Category: Articles

Own Nothing, Control Everything

A real estate investor offered to buy me lunch in exchange for information. He wanted to know how we held title to our properties. In other words, whose name was on the deed?

When we met, he explained that he’d gone to the deeds room in the courthouse to lookup which properties Kim and I owned. After much research, he concluded that we didn’t own any houses – and he was right!

But how can I be a real estate investor and not own any real estate. Easy answer. We don’t own any properties personally! Having assets in our names can be reckless. Plus, it can wreak havoc on our estate plan when we die.

NOTE: I’m not an attorney or a CPA, so what I say is just my opinion. Seek competent council before you make any big, life-changing decisions.

We use trusts to hold all of our property – both real and personal. In other words, everything we own is held in a series of trusts that are controlled by our trustees. We do this for two main reasons: estate planning and anonymity.

Let’s talk about trusts and estate planning. Most folks have a will. Upon death, their will gets probated. This means a judge determines the validity of the person’s will. And here’s the frustrating part: if anyone disagrees with anything in your will, that person(s) can sue your estate.

Oh, it gets even better. Did you know that once your will is probated that it becomes a…

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Run, Move, Sweat!

What the hey? In the past four months, six people close to me have gone to the hospital with heart problems. One died. Four others had stents implanted, plus they were put on expensive, life-long heart medications. Just last week my brother-in-law went in for a stent – he’s in his early forties. Yesterday, it was my sister-in-law’s turn – she’s in her mid-fifties. Like I said: What the hey?

As it is with most real estate investors, Kim and I have spent years working diligently investing in real estate. Why all the effort and sacrifice? To achieve financial freedom so we can do what we want, when we want, where we want, why we want, and with whom we want.

But what if we achieve financial freedom only to discover that our good health has gotten up and gone? If health issues make us invalids, what good is financial freedom?

What can we do to prevent this? One hour a day – Run! Move! Sweat!

Most every morning, Kim and I spend…

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Wish I Had a Do Over

I’m writing this on Friday, October 9, 2015. It’s a heavy day for me. Today is the sixth anniversary of Jack Miller’s passing, and for the past few days my thoughts have frequently been about Jack.

Many of you have never heard of Jack Miller. Fewer still ever took the opportunity to learn from this great man. Jack, hands down, is the best all-around real estate investor I’ve ever met. He was the definition of original. There was no boundary he wouldn’t push.

Put simply: Many of the creative deal structuring and funding techniques investors use today were born in Jack’s wonderful imagination. There has never been, or will ever be, another Jack Miller.

I wish I had a do over. While I attended most of Jack’s seminars, there was more than a handful that I missed. If I could get that do over, I’d be front and center at each one of those missed seminars – taking notes like crazy!

Kim just asked what I’d pay to attend just one more of Jack’s seminars. One hundred thousand dollars wouldn’t be too much. God, to hear Jack ring his big bell that let folks know that class was back in session…yep, one hundred thousand dollars would be well-spent money!

When Jack passed, he was nearly eighty years old and at the top of his game. Here are a couple of Jack’s quotes I wrote down at his February 2009 Money Matters seminar…this was the last seminar he taught!

“When you are the only one in the desert with water, you can command a handsome price for that water.”

“Don’t look for big chunks of money. Instead, look for lots of small deals that pay you constantly”

“As real estate investors, we must constantly be adapting to the current market. Dinosaurs failed to do this and they’re now extinct.”

“There are two horses in this business – houses and paper. When real estate values drop, move to paper. When paper drops, move to real estate.”

“To succeed as a real estate investor, fish with a big net. You won’t make it if you’re fishing with a line that only has one hook at the end. In other words, you gotta make a lot of offers!”

“It’s one thing to pass a law. It’s another to enforce it.” (He said this with a twinkle in his eye!)

“When house values drop, it’s like the Titanic is sinking and you’re in the life boat saying, ‘Seats for sale!’”

“Keep thinking about how to pick up the penny off the pavement.”

“Raindrops turn into a river. You want a lot of people owing you money.”

“As an investor, always do more than you…

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Sage Advice From an Old Investor

Only three meetings left! With the close of December’s real estate investors meeting, Kim and I will be shutting the doors on North Georgia REIA forever. With the end near, Kim and I have been reminiscing about the best lessons we’ve shared with our group.

With this in mind, here’s some sage advice from an old investor.

How do I know whether the deal is good or not? How do I know what I’m looking at? And if I decided to take the deal down, how do I get it funded fast without going to a bank?

When Kim and I began our investing careers in 1995, we thought all houses were pretty much the same. Over time and with experience, we learned what types of houses worked best for us.

If we are going to keep it as a rental, our favorite house is a…

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What Does Creative Deal Structuring Look Like?

Since 1999, Kim and I have continually learned from Pete Fortunato how to creatively structure and fund our deals – without going to banks!

The BEST real estate investing meeting we attend is the weekly Real Estate Exchangers meeting in St. Petersburg, Florida. It’s creative deal structuring and funding at its most pure.

Here’s an example of a deal that was put together at yesterday’s meeting.

Rich has a SUV that he’ll sell for $3,000 cash. Pretty straight up deal, right?

Pete offers to trade his Nissan truck for Rich’s SUV. But Rich doesn’t want a truck; he wants $3,000 cash! Does Pete have a hearing problem or what?

Here is a classic example of Use What You Have, To Get What You Need, To Get What You Want.

Upon seeing that Pete’s truck is on the block, Kevin offers to give Pete a…

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And Kim Came Running Outside Naked

Kim knows she’s not supposed to answer her iPhone when she’s in the shower. If the phone gets wet we’ll be saying goodbye to $700. Her wise and handsome husband has repeatedly warned her about this. No matter, that morning, as she bathed, when her phone rang, she answered it.

Seconds later, Kim came running out of the house naked!!!

You see, when Kim answered the phone, I was the one calling, and I was screaming, “Get back to the barn NOW!!!”

While trying to load our six-foot Bushhog onto a flatbed trailer with my tractor’s frontend loader, the 1,400 pound Bushhog slammed down on the four fingers of my right hand like a…

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If You’re Not Saying Wow, Then…

Boy was Mike ever excited! He found his first real estate investing deal; a property he planned to keep as a rental. Knowing that Kim and I loaned money to purchase investment homes, he gave me a call.

Mike’s contract was a gem of an opportunity – at least according to him. The seller told Mike that six other buyers were lined up with cash money. If Mike wasn’t able to close within a week, the seller would let another lucky stiff…errrr…I mean investor…have the home.

Mike explained that the house was built in 1955, had three bedrooms and one bath, needed a good bit of work, the neighborhood was okay but not great, and like-kind houses in the area rented for $800 per month. The seller told him the home’s fair market value was…

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How Can One Deal Lead to More Deals?

Most folks think real estate investing is finding a deal, taking it down, getting it rehabbed and sold, and then going out to find the next deal. But what if you structured the deal in such a way that one deal leads to more deals? Let’s look at two real-world examples of this.

A few years ago, our good friends Joe and Ashley English, found an investment property they wanted to buy. Only one problem, they didn’t have the money to buy the home. Joe sent an email to several investors explaining that he was seeking funding.

Within minutes, Joe’s phone rang. It was Pete Fortunato – the best creative deal structurer we’ve ever met. Pete was on Joe’s email list.

After a short conversation, Pete agreed to…

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One Step Beyond

In September, Kim and I are bringing Pete Fortunato to town. Pete is the BEST creative deal structurer and funder we’ve ever met. He has been one of our primary real estate investing teachers since the late nineties. If you are a regular reader of our column, you’ve heard me quote him hundreds of times. There’s simply nobody else like Pete!

Here are just a few of the quotes that I jotted down the last time I took Pete’s One Step Beyond seminar.

“Every deal you do is a seed for another deal.”

“If you do a good deal with someone, they’ll want to do more deals with you because you’ve proved yourself to be honest and competent.”

“How do you know whether it’s a good deal? Each party is happier after the deal has closed.”

“Most of the time a yellow pad is the best thing on which to draw up an agreement. Then take what’s on the pad and type it up in the form of a contract.”

“Opportunities are found. Deals are constructed. So don’t go out looking for deals. Instead, look for opportunities!”

“Opportunities are born out of someone’s uncomfortable circumstance. You find out what this is by asking, ‘Why are you selling such a nice house like this?’”

“When you present an offer and the other party begins to cry, either your offer is really good or really bad.”

When dealing with an attorney or realtor: “Your traditions are not laws of nature. Why should I let your traditions affect my transactions?”

“It’s inconvenient to be physically alive but financially dead.”

“Real estate is a thinking man’s game, not a running man’s game.”

On Thursday, September 10, Pete will be teaching at our North Georgia REIA real estate investors meeting at the beautiful Hilton Garden Inn in Cartersville, Georgia. Because we are closing our group at the end of December, this will be the last time…

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Be Hard on the Problem and Soft on the Person

An investor who owned four rental properties for the past three years called for help. He was at his wits end. Because he hated tenants so much, he was seriously considering dumping all of his rentals! By the way, this is not an uncommon feeling for new and inexperienced landlords to have.

When we met to discuss his situation, he let me hear a recording of a conversation he had had with a tenant a few days prior…and I use the word “conversation” with reluctance.

The tenant consistently paid rent six to ten days late. This sent the landlord into orbit. Over the phone, the landlord screamed at the tenant, “You are a liar, an idiot and you’re totally worthless! Pack your crap and get out of my house right dang now!” And from there, the landlord’s words really turned foul. I felt sorry for the tenant and angry with the landlord.

The landlord knew he had lost his cool and crossed a very serious…

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