Focus on a plan to make money investing in real estate.
good morning Tom here flip anything USA
and so the title says it all today get on track get focused something I'm
working on myself you know you get these abstractions get in the way I got my
shoulder it's been really giving me a lot of trouble here lately I don't know
where that came from but it seemed to be going away very quickly you know I get I
always think about you know beginning of the year about startup you know people
have their New Year's resolutions you know I say started early and I fact
it's always been a great time to make money these right now from now until
really by January 15th but certainly before January 1st because people are
just sidelined big-time with the things I got to do they have company coming
they worry about cleaning up her house are they're they're trying to feel get
into a house tenant it's not the best time to rent a property
I still get some of my properties running I always try to have everything
full this time I actually have probably six seven vacancies right now which is a
lot for me so you know and I've been a little bit
lacks I gotta get these things fall because I just doing the math on it you
know just between the six vacancies that I have they're not all big ones but some
of them are pretty good-sized you know it's probably they could do the math on
here one's probably worth 4,000 the other two 4,000 there's 8,000 bucks just
between three of them
ten
fifteen yes I probably got I was thinking in my mind I'm wasting I'm
losing about you know seven eight thousand milk but just I can I already
know just by doing the math here it's gonna end up me and that's someone gave
me notice they're gonna be out of the first so I'm not eating it yet but I'll
be losing probably about twelve fifteen thousand a month in rent come January
first so definitely gotta concentrate I'll get
those filled up and of course it's not the greatest time but interesting enough
sometimes that's what I like about this time of year is that you know
everybody's so sidetracked you don't have as much competition I'll give you
an example when I rezone a property and I've reasoned a few I rezone them in
November October November December you want because everybody's the people
that'll complain and try to stop you from doing what you want to do they
don't show up they're too busy so it's a very good time to get a rezone and that
sort of thing have a property what you know get me so
dirty you want some sort of merits if you can time it out do it right now do
it now if you get some we'll do it right now because you'll have a whole lot less
people people have less time and there's a lot of busybodies that like stick
their nose in your business that are in certain neighborhoods well they don't
have this much time either which works for it the other thing I was gonna say
is you don't have as much competition looking for deals and and I'm reminded
they just got a letter actually I get a lot of letters you know I get a lot of
letters from people trying to buy my property
and like I just got this one I'll read this one - you got a bad leg but I'll go
ahead and pratik it - because I read letter C but so this is somebody that
just wrote me on a property that it's actually direct me on the three-day deal
yes is a little before I read this to you but you know it's a great time to
get focused I know you got other things going some of you don't need to younger
when I was in my 20s I just dreaded holidays I wanted to work I wanted to
make money to me and I employed people you know even when I was 20 I had had
employees you know I've been I've been been self employed since aizen 18 so it
would so when it came around Christmastime I was just thinking I want
to work I love my people to work every lunchtime up people look forward to
Friday I dread Friday I go great weekends here you know I don't have
people working for me and I would be more productive if I had more people
working so I always try to get everybody work Saturday I always try to get people
to work Saturday at work for me that's really pretty tough box I guess but I
worked that works Sunday I didn't care I want to make money and so anyways but so
here's a letter here's a letter from four people somebody approached me this
is actually an agent kind of approaching but it's made to look like handwriting
but it's not it's a they just used a you know a printer with a font that looks
like handwriting but it's not so hello my name is say Alex I represent a buyer
that recently purchased a home in your neighborhood and is looking to buy more
property in the area he's interested in buying your house at X
if you are interested you can pay cash close quickly and we'll buy the house in
as his condition no realtor Commission's involved well pretty good letter really
not a bad letter if you're interested or know someone who is please feel free to
call me se habla espanol and I will be happy to see if we can work something up
you know it's not a bad letter every letter I write though the way I conclude
my letters as I say if you're not interested now please hold on to this
letter and call me in the future that's very important never forget that
that's probably one of the most important lines you can put at the end
of your letter any people remember the beginning of a letter and they remember
the end of the letter and you always want to conclude with keep this letter
and call me later if you change mine so other than that it's pretty good
letter so anyways when the app I should have the app ready in the stores where I
can hand it out today I'm not going to do it today but but we're very close and
for those of you I mean I'm very excited cuz it's great we're free great for you
guys to start off the new year you know what I mean you have an app hit the
ground run and start making money start flipping things and property and and you
know I'm concentrating them I'm I'm gonna go pound a couple signs in the
ground today I'm getting rid of some property
I'm a little bit nervous a little bit nervous with the economy to be quite
honest I think we're doing pretty good I think things are pretty good but I need
a chunk of money and I I want to buy a bigger bill a little bigger bigger
property I also need to go get a loan for you know maybe a couple million
dollars for a for the I have three acres I want to develop its commercial
property and I'm gonna go ahead and build a building on that and as we get
into that I'll share that with you guys too but anyways that's all just want to
you know just invite everybody to you know support each other and you know man
focus on making some money you know focus on selling things if you don't
have the budget to buy real estate right now don't worry about it you know just
focus on getting a deal on something doesn't even have to be something you
know particularly well just remember you can always go to Craigslist go to tools
and people sell tools but this time of year by the way can people need money
they try to raise money just go into tools on Craigslist near local
Craigslist okay and then sort by most expensive the most expensive okay and
then you start looking at stuff that's most valuable and as you go down you
know see what interests you see what you know there's there's opportunity
sometimes gonna be a compressor that can be of this or that you know and you know
you'll just you'll learn a little bit about the product if you don't already
know like if I was gonna buy a a rotary air compressor I'd be looking at the
hours don't worry you don't want that has you know if you get one that's under
10,000 hours it's gotta last long time it's gonna it's gonna be worth something
um you know bikes I just bought mountain bikes for me and my boys and I bought
the cheap ones I bought them brand new but they were 500 bucks apiece
and yeah I was joking with my son I said son I mean there was bicycles in there
there were $12,000 I said you know son I said maybe I should buy you this bike
and then when you go to college you can sell it then you can buy a car because
they've done a better than any car I had when I was that age but anyways
anyways you know just just start making a plan and make a plan you know
if people that don't have a plan can't get anywhere you know and your plans can
change that's okay but you know but the goal is make money like right now I'm
you know some of my plans will share with you right now
hey that's always make money number one but I I'm also wanting to optimize my
assets and I kind of went through this about four or five years ago and I got
rid of lots of land and I converted that land you know millions of millions of
dollars land I converted into millions of dollars in rentals and those rentals
now just bring in tens of thousands of dollars a month in income rental income
and but now I'm sitting here and I'm looking at assets that aren't as
productive as they could be and I really I'm just talking about houses talking
about houses that are worth four or five hundred thousand that only bring in
about two thousand dollars a month rent that's terrible return on a four hundred
thousand dollar investment when I put four hundred thousand dollars out at a
minimum I want to make 10% on my four hundred grand so at a minimum I want to
make four hundred or forty thousand a year but but really what I want to do is
I want to take that you know that that chunk will just say four hundred
thousand and what I want to do is I'm gonna go borrow three to three times
that and so so I'd want to buy something for you know say a million six put four
hundred thousand down and presumably I'm buying something that's worth two
million for a million six and then I'm going to
you know then I'll be getting maybe 10 12 percent minimum on my 400,000 and
then on the other 1200 on the other at twelve hundred thousand that I borrow
I'm going to you know borrow that at about four percent and I'm gonna get
about ten percent on that too so I'll make six percent on the on the on the
twelve so I'll make you know seventy two thousand dollars a year on the borrowed
money and I'll be making you know roughly forty thousand a year on my on
my cash so there's you know hundred and twelve thousand dollars a year you get
think like that you need to think in terms of return on investment optimizing
your income and I don't care isn't I remember still so well just figuring out
a box of suckers that I would buy for a dollar in ten everything I pay a dollar
ten cents for a box of the secretary there's 24 24 of these lollipops in a
box and I'm enrollment to the guy at the store because what they would do is
they'd rip the top of the box off and that would just set it in the shelf but
I could read the information on the box I knew that you know there's 24 in a box
and so I went to the owner of the store and I said hey how much if I buy a whole
box of these things and he gave me a deal he did he gave me a deal that seems
like he was charged in 10 cents apiece for those things but he'd sell me that
whole box I think for like a dollar ten or a dollar 20 probably a
nickel apiece he charged me and normally they'd be 10 cents apiece I think he
maybe he saw that I was kind of a little entrepreneur and and he's cutting me
slack I don't know but he saw the whole box I bought boxes from him regularly
and I'd take him to school and I'd sell them at school and at school if I
thought you hit if I thought you'd pay 25 cents for it that's what the price
was if I thought you'd pay 10 cents I'd charge you 10 cents in other words I
optimize the product and that's what that's what you do when people you know
I have other companies and where I manufacture and I make new devices and
people say you know what are you gonna sell that for I said man I don't know
yet and I go but as much as possible and that's the goal I want to get as much as
I possibly can get for it and that might mean not price in it I mean sure
somebody might pay $200 for something but I might 150 might be the magic price
because the most people will buy it so that is the most profitable sauna for
150 not 200 but just like my suckers if I sold them off for a quarter you know I
would sell 3 a day but if I if I sell some for a quarter and I saw some for 10
cents I'll sell the whole box and so always think in terms of like that and
you know all Hank Booker one of my mentors from years ago owns just many
many many millions of dollars in real estate in Los Angeles County
he said he said many can't get her taking a profit you know cuz town man I
probably could have made a little more on this it's not Tom and he was buying
some of my property - but he didn't say it for that reason but he said that he
goes man you can never get her taking a profit remember that and he'd actually
got devastated and not devastated he didn't ruin him but cost him a lot of
money you know he was - he had notes on several million dollars in notes on real
estate that he owned in California and the earthquake came and no earthquake
insurance and so it rattled those when he sold a lot of this property but it
was carrying a second trust deed on it and so when the things you know things
got rattled up there the the fireplaces collapsed and you know crushed down half
the house or a living room and the bottom line is they the tenants didn't
or the the buyers didn't have insurance people that he sold the properties to so
in the end they were gonna let the property go for it was owed on the first
then he'd be taking the house back but he'd be taken back a damaged house so in
the indiana work deals where he you know he lowered what they owed him on the
second or he just let him have the property cuz he didn't want to take it
back so anyway it's kind of jumping around here but
always think in terms of optimizing your dollars you know when I owned a cabinet
shop we had a we call a panel optimizer and that was a program they just just
coming out but I mean less cabinet guys we figured this out already you know you
take a sheet of plywood and you want to cut as many cabinet sides you know
figure you got a piece of plywood that's four feet wide you don't wanna you don't
want to cut more than you know gonna cut more than 20 3 and 7/8 width because
that's all you're gonna have left on the other side if you cut 24 now you have
less than that on the other side and now you've got a panel that's not wide
enough to make a full cabinet depth that you need so what you do is you want to
cut that thing right down the middle or you know you want to make it so that you
can get you can cut it in half and use both halves and then when you can go you
can cut it the other way you got 96 inches most most counter Heights are
roughly 36 inches right so you don't have quite enough height out of that
panel to get three cuts so you start thinking about how you can optimize
those cuts so that you can get you know maybe a bathroom cabinet which didn't
used to be quite as high as a it's a kitchen cabinet the trend is now the
bathroom cameras are a size kitchen cameras but my bottom line is you're
optimizing you're getting every cent you can out of that piece of wood you know
you cut your longest lengths first when you're cutting up would you cut your
longest lanes first and you cut your shortest length afterwards because you
want to cut the shortest pieces out of the remainders the scraps you don't want
to start cutting your short pieces first out of a long board because they need
all of a sudden you get down to the end you're oh I don't have enough to cut the
long piece that I need but you got all these scraps sitting there from other
parses and pieces of wood that you cut up so anyways then look at your budget
the same way look at your budget the same way you look at the money that you
got in your pocket the money that you got in your bank and you go how can i
optimize this money how can I use this money to get the most out of it right
and for me that you know leveraging like I just explained to you when I buy it
loan I want to get it first of all I want to buy a great deal get a discount
next I want to put 25% down leverage the other balance and make money on that I'm
making more money on the borrowed money that I am on the down on the money that
I put down that's just smart thinking right okay right now at the same time
everything's numbers to me right I'm anticipating you know real estate the
interest goes up the values are gonna go down on these houses because people
don't look in terms of how much they look at how much a month I look how much
money can I make not how much a month sometimes a little bit but for the terms
of making money I'm looking at a profit so I realize I need to sell this stuff
off before it goes down in value and also then I'll have cash and I can make
a better investment because I'm getting such a terrible return on these houses
right now and again that goes to the fact that like I always talk about
houses I do not think houses are good long-term investment because you know
they go up they can go up rather quickly but they're not great for cash flow then
because they they're not they're not the values aren't determined on their income
through an emotional value people people raise the values of homes in a
neighborhood by desire if they want their kids in it they want you know they
like it for whatever reason a good neighborhood but the rents rarely keep
up with with the income in other words you're always gonna get a greater return
on investment on a property that's in probably a lesser neighborhood or not as
nice a neighborhood if he had no high-end neighborhood the rents usually
don't keep up other than if you're in like on the beach if you're on the beach
and on the sand you know and you want to do a weekly rental or a three-day rental
then it's different but it's not of course it's a job so anyways I'm gonna
leave it at that for now but man think in terms of money man just you know
everything just try to think in terms of money you know and somebody you know you
know just I mean I think about it all the time you know just need some
somebody had talked to me about age what they paid for their car I'll say what
year is it how many miles are on anything start
doing the math and paint how many how many miles are left on this car and for
what they paid for it in fact you guys know I'm looking right now I'm trying to
find out a Porsche Cayenne GTS it's kind of hard to find used and I just missed a
deal the other day and I'm trying to I'm trying to find that same deal I'm trying
to find that deal so I'll be looking a lot some night it's not gonna happen
overnight but but anyways that's it for now flip anything USA please share
subscribe and please share on the you know in the app you guys know I'm giving
out the app Tom it flip anything usa.com I'm trying to hit a thousand of each and
I don't have quite a thousand names yet so please spread the word free app free
flip free real estate app investors at so share it on how you can if you would
and they just need to write me Tom and flip anything usa.com
and they're gonna get it and it is done it's done for Android and it's done for
iOS and now it's just a matter of me hitting those numbers before I shotgun
and out there and give to everybody anyways so you got any comments or
questions just put them down below I can't read them now I'm gonna grab some
coffee here at Starbucks and and then I'll be starting my day and maybe we'll
do another white word lesson later so anyhow that's it thanks take care
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