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Updated over 15 years ago, 06/04/2009
My dad thinks I want to scam people...
So whenever I visit my father for our "weekly meeting" I always go on about real estate investing. He always has only 2 responses:
1) you cannot do that here (i'm serious)
2) what you're trying to do is rip someone off
No matter how hard I try to explain that I want to create a win-win situation, he has this core belief that if you're "making money off somebody" then you're scamming them.
He has same belief when it comes to car dealerships (ie they'll try to take you for all you got if you don't negotiate).
I tried to explain to him the basic idea behind Capitalism, but he strongly belives that profiting off someone, especially in excess, is ripping them off. The idea here is that if you disclosed to the buyer/seller how much you're making, they would never want to do the deal.
He has strong belief that all business in America is built on ripping people off. The only way to get "truly rich" is to rip someone off. While he doesn't have a moral objection to ripping someone off, he is ready to use it as an argument against REI strategies.
Anyone got any advice on how to deal with this? My father's support would be a big motivator.
My dad was the same way. At first it annoyed me. I would try to change his mind.
After a wile, I came to the realization that the only person in this world I could change was myself. So stopped talking business with him.
When ever he brought up the topic of business, I would change the subject by simply saying: "Dad, I love you and life's to short to be fighting with each other. Now tell, me how are the Bulls are doing?" (We lived in Chicago)
Also, don't forget to tell him you love him every time you talk to him.
Hope that helps.
Ivan, when you've done a few deals make sure you get testimonials from the sellers describing how much you helped them. Not only use those for further marketing but show them to your dad and show him what people are saying about you helping them. I can't imagine him being nothing less than proud of you for that.
I still have a hard time getting my father to understand certain creative techniques but he sure doesn't mind that I pay for everything when he comes to visit once a month.
Ivan,
You just need to go out and be successful. You know what your doing is honest and legal. Your father is old school and sounds like he hates America and Americans. You will never be able to change his mind and thats ok. Sometimes you just need to let it go. I used to MLM back in the day and I could never understand why my close friends and family did not understand the great opportunity I had. You just need to not talk about real estate with him. Keep in mind, you are going to be successful and your father will not be.
Ask him if he has a mortgage on his home? Amortized over 30yrs he will have paid almost double in interest.
Be prepared to leave anyone who does not believe in you behind. You do not need them!!
- Curt Davis
Nick actually that's not going to work with him. He believes that most Americans are being ripped off without realizing. The idea is that salespeople hypnotize them to the point where they're happy with their money spent, simply because they don't know the other side of the coin. But good advice to try :)
Abraham Lincoln once said: “A man convinced against his will is of the same opinion still.†There is no point trying to change his mind, just do your business in an ethical manner and know that you are doing the right thing. I would imagine that your dad is a blue-collar worker or in a profession where he trades money for time.
:cool:
Curt I hope you don't mean "leave hem behind' literally.
While my dream is achieving financial independance, for some reason the #1 thing that associates with that is bringing my dad $10,000 cash in envelope every month. As much as we have a love/hate relationship, making him proud (for reason I don't understand) is more important to me than making myself rich...
Real estate is not usually a win-win situation - that's just guru nonsense that is intended to make newbies feel better about themselves.
The truth is that when you're buying a property for 50 cents on the dollar - someone lost BIG TIME! Clearly not a win-win. On the other hand, YOU did not cause the seller to be a loser. In many cases, they made poor decisions that caught up with them. In other cases, they lost their job or had a death in the family. At any rate, even though they lost big, that doesn't mean that you did anything wrong. Your job is to make money and all you're doing is taking advantage of opportunities that arise.
Back to the original question. I agree with Jose. If your dad is critical of your real estate investing, don't talk real estate with him.
Mike
Ivan,
I did not mean it literally. You need to be prepared that you want to go down one path and your father wants to go down another. We all want to make our family proud and want their blessing but be prepared for him to never understand.
Me personally, if my dad did not approve of what I did for a living and it made me wealthy, I would not have anything for them financially.
You need to read the book by OG Mandino " The Greatest Salesman in the World " It is amazing and will change your way of thinking.
- Curt Davis
As usual, Mike is right. For the most part, RE is a zero sum game so when you get a good deal, the other party usually doesn't. Now, you may have filled an immediate need for them to have $10k in hand for example but you also eliminated the possibility of them having $20k in hand 3 months from now if they had been able to wait and sell at full market value. I guess it all depends on someone's perspective of "winning".
It's no different than when I was happy getting rid of our crappy old car as a trade-in for $3k last year (felt like I won) until I saw the dealer wash the car and put it on the lot for $6k the next day (felt like I lost). I'm sure he didn't get that much but he probably got more than I thought he could which leaves me feeling like I left money on the table - my win became a 'push' at best within 24 hours...
I do respect your desire to put family first though, Ivan. I agree with the strategy of just avoiding the topic but in my book, family trumps all else - especially the almighty dollar.
interesting IVAN. As others said you do not need his approval if you are doing things ethically. But I wonder what he will think if the economy continues in the lackluster manner or even turns down a little bit more and he is put in the position of posibly losing his home for whatever reason (job loss, interest getting higher).
You have done things properly and can offer him a home from your dealings that you now possess. Will your being able to help him make any difference to him? Or you step in and pay what is needed to keep him in the home that he is in now.
In other words, do what is right with your business, and by him, and let your actions do your talking for you. Actions do speak louder than words and if you know him as you should, his actions will say "thank you" to you even if he never does or just cant do.
If possible keep one house deal open for the unexpected unthinkable thing to happen.
#3 Off Topic Contributor
- Attorney
- Viera, FL
My dad was a real estate investor, taught it to me, and still was critical of me when I first started. Until he started calculating my returns and realized I was actually listening the whole time. I've figured out that with some fathers, the negative attitude is really a test to see if you can hack it. It's tough love.
Tim
IMO, your father may be right about many things and his approval may be important to you, but keep in mind that he will approve of your success if you follow your dreams. He just doesn't have to know the details about what you do if he doesn't understand them.There's plenty of other things to talk about. ......just my 2 cents.
In America, everyone has choices.
Everyone is in the business of making money.
What it really comes down to, is timing. Your buying when everyone is selling. You got a great deal cause you bought at a great time. You made a profit cause you sold at a great time. For example, this is what I hear lately, "man, I should had sold my house during the housing boom."
Thanks for asking this question, Ivan! I really enjoyed reading the replies. I know how you feel: I spend time once a week with a person twice my age and ten times my intelligence and all he can ask is how ethically I can justify ripping people off like that.
But let me tell you this: two years ago I had a half-remodeled duplex that I would have paid someone thousands of dollars to take off my hands. My experience with it was so psychologically painful that I didn't care about the money. For me, it's a balance of what's more important in life to me: my sanity or a building. If someone had helped me out of that situation, I would never have changed my mind about selling to them, no matter how much they made off it.
I have been giving this very thing a lot of thought lately. I have come to the conclusion that we ALL take advantage of other people. If you work for someone for a wage you take advantage of their need for help in their business. Your doctor takes advantage of your need for good health, the grocer your hunger, a mechanic your broken car, the farmer supplies the grocer, the handyman (me) fixes the house you can't, won't do your self. And finally when your time is up the morticians take advantage of the need to inter your remains. We all need each other for something. The real estate invester takes the property off your hands that apparently no body else wanted that bad yet. Is that unfair? I don't think so. You might suggest that if you gave what your dad thinks is a fair price for your investsments, you likely would soon be asking if your old room is still empty. I'm not trying to say be mean to him. It is just if your going to take a risk of buying a property on speculation, then you better have some room in the deal for the unexpected. Try explaining the deal from the end buyer you hope to sell to back to the person you bought from. If you pay too much you HAVE to sell for too much or go out of business. Or run for congress.
Ivan,
How old are you? If you are caught up in the GURU mindset I agree with him.
Your father is right about business in America. We have one of the largest herds of lemmings in the history of man. The funny part is. In the downturns in the economy you understand what works. The old rules work. Your father follows the old rules. Work hard, save your money. If I am wrong about that please correct.
He also probably does not understand Real Estate. Ask him what does he feel a good investment is? If he says the stock market, that sure could be debunked. He is probably income focused not gain focused.
He is worried for you because he cares about you. Always keep that fact in context. This type of friction is what the books and sales/MLM predators prey upon. Nothing like enabling your "my dad does not get it" genes. People buy and sign up for stuff just to "show them".
I see a LOT of some called real estate investors who con people. Almost all Guru's con people. Just do not be one of them. Show him some results that are not ill begotten gains. He will come around. Investment is about obtaining acceptable returns within a margin of safety. Someone how the Guru's hijacked this into get rich quick with no money, credit or sense.
My grandmother said the same thing, then again I was doing door knocking on foreclosures. She has nothing but support now that I am mostly buying REOs. I honestly felt a little awkward with the foreclosure deals, my concience is clear these days.
- Anson Young
- Podcast Guest on Show #235
Jeff I'm only 22.
My dad's biggest objection is that "back in Russia, we did business like men" and here business is about ripping off the weak ones.
I think I do agree with you about the "lemming" mentality in America as you put it.
I don't think I have guru mindset and my results will come when the puzzle comes together :)
Ivan,
I don't think you are going to change your dad and the advice given here that you should talk about other things is good.
But that doesn't address the bigger problem. The problem isn't how your dad thinks, it is how you think.
That is a much bigger problem. As long as your dad's approval is important to you it will be something that holds you back.
Ivan, I don't know you or your dad so the following comments may be off base and you will have to decide if they apply. They are intended to give you some things to think about.
1) It might be worth talking to your dad on a different level. Sometimes old school people like your dad, love and are very proud of their children. They just don't know how to show it. He may already be very proud of you in ways you don't understand.
2) Is your dad successful? Given his attitude I suspect not. It could be his attitude is an excuse for his lack of success. Perhaps he saw other immigrants go on to be much more successful than himself. His mind created this belief to justify his own lack of success.
Best wishes,
Ned Carey
Successful real estate investing is extremely difficult work. There is a steep learning curve and a constant barrage of unexpected turns and twists in the road.
Finding and closing good deals is difficult, managing renovations is difficult, and marketing property is difficult. If you make mistakes during any of these steps, you might end up losing a lot of money because the risk is high.
Folks who criticize the industry are often naive, and believe it's easy to "rip people off" because all they ever see is the guru hype commercials that make it seem like a slam dunk. If they ever tried it themselves, they might be impressed.
Maybe "a day in the life" journal of your business might be the reality check your Dad needs to understand how hard won the profits are.
Originally posted by Robb Terranova:
Folks who criticize the industry are often naive, and believe it's easy to "rip people off"
Good point Robb. That is true of cynics in any field they gloss over the details. You an criticize anyone if you ignore the details of the work they do and what it took to get them there.
Ivan, don't talk about REI to him; just prove it down the road and he will come around. Its a European thing. My dad from Czechoslovakia also had a similar attitude. When I was younger and would excitedly talk to him about buying real estate and using OPM he would lecture me "if you don't have the cash saved you don't buy something". He thought it was a death sentence to buy property with mortgages. He owns 2 properties; I own 54, thus over time, I earned his respect and changed his attitude. Stick to your plan!!
One thing that I learned from the mentor that taught me about short-sales, is that with many parts of real-estate investing, is does appear and/or "feel" like the investor is ripping the seller(s) off. My mentor told me that if I prescribed to that attitude, those I work with will pick up on it and it will make it difficult to build positive business relations.
Now, don't jump on my case about for or against touchy-feelly theories. The yea or nay for that is not the point of this post. With my specifics of short-sales, I do remember back in the beginning when I would think in the back of my mind whether I was taking advantage of people's hard situations. After talking it over with my mentor, I started to shift my thinking towards that I was providing these people a great service. Given the circumstances they had, I was providing for them the best solution available. As I got more into that positive mental attitude, I became much more happy with what I was doing, regardless of what others were thinking about me. Even Fathers.
And ya know what? This is the same for every aspect of real-estate investing. When sellers have a broken house and they can't sell it, a rehabber will come along and provide the best solution to those sellers. When the rental thing isn't working for a seller. A landlord will come along and provide the best available solution for them. Every single niche of real-estate does just that: provide the best possible solution for people that are having difficulty selling their property(s). And, yes, the real-estate investor is going to make a profit. That's just the way things are and nothing is ever going to change it.
So, with your Dad, I would suggest that, instead of debating over the merits of making a profit in real-estate investing, focus on the positive things your provide the sellers that you work with. Place the emphasis on the good that you do because you are a real-estate investor. Make the good the focus of why you do it, in addition to all the additional benefits, including making a profit. Invite your Dad to share in the good that you make available from what you do.... Ok, ok, sorry for going off on touchy-feelly mumbo-jumbo.
In the end, even if your Dad chooses to bicker about the "bad" that you are doing because of being a real-estate investor, your positive attitude about the good that you make available will drown out anything your Dad, or anybody, might dish out at you.
Dean
Love him and keep working to be successful. As you become older you'll notice him becoming wiser.