask my assistant for your stats. How many times you logged into the training site. How many training videos you watched. How many offers you made. How many proof of funds letters you have pulled. How many questions you have emailed to our support desk.
And based on that information, I know how hard you are trying.
Let me tell you this. I don’t care if you have lots of money or very little money. If I see that you are trying I will bend over backwards to help you.
But if I see that you are not, then I will move on to another student who is trying.
That’s fair right?
It’s up to you and how bad you want it.
Swiping your credit cards won’t get you results. Studying, learning and going through the training will. Then you need to act on what you have learned and you need to start doing something (like making offers).
Start making offers every day. Call listing agents. Bid on properties online. Engage with our support desk for all your questions. We are there to help you.
I want students that are willing to learn.
But If you are thinking about signing up I also want you to know what you are getting yourself into.
You think you are going to come into a market with experienced wholesalers and take money out of their pocket without putting any time and effort in?
Never going to happen
Check your ego at the door.
You think you know about real estate because you are a real estate agent? or a mortgage broker? That’s retail. This isn’t retail. This is wholesale. It has nothing to do with retail.
You need to empty your cup and be willing to learn.
Imagine your brain is empty and you know nothing and start learning.
If you attack this endeavor halfheartedly you will lose.
I want you to attack this task like a beast.
As if your life depended on it.
If you decide to spend your good hard-earned money to get into my program then understand that I have spent thousands of hours refining it just for you.
This article you are reading right now has taken me more than a few hours to write. It has gone through many edits.
I write it for you.
To have an impact on you.
So that you will have the greatest chance of success.
I understand and appreciate the money you are contemplating spending.
And I want to give you 100 times your money worth.
Twenty years from now I want you to look but at your decision and say to yourself that it was the best decision you have ever made.
Many of my students say that. Read some of their testimonials here.
I want my program to be the best real estate training program in the country.
I belong to the biggest baddest real estate mastermind on the planet(which isn’t cheap) in order to make sure that I have the best information from the sharpest minds in the real estate business.
I read every single real estate book that comes out on the Amazon store.
I read three books a week on real estate.
I want to make sure that there is not one single thing that I miss.
I do that for you.
So that I can teach you everything that I know.
But here’s the deal….
You Need To Be Willing To Give Me YOUR BEST EFFORT.
I don’t care how smart you are.
All I care is that you give this your best effort.
Because before you sign up
I want you to know that what you want (financial freedom)
WILL NOT COME EASILY
You will need to be a warrior.
You will need to be a winner.
You will need to be a fighter.
And you will need to have a “quit is not in my vocabulary kind of attitude”.
You will also need to watch how you spend your personal time.
Cut your TV time in half (I don’t even have TV).
Spend your spare time reading books about motivation, fear, real estate investing.
You want a good place to start?
DON’T WATCH THE NEWS
Watch out who you spend your spare time with. You will probably need to make some changes. And that won’t be easy.
Any endeavor worth pursuing requires sacrifice.
This is no different.
Anyone who moves you closer to your goals stick with that person. Anyone who moves you further away from your goals or who makes you feel bad about yourself you should avoid like the plague.
I don’t care how close of a relative they are.
Toxic is toxic. It’s not hard to know if someone makes you feel good or bad. You already know the answer.
I divide people into two groups.
Those who make me feel good and those who make me feel bad.
Good people pump you up. They lift you up. Like my brothers in my mastermind.
They are powerful.
They make you smile.
They are positive.
Find people like that.
Be like them to others.
Pump other people up.
Make people feel good about themselves.
And they will feel good about you.
Read some Dale Carnegie while you are at it.
If you think you can just jump into this game of wholesaling and flipping and make tons of money then you are very much mistaken.
And you will be disappointed.
You must understand that.
You need to learn.
There is a training curve (around 6 months).
You need to understand wholesale real estate, ARV, how much to offer, repair estimates, comps.
This will take some time (around 6 months).
Then armed with this knowledge you need to act on it (by making offers).
you need to do.
And in the doing it will start making sense – if you don’t quit before it does.
Which is exactly what most beginners do (unfortunately).
If you are willing to put in the time and the effort.
If you are willing to learn.
If you are willing to attend the boot camp and then attend it again.
If you have a no defeat no give up attitude.
If you are willing to watch all the training videos.
If you are ready to empty your cup and listen and learn.
If you have a good work ethic, a burning desire and passion.
If you are not lazy.
Then sign up here.
I am ready for the challenge. I welcome it. Just bring me your best. Because that is what I do. Every single day. I bring you my best. And both you and me, are worth that – your time, my time, your best effort and my best effort.
But don’t be weak. Don’t be passive. Don’t be timid. You have greatness within you. If you are willing to just go for it you will see that greatness come out.
And when and if it does it will come out with such intensity you will want to roar like a lion.
Be a warrior.
Think like a warrior.
Live with passion.