All Forum Posts by: Paul Strauss

The other thing that has helped me is finally getting organized. It has taken me the better part of the last 7 months, but it had to get done.

When you're organized you can be more efficient. Some people think organization stifles creativity and spontaneity, but just the opposite is true.

When you're organized, you can be MORE spontaneous, and you can definitely be more creative because when you're not surprised by deadlines, fighting fires, and looking for your wallet and keys all the time-- you're free.

When your world is less cluttered, your MIND is less cluttered.

I would skip news, and emails first thing in your day. People that know me would think I'm a 24/7 news and politics junkie that does nothing but read all day. Truth is, I've identified sources that boil it down and I get most of my news in under three hours a week.

In fact, this post has inspired me to do a Tim Ferriss LID (Low Information Diet) again. My computer and phone will now be OFF until noon each day, and will resume the OFF position at 5:00 p.m. on business days, and will remain inactive except for VIP phone calls all weekend.

I'm due for some TUNE OUT.

Thanks for the inspiration :)

This is an example of a deal I saw right here on BP, and the person that posted it should be embarrassed. Don't worry- I'm not going to name names or provide details-- but here are the numbers:

$32K asking price
$10K estimated rehab costs
$55K ARV (After Repair Value)

ASSUMING (and we all know what happens when you assume) that the rehab costs are spot on, and there are no carrying costs (carrying costs: mortage payments, utilities, non-owner occupied property insurance, property taxes, etc) because you rehab and sell it in less than 30 days...AND ASSUMING you sell it yourself and there are no realty commissions because miraculously you found a buyer in 30 days or less who is going to pay FULL ASKING PRICE in cash, and naturally this unicorn doesn't have closing costs, either- oh, and ALSO not using a broker, your AMAZING pre-tax profit would be:

$55K sales price - $42K = $13K

Since we're assuming things, let's talk about what you can REALLY assume:

Assume your rehab costs run $12,000 (don't think an estimate can reasonably be off by 20%? think again).

Now your costs are $44K

Let's say that realistically your buyer offers $45K and you end up setting on $49K:

Your profit is down to $5K

Assume have at least a buyers broker in this deal and you get a discount so you pay 2% - $980

Your profit is down to $4K

Assume you have $200 in utilities, 2% of the deal in closing costs- another $980, and other ancillary costs-- call 'em $1000--

You're now under $2K

My prediction: You'll lose money on this deal.

And if you're new, you will see DOZENS of deals with numbers like this, or worse.

And they're bad deals. How do I know? Because I buy these properties from lenders, and at the tax sales after "investors" screw themselves into the ground trying to wring a profit out of them.

That's a lovely chart, but the fact is most newbies don't fail. Most never start. Those that do start quit.

Here's the short version for those that don't like to read: If you want to build your credibility- be credible. In EVERY area of your life.

INTEGRITY is vital, but when you're just starting out, what is it? Start with the small things. Read the Sermon on the Mount (in The Bible) starting with Matthew 25:14 - 28 and understand that stewardship over the small things in life is what integrity is all about. Here's how to tell if you have integrity:

1. Have you managed what you have well, or are your finances a complete wreck, and your credit a mess?

Real estate isn't a lottery ticket, it can NOT save you from yourself, and it's not a quick fix for years of laziness, and financial mismanagement.

Quite the contrary- if you've done poorly to this point, the last thing you need is more responsibility. Go clean up your mess and build a foundation upon which to construct your first deal.

2. Are you the best employee where you work? It's rare that a lousy employee will be a good business owner. Stories of under-appreciated entrepreneurial employees who stunk at their jobs but finally made it big are frankly-- bullhockeypucks.

You may well be smarter than your boss. You may have great ideas that are being ignored, but humble yourself and remember- YOU work for HIM. And if you're so smart, why do you suppose that is?

3. Be on time. Are you punctual? This is probably the biggest indicator of character there is. Especially early in a relationship, but really at all times. Now, I realize life happens- there are myriad acceptable excuses for being late. However, when a person is perpetually late- especially to standing appointments, or first appointments I have a huge problem with it. If you are perpetually late- you are not a respecter of other people's time, or my time then it's unlikely we're going to do any business together. It's just the way it is.

4. Do you treat EVERYONE you meet with respect. I like to go dutch for "dates" with prospective JV partners and others. I like to see how they interact with service staff, and even how (or whether or not) they tip. I like to observe how they treat other people, and especially how do they treat people that can't do anything for them? I'm bold and unapologetic about this one. If your prospective partner can't manage to be patient with people, and treat all people with respect regardless of his or her perceived notion of their station in life (and often it is merely perception- it's not where you are, it's where you're going- and that includes the maid) then some people would give you the well-educated, polite interpretation that they must have a poor self-image themselves. I'm saying they're a scumbag. None of us has the right to think of ourselves as better than another purely for reasons of social standing or status. All people deserve respect.

5. How's your general attitude and outlook on life? Are you cheerful, generally optimistic, or are you a doom and gloomer. Of the emotional range- how much time do you spend in the negative emotions- fear, anger, and so on? Do you generally whine and complain a lot?

6. Are you disciplined & well-organized? It's pretty easy to tell. In this area I finally just had to stop pretending it didn't matter & tighten up. Recently I have taken 17 large boxes to Good Will, filed or shredded every scrap of paper, organized my tools, and lost 15 lbs and an inch off my waist. Again this goes to how well I was managing a little so I can take on more.

7. Do you lie, cheat, BS, or cut corners as a way of life? Sad fact is we all lie. I've done it, and you've done it. Perfect example (tell me if this isn't true for all of you): Phone rings. It's so-and-so. You don't want to talk to them so you tell your spouse, or assistant, or whoever picks up the phone, "Tell 'em I'm not here, or I'm in a meeting", right? Wife asks, "Do these pants make me look fat?" or "How do you like my new haircut?" what do you say? You say you're just as sexy as the day we met, and I really like your new magenta dyed hair. I'm not talking about this kind of thing. I'm talking about the sociopaths, the congenital liars. And there are a lot more of these people than my happy-go-lucky, optimistic attitude wants to admit :mrgreen:

8. Do you have a high standard of ethical behavior? Here, I'm talking about the difference between having a standard, or making it up as they go along. I no longer deal with people that live by "situational ethics" and "technicalities". I don't have time to live in the fine print, so if you throw fine print at me in some attempt to slip something past me- or you do the same to others; if you do wrong and justify and rationalize it rather than admit it, and repair the damage- you're out.

to name just a few things... Odds are really good the hidden flaws in your character are already well-known to everyone around you. None of us can hide our true self for long. The good news is that if you go to work on yourself-- that'll be observed, too. Your reputation IS your credibility.

Decide what you want. Learn the principles that tend toward success and apply them in your life.

"Everyone should get started wholesaling" is a foolish statement in my opinion because it assumes everyone wants the same things.

Further, "wholesaling" may not always work. Then what? I'm reminded that "Methods are many, principles are few. Methods may change, but principles never do".

I've made it a point to IGNORE "gurus" for the last three years. It has been the best three years of my life in terms of income and net worth.

Well, I don't actually ignore them. I tell them I'm eager to send a check, but I need to see your last 5 HUDs. That's pretty much the end of any conversation with most "experts".

I recommend reading Frank McKinney's book, "Make It Big! 49 Secrets For A Life Of Extreme Success". While Frank is a successful real estate investor with two other books that pertain more directly to real estate, this particular book is one of the better ones for principles of success that you can apply to your life including practical, actionable things you can do to change your life using each of the principles.

The first two are the most important: Recognize your highest calling as early as possible in life- and the odds are, for the vast majority of people your highest calling has zippity doo da to do with real estate.

You're just here because you don't know what else to do, and you haven't given any serious thought to what your calling in life may be, and you haven't spent any serious time deciding what it is you really want out of life. If you've been lurking around here and/or reading about real estate for years, yet you have no deals under your belt- this probably describes you to a "t".

Your "highest calling" is something that gets you out of bed everyday. Yes, you have to eat, you probably enjoy the climate controlled indoors- and that's a motivator. You might have creditors, a mortgage, a car, kids, groceries and other motivators. But I mean something in the back of your mind, buried deep in your heart that your life is really all about. It is something you find emotionally fulfilling, something you have potential for (I find basketball emotionally fulfilling, but the Bulls and I agree- I have no potential for it), something you may have always wanted, or been longing for for a very long time, something you feel utilizes your God-given talents completely, and something that will make a difference in your life and the lives of others for the better.

The second is knowing where you're going. Creating a personal vision and mission statement. Some people have multiple mission statements for their different roles in life- and you can do that. You can have a professional mission statement, a mission as a father (or mother), as a husband, as a little league coach, etc. Personally, I just have one.

Having a vision for your life and a mission is vital because your vision or mission statements tell you how to behave in every situation.

Which brings me to tying these two principles together: How you develop determination is that you discover what worthy, constructive, honorable pursuits drive you in live, you purpose in your heart what you'd like to do, you make your plans, and at least in my own life- you ask for God's help to achieve things in life that support your vision and mission.

The main reason most people quit? They don't have a strong enough "WHY", and when you don't know why you're doing what you're doing- you get distracted. You find it hard to focus. You are pulled in this direction or that.

I say figure out who you are, and what worthwhile objectives you wish to pursue in life. The Bible (one of my favorite books) says that a "double minded man is unstable in all his ways" (James 1:8). Other translations state that "A person unsettled in their opinions is unstable in all their ways".

Determination is less about grit and motivation, and more about knowing what it is you were doing in the first place. And if whatever it is you're doing isn't that important to you, then you won't have the fuel you need to propel you forward when times get tough.

@ Shawn H- I have 1 SFH property in Ina, IL- population 1,800 (600 if you subtract the population at Big Muddy Water Correctional Facility), as well as five mobile homes in unincorporated Jefferson County.

The mobile homes are nice units, btw. People up north don't realize there's a such thing as a "nice" mobile home- but they really are great little places.

It's not much, and I am not likely to buy any more there. My two major concerns are the Federal and State bugdet and the Obama administration's proposed $2 trillion energy tax hike (cap and tax).

Big Muddy is the economic anchor in the immediate area- so those employees directly, and the ancillary services that they require to run the prison prop up the median wages in the area to $33K +/-

The other industries are obviously agricultural (dependent on energy for operation and transportation) and after that it's plastics / rubber at plants operated like Cooper Tire up in Mt. Vernon which will be directly impacted by the automatic tax increase next year, the new healthcare taxes, and especially the massive new energy taxes.

Of course you can't rule out "necessity"...