I have the pleasure of hanging out with RJ Palano. Yes. Happy New Year. Anyway that you guys missed training on how you are Mbaise. Ok so I want to ask you some really tough questions OK because this is all about putting him on the spot and see if he can hang with me. So our day yes and your pain. What is the definition of a True Investor? First, we got to make a separation and make a distinction. There’s business owners and many people that have business that are in the real estate business think they’re true investors or they think they’re an investor when really they’re not investors are operating a business to really find out what it’s like to be an investor. You really got to go to the book and find out what it’s like to be working in a business and what it’s like to be working in prisons. In my opinion a true investor is somebody that takes their money and they literally invest. It’s not an investor who’s not somebody that flips houses it’s a business. Is you know houses as a business like wholesaling houses as a business. Find them fix them and taking them to retail. That’s a business. When you start buying them and holding them that’s when you become a true investor. I had a stake in it. Exactly. And that’s really what develops true wealth in this business because you use the money in my case.
This may apply to some of you that are watching right now but the money that I made flipping houses and taking houses from rehab to retail. I’ve used that money for my investments. So that’s one way to make the money to get the money if you don’t have the money. Like many of you I’m sure I was born with nothing that came from nothing which is a great place to come to by the way because you certainly start to appreciate everything that you’ve got when you come from nothing when intended attended you. It’s a lot different. You don’t appreciate what you got. So when you go from nothing you have to find a way to get the money. You have to develop the skills to be able to negotiate to buy properties that give you creative financing. Do you think you get terms that you can use. So you don’t need so much money and you can get into many more transactions. Actually that’s really how I cut my teeth negotiating with people and getting them to mortgages for me. I’d go to a play about 350 houses. Wow. OK. OK. So you start off in wholesaling before you started right now. What do you feel coming out. OK so we go back to the beginning of time. I’ve reinvented myself several times in this business and you do that based on market conditions and your failures along the way. When you trip over yourself a few times you just pick yourself up dust yourself off and what did I do. What do I get to do now to take advantage of this market place.
Way back when when I first started going to seminars in the very early 80s and I started with Jack Miller my greatest mentor. This day I started to also try to learn how to get into the business. I would buy houses but then I learned also how to buy notes promissory notes secure by mortgages or security. Do you try to trust any what area you live in in this country. And most of that education came from a guy named John Sharp who’s still out there making a big a little deals in the source of for the fantastic and a guy named Jimmy Napier. And once I understood how to understand the present value of money and how to discount cash flows and how to create yields buying personal notes and mortgages which is what I really really really got really good at then I understood hard lending and lending. That’s where I really cut my teeth. But at that time any house that I could buy would terms I would keep every single house that we would terms. So the key in this whole business of buying houses is you don’t just go into an analysts which is probably the worst place to go. Also if you own one of our houses from people that need to sell OK if they don’t need to sell then you can’t make a good negotiation for yourself to get the kind of terms that you need when you’re taking over financing or structuring the no interest rate loan from people like we do. Often you can do that stuff when you go fishing.
So we started getting all these tools and that was just a matter of putting everything in place and it just depends what the tide brought in that house deal that a brand deal in this deal. So you have to have more than one arrow in your quiver and you have to have more than one solution. If you’re a one trick pony like all i do is wholesale houses where you would’ve got killed you absolutely destroyed them in a market crash in 2006 other than a year he got killed and most of those people I had one friend because I know I can tell. Real estate investor and how involved they RV how much vodka they drink. That’s literally what one of my friends told me he was starting earlier in the day every day because he hung out to dry. I got hurt too but it’s a matter of reinvention going forward is really becoming a true investor. I buy houses that will continue to support your lifestyle issue. That’s really the whole deal. If you become a true investor you can have enough houses that will replace your think about it. Isn’t that what we all want. Nobody really wants to go to work today. I know guys retire I’ve come to Hinderer epiphany a couple years ago. I talked to an investor from California. I asked him like are you still going to retire and I’ll probably get a part time job. Subsequently he did retire. Then I realize all the people and all my friends that talk about retiring were for somebody else. Guys Like Us ladies like Brigitte we don’t retire. We hire me. We get tired. Once in a while my of your return before become completely retarded. But that’s another story.
The thing is is guys like us we just keep on going because that’s how we’re wired that’s how we’re driven. We find purpose we find passion. So yeah it is not my family my parents it specially tell me slow down take a break and the winter break. Yeah I do I take some days off for cations my family the rest of the time it’s a boring life has to be drained. Absolutely. And if you love what you do you’ll never work a day in your life again. So it’s really a matter of creating these opportunities for yourself because what are the greatest questions ever asked to be a summit or was this used by Jeff Miller. He asked everybody How much money do you need a month and you had no debt. Imagine no debt in your house or in your car. People watch us break this down. How much money do you need a month and you’ll have answers from 3000 to 100000. That’s what you’re selling. Nobody really knows. I don’t know what kind of a lifestyle that is. But then the next question becomes how many free and clear houses do you need to achieve that lifestyle. So you have to understand if you’re free and clear you get a management fee you got to pay taxes insurance and maintenance work out that number. So let’s just pretend that your number is 7000 so if you need 70000 a month let’s just pretend that you buy a house for a hundred thousand seven hundred dollars a month. You need about 10 houses so you need a million dollars to get you to that spot.
But if you’re young rich and people don’t care then you can buy houses and terms and guess what. Eventually they’ll pay it off in your free and clear. So if you can negotiate great terms today of low interest or no interest eventually that stuff’s paid off and you can now have the lifestyle you want and you don’t have to be like the guy who’s taken a video right now he’s got a shot tomorrow to get paid. You can stay home and get paid by the renting you’re collecting and never have to work again which is VCP was one of my goals all my life and you know I had a couple of roadblocks along the way. Life is like this sometimes. And I ran right past the last year of life which is so goals are so powerful by understanding what it takes to become an investor and do that kid you need to be able to negotiate the highest paid work industry. That you can negotiate trades you can take that information and you can get anything you want later if you just help enough other people get so that true exactly. And you know for some of our true investors that are not quite there you know they’re still playing the wholesaling game and they’re kind of like you said the one trick pony. Don’t get discouraged because we all start somewhere you know frankly I started off buying rental properties so rental portfolio rehabbing and buying and holding was our first method for me. It was by accident when I bought my first home which I’m actually selling this month is 16 years. I bought I actually built my first home accidentally in my homestead with my homestead.
Then at 21 became my investment property later and I held it. It was like mind that I live in a house three times down. It was like a transition everywhere I would go and that probably has been my best investment yet. And so that’s what I learned first. I actually didn’t learn wholesaling until later when I realized that some of the deals that some of the deals have come across weren’t ones I really wanted. And I know I can make it to five 10 grand quick flip and give it to someone else who did it. You know there’s a there’s a buyer for every type of property. And what you just said is exactly how my transition was to. I didn’t understand wholesaling till I moved to Florida. Everything I bought in New York when I was older I kept my model and keep it everything to the end of my life. You know give it to my kids or sell it for the title with my goal. I got to Florida I was opened up to a woman bolthole shall we say Do not ever stop selling. I kind of look at it like this. Here’s how it really works for me because in this business the thing that counts the most besides your knowledge is your ability to take action is having the opportunities but you have to create the tools we create you ever retained by the generation. There are so many ways to do this and it changes it more is based on the new technologies that are out there. And if you’re not on the cutting edge you’re going to be under the your competition.
I see myself like this every day and I’m doing my checking. I see my arms literally like this. And all the leads coming into this funnel and they’ve got to go right down right here by my eyes. I get to see everything in my business and get a couple different states. And I say oh this deal that’s a wholesale. This isn’t regal we can’t say but I know what I mean for retail. Well this one we’re going to buy and hold. This will be taken subject to will put them over here. It’s going to go my pension plan. There’s no rule that this one’s going to go to my other retirement accounts. I look at everything and decide where it goes from there. When you can’t do that unless you know the leads come in that allows you to not just become a true investor. It allows you to make money in profit and monetize all the other opportunities that come your way which is critical. So you keep you. You have to have more arrows in your quiver or solutions to different situations that come your way as the tide comes in. It’s a hybrid go up but it’s critically important that you have these lean multiple ones because first of all the more you have the more times the more practice you get to negotiate through you really perfect human relations skills in this business. Rigid developing rapport is probably the most key thing.
You get one shot if that person is calling you around the Internet and they find you you’re going to develop a report like that because for people who do business with you they have to trust you apps before they trust you they like you at least a little bit and if you can develop that report to get them comfortable with you you’ll create opportunities that other people just can’t because they don’t know how to get through is what when I say that. Exactly so. Look I don’t want to have the title anymore. I’m a rehabber and a wholesaler. That’s not a true investor. I wanna be that guy or girl that can look at a deal and go oh which way am I going to go with that. There’s so many options. It’s not hope that at some point you’re pure you know because some people have more time than money you have more money right. At some point you can put those people to buy the houses like I have right. And you’ve got all the crews into the world. You stand from a top still. I’m involved to a degree because I help with the substance of doing that. But as you get bigger and better you start to replace yourself so that you can take yourself out of the picture and let the business run because you know what we all want and if you don’t think you want this. Trust me when I tell you what is is self managed business from business that runs with us so that I can go play tennis with a guy and it’s taken a video of this afterward and not care about the rest of my day. So we all want to do what we want when we want for home all we want.
Becoming a true investor and becoming an expert in the real estate business. Being able to solve other people’s problems will absolutely allow you to do this and I’m so grateful and thankful to actually be part as an adviser to two investors. The reason for that is simply this. I love paying it forward. Nobody is a self-made success. Anybody who said to you I’m self made run in the other direction because nobody makes it without a team of people because none of us are good at everything. I only work on my strength. I have people that hire out my weaknesses. And then realize I did it all my life and I’ve come to realize recently that I’d never do the stuff that I don’t want to do because I’m not good at doing it. So you need to surround yourself with good people and they will you know your stories that weakest link in the chain they will help perpetuate you to the level that you have your goals are clinically clearly articulated or you’re not going to get on the spot. So thank you. RJ Thank you guys for listening.