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Building Wealth Through Real Estate – Chapter 1

WHY REAL ESTATE

Chapter 1

YOU CAN GET A BIG CHECK IN DAYS, NOT YEARS

I started in the real estate investment business after attending a two-day seminar back in 1982. Luckily, one or two things I learned there worked. I quickly discovered a whole new world of opportunity was out there that I’d never been exposed to – a world built around using my brain, not my back, with huge paydays and freedom from swapping hours for dollars.

Not long after that seminar, I had 276 rental units. That may sound wonderful, but I sat down to pay the family utility bills one day and discovered there wasn’t enough money to cover them, which led me to take a hard look at how I had been operating. I had become a paper millionaire quickly. It had been easy to accumulate equity, but I had no cash. And I couldn’t eat equity or pay bills with it. That’s when I started to look for cash flow. It was this chain of events that led me to develop the quick turn method to generate fast cash.

You can make $10,000 to $100,000 or more in this business with just one deal, even in a low-priced market. It doesn’t take many deals like that each year to make a good living. This book is full of real-life examples of people who have reclaimed their lives after I showed them the magical world of quick turn real estate.

Most people work all their lives to get pensions equal to half the wages they were earning – wages that didn’t even cover their bills. You have the opportunity to take the future in your own hands and build cash flow that will continue whether you have a job or not.

The first step is to take care of today’s cash flow needs before you start building your empire. Once those needs are met and you possess the ability to generate cash, there are countless ways to turn the cash into a consistent flow and provide for a secure retirement.

YOU DON’T HAVE TO WAIT

Some people think the only way to make money in real estate is to buy a rental property; sit on it for 20 or 30 years; contend with bad tenants, plugged toilets, and negative cash flow; and then sell for a profit. But that assumes there is something left of the house and that inflation hasn’t decreased the property’s value. It also assumes that during the holding period the owners don’t get so frustrated with the property management they just quit, which is what happens to many people.

My intention is not to discourage the use of real estate as a retirement tool or to indicate that people shouldn’t hold property for the long term. In fact, I honestly believe the greatest profits take time to develop. Huge fortunes have been amassed (some accidentally, it must be admitted) by the people who sat on a property for a long time, then awakened one day to find the value increased by 10 or 20 times the purchase price.

But most people don’t have the luxury of time or the blind luck to make money while they sleep. And most are not properly equipped with knowledge and a clear – cut action plan before they start to buy properties. I’ve seen many people who think owning a few houses will make them rich enough in five years to retire and go fishing all day. More often, the opposite happens. The houses drag down the owners, who weren’t properly trained to deal with the realities of real estate ownership. Those owners didn’t have the knowledge you’ll get from this book – knowledge that will keep you in control.

THE GOOD NEWS

If your intentions are to buy real estate to generate more cash, and if you want to have the cash now rather than years from now, listen up. There is a way to do just that. It involves flipping houses fast, or what I call “quick turning.”

I have bought and sold more than 2,000 houses for fast cash profit. Along the way, I developed a system that anyone who has the desire and willingness to learn can duplicate and make work for them, regardless of their financial condition. We’re going to study all the aspects of this system, step-by-step, in the following chapters.

If you think you need a lot of money and good credit or you have to be a genius to make money in real estate – it just isn’t so! In this book, you’ll learn how to convert houses to fast cash, no matter where in North America you live and regardless of whether you’re wealthy or flat broke. In fact, if you’re broke, you may actually have an advantage, because you have no choice but to learn before you leap. Those who have money tend to leap before they learn, then blame their failure on the system, the economy, their spouses, and their mothers-in-law – everyone, except themselves. In this or any other business you have to learn the fundamentals before leaping.

These are the three basic reasons to by non-owner-occupied real estate:

  • Quick cash profits
  • Monthly cash flow
  • Long-term growth

“But wait,” you say, “what about tax shelters?” Forget tax shelters! Those days are gone. Many properties bought for tax shelters before the 1986 tax change were soon owned by the Resolution Trust Corporation (RTC) or the lending institution. This is especially true for such large properties as apartment and commercial buildings that were sold for a fraction of their former value. Today, tax benefits are a bonus, not a reason to buy.

Once you’re sure your family’s needs are being met, you can afford to invest in some “keepers” for long-term growth. You’ll learn more about that strategy in the following chapters. For now, I’ll assume you want to know how to make fast cash without using your money or credit.

WHY REAL ESTATE?

One thing is sure: People always need a place to live! Why not be in a business that will never lack customers? Why not work at something that produces paychecks in the thousands, whether you are involved part-time or full-time? How would you like to go where you want, when you want, stay as long as you want, and never worry about what’s happening while you’re away? And then there’s the recognition you’ll get for being a person who can find houses for people who never thought they could be homeowners.

Best of all, why not be in a business that’s recession proof? You’ll learn how to make money with real estate in spite of the economy, interest rates, or the market situation. The only real difference between the “haves” and the “have-nots” is knowledge converted to action.

When I started in 1982, the prime rate was 18 percent. Times were tough. Money was tight and chaos rampant in the real estate industry. Realtors were dropping like flies, and Wall Street had no kind words for real estate.

Yet somehow I managed to buy 23 properties my first six months in business without using a dime of my own money and made an average profit on each deal of $17,000 per house. Me . . . a dead broke auto mechanic with no previous real estate experience and a bankruptcy on my record. Even though I was new and clueless, I managed to make more money in my first six months than I had made the previous year swapping hours for dollars 60 hours a week.

Today my experience is quite normal for thousands of my students who exceed their job income quickly with real estate. You’ll read about a few in the following chapters. It didn’t take me long to learn that wealth comes from chaos, and when everyone else is complaining how tough times are, smart people smell opportunity and find a way to capitalize.

LITTLE OR NO MONEY OR CREDIT NEEDED

There are two ways to lose in my world. One, write a big check to buy a house; don’t write a big check and you can’t lose a big check. It isn’t rocket science. You can buy all the houses you need, including your own primary residence without spending a dime of your own money. You’ll see a preponderance of evidence of that in this book.

Second, you lose in my world by guaranteeing debt. We don’t apply for loans, fill out an application, and suck up to bankers in my world. Your credit won’t be needed; if you use it, you’re doing business incorrectly and setting yourself up for a fall. Stay out of banks – I’ll show you how my students and I are buying millions of dollars in real estate with no personal liability. If you insist on breaking this rule, I can promise you your empire will be built on a house of cards, not on a solid foundation.

There’s actually a third way you can add to this list of ways to lose in real estate – one of equal importance to the first two. That way can be avoided, however, by following a rule that will make the difference between whether you love this business or hate it:

Don’t make promises you can’t keep.

If you don’t lie to the people you deal with and simply tell it like it is . . . you won’t have to remember who you lied to last. What an amazing idea. We simply deal with those who want to deal with us and forget the rest. More on that later…

IT WORKS EVERYWHERE

Where there are people who live in houses, there are people who want to sell houses and others who want to buy, regardless of the economic climate or geographic location. It was that way before you were born and it’ll be that way after you’re gone.

I tell my students that if it doesn’t work where you live, you can always move. But as soon as you’re out of town, it’ll start working for everyone else. If you say it won’t work, it never will. I believe the best place to do a deal is in your own backyard. If you can’t do deals where you live, moving won’t help. Only training can fix the problem – not a U-Haul truck.

EVERY DAY’S A PLEASURE TO GO TO WORK

When I was a mechanic, I hated to go to work. I went because I thought I had to. Groceries were a requirement around my house. I’d work 12-hour days and come home with burnt hands, greasy fingernails, and a lousy attitude.

Then I got into real estate. I couldn’t wait to go to work. Every day was exciting. I was in charge – on fire with passion for my work.

As a mechanic, weekends and vacations were what I lived for. As my own boss, I didn’t want to quit on weekends; I wanted to work. To this day I take vacations because my wife says we should. Personally, I’d prefer a postcard, but when you’ve been married as long as I have, you learn to do what you’re told. We’ve been married for nearly 40 years, and she’d still putting up with me. Four children and nine grandchildren later, here’s the secret to marriage that’s worked for me!

You can be happy, or you can be right.

If I were you, gentlemen, I’d commit this to memory. It’ll save you a lot of arguments.

As I write this, over 30 years after I got into real estate and over 2,000 houses later, and after training more than 500,000 students, doing hundreds of seminars, and creating a mountain of products . . . I still can’t wait to get out of bed and go to work.

Some folks think that’s the definition of a workaholic. I can assure you those folks are broke. You see, when you can’t wait to get at what you love, even if it appears to be work to others, there’s no such thing as stress in your life. Stress is for job slaves who hate what they do.

People without a mission don’t understand missionaries.

WORKING FROM HOME: NO LARGE INVESTMENT OR FRANCHISE FEE

I worked from home for two years until Beverly, my wife, told me to get an office. Until recently I worked from an office outside my home where I did real estate and built other businesses. Today I’m back in my home with an outside office I visit occasionally to pester my COO, who runs our publishing business called Global Publishing Inc.

Most of my students start working from home and just stay there. Many are making in excess of a million dollars a year from their home. Your biggest investment will be in your education. There you don’t have a choice. There are only two ways to get a business education: the easy way and the hard way. As most of us do, I chose the hard way.

Obviously, the best way to learn any business is to follow a proven system and do no pioneering. I’ve made millionaires all over North America and other countries – people who chose to follow my system. Some did so immediately, whereas others tried it their way for a while and then came back to my way. Some tried it their way and were never seen again.

You get to decide whether you choose the easy way or the hard way. And remember this:

If you think education is expensive, try ignorance.

Fortunately, for you there’s plenty of training available beyond this book. We have courses, live trainings on all aspects of quick turn real estate, and mentoring on the phone as well as seminars near where you live. The options are all on my Web site at http://www.ronlegrand.com.

A PART-TIME BUSINESS THAT PRODUCES A FULL-TIME INCOME

Anyone spending more than 10 or 15 hours a week buying houses is wasting most of his or her time. I’ll be the first to tell you that’s exactly what most people do.

It’s easy to be busy. It’s more difficult to be productive. The real art is to be productive without being bushy. Do the right things and that’s exactly what will happen to you. Do the wrong things and you’ll feel like real estate is just another job sucking up all of your time.

People forget, or never learn, what business is supposed to be about. It should free up your time so you can enjoy life and do the things you can’t do as a job slave. Business is supposed to provide for you and family and make life easier, not drag you into an endless vacuum of always being busy but never getting rich.

The most important lesson I ever learned in business is one of the toughest for most people to incorporate into their business and life, but doing it can make you filthy rich. By not doing it, your life will pass by in an endless parade of minutia. Here’s the big lesson, my credo, and what has contributed to the success of so many of my millionaires:

The less I do, the more I make.

This is not about being busy. It’s about making money – a lot of it. I’ll suggest to you that the busier you become, the less you’ll make.

Here’s another wake – up call for you: If you can’t do real estate part-time, you won’t do any better at it full-time. More on this later…

All people are self-made. Only the successful people admit it.”

©Copyright 2012 | Heritage Financial LTD of Jacksonville LLLP * www.ronlegrand.com

 

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