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We had a great case study in Dallas last night—another packed house, a lot of energy. Some great, great presentations on two single-family and as well as a great multi-family presentation including the multi-family they brought their daughters introduced them. It was really a family presentation, which was great. It’s good to see and like to see. Start getting these kids interested and understanding this—the younger the better.
One of the things that I was thinking about today is that sometimes we don’t realize how close we are to success. That success can be right around the corner or right—even sometimes it could be right in front of us and we don’t see it. And it just doesn’t happen to you if you don’t take some action. You’ve got to take some action, but you’re just so close sometimes and sometimes we don’t see it. And if we don’t have the right people helping us, you could be blind and right in front of you.
And I’m going to use this example this was a letter in yesterday’s Dallas Morning News. This was to a financial writer, well-known financial writer who’s been in the Dallas Morning News—I think he’s syndicated—for years. Here’s the letter.
“I’m 52 years old. I have about $35,000 in a savings account and I own two homes outright. But I know nothing about investing. I don’t even know how to get started. I invested in mutual funds through a salesperson and lost about $6,000. I pulled that out in 2004 and invested in natural gas with my accountant. My $18,000 investment is now down to $12,000. I am thinking of pulling out and buying an investment property. I have always made money in real estate because I do a lot of my own work. I am tired of losing money investing. I have lost trust in investing, but I should start a safe retirement account. I have heard annuities may be a safe place. How do I find an honest investment service where my money will grow safely?”
The answer’s going to be mind-boggling. But before I get to the answer, I just want to take that letter because there are very powerful things happening in this letter. First of all, the first paragraph, “I’m 52 years old. I have about $35,000 in a savings account and I own two homes outright.” Right there this person’s done some things right. They’ve lived within their means. Now, they don’t understand what we talk about investing in real estate, how we do it, but it doesn’t sound like this person has much debt, if any debt, has 35,000 saved and owns two homes outright. So they’ve paid off some things, so I mean that’s a credit. I mean, we could go on and on about what we did need to do with that equity and why we should be having a mortgage et cetera, but owning two homes outright, this person’s sounds like they’ve lived very responsibly. So that’s the first part.
So those are good things, but he’s saying, “I know nothing about investing. I don’t even know how to get started.” He or she has done some investing and has built up some equity over the years. Then he says I invested in mutual funds, lost money, pulled that out, natural gas, lost money. “I’m thinking of pulling out and buying an investment property.” Great statement. Great statement. Next statement, “I’ve always made money in real estate because I do a lot of my own work.” Well, you know, we could disagree on some of that, but he’s saying he’s made money in real estate. So then, “I am tired losing money investing.” Well, then don’t do it anymore. “I’ve lost trust in investing, but I should start a safe retirement account.” What retirement accounts are safe?
So here’s somebody just—the only problem is that just doesn’t have the right direction to go. Doesn’t have the right people around him to help get that answer. I wish that he would have come into us or listen to the show and listen to people like Del or myself or the others that host some of the other experts and mentors to help guide this person.
This person is just sitting on a gold mine really, 35,000 in cash and two homes. Even if those homes are only $50,000 homes—and I doubt they are—that’s a hundred thousand dollars in equity that’s $135,000. And if you listened to Del the other day, there are apartment complexes starting to pop up, small ones that are coming available because of the financing problems of the owners, maybe they were highly leveraged, they’re going to foreclosure—those are coming too. This person could have income property from day one for the rest of his life—his or her life. All right, so he’s tired of losing money, et cetera.
What I want to point here, this person is on the edge of—and I won’t say—“success” isn’t the right term, ‘cause I would say this person sounds like a success. He’s trying to figure something out. Lived responsibly because of paying off these two homes, somehow paying those off. Having some savings but doesn’t say anything about that, but probably not ‘cause that’s the way they live their lifestyle. But this person just in these three paragraphs of these nine sentences is right on the edge of financial freedom and doesn’t know it. That’s what’s sad. That’s what’s sad. That’s why we’re here on the radio talking all the time. That’s why we’re here taking your questions, trying to help people see what you can see.
We had a case study last night—two case studies, people both using conventional financing. Last night that happened to come up, had some questions of people and they both had 25 or 30,000 in a deal making about $400 each a month cash flow, great deal making 18, 20 percent cash-on-cash, people thrilled.
Some people they’ll complain, well, I don’t have that kind of money, well, there’s other options. We didn’t display them tonight. We did last month, so there’s other options. So instead of some people are—I think heard said, well, I don’t have that so I’m not listening. They shut it off instead of listening and learning.
But here’s the situation, 52 years old, all these examples, this person is on the cusp of having financial freedom and just doesn’t know it. That’s what’s sad. That’s what we try to tell people. That’s what we’re trying to tell them. You’re sitting on a gold mine. But how do you do it? This person’s looking. They’re interested. They don’t want to invest in other things. They basically—he said the stock market, mutual funds, natural gas—of not doing it. In fact, he’s got more than that—he’s got what, $18,000 investment’s down to 12,000 — there’s another 12 on top of 35. So the answer is just mind-boggling, and we’re going to get to that after the break. Wait till you hear this answer.
