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The Rewards of Development

March 14, 2021 by  
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In last week’s post, I shared parts of a bio of mine written years ago. Part of what that bio recounted was how I got into real estate. I started with small properties at first, but later on I gravitated into a much more profitable part of real estate known as development. Looking back, some projects I did really surprise me. I find myself thinking, “Wow, little ole me did all that!”

My work in the development side of real estate has been some of the most profitable of my entire career in investing. I’ll never forget getting a call from a guy in Pennsylvania telling me about a 77-unit apartment building that was for sale at a great low price. Shortly after that I heard, for the first time, about people converting apartment units into condos. After a lot of red tape with the local authorities of Bethlehem, Pennsylvania, I got the go-ahead to convert all 77 units into condos and, wow, what a quick 2.7-million-dollar profit I made. It was so easy because most of the renters bought their own unit.

I followed that up with a 44-unit condo development in Mississippi and walked with 1.3-million-dollars in profit from that. After those great successes, I developed a 13.3-acre commercial development right here in Salt Lake City and made 1.1-million-dollars in profit there.

I was on a real roll when my Kauai attorney called me and told me of a great plot of land on which I could develop a bunch of condos. I was skeptical at first, but after I drove by the golf course that was next door to it, I forged ahead and laid out plans to build 68 condo’s right near beautiful Princeville, Hawaii. Wow, was I super surprised when I sold all 68 condo lots before we even broke ground.

Timing is so very important with development. You sure don’t want to get into a big development when the real estate market is at the top and there are reasons to believe that the market is turning and heading down. You also don’t want to get into a market that is oversupplied in the type of real estate that you want to buy into. That’s when you need to be patient or need to look at another city or state where the market is already down but looks like it’s picking up.

I continue, to this day, looking for the right and best real estate, whether it’s dirt to be developed or apartments and commercial developments. In August 2003, I hired an office manager (Kimberly Wangsgard), because, wow, did I need help with all my properties. Ms. Wangsgard had, in her former job, played a critical role in development for S-DEVCORP, a company that had developments ranging from 1.5 million dollars to 30 million dollars.

She helped me so much that I eventually had her change her last name to HAROLDSEN. Yes, I married that very beautiful, brilliant, and kind woman and it’s been an absolutely wonderful and happy marriage. An excellent development indeed!

A Glimpse Into My Past

March 7, 2021 by  
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I was going through some old papers and came across a biography I wrote about my life. I thought, since a lot of people ask me about my background, I would share some of that with you here:

Mark O. Haroldsen was born in Portland, Oregon, way back in 1944. He attended high school for two plus years in the Middle East before moving back to the USA where he graduated in 1962 from Ames High School in Iowa. Mark attended Utah State University on a basketball and track scholarship. His time on the bench, however, helped him decide to drop the basketball dream and pursue a Bachelor’s Degree in Business which he received in 1969. He followed this with some post-graduate work at De Paul University in Chicago.

His career began as a stockbroker with Goodbody & Co. in 1969. Later he worked for Paine, Webber, Jackson & Curtis, then went on to work as a manager for Bosworth Sullivan in Salt Lake City, Utah from 1972 to 1974. After a short political career, he lost his bid for the Utah State Treasurer and started buying real estate. This change was inspired by a Denver client that was making millions in real estate.

After gaining tremendous success in real estate, Mark started a real estate seminar company which he ran from 1978 to 1986. The multi-million dollar company set the standard for real estate conventions, retreats, and information, presenting up to 50 seminars a week using a huge staff and brilliant speakers.

Not only is Mark an extremely successful real estate investor, he is also the author of many books including his first and most successful book, How To Wake Up the Financial Genius Inside You. The book sold over 2 million copies and landed him on several national talk shows.

After the enormous success of that book, he began publishing the Financial Freedom Report, a real estate magazine that ran for over 20 years. And yet, that was just the beginning. He then got into a much more profitable part of real estate, known as development. 

I’ll stop sharing my bio there as I would like to go more into how that development thing worked out in next week’s blog, including how I made millions of dollars in profit through real estate development.

Duplicating Success

August 30, 2020 by  
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As I mentioned last week, I love a good success story and have often tried to get to know these big successful people. In a few cases, they even offered to be my mentor. I really believe that the mentoring was one of the most important contributors to my financial success.

I’m also a huge believer in seeing what other super successful people do and then going out and doing the same thing. I did it with my first book after seeing what Joe Karbo, author of The Lazy Man’s Way to Riches, did to sell his books. I got to know him and then did the same things he did, selling 2 million copies of my first book.

And a long time ago, I read of a guy that converted his apartment units into condos, selling them to existing tenants or new buyers. I took that idea and converted 70 plus apartment units I had in Pennsylvania to condos, quickly selling out to most of the renters who were already in them and, wow, did I make a quick profit of over $7 million! Did that surprise me and please me? Oh yeah… big time!

I also looked to other people when I started fixing up houses. Realizing that the decorating part wasn’t really my thing, I picked other people’s brains to get the ideas I needed. Picking people’s brains is pretty easy since people like to talk about themselves and what they do for a living. I would simply take designers, architects and other professionals to lunch and get ideas for the cost of a meal. I would also look at other nicely fixed up houses. I have gone so far as to exactly copy the look of a neighboring house I was fixing up because I wasn’t sure what to do with it. That little bit of copying got that house sold super-fast!

It’s amazing when I travel to new and different countries too. I see a lot of ways people in other countries are being successful and not just when it comes to making money. For instance, in Europe, people eat much smaller portions, have tiny refrigerators because they buy food fresh so often, and they take time to relax when they eat. We could learn a lot from the way they eat over there that would be healthier for us all.

All of these things are something that anyone can copy and, yes, that means you! Keep your eyes and mind open and you might just see things you can duplicate to make a better life for yourself and maybe even make a fortune.

Great Opportunities in Uncertain Times

June 7, 2020 by  
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Okay, we are still in a pandemic and, I must say, with all this spare time to think and visualize the future, it may be an ideal time to look for those motivated real estate sellers. A purchase now could greatly improve your financial situation while, at the same time, you could be helping the seller who might be struggling to bring in money since they may not be receiving a regular paycheck.

In most American markets, real estate values and prices have been pretty tight and it has made it tough to find real bargains that will produce a cash flow. However, things have started to change and it may well be the ideal time to make a lot of low priced offers in order to find super motivated sellers. As some of you that know me well probably remember, when I was on my way up to the millionaire status and had tons of energy and drive, it was common for me to make many, many offers each week – like dozens.

I would just go through the listings and send the listing brokers offers that were 20% lower than the asking price and sit back and wait for their responses. I called it my “shotgun method”. I did this before I even drove past the property. I didn’t want to spend my time checking out and walking through the property until I had an acceptance or counter proposal. Of course, I made all offers with a “subject to my approval” clause. And, of course, most of my offers came back with an absolute rejection, but some would come back with a counter offer and a few even with a total acceptance of my low, low offer. Then, and only then, would I take my time to go check out the property and accept or reject their offer or even make a counter offer to their counter offer.

So now, with this terrible virus thing, we’re seeing more motivated sellers that really need the money and are much more willing to accept a lower price than just a few months ago. This could very well be a great financial opportunity for you and, for many sellers, it could be a great financial relief. Think about it and then add some ACTION!

So, hey, maybe this pandemic may have a few good things for us. Tracking down opportunities is certainly a much better thing to do with you extra time verses attending a protest with the potential of doing great harm to yourself and others. Don’t get me wrong – I don’t blame most of the demonstrators and, personally, I feel for people of color and I totally believe all humans are equal and should be treated the same. But I think you might agree that looking for investments is a better use of your time.

One last thought. When I told my wife about this week’s subject she said, “What you say is all true, but it does take one thing more and that’s COURAGE.” Wow, she’s so right and having written a book titled The Courage to be RICH, I certainly should have thought of that. So, add courage to making all these offers so you can be more aggressive and really take advantage of these opportunities.

Be One of the Smart Ones

November 10, 2019 by  
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So, in last week’s post I told you a bit about the lady in Paris that suddenly found out one of the paintings in her house, one that she thought was just an average painting (the one you see above), was extremely valuable and it went on to sell for $26 million dollars!  Wow, what a shock that must have been for her! But have you read that many people who all of a sudden win the lottery or suddenly come into a huge fortune blow the money in short order or are scammed out of it? The problem is that most of the time, people who haven’t earned the money over time are clueless and just don’t know how to handle it. Most of these people start spending it like crazy and or they are taken to the cleaners by scam artist.

Compare that overnight super-rich person to a person who has worked for years and saved every extra dollar they could. The smart ones don’t go out and buy a brand-new car that will immediately drop in value. The smart ones buy a used car and put whatever extra money they have into savings. Then they slowly build up enough money to buy an asset that goes up in value and, if they’re really smart, when they sell that asset at a profit, they reinvest that profit in another appreciating asset. Over the years, those small savings and investments can grow into a fortune.  And if you have made your money that way, then you most likely won’t be like those who suddenly came into big money and spent it all or got scammed out of it.

It will be very interesting to try to follow the Paris lady and see if she goes crazy with her money, following the typical lottery winners. Please, Paris lady, be cautious and wise with that $26 million. Don’t put your money with someone else who makes promises of huge returns.

Years ago, I met a guy who told me that he could give me a 10% return, per month, on my money, guaranteed! Remember the old saying, “If it sounds too good to be true, it probably is.” I had a friend who had invested about $300,000 dollars with this guy who said it was going to get a great return and guaranteed it. I was pretty darn sure it would not be even close to that. And yes, my friend lost his entire investment, and the bad guy in now serving time in prison. Not that him being in prison gives my friend any of his money back.

So, I sure hope you see the huge benefit of saving all the dollars you can and investing them wisely. Do the research carefully. It’s my advice and experience that you should invest your savings in income producing real estate. It almost always goes up in value and even if the appreciation is very slow, if you have purchased wisely, you will have tenants paying off the mortgage. That’s what the smart ones do!

 

Compound Gratitude

October 20, 2019 by  
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Receiving thanks and appreciation from people you have helped can be such a huge reward and is such a great feeling!  Last week I wrote about super successful Scott Keller who was donating 10 million dollars to a University. Scott has thanked me over the years for sharing some of what I’ve learned about financial formulas, motivation and inspiration.

When I was writing my blog about the great feeling of helping others, it brought quickly to my mind and heart the many, many times I’ve received some huge “thank you’s” and credit from Craig D. Horton of Medford, Oregon. It started many years ago, shortly after I wrote my first book and has continued over the years. So, I sent an email to Craig after thinking about him and his generous and great appreciation for the help I gave him as he pursued his fortune. Here are some of the words he wrote back to me.

“Thanks Mark for this continuous journey of excellence as well as persistence. Your mentorship to myself and my wife Jane means a lot personally to our family.” He went on to say, “In my early investing days, I was partners with someone who subscribed to ‘The Financial Freedom Report’, which was an investor magazine for real estate people that Mark O. Haroldsen published … I read each monthly issue and devoured the content, especially the Subscriber Success Story. I subsequently read the following Mark O. Haroldsen books: How to Wake Up the Financial Genius Inside You; Goals, Guts, and Greatness; The Best Real Estate Deal I Ever Did. All are excellent books that every real estate investor should read.”

Wow, those words of thanks to me were worth more than money!  After reading that, I realized that I needed to send him my latest book, How to Ignite Your Passion for Living too!

He went on to say, “The major influence on my life of the written work and seminar experiences from Mark O. Haroldsen has been the concept of compound persistence. That principle simply says if you think long term with good goals, good support, and a good plan you will succeed as long as you always stay persistent. This has been my experience from the teachings of Mark and his team in over 40 plus years of investing. I have seen this principle also work with other investors as well.”

He and his wife Jane own a property management company, Medford Better Housing Association. Craig also told me how many rental houses he owns as well as a nice size apartment building. And then he closes the email with, “Your ‘Financial Freedom Report’, Compound Persistence Principle Guy … Craig D. Horton.”

I’ll close this blog by saying this: THANK YOU, THANK YOU, AND DOUBLE THANKS, TO YOU CRAIG D. HORTON FOR LIFTING MY SPIRITS, MY BRAIN, AND MY LIFE!

Always Living Large

June 28, 2019 by  
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So, I’ve been having a bit of a stressful but exciting week as I work on a big real estate deal. Yes, sometimes, even though I’ve been doing this for decades, making deals can be a little taxing but as Mitt Romney, former GOP candidate for President once said to the graduating students at Utah Valley University about experiencing a fulfilling and purposeful life,  “One thing you’re going to have to do is live a ‘large life’”. What great advice. That is something all of us need to pay attention to. We need to go out and do it and do it our entire lives.  I wrote about this some 4 years ago, but I think it’s worth a rerun. So, here’s basically what I wrote in May of 2015:

So many times, we hesitate to “live large”. Why? Because most of the time we fear that we will fail. “Failures don’t have to define who you are,” Romney had gone on to say in that Utah Valley University speech. “Through all my occupations, I have experienced successes and failures. I am asked what it felt like to lose to President Obama. Well, not as good as winning. Failures aren’t fun, but they are inevitable.”

How about you?  Have you racked up a lot of failures or just a few?  It seems to me, from my experience, that the number of failures I’ve had is in direct proportion to how large I’ve tried to live.  So, yes, I’ve had a ton of failures but some of those have led to some huge successes. And the reason for those successes was that I learned so much from my failures.

I remember one huge loss that I learned a valuable lesson from which lead me to some very, very large successes.  What happened was I decided to lend a large amount of money with a restaurant as collateral.  Big mistake on my part! Why? Because I don’t know much about that kind of business so if it failed, I certainly wouldn’t know how to run it. And guess what? It did fail and I lost almost all of what I had loaned.

What did I learn?  Well first I found out that restaurants have a very high rate of failure and second, I learned that I shouldn’t stray from what I know best.  Not that I shouldn’t ever loan money but if I do, I should loan it on assets that I understand as well as being on improved real estate which, ideally, would also be income producing.

I forged ahead and made many millions of dollars’ worth of loans that were backed up by real estate and was very successful.  Later I discovered that I could do even better by owning the right kind of income producing properties. I also, very successfully ventured into the development of condos and warehouses, where the profits were even bigger although they did come with increased risks but in that case, those were risks I was willing to take.  And much, if not most of that success, came from lessons learned from my failures and my trying to “live large”.

Romney’s words are not just for graduating students. They are wise words for us at any age!

Daring to Dream Big

April 12, 2019 by  
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Years ago, I dreamed of being wealthy. I studied the lives of the rich, especially the ones who started from scratch. I mean, I really studied them and analyzed everything they did and how they did it. I discovered that millionaires are not a hundred times, or even ten times, smarter than you and me. And they aren’t working ten times longer or harder. How could they? There are only 168 hours in a week — no one gets any more than that. The difference was an honest to goodness and simple wealth formula that, if followed, works.

Before I discovered this wealthy formula, I lived in Denver, Colorado in a cramped and tumbled down house at 2545 S. High Street, near the University of Denver. I felt desperate and forced into a corner. I had to borrow a $150 from my father and another $150 from my father in law just to buy groceries and help pay the rent. If that wasn’t enough, I was several thousand dollars in debt, but I still kept studying the lives of the rich and dreaming of being a millionaire.

Then it happened. I met Larry Rosenberg, a man who became my mentor and showed me the simple formula that had made millions for him. He convinced me that I could do the same thing.

I began to apply the formula I had been shown. The results were amazing! I couldn’t believe how simple it was. In fact, it seemed too simple. (Please note, I said simple, not easy!) It did take work but oh, how that work was so very worth it!

For the next 3 ½ years, I worked very hard to refine and improve the formula that I’d been shown so it would be easier to get quicker results. As I did this, my assets and income multiplied very rapidly to the point that I didn’t have to work at my regular job. I quit!

The simple formula that I had been shown was to leverage income producing real estate —-as in small houses and apartment buildings. The key to building my fortune was to find run down properties that I loved to call “dirt bag properties”. These were properties that I could fix up and improve the value by 10 or 20 percent and then I could turn that 10% or 20% increase in value to 100% return on my investment, because of that great thing called “leverage”.

And as I’m sure you know a 100% return on your money can and will increase your net worth quite quickly! In my experience leverage income producing properties is the most reliable, fastest, and safest method of making big time money. Most people have a little bit of that “leveraged real estate” in the home they bought. But if you have to go a step further and but some dirt-bag or rental properties and fix them up and make those huge 100% percent returns. If you buy right, it will work wonders for you.

 

The Shotgun Investment Strategy

March 8, 2019 by  
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In my opinion, and from my experience, the best type of asset that lends itself to forced improved value is good ol’ real estate, and specifically properties that need a face lift. These are beat up houses, duplexes, apartment buildings or what I have often refer to as dirt bag properties.

The key is to just do a face lift, not perform bone surgery, so you would need to find properties that are run down mainly on a cosmetic level. You really don’t want a property that needs to be fully rewired, have plumbing pulled, or the foundation replaced. I look for properties that haven’t been painted for 25 years or the front lawn is dead and the fence is falling apart. It may just need new carpet and window coverings to turn it around. Those kinds of properties can make you a fortune and can do so in a few short years.

I do want to add that when I was introduced to leverage, I was a stock broker. I began trying to use leverage with stocks and bonds, but I found out very quickly that the real problem was I really couldn’t fix up a stock and I didn’t have any control over the company whose stock I was buying or the stock market itself. I did, however, have some control over a little beat up house that I would buy, even though that is where the real work began.

Once you have found the dirt bag property, the next big chunk of work is actually doing the fix up to greatly improve its value and give you those big fat returns on your invested dollar. So how do you find those fixer uppers and exactly what kind of work does it take?

There are several ways this can be done. You could drive through the right neighborhoods that are a bit run down and in your price range, but that is the hard way to do it and it takes a ton of time. Since time is one of those things that none of us seems to have enough of, I recommend what I call the shotgun method. The concept of a shotgun is that when a hunter shoots at a bird the shotgun blasts hundreds of BBs that spread out as they speed toward the target. Most of those BBs miss the mark but it only takes one or two BBs to bring down the target. Likewise, my shotgun method of finding the right properties is very efficient and a real time saver and it only takes one or two hits to score your target.

All you do is use the internet to observe all the for-sale properties that even roughly fit your specs and then make low ball offers which would be around 20% to 25% lower than the asking price. You do this without even driving by the property. The real key here is to be sure you have a “subject to” clause in your offer, which basically says that this offer is good only if certain conditions are met. Those conditions can be acceptable financing or even something simple like “subject to my spouse or partners approval.”

So now when you shoot your shotgun at many dozens of properties each week or each month, you only get in your car and drive by and/or do an inspection after you get a counter offer or, sometimes, an actual acceptance on your super low-ball price! It does happen once in a while!

Using the shotgun method works if you make enough offers. Eventually, you’ll score a property and then the physical work begins. It’s not easy but it’s simple and, most importantly, increasing its value is within your control.

When You’re Not Brave

March 1, 2019 by  
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This week I want to continue on this big thing we all know and have experienced called fear. Let me start by asking, what do we know about these fears?

Well, first remember that fear is a natural emotion, one that must be understood, confronted, and controlled. So maybe when you have great fears for whatever reasons, this would be an appropriate time and place to “fake it till you make it”. Some people who know me are surprised to learn that I have been very fearful many times but have gone ahead and done the “fake it” thing.  Maybe we ought to whistle a happy tune and no one will suspect you and I are afraid. If we pretend to be brave, acting the way a brave person would act, the results can be amazing.

Consider the many times you have lain in bed thinking about some tough assignment, something that you are slightly or very fearful of doing. If you’ve never done it before, quite naturally you are reluctant and anxious. For example, if you are giving a speech for the first time to some very important people, or asking a banker for a huge loan, or presenting an offer to buy a particular property for a ridiculously low price. Or it may be visiting a new state, city, or country, or being a master of ceremonies. If you are normal you become very fearful with these new situations.

Whatever you have to do on that particular day as you lie in bed, if you have a few fears of doing it, they will only intensify the longer you lie there and think about it. What will overcome those frightening thoughts and imaginings is action. Even if it is incorrect action, get up, get going, and get the blood running and the brain thinking. Take a shower, get on the phone, write a few text messages and emails, go see people, or set up a lunch appointment. Make things happen!

Action overcomes fear because most fears are in your mind and action lets the physical part of you dominate for a while. The physical side of you needs to dominate because the mental side of you, in many cases, has become too introspective and too analytical. We tend to analyze so many things to death. We have all heard of “analysis paralysis,” which is more than two cute rhyming words.

Sometimes we think too much. In today’s educated, deep thinking and analyzing world, it sure seems that we have a lot more planners and thinkers and analyzers than we do action people. Obviously, we do need some kind of plan, but the greatest plan in the world is worthless without action. I would much rather have a mediocre plan and some real action people to carry it out than the most phenomenal plan in the world with a bunch of inactive and do-nothing people.

Action really is the critical key to huge success and accomplishment. I have never met a person in my life who has total confidence in themselves and doesn’t experience fear from time to time. There is not one of us human beings on this planet who won’t have some serious questions about their own ability to succeed in every new venture they start. We all need to remember that and as the great title of Susan Jeffers book says, “Feel the Fear and Do It Anyway”!

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