Clicky

Search:

A Darling Little House

July 15, 2017 by  
Filed under blog

Many years ago, I wrote a book called The Courage to be Rich. This week, I re-read some of that book and, in particular, a chapter entitled “How Yuks Can Create Big Bucks”. It reminded me again that making money by acquiring beat up, old, dirt bag properties and adding your own sweat equity can make a person rich today in the exact same way it did 30 and 40 years ago. In fact, right now, with many properties selling for top dollar, it makes even more sense to lower your financial risk by investing in these kinds of properties. Here is an excerpt from that section of the book.

Changing a Tacky Dump into a Swiss Chalet

I really couldn’t believe what I saw. A few years ago, while driving down a street in Salt Lake City, I glanced over at a little white house, maybe a thousand square feet at the most, and I just about drove off the road. The formerly grungy house had been completely transformed. Instead of a tacky little house complete with cluttered yard, worn grass, and garbage cans by the porch, I saw a cute, Swiss chalet cottage. The change was so stunning that I pulled over to stop and stare.

At first glance, it seemed that someone had spent a ton of dough making the property shine. Upon closer inspection, I found that the changes made on the outside of the property were quite inexpensive. The dirty sides of the house had been covered up by a fresh coat of paint, and Swiss style shutters with decorative patterns had been placed on either side of the windows. The garbage cans had been moved from the front yard to the back. For extra frosting, a white picket fence had been put along the front of the yard. One other conspicuous difference was a FOR SALE sign prominently displayed.

I was totally amazed at the change, but even more amazed at my reaction to the changes! I had, for years, been in the business of buying properties that needed fixing up and, after some work, would resell or refinance them at substantial profits.

Prior to stopping at this house, I considered myself very smart and successful at what I did. But here is the huge shocking part of this experience. My first reaction was: “What a cute little house! It’s absolutely darling. I should buy it!”

Talk about dumb–really dumb. Here I am in the business of buying dirt bag properties, fixing them up and making big money selling them and this little house almost fooled me into buying it. But now as I think about it, that experience is teaching me a big lesson.

Almost everybody would rather buy a property that looks nice and new and pretty. That’s just normal in us human beings. That’s why people are making money by fixing and fancying up beat up houses and apartments. And now in today’s market where a lot of properties are at top prices, these types of properties are the safer investment. You can greatly increase your chance of making money by doing the simple fixes that stand out and grab people’s attention!

That darling Swiss looking house certainly did it for me and needs to be duplicated. Or should I say, “Hey, here is another way showing how you can make big bucks from yuks.”

Using a little Jaw Jaw

December 5, 2014 by  
Filed under blog

I am in the process of updating 4 of the 8 books I’ve written, which has been a fascinating and mind opening task.  First of all, it’s quite a stunning experience to read your own words that were written many years ago and then to come across something that you find to be very profound. I found myself saying “Wow, this is a pretty good money making method and is quite inspiring stuff. Did I write this?” then I’m thinking,   “I can’t believe I wrote this. Where did this come from?” However, I must admit some of what I wrote also brings on thoughts like “Ugh! This is kind of simple minded and even stupid. I’ve got to change this!”

While updating and re-writing some of my book The Courage to be Rich, I was struck particularly hard by what I wrote about the huge power of negotiating and the incredible financial rewards that come just from smart and calculated discussions.  Yes, just by using your head and your words you can make huge financial returns on your money! Winston Churchill said “Jaw Jaw is better than war war” and I will add that, Jaw Jaw alone can make you 100% in returns on an investment too!

With good negotiations you can take a mere 5% discount combined with another 5% in earnings and come up with a 100% return on your money. Sound impossible? Not at all. I have done it myself a few times and others I know have done it. It’s in the numbers.

For example let’s say you found a very attractive piece of real estate and the seller was very motivated to sell it. With good negotiating skills you could convince him to sell the property for just 5% lower than its fair market value and maybe even a little beyond that and then you buy it with just 10% down. Now, using another round of skilled negotiations, you convince a buyer to pay 5% more than the property’s fair market value by making the property sound better than it may appear to be. Of course, fixing it nicely helps too. Then, guess what? You’ve just scored a 100% return on your money; you invested 10% then saved 5% on the buy and made 5% on the sale of it for a 10% profit, or 100% of what you put down on it!

If you get tripped up at the point where I say you are only investing 10% on the property, that’s not hard to do either. Further negotiations can convince the seller to carry the mortgage or you can use a bank for the mortgage and a signature loan so in total you have 90% financing.

Go ahead and run your own numbers on any size property with those percentages and you’ll always come out with that huge fat return of 100% on your money by just using your brain and your words to convince people of what great deal you make them. These are just some of the gems you can find in my books which are available online on places like Amazon and on my website.

Wants are not Needs

October 25, 2014 by  
Filed under blog

Ok, let’s talk about money.

A few days ago I was thumbing through a book I wrote back in 1983, The Courage to be Rich, when, in Chapter 4–The Fallacy of Working for a Living, I found a quote from a guy by the name of Joe Karbo (who, sadly, passed away from a heart attack at the young age of 55). The quote was: “Most people are so busy earning a living they never make any money.” What Joe was saying is that most people are ‘wage slaves’ and never figure out that the key to wealth is really not your earnings or wages. Yes, wages have a part to play but only if you do the right things with a portion of your wages. Your wage doesn’t have to be huge but the key, of course, is saving some of it and setting it aside then letting it build up enough for you to make the right investments.

Of course, the problem with most people is they don’t use enough discipline to control their spending. They think there are things that they just have to have now such as a new dress or car, a fancy night out on the town, an extravagant vacation, etc. I find it very interesting that people choose words like ‘need’ rather than the more accurate word ‘want’ when talking about the things they spend their money on. There is a huge difference between our needs and our wants. Most of the things we think we need are really just things we desire. We all need water, food, shelter, clothing and a certain amount of security to survive and have the chance to thrive. If you take time to think it through, you will be able to see the difference and if you really see the difference, you can then choose to set aside those wants that you previously thought were needs. That will get you the money you’ll need to save up in order to invest and get ahead.

What I used to do when I was depriving myself of a lot of extras that I really wanted right then and there was to concentrate on the huge benefits that I would be receiving later on. I would focus on two wonderful words: ‘passive income’. That concept of having income that would come in automatically each month, whether I got out of bed or was vacationing in Europe, would really motivate me to not spend on things that were wants and to keep saving more and more of my wages. And it paid off big time. Now I spend a lot of time traveling the world and doing super fun things without worrying about the money. It comes in every month no matter where I am or what I’m doing.

It’s so funny how often I hear, “Oh Mark, you are so very lucky to have such a great life style.” They probably don’t mean that literally, but I always respond with the same thing, saying, “Believe me, it’s not luck. It was good planning and discipline over a long period of time.”

Friends, pretty much anyone can do what I did. It does take time but it’s so very worth it. If you think you are too old and don’t have enough time to do it at least pass the message on to your kids and grandkids. They will thank you and greatly benefit for many generations to come!