Episode #14 – EarlToms Podcast – What’s Your End Game?
0:00
Welcome to EarlToms podcast. Today we’re gonna kind of do some some forecast thinking, maybe some reflection. And we’ll try to keep it a little shorter than than usual. Simply because it’s a not necessarily real estate related but life in general related episode. As I’ve been sitting here watching the last couple of weeks, I’m not going to get into the to the to the politics of it, because that’s that’s not my place. The only thing that I will say is no one deserves to die for any reason be killed. Other than that, the opinions, the politics, everything that’s involved in it, is for you to decide on your own. But what it made me do is kind of reflect on what’s the end game? What are what is everyone right now in this country. actually looking forward. So as we’re going to look at what’s going on in society right now, I think it’s a good time to kind of ask ourself, you know, what’s your end goal your endgame for being in real estate in general you know, everyone had a reason when they first got into real estate, the why they wanted to do it. It may have been just the appeal of you know, the hunt, wanting to be able to have some kind of financial freedom it everyone’s gonna have a different reason you’ll probably have you know, a top five like you do everywhere else if you know if you were to survey everyone. But we oftentimes lose track of the original reason that we got in what it what was it that made us get in this business and what did we hope to accomplish them We want to retire by the time we were 40 or 45. You know, did we want to Be a Millionaire? What was the reason that you want to help people? So, I just want to kind of make everyone think about the reason they got in in real estate in the beginning. Are you staying on track on that? Or has something changed? But are you still achieving your goals as you go through this business on an everyday basis on a weekly basis, monthly yearly five year plan, you know, what? What’s keeping you motivated to be able to achieve that goal? So, really, what I’ll do is I’ll just kind of give you give you my story, the reason you know in the beginning, you know why I got in how things have gone over the years. And see if see if maybe some of you are saying Similar, some of you are different Are you are you staying the course are things changing? I mean, we all know that the real estate changes on a daily basis. So you have to be flexible, to be able to keep up with trends, the market, things of that nature.
3:16
But a little bit of my story of why I got in I was one of the few that that was actually raised around this business, my dad was in it, you know, back back when he was in it, you don’t even really need a license to be in it. If somebody signed off that said, you were you know, qualified to go appraise a property, then you could go appraise a property, if you somebody signed off on it and said, You know, you’re qualified to represent me to sell my house. Then you got the agent commission. You know, so from an early age, I was chasing my dad around, trying to figure out what was You know what made him tick his motivations behind behind things, the reasons he got in the business. I can always remember going into my MSA and I would always remember seeing skyscrapers as a, you know, five year old 10 year old kid. And I would always think to myself, I want to own one of those one day. That’s that’s just the coolest thing. You know, as I grew up, I was able to talk to him some more. I learned a lot of things from him. But I was never able to actually put the application Part Two what I what I was taught what I heard what I saw, until I started doing it myself. And then, unfortunately, when I was 21, I lost my dad to cancer. So it kind of kind of shook me a little bit. Then being that old, I just, you know, gotten old enough to sit down and have a beer. So the next couple of years, I kind of just debated on whether or not you know, I wanted to get into this business from that, from five years old to 21. I knew that real estate was going to be my path. So, whenever, whenever I, you know, after he passed, a couple of years went by, and I just I felt lost. I didn’t really have a direction. I gotten into an argument with the college that I was going to because I went to file my graduation paperwork. They said I had the wrong major down. I had three classes left. It was supposed to be my last semester. They said that I had another year and a half. I basically gave them two fingers, not the index and told them they could have it.
5:55
But when I left my mother was disappointed that I left I didn’t finish what I’d started because that was not the way that I was raised. And I made her a promise that I would eventually go back and get my degree. You know, when someone 20 years later, I’m actually doing that. It’s a college is a lot different than what it was 20 years ago. But But those couple of years when I was just kind of lost, didn’t really have a direction. Something just came over me one day and said, You know what, this is where you belong. You know, so I went and decided to be an appraiser because I already had siblings in the family that were agents and I didn’t want to compete directly with them. I didn’t think it was a good idea. Plus, we had always promised our parents that we wouldn’t work together because when you grow up with as many siblings as I do in the family, there’s always that competition. And there was always you know, fights in the backyard. There was always argument Things like that. So we just made that promise, you know, to our parents and then we want our end up just appraising to not compete directly with them because I’m the youngest of my brothers and sisters. And then when I got in, when I got into appraising, I set out some goals. I was going to appraise for five years after our appraised, I was going to invest after that, that was that was going to be my stepping stone, I needed to understand why people did what they did when it came to real estate. So that I would understand that when I went to invest, I didn’t just go out there and say, this looks like a good deal. I hope it works and put my money towards it because I could have, you know, I could have lost thousands upon thousands of dollars still be in debt to this day. If If I would have done it that way. You know, no one really wants to do that. But actually a true story. My first my first flip that I did, I was actually appraising. And I went about the house, got it, got it renovated, put it on the market the day I put it on the market back in 2008, the CEO of countrywide, I don’t even know if they still exist. But he came out and said that it’s about to get bad. Well, I thought to myself, you know, I’ve got it on the market just in time, but in the back of my mind, I’m thinking to myself, I’m appraising real estate, I should have known this. This was not the right time to buy this. So what wound up happening is is for a year I had a 15 year mortgage on this property. So what wound up happening is is I wound up paying $1,000 a month for a year and had to reduce the sales price to the point of taking $2,000 to the closing table just to get this house sold after a year of holding Because I made a bad choice. Now after since that house, I’ve never lost money again on a property. But what I did is I took a year off. Because I thought to myself, you know, this could have been a lot worse, I’m appraising, I’m supposed to know be able to recognize when things are coming. And I didn’t, I didn’t see it. Now why I didn’t see it, I don’t know. But I, I’ve been appraising up to this point about three years. And it just made me kind of go back and reevaluate, learn the methods and the reasons and things like that over again. So after a year off, I decided to jump back in and start start flipping again. So I was still, you know, having to take out loans, credit unions, things like that, that doing signature loans back then, until they they kind of got taken away and got harder to harder to get but After that five years, my mother welled up getting cancer. So I decided to go out on my own and start appraising on my own. Mainly because it gave me more flexibility to be there for her and be able to take care of her but still maintain my ability to pay my bills. Now, I wasn’t getting rich at this point in time, because we were in the foreclosure crisis at this point. But I was still able to get everything in my day done and take care of the people, you know, that I love. They were important to me in my life. But once once that once he got finished with with cancer, and we came through the foreclosure crisis, I realized that it was time for me to actually step away from from appraising because of the things that I saw during the foreclosure crisis, meeting families, things like that. The banks, what they were doing to These families, business owners, it was it was not a it made it hard to sleep at night.
11:09
I had, I like to think that I was good at my job. I had the ability, you know, within that five year period to basically appraise for government sections. I had a, I had the ability to pray some, some high end commercial buildings, small offices up to, you know, buildings that had more than 10 floors on them, let’s say. But I also, you know, appraised a couple thousand houses in this point in time too. But when we came through this foreclosure crisis, it realized that a lot of people were going to need a place to live that didn’t deserve really what was going on with them. So I decided to start investing and start getting into the rental rental holding business. You know, I still flip but I still wholesale but mainly a lot of this stuff that I do is to fund my holds. So my goals have had pauses in them because certain things in life come up. But my goal to own that big skyscraper is still there now will I ever achieve it? I have no idea I may be 70 years old and finally get it I may never get it. But there’s there’s something the kid inside me still wants that. That skyscraper. So what? What I want everyone to actually think about whether you’re new, whether you’ve been in this business 10 years are you doing what is needed to be done to achieve the original goal of why you got in this business? Because I can almost assure every single person listening to this episode. You had some very lofty goals when you got in this business. Most of them were probably financial So are you if you’ve been in this business for five years, 10 years, are you better off today than you were when you got in? And if you’re not, then just take a step back and try to figure out why you’re not. A lot of it, you’re going to find is going to come down to three things, your attitude, your ability to learn, and how you’re spending your money, your financial situation. So when you when you go and meet, like, I’m going on Monday to meet a lady that selling a house, she’s got an anomaly is basically a habitat house and in an area that’s not so great. Everything in this area was built around 1930 and her house was built in 2007. Now do I like going over there and no one I’m going to wind up having to give this lady an offer. That’s not going to be what she’s wanting. No, I don’t enjoy doing it. But it’s also good practice because your attitude a lot of times determines whether or not you’re going to get that deal in the first place. If you go in with a man, I remember two weeks ago, I’ll put a house under contract that I’m gonna want to hold him. Somebody came in and said, You know, I came after someone and I said, This guy offered a maximum out said the reason he was doing it because he’s gonna make up came in for those 25 or $35,000 on every house, and just came right out and told them and they basically looked at him and said, you can leave now, those type attitudes are not going to get you far in this business. Now, I wound up getting this house for less than they paid for it, because I took the time with them to actually understand their situation. Have a conversation with them like they were a person that deserve deserve to be retrieved, treated with With respect, but it still gave me the ability to get this deal, man, if I was to turn around and sell it based on what I bought it for, I would make that 25 or $35,000 that that guy that came before me was going to get that they asked to leave because of his attitude and his approach. Is it going to work for you every single time? Absolutely not. But you will be able to sleep a whole lot better at night. If you go in with a positive attitude. You’re trying to help someone in your mentality whenever you’re doing this.
15:36
And not just Oh, you’re you’re the bank going in your number. every homeowner you meet, you’re a number. I can only do this if I can make $30,000 and your that’s gonna rub a lot of people the wrong way and you’re gonna miss so many deals on that mentality. That attitude. You hear a lot of these things. People say this is what we’ve got to do. This is what we’ve got to do. This is what we’ve got to do. Sometimes that works. The majority of the time, that does not work, because what you’re going to wind up finding is, is if you’re doing your marketing the correct way, how you’re spending your money, you’re going to have these people that you show up to that lay down for you. You don’t you don’t really have to do anything other than have a conversation with them and they’re going to lay down because you’re actually taking the time to do market research to research your marketing figure out where your dollar spend is, Who are your better clients that you can get these houses from everyone that pays attention to anything that I’ve posted on the website, EarlToms.com. Something about yellow letter HQ. One of the reasons that I love That is because it helps me stack my list. I can scrub my list right there on the dashboard. If somebody calls me that gives me that. That famous phone call, don’t ever send me another card again, I can just type their address and it will mail to that address ever again, I don’t have to worry about pulling new list getting that same phone call from people. Because once it goes in there, it’s in there for good unless I take it out. It’s you’re looking for people, especially like on those postcards to where you can stack your list. So you’re looking for people that you know, have a tax lien, that have filed a bankruptcy, just got a divorce, have a lot of equity. You’re not you’re not just sending something to a tax list, because one thing that I’ve noticed on Prop stream is when you sit there and type in tax lien on there to do their searches. A lot of times it’s an IRS lien for the owner or the person that’s living there. So it could be a rental house but because that was the address that was listed on their tax return, now they’ve associated that address with that property, and it doesn’t have anything to do with the owner. So you’re wasting money sending those type things out there. Now how you figure out that that doesn’t go with that property is you basically put in there, okay, I’m gonna stack my list and now I’ve got a bankruptcy sitting on top of it, or I’ve got high equity sitting on top of it, you you actually multiply your ability to get deals closed, the more precise that you are with the money that you’re spending, you don’t have to go out there and spend 510 thousand dollars every single month to do five or 10 deals. Because if you’re targeting the people that you need the ready to go sellers. Most of them are going to lay down for you. You don’t even have to do a whole lot of work. They’re just looking for someone to treat them like a person. They it’s it’s not an easy asked to be able to figure out but, you know, you can come up with a program a lot of people use podio there’s most of your CRMs have ways of tracking your spam, things like that. I track my honestly in QuickBooks $20 a month, but my accountant actually enjoys it because it makes their life easier. And everything is done pretty much for them. So that actually saves me money whenever I go to have my taxes filed every year to and I’m basically spending $200 a year to save me ever how many hundred thousand?
19:36
You know, when I get my taxes filed, but it gives me a screenshot a snapshot of where I’m spending my money. am I spending it on? You know, marketing? am I spending it on office supplies, software, payroll, where am I spending my money, and I can see that every single month and it’ll give me a chart that basically tells me am I taking in more money every month than I’m spending Because when you get to those points when you can see it on the graph to where you’re spending more money every month than you’re making, you got a problem, and you need to figure it out pretty quick. Because if you don’t, you’re gonna go out of business and not too distant of a future.
20:16
But to get back to what we were originally talking about all, you know in this episode, what’s your motivation? Are you still own? Are you still own the path that you originally set out? Now? Does that mean? Everything has to stay concrete in your path? Absolutely not, like we said before real estate changes on a daily basis. But it’s okay to kind of to kind of deviate off of it. But are you getting to the point to where, you know, you might have to take that same growth to be able to get to where you wanted to be eventually, but every single week, every single year, if you’re not taking steps forward, those goals that you have are never going to be achieved. Now, if you never set any goals, that’s the first thing that you need to do once you listen to this episode is sit down and make some goals. Because if you don’t have anything to work for, you are never going to accomplish anything. That’s the principle of sports. If you’re not playing to win, there’s no sense in playing these participation trophies that they’re giving out now. I didn’t get them when I when I was playing. One thing I got when I was playing was a trophy if you want and you had to win the whole season to be able to get the trophy. No. It gave you the motivation to be better not just be average. The the way that you the way that you do all that is sit down. You know some like Dave Ramsey, for example. Dave his his stuff is just goals. But sit down Mike. I want to do this every week. This is how many phone calls I have to make. This is how many in you know, appointments, I have to go home, don’t sit there and tie yourself down to, I’m only going to go look at a house. If the owner tells me that there’s, you know, they’re asking this and there’s a $25,000 profit sitting in there. Go own these appointments, if you can figure if you can listen and learn to pick the sellers, words, the conversation, to where you see openings, go on those appointments, because there’s a reason they pick the phone up and called you. Sometimes they’ve got pride and say, This is what I want, and you’re giving us too much. But if you were listening to the conversation and leading them in the right direction, when you go out there that could very well wind up in a deal. If it doesn’t wind up in a deal. Then when you get back to your office, you sit there and go back in your mind and go How did I miss that deal and Do a real internal analysis of it. Was it you? Was it the situation? Was it the owner, what caused you to not get that deal? You have to have goals, you have to have an end game to be able to do it. So when you’re going on these appointments, taking these phone calls, calling these people that’s just like practice to be able to get ready for the game. And the game is your end goal. That’s what it always is. So if you want to own a skyscraper, if you wanted to have 50, rental houses, whatever your goal was, when you originally got into this business, are you practicing to the point that’s going to let you turn the lights on forgetting time? I mean, that’s, that’s why you do this. And if you’re, if you’re forgetting that and not going through it, if you get to the point of just going through the motions, you need to stop you’re wasting money. You have to wake up every single day with the mentality that says This is what I have to get accomplished today. This is what I’m going to do, win or lose. I’m leaving it on the floor. That’s that’s got to be the mentality. If it’s not, you don’t belong in this business because you’re not going to be successful. And I know I’m taking that in a harsh way with you. But I’m just trying to give you a reality.
24:21
You can go and do things like what I do, there’s a website called start engine. You know, I get these emails all the time, equity investing, you know, you get in on the angel investor side, a lot of these things you can invest with just $100. Some of them are $500, someone with $1,000 minimum, but you get a hold of these companies before they go public or before somebody buys them. And then you become a shareholder. And then you cash out. I saw something one time before I originally started doing it. That’s $100 investment at Amazon. At this equity stage of investing. What have some would be worth doing Point 4 million or $2.5 million right now $100 investment when Amazon was an equity stake will be worth $2.5 million today.
25:11
If I have an extra hundred dollars, and I think, you know, hey, this might work down the road, it’s gonna take 510 years for it to, you know actually get to the point of being worth something. But if I have an extra hundred dollars that I can invest them, then hey, go do it. Because if I all I need is one to hit, I don’t need them all to hit, I just need one to hit. So if one hits that put that would put me what 2.5 million closer to buying my skyscraper. Or if I go and say buy silver, I do that every month actually. Anyway, I bought 10 ounce bars of silver every month. That’s, that’s just something to have. That’s a diversification of being able. If I need money one day, if life gets in the way, planning for retirement, you name it. I don’t really do the IRA the 401 thing, it’s just not my not my thing.
26:05
Some people are different some people like that. It’s all It all depends on what you know you want to do. But every time you have just a teeny tiny bit extra money, plan for your future, put something back, pay off a credit card, pay down the interest because the lower your monthly bills get, the more money you’re actually gonna be able to have every month and then that puts you that much closer to achieving your goal.
26:31
We have to in this business, slow it down because it moves so fast. And it and it is a kind of a curse because a lot of times it makes you lose focus on your goals on your end game. And then you get sidetracked you get off course and then when you try to bring yourself back in depending on how far off course you’ve got, makes it that much harder to come back. And, and really get back on that path that you want to be.
27:04
So given everything that’s kind of going on in society right now, I just I thought it was a good opportunity to, to kind of have this conversation as it were, as it relates to, to real estate.
27:19
I’ll say it again, not a single person in this world does deserves to die. The way that that man did. We can we can actually be better together. There’s, you know, if it has to start somewhere, so the way I see it, why don’t let it be the wholesalers, we have a bad reputation. Why don’t change that? Why not be the good guys? We’re the guys that tell you the truth. We’re the guys that, you know, don’t let your house sit on the market for six months and not so we’re the guys that gets you results. We’re the people that treat you you know, like fans. so to speak, we help we’re here to help your situation you can trust us. We’re not we’re not seeing color, we’re not doing anything. We are here to help you. But at the same time, we’re honest about it. And we tell you, we’re here we have to make money or we couldn’t keep our doors open.
28:19
So, right now with everything going on, take a take a moment, reflect on the reason that you got in this business, where you are today in your business, how close you are to your goals, do your goals need to change? Do your goals need to stay the same? Figure out where you are? And if if need be, reform your goals, get them to where you need them to be. Get your life where you need your life to be?
28:49
Because, in a lot of ways, many, many, many people have families. So take the opportunity to realize Tomorrow many times, and we saw that two weeks ago, in an instant, lives changed. many lives changed. Not just the man lost his life, but many lives changed on that day. Take the opportunity to realize that and better yourself better your business. And let’s move forward as the standard bearer for ethical business, for compassion, helpful. Let’s be that in real estate today and in the future. Focus on your goals, treat people with the same amount of respect and love that you would want them to treat you with if you were in that situation, and we will all be a better society and a better profession for it. Now, I appreciate you listening to this episode. We’ll be back soon with another episode. Until then, Visit EarlToms.com if you want to get any other information like I said we just put something on there for yellow letter HQ that will kind of explain their their services.
30:13
But there’s a lot of information on there that will help you. You know grow your business keep things on track. Again, that’s EarlToms.com. Until the next episode. Stay safe, love each other. Let’s make this a great business in real estate.
