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Losing Out to Fear

May 5, 2017 by  
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I am totally convinced that most people don’t end up making big money–especially when you are talking millions of dollars—not because they aren’t smart enough but because of their fears. It is a fear of failing and/or the fear of losing what little money they may have. Believe me, I totally understand those fears because that is exactly what held me back for a long time.  But that’s when my wonderful friend and mentor, Larry Rosenberg stepped in and gave me the courage to overcome my fears or at least reduce my level of fear. At the same time, he showed me exactly how to do the big deals and reduce the risks which, of course, reduced the amount of fear I had.

Don’t get me wrong there are always risks but even so, Larry convinced me that if I wanted to hit it really big, I would have to take some bigger risks. At that point, I reasoned with myself and agreed with that old saying, “Better to try and fail than never to try at all.”  I never forgot being told repeatedly when I was young, “Nothing ventured, nothing gained.”

There is no question that when you use financial leverage on a purchase that you increase the risk to yourself.  Like that old example I’ve used over and over—if you put 10% down on a $500,000 dollar property, you could lose all your money if that property dropped in value by 10% and you had to sell it. That’s $50k gone just like that.

That kind of risk is scary but on the other hand, if that property increases in value by 10% then you’ve just doubled your money or made a 100% return. Remember what huge numbers 100% returns do to your money over time–just one penny compounded at 100% a year grows to well over $10 million in just 30 years! That’s the great power of compounding. Of course, you can reduce your risks, big time, by using your brain and your brawn to fix up a property which greatly increases the chance of raising its value and greatly reduces your risk.

If you want to reduce your risk even more, you may want to do what one of my long time students did early on in his acquisition of property. I’m talking about Dell Loy Hansen who now owns properties valued in the billions. He started from scratch after he read my first book, How to Wake Up the Financial Genius Inside You. How did he reduce his risk?  He went out and found partners which allowed him to buy property with much bigger down payments, so they went into these investments with a lot more equity and hence less risk. That, of course, reduces the possible return on the amount invested but, for Mr. Hansen, it greatly increased his leverage and allowed him to buy bigger and bigger properties, hence his multibillion-dollar portfolio.

So remember, if you want to hit it big, be prepared to take some risks and if you want to cut those risks a bit, go find some good partners to share in the initial down payment. Just be sure to take good care of those partners.

 

 

How to Double Your Financial Leverage

August 13, 2016 by  
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Leverage is a great tool you can use to grow very, very wealthy and do it fairly quickly, but there is another faster way to make the financial returns even bigger! I like to call this bigger and better way “Super Duper Leverage” because it really can magnify your return on investments and at a more rapid pace. The method involves bringing a partner or partners in on your deals.

In my early years of investing in real estate, I didn’t have any partners. All the money that was needed on a deal was mine and, of course, there would be the loan from the bank or from the seller of the property. But then I came across a super bargain on a 100 unit apartment building that I just had to have because I knew that it was going to be a huge money maker. The only problem was that I didn’t have enough money for the down payment.

However, as luck would have it, the real estate agent told me she had a friend that could put up a huge part of the down payment. To make a long story short, I put up what I had and this guy, who I’d never met before, living up in Idaho, put up the majority of the down payment.

Fast forward a few years … I sold the property giving the investor/partner hundreds of thousands of dollars’ in profit. The great part about this though, is that I also made the same profit but on my much smaller investment. The return was several times the amount I put in so I was thrilled and not only that, my new partner was happy as a clam, seeing he had put his money into a great deal with a partner that didn’t let him down.

Bottom line is that, with this partner putting up most of the money I was able to achieve a huge return on my investment–a much, much bigger return than I could ever have gotten on my own—and my partner had a big win as well! That’s what I call “Super Duper Leverage”.

If I’d been more aggressive after learning and profiting from the lesson I learned from that great deal, I probably could have kept up with my most successful student and follower, Dell Loy Hansen, who bought my book when he was in college. He eventually found a gold mine of very wealthy partners who, over time, joined him in multimillion dollar deals to the point that Dell now has over a billion dollars’ worth of property. Wow. Talk about “Super Duper Leverage”!

I want to elaborate on this subject more next week and give you some methods and ways to find and keep partners so as to be able to leverage your investments to the max. I’ll also talk about the legal aspects and the caution you need to use so as to do it the right way without legal troubles. You can certainly make a great deal of money with a partner but you also need to do it smart so you keep what you make and can go on to make even bigger and better investments with partners who trust you and keep coming back for more.

 

 

Thanks a Billion!

February 27, 2015 by  
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I’ve been talking about the great success of the young university student that started with nothing and ended up with billions of dollars worth of income producing properties but this time,  I thought I would try to tease you into reading,  or re-reading, The Next Step to Waking up the Financial Genius Inside You by posting the thank you letter that Dell Loy Hansen sent me years after reading my book and which now prefaces the Pre-forward of the revised edition. This is just one of many thank you letters I have received and shows you how putting my principles to work really can change your life. :

Dear Mr. Haroldsen:

I have wanted to thank you for many years, but like most people I have not until now. When a friend told me you were going to republish your wonderful book, How to Wake Up the Financial Genius Inside You, I saw my chance to return a favor.

You woke up my “genius” over 25 years ago when I had a $200 VW and a ten-speed bike to my name. I wanted to own real estate to gain cash flow and future value as the mortgage loans paid off, but how? Your simple, straightforward plan allowed me, at 23 years of age, with no credit history or capital beyond a 2 week paycheck, to buy my first two homes for $200 down. I owned those homesf for 12 years them sold them for a $72,000 profit plus the years of cash flow I lived on.

When people ask, “can I still do this?” I smile. I truly believe it is actually easier today with better information, computers, more cash in the economy, and obviously, a great deal more real estate to choose from. I sincerely think I could do “better” today with an average intelligence and above average desire than 25 years ago.

For 25 years, I have pursued your principles and continued to grow in economic strength and knowledge. Today, the group of friends and family that I lead as chief operating partner own over one billion in real estate in Utah, Nevada, and California. The cash flows now exceed my dreams and my friends and family are economically secure and grateful. Life is so fulfilling as my options to travel and do charitable work are part of my every day life.

Thank you a million –or more appropriately, “Thanks a Billion!”

Your grateful student,

Dell Loy Hansen

CEO Wasatch Property Management, Inc.

Okay … did I tease you enough for you to read the book?  You could also do someone a huge favor by giving or sharing the book with them–it could change their life and yours too! Get yourself or a friend a copy here.

 

Fast Track to Billion$ with Friends

February 20, 2015 by  
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I hope you saw the great wisdom of Brian Tracy’s words of advice of to surround yourself with the ‘right people’ aka RP.  (See my February 13th blog post.)  Those ‘right people’ are, for you, the people that have excelled in an area of life that you want to be super successful in as well.

When I was young it was all about money and, yes, a little bit of fame too. I must admit that excelling in the money department and my path to multi millions couldn’t have been done without the help, coaching and direction of certain RP in my life.  Those people were a god send. Knowing them paid off really big time for me.

But my climb up the money mountain has been eclipsed by a young man who read my first book, How to Wake Up the Financial Genius Inside You.  This university student started with nothing but quickly saw the genius behind the RP idea and was smart enough to approach a his own set of people. His RP helped push him to buy income producing property now worth3 billion dollars. Whereas I mainly approached people that could coach me and direct me this young guy approached super wealthy people and brought them in as partners.  In addition to his real estate empire he paid north of 70 million dollars in cash for the professional soccer team Real Salt Lake. This young man’s name is Dell Loy Hansen.

Part of the key to Dell’s success was taking good care of his partners. He made these great deals with them and so they in turn told others about their success including people with money. Having more people willing to invest with him allowed him to buy more and bigger properties.

So whatever your dreams are, if you want to hit it big, the path is much shorter and faster if you find the RP to surround yourself with and to work with. I also want to stress that there are many, many other good reasons to seek out and associate with those RP and for reasons much more valuable than money. I’m talking about the great life-long friendships you make and the wonderful warm relationships and experiences those alone can bring.