Case Study #3 - Preferred Returns

In this case study, Fernando Angelucci looks at preferred returns.
First, it is important to understand what a preferred return is. Basically, what this means is that whoever puts in money in the deal, they are gonna get their income first as the preferred return party.
In dealing with this, it is important to know if it is an absolute preferred return or an annual one. And there is a big difference between the two.
Learn more about what a Preferred Return is and how it can relate to your business in this 5-minute video.
Fernando O. Angelucci is Founder and President of Titan Wealth Group. He also leads the firm’s finance and acquisitions departments. Fernando Angelucci and Steven Wear founded Titan Wealth Group in 2015, and under his leadership, the firm’s revenue has grown over 100% year over year. Today,
Find out more at
https://www.TheStorageStud.com
http://titanwealthgroup.com/
Titan Wealth Group operates nationwide sourcing off market investment properties for Titan Wealth Group’s acquisition as well as servicing a network of thousands of active real estate investors world wide. Prior to founding Titan Wealth Group, Fernando worked for Dow Chemical, a Fortune 50 company, rolling out a flagship product estimated to gross $1B in global revenues.
With an engineering background, Fernando is able to approach real estate investing with a keen analytical mindset that allows Titan Wealth Group to identify opportunities and project accurate pictures of future performance.
Fernando graduated from the University of Illinois at Urbana-Champaign with a B.A. degree in Technical Systems Management.
Titan Wealth Group was founded in 2015 with the vision of gathering individual investors that have the means to invest but lack either the time to find high-yield investment opportunities or the access to these off-market deals. All too often, founders Fernando Angelucci & Steven Wear came across investors who had deployed their capital only to regret the lack of consistency or degree of returns their investments were producing. In response, Titan Wealth Group provides access to highly-vetted real estate secured investments and off-market acquisition opportunities primarily in the Greater Chicago MSA. Today, Titan Wealth Group not only assists individual investors but has grown to support the acquisition goals and capital deployment of investment groups, private equity firms, and real estate investment trusts (REITs).
As a facilitator of wealth growth, Titan Wealth Group believes that success is not limited to the sum of our efforts and is infinite with what can be accomplished through partnership.
#SelfStorage #RealEstateInvesting #AlternativeFunds

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I was just asked the question on, how do preferred returns work? Is it annual? Is it total? Or is it considered interest? Is it considered capital gains? So let's first look at what a preferred return is. What a preferred return means is that whoever puts in money into a deal, they're going to get their income first as the preferred return party before anybody else. Now let's say we're working with a 6% preferred return. The second question as a potential investor that you should be asking your syndicator or your sponsor is, is this an absolute preferred return? Or is this an annual preferred return?

And here's the difference. Say there is a five year project that is offering a 6% preferred return on your money. If it's an absolute preferred return, what that means is over that five years, you'll get all of your money back, plus 6% profit on top of that. So if you put a hundred thousand dollars in, that hundred thousand dollars will come back to you in that five years, plus that 6% on top. So now you're at $106,000 returned. And then the equity splits will take, will come into effect after that.

Now, if it's an annual 6% return, preferred return. What that means is every year you will be making $6,000 on your hundred thousand dollars invested. Once you get to that 6% in that year, say it only takes six months in that year to get to the 6% return, then everything after that will be split. So that's kind of the difference between absolute and annual preferred returns. Now let's talk about how it's classified. This is something where the answer really depends. It depends on how the syndication is structured. What type of tax strategies your syndicator or your sponsor is using, and then how that income is returned to you.

So for example, one way is to have interest income. So when you have interest income, you may not necessarily be an owner in the project. You may not actually own any part of that project, but you're actually more of a lender. You're in a debt position. You lent a syndicator, a hundred thousand dollars, and he's willing to pay you 6% on that hundred thousand dollars, almost like a coupon, if you will. And once that income comes back to you, it's considered interest income, which is taxed at a different rate than say equity.

Now that second way that you can get your money returned to you is what's called return of equity. It's actually not taxed at all. Say, you invest a thousand dollars into a syndication and each year it pays you $6,000. What that $6,000 can be classified as is a return of your hundred thousand. So every time he gets 6,000, all the way up until you get your initial hundred thousand dollars back, that is return of equity is not considered taxable income. Now, again, I'm not an accountant, I'm not an attorney. I don't claim to play one on TV or on YouTube. So please, you know, talk to your counsel and your advisors before you do any type of investment.

Another thing that you can do is once you've had all of your initial investment return to you, any income above that, if you're in an equity position, as opposed to a debt position can be classified as capital gains. Now, again, there's a ton of tax advantageous ways to receive that income. You can receive it, you know, over a longer period of time using some advanced strategies, like a charitable remainder trust, or you can roll those returns into another property using a 1031 like kind exchange. And that will defer the taxes down the line.

Another thing that you can also do is you can just take the income and pay the capital gains on it. There's a lot of different strategies out there, and it's always important to talk to investment advisor or a CPA to see what the best way to receive that income is for you and see how that works with the way that the syndicator or the sponsor is structuring that syndication.

So if you'd like to learn more about preferred returns or how income and different types of syndications are taxed, feel free to drop us a line at www.TheStorageStud.com. And again, my name is Fernando Angelucci, wishing you good luck and good fortune, until next time.

418 Investing in PreREO with Barry Owens

http://moneyripples.com/2020/08/21/418-investing-in-prereo-with-barry-owens/

We have a special guest today, the President of PreReo, Barry Owens.
He is a 30-year mortgage industry veteran. Basically he provides problem-solving solutions to create win-win solutions. He has an extensive resume in the industry and it is an interesting story.
Chris Miles, the "Cash Flow Expert and Anti-Financial Advisor," is a leading authority on how to quickly free up and create cash flow for thousands of his clients, entrepreneurs, and others internationally! He’s an author, speaker, and radio host that has been featured in US News, CNN Money, Bankrate, Entrepreneur on Fire, and spoken to thousands getting them fast financial results.

Listen to our Podcast here:

https://www.blogtalkradio.com/moneyripples/2020/07/17/418--investing-in-pre-reos

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Chris Miles (00:00):
Hello, my fellow Ripplers! This is Chris Miles. Your Cash Flow Expert and Anti-Financial Advisor. Welcome you out for a wonderful show. A show that’s for you. And it’s about you guys. It’s about those of you that want to work. You don’t want to work so hard because you’ve been working your tail off. You want to work because you want to not because you have to. To have that freedom. That prosperity. That cash flow. Today! Not working 30 or 40 years and saving forever and hope that someday you might have a retirement, but you want that freedom right now. So you’re gonna be able to live a life to do what you love. To be with those you love. Whenever the heck you feel like it. But on top of that, as a Rippler, you actually want to create a ripple effect in the lives of others too. Not just your family and generations beyond you, which is awesome, but for everybody you come in contact with to enrich your community and make things better.

Chris Miles (00:55):
And guys, I appreciate you guys that have been sharing this show, creating a ripple effect that way, because as we can be able to do this for other people, man, this just gets bigger and bigger. And I appreciate you guys allowing me to create a ripple effect through you and an essence, creating through others as well. Thank you again for tuning in for joining us and for following us too.

Chris Miles (01:13):
Here’s a quick reminder. Go to our website, MoneyRipples.com. You can check out the blogs that have the videos of these shows as well as the free book Beyond Rice & Beans, Seven Secrets to Free Up Cash Today. That you can download for free right now to be able to find more money today. So check it out.

Chris Miles (01:28):
Alright! So I’ve got a special guest today. You guys have had, you know, we’ve had repeat guests. So one of our biggest repeat guest we’ve had on the show is Jorge Newberry. You guys know from like American Homeowner Preservation, things like that. Well, we’ve got a special guests here with one of his partners, someone that he actually worked with in a company called PreREO. This guy’s name is Barry Owens. He’s the president of PreREO. He’s a 30 year mortgage industry veteran. He believes that PreREO provides an incredible opportunity for bringing no holders and community investors together to mitigate losses, to lenders and accelerate returns for investors. Basically creating a huge win-win for everybody. His unique background experience creating and executing a variety problem solving solutions, positioned to successfully and build the infrastructure to handle the varying and specific needs of no buyers and sellers. Prior to joining his PreReo, Barry worked in leadership roles, such as [inaudible]. So Barry, welcome to our show!

Barry Owens (02:19):
Thank you very much, Chris. Happy to be here.

Chris Miles (02:22):
Yeah. So tell us like first and foremost, like how’d you even go this route because many people go in like the banking industries and things like that, but I know a deal with Reos or Real Estate Owned Properties, right? Like dealing with these, it’s a very specific niche. How’d you get there?

Barry Owens (02:37):
Yeah. It is a well known, but also hidden niche, right? The people that are in it know it very well. You know, they’ve learned a lot through it and they’ve made a lot of money through it, but it is also very quiet because it’s not very traditional.

Chris Miles (02:51):
Yeah.

Barry Owens (02:52):
I very connected to the bank, you know, having the right contacts, having the right introductions, having access to the products is really the key in it. So yes, it is a very niche driven market where, you know, knowing the right individuals, having the right contacts, whether that be at the lending institutions, institutions like ours that can actually provide the product is a very strategic advantage to participate.

Chris Miles (03:18):
Yeah. Now this is a very synergistic business that goes along with American homeowner preservation. I can see it. It makes perfect sense while you guys are connected. Tell us, for those listeners that don’t even know what REOS are. Right. Give us a brief introduction about what they are and that sort of thing.

Barry Owens (03:32):
Yeah. So REO, it’s a bank acronym for Real Estate Owned. Basically it’s a property that either an investor or banking institution has foreclosed on and taken back into inventory. It did not sell it forclosue sales. So now it’s going to be brought back in marketed for sale by the institution. They sometimes use third parties to sell it for them, but yeah. And then basically owned asset that’s an REO or you’ll sometimes hear it referred to as an OREO, Other Real Estate Owned.

Chris Miles (04:02):
Absolutely. And this is key because I know from last recession, when people I knew that were dealing with Oreos connection is everything like it’s not about who has the most money, because you can sometimes offer less money and still get an offer accepted if you have the right relationships with these banks, with these institutions. Correct?

Barry Owens (04:22):
Correct. And a lot of, again, it goes back to my earlier comment on, you know, as you said, the relationship as you become a repeat buyer that gives you a lot of credibility with these investors that we know you’re going to keep coming back, purchasing more product. So yeah, you kind of do get bulk discount mentality going, you know, when you’re a repeat buyer, it definitely builds your credibility.

Chris Miles (04:43):
That’s absolutely true. And so give us an example, like what does it like to buy a property through you guys? Like, you know, give us example so maybe, cause obviously you buy a whole portfolio of these things, right? Do you sell these by the portfolio or do you sell the individual properties, like piece them off? How do you do it?

Barry Owens (05:00):
Typically they’re going to be pieced off. Now we do have buyers that will buy multiple properties at the same time, but they might not all close on the same day, but we might have three, four or five, six deals going with them at any given time. But we do sell these, you know, basically individual properties in our note, which is the preREO market, which is really what, you know, our website, preREO is focused on is selling the notes of the foreclosure properties. They’re not REO yet. They’re preREO. We’re selling them out instead of the actual physical property, which is the discerning difference between the preREO and the REO.

Chris Miles (05:39):
And why would they want the preREO versus the REO

Speaker 3 (05:44):
Opportunities. The program that we created historically owning a vacant note, a property note, and the property is vacant. It’s a very costly endeavor. You have lawn care, snow removal, vandalism, all those factors. And plus you’re paying interest. You’ve got all these things, plus you’re completing a foreclosure. So it’s basically a dead money asset, which is why people are frowned upon the past. What we’ve done with preREO is create a program and we have the complete infrastructure to handhold people through this entire process, through the turning networks that we have and the servicing that we have with AHP backing us. And you know, those pileated ponies where we can handhold somebody through the entire process. And the key here is the receiver. When you can get a receiver appointed and people oftentimes get nervous on receiver, that’s expensive and doesn’t need to be because our receiver can be any person that can’t be an entity, but it can be any person.

Speaker 3 (06:48):
So as an example, if you have a local real estate agent that you work with, or, you know, we also have a vast network, we could introduce you to as well, you have a contractor or you know, that real estate agent whomever you would choose. You can have that person appointed as the receiver by the court, take possession of the property of this vacant property, which you’ve purchased at a great price because of the fact that again, historically vacant notes are not something that people go after a whole lot, but we’ve been able to bring this entire segment of the market and put it in front of investors and the network and the supporting network with the receiver. So that receiver now has the power of the court to go in and take possession of the property. Re-key the property, the buyer of the note, you know, the preREO partner, they can go in, take possession, do the necessary repairs, if any, that are required to a property, put a renter in it while the foreclosure action is going. So now you’ve turned that, you know what used to be a dead money asset into an income producing asset while you complete the foreclosure. And then once you complete the foreclosure, then you have that REO that we talked about earlier. Now, what do you want to do with it? Are you a buy and hold strategy? Or I just want rental income? Are you a flipper? You know, Hey, let me take my profits now. But you have a multitude of strategies that, you know, will be completely up to you once that process is done.

Chris Miles (08:26):
So walk us through like sample deal. Like what may one of the investors that have gone and purchased one of these properties, walk us through like what the process was like and the numbers too. Like how did those numbers work out for them?

Speaker 3 (08:37):
Yeah. So to give you an example and I can’t really get into the specific numbers, but I will lay it out. So one of our initial customers, it’s been a longer term customer of AHP. They purchased a couple of the notes a few months ago, you know, as we were rolling up the program. They just paid off their first note and they are back and they have numerous offers now on other properties. So the return was obviously significant enough for them. Honestly, I don’t even know what their return was. They paid us off. Now they’re back putting in offers on other properties. So, but as like hypothetical numbers, you know, one of the samples that we use is that, and this is a good example. It’ll set the table. So for, to do round numbers, we typically sell the properties at 75% of value. So what that means, if you went to a realtor.com, you would see a property at $133,000 value, we will sell it for a hundred thousand. The note for a hundred thousand dollars preREO will fund 75% of that. The investor would need to come to the table with $25,000 to fund it. They’re part of the participation agreement, right? I have.

Chris Miles (09:58):
So to be clear, they’re not buying the full hundred thousand of the note. You guys are partnering together, you’re putting up 75% of money. They’re putting up 25% of that net price. Right? Yeah.

Barry Owens (10:10):
Correct. And they need to have some money in the back for rehab. And the legal costs, that will incur. We estimate it’s about $25,000 or so, you have to get the receiver appointed. And obviously that number can vary, you know, on a palatial estate, you know, $3 million estate, your numbers are going to escalate, but yeah, $25,000 repair and legal expenses to pay the $2,000 for the program fee. And you give the 12% return to preREO on the money based on how long you hold that money. And then we will do it for up to three years, you can pay us off in two weeks as well, if that would be your choice. And typically what we would see, the one analysis that we ran in that case after the repairs are done, the property is worth $79,000, your net, after all the costs, after the participation fee, after the 12% annualized return, if you sell it in a year, you’re looking at a $39,000 return. So these numbers can be very lucrative in a very short period of time.

Chris Miles (11:26):
Yeah. So let me walk back just so people can kind of get a visual because it’s always easier to do this, and I know that they can reach out to you guys and see some of the stuff too. So in this example, somebody puts $25,000 down, right? That’s their investment into that out of the hundred thousands of 25% they put in, like you said, about another 25,000 repairs, right? So they’re at about 50,000 bucks. Plus like you said, there’s about $2,000 program fee. You mentioned like, and this is a key one I wanted to focus too. So because you’re coming in with the 75,000, right? They’re paying you essentially like 12% a year or 1% a month. Right?

Barry Owens (12:03):
Correct.

Chris Miles (12:04):
On that money. So, and we’re saying this over how long? A period of time?

Barry Owens (12:09):
The example that I just gave was a one year, but we worked through the notes, but we have people that pay us off in three months, depending on where it’s at in the foreclosure. So the timelines on these varys greatly.

Chris Miles (12:23):
Yeah. It can vary greatly depending on the speed, but even if it took a full year, which is a decent amount of time, right? That’s like, you know, 9,000 bucks to come out of pocket. So they might’ve come out of pocket a little over 60 grand. Correct? In that example.

Barry Owens (12:36):
Yeah. Depending on how you want to play that out. Yeah. For they would liquidate the investment. Yes, totally. Yes.

Chris Miles (12:42):
But then, like you said, after they liquidate, what’s the return on that, that, in that example,

Barry Owens (12:47):
Well, on that example would be $39,000 is the profit in the spreads and looking at

Chris Miles (12:55):
That’s a huge profit for a short period of time.

Speaker 3 (12:58):
It is a very significant profit, which is, you know, we have just really got the program running, just started adding a bunch of properties to it. Like I said, we’ve only had a couple of test samples, or test cases that I could talk about and have gone through, but it’s already proven to be a lucrative, as I stated, people aren’t going to come back investors, aren’t going to come back to a program where they didn’t make money. So we are already seeing the repeat investors on these, which is fantastic. I mean, that’s, what’s gonna make, you know, the model thrive. We want to see the investors do well. And we’re partnered in this, you know, we have a vested interest in this doing well.

Chris Miles (13:37):
Right. This is kind of a done with you deal. Right. It’s definitely not done for you. There’s definitely a lot of your own involvement in this, but there’s definitely a place where you guys are really, truly partnering together for these deals, right?

Barry Owens (13:50):
Yeah, absolutely. Not only with our money, but with our resources. It was through legal and AHP servicing and all of the support mechanisms that we have in our, you know, internal staff to walk people through issues and, you know, educate them as we go. So yeah, it’s definitely not, you know, here write a check and then you’re on your own. There’s a support mechanism through our process.

Chris Miles (14:13):
That’s right. And that’s the kind of the cool thing. And everybody listening, I want them to really understand the difference here is that there is a difference between passive investing and active investing. And we’ve mentioned this on the show several times, right? I mean, passive investing is you turn it over. You’re really not doing a whole lot. Right. Even if you buy a turnkey property, you know, even though you have somebody that helps you buy a rental property, that’s I would call it a partially passive investment. Right. Because there’s some work upfront, but once he got it going, then it’s mostly passive. Well, this one’s definitely more on the active side, but as you go up through those ranks, the potential for returns is much bigger. There’s also more time involvement in this, but still, I mean, you took that say you took that same again, we’re rounding down to 60,000 bucks, right.

Chris Miles (14:56):
But $60,000 and you put it with AHP, you know, very, very passive. Like you do nothing. You know, you let them do all the work, right. I mean, you might make 6,000 bucks or so in a year, you know, but in this example, you said, you can make over 30 because now you’re getting more involved. You’re become more of an active investor in this kind of thing. And I know there’s several of you that either one, you like note investing, which this is kind of up your alley anyways. Or two, you’re already trying to find ways to buy properties at a discount and trying to find ways to create leverage. And this is exactly the way to do leverage. And by the way, nice thing he has here too, is, you know, obviously this is private money. Well, I mean, you’re using like AHPS money, but you’re not actually, they’re not going and having to qualify for a bank loan, which could take weeks, Right?

Barry Owens (15:39):
Yes. Yeah. They’re the qualifier. If you’re coming to the table, you’re participating with us, you know, we ask you a couple of generic questions, but yeah, it’s very smooth, very easy process. It’s not something that you get back loaded with paperwork that you have to keep going back and forth with and keep coming up with documentation.

Chris Miles (15:59):
Right. You can get hung up on this or that. And the other that just becomes frustrating and extensive, you know, so we’re definitely not saying this is a recommendation. We’re definitely not saying this is risk-free or anything of that nature, but definitely this is an amazing option, you know, and especially where you, like you said, this is preREO. This is not like buying OREOs where I’ve seen a lot of people got burned the last recession buying OREOs, you know, outright, and then having huge tax bills left on them. Cause they’re out in Chicago or something, right. It’s not like that.

Speaker 3 (16:26):
Yeah. And we do the due diligence on them and we highly encourage everybody to do their own as well. But we will give you a broker price opinion, which is a third party, independent value of the property. And obviously you can go out to realtor.com or Zillow and look at some estimates, they’re both on rental incomes and property values. So you’re going to go into this with a lot of information, you know, to make it secure. And as you stated, yeah, there are people that have been burned tentatively on the REO market for one reason or the other. But there’s also a reason why there’s so many TV shows promoting these fix and flips, you know, in live scenarios because there is definitely a lucrative market out there for investors.

Chris Miles (17:10):
Absolutely. And especially, I know there’s a lot of people that listen to show that say, okay, Chris, I get how I can buy rental properties and whatnot, but is there anything I could do that could be more lucrative? That could be faster and accelerated. And I’m not telling people to just go and should I go for pie in the sky and swing for the fences, and they strike out and they lose money. That’s not what we’re talking about doing here, but definitely if they have their bandwidth to put a little time and effort into something, this could be a great opportunity for them.

Barry Owens (17:39):
Yeah, absolutely. And again, with the support mechanisms that are in place, you know, from a value, it, it gives a very high comfort level to everybody. We want to make sure that everybody’s very comfortable with what they’re investing in and how the process works. So we’re here, you know, a very supportive team behind it.

Chris Miles (17:57):
Well, Barry, that’s exciting stuff. I love it. Everybody, we’ll put in the show notes, the link. So you guys can go and find out more, but Barry, I appreciate your time. This is really cool stuff, a great niche and a great opportunity that even someone who’s got, like you said, maybe they got 50,000 or a hundred thousand bucks. This could be an amazing opportunity for them to take advantage of and really create some great returns. Whether they create a rental from it, whether they flip the property, whatever it might be. There’s some definite opportunity here for them.

Barry Owens (18:26):
Yeah. Absolutely. Looking forward to it. And I would greatly appreciate the time today, Chris.

Chris Miles (18:31):
Absolutely. Man, I really appreciate the opportunity to have you on as well. So, every definitely check it out. Like I say, go to the show notes, you’ll see a link there. You can go and learn more about what preREO does and really how you can become more involved and how you can even ask more questions. So everybody go check that out. And man, again, this show is all about how you take action. It’s not just about being a hearer of this podcast and the hearer the word, but a doer as well. So make sure you go check that out, learn more, especially this, some that really hit home for you, or this is something that you’re already trying to do. And this just gave you more, leverage, more opportunity, check them out. So everybody, I hope you make it a wonderful and prosperous week and we’ll see you later.

Jay Conner - Real Estate Investing Successes

https://www.jayconner.com/jay-conner-real-estate-investing-successes/

Jay Conner, The Private Money Authority, talks about recent successful real estate deals.
#RealEstate #Foreclosures #PrivateMoney

Come visit and try our four week FREE trial membership!

www.JayConner.com/Trial

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Well, hello there! And welcome to another episode of Real Estate Investing with Jay Conner. I’m Jay Conner, The Private Money Authority. And also the host of the show. And if you’re brand new to the show or never tuned in before, here we talk about all things, real estate investing. We talk about single family houses. We talk about commercial deals, lands, self storage, multifamily, you name it. But the majority of the time we do talk about single family houses and how to never miss out on a deal for not having funding. You see, I became known as The Private Money Authority back in 2009 because when my wife Carol Joy and I started investing in single family houses here in Eastern North Carolina, back in 2003, the first six years, we relied on local banks and mortgage companies.

And then I had a rude awakening in January of 2009. And that’s when I got cut off from the local banks with no notice like the rest of the world did when we had the global financial crisis going on. So I knew I had to find a better way and a more efficient way to get my deals funded. So that’s when I learned about private money. I was able to raise over $2 million in private funding from the time I started attracting the private money. So we know in the real world out there, even though there are many creative ways to buy houses and properties, at the end of the day, most of the deals are done and concluded by having all the cash ready to go.

So on today’s episode, I want to share with you four ways to get more offers accepted. Four ways. To get more offers accepted. But before I do, I have a free offer for you and you can’t be free. You see, just recently I launched my new membership site, which is called The Private Money Academy, and this is a monthly month to month membership. And we now have over 100 members that are showing up twice a month to have zoom coaching with yours truly, myself. And I’m going to give you in just a second, a way for you to have access, to enjoy the membership for a free four week trial, just to give it a trial run and see how you like it. The reason you want to take advantage of this is, first of all, I just mentioned. We have at least two live zoom conference calls a month where I’m coaching all the Academy members revealing my secrets to how we actually run this business in less than 10 hours per week. Netting over seven figures per year.

On each of the zoom conference calls for the Academy members. I have one of the members in what we call the Hot Seat Section. And in the Hot Seat Session, what we do is analyze their business, find out where they are, what their struggles and challenges are and how to overcome those. And then we put a plan together for the members to take their business to the next level. We also have a private closed Facebook group for all The Private Money Academy members to be a member of. And then I also have four different areas of training in the membership site, video training that we update every month. So if you would like to check it out absolutely for free, then after this show, get right on over to www.JayConner.com/Trial That’s JayConner.com/Trial Come on in to the membership and come join the fun and come learn a lot about real estate investing.

In addition to that, before I dive into today’s topic. I really appreciate it if you would subscribe so you don’t miss out on any future episodes of our show. And if you are tuning in on iTunes, we would love for you to not only subscribe, but rate and review and give us five stars. If you think we’re worth it. We’re on Google play and many other platforms. No matter where you’re tuning in from, we’re glad you’re here.

So let’s go ahead and jump into today’s show, which I’ve titled, Four Ways To Get More Offers Accepted. But before I go over those four ways, I want to, first of all, give you two underpinning principles that always helps you get more offers accepted regardless of the structure or the way that you have done so. Or that you’re going to structure a particular deal.

First of all, the way I do this business and the way I’ve done this business since day one is having a mindset of always creating win-win scenarios. It’s gotta be a win for everybody. And the way for you to create win-win scenarios is for you to have a servant’s heart. You see, if you have the mindset of I’m going to just come in there, you know, whether you’re looking to do a wholesale deal or you’re looking to, you know, make an all, you know, all cash offer and you’re just going to offer, offer, offer. You know, sometimes, it’s the price is not the, is not the main objective or the main motivating factor that seller has. You know, my students hear me talk all the time about when we are doing deals. There’s so many different people that win. We want to create a scenario to where the seller is going to win and they win by us solving their problem. We wouldn’t be in this business unless we had the opportunity to actually solve problems.

So we want a win for the seller. We also, if you’re going to use private money, we want for the private money lender to win by paying them a high rate of return safely and securely. When we go to sell that home, particularly if we sell that home on rent to own, then we’re creating a win scenario for that buyer because the buyer didn’t have any other way to buy a home until we came along and we have a program to where they can actually have a pathway on to home ownership. The American dream. And then we win as well because we are able to bring these solutions and these different structures together. Now, I just, I want you to really think about this win-win scenario. You see, sellers, whether you are meeting them in person or you are talking with them in person the very first time. The seller knows and can tell what your outlook is.

Are you there in that conversation just to make a deal? Or are you there to really fix their problem? You see, here’s what I’ve discovered. When my focus is on the other person and I’m really tuning into what they need and what their problem is that they’re wanting to have taken care of. And I’m really focusing on them. I don’t have to worry about me because you know, it’s like Zig Ziglar said, if you take care of enough, other people, helping them get what they want, you don’t have to worry about getting what you want in the overall scheme of things. You know, over the years we have purchased and invested in a lot of homes that were in foreclosure and I’m not talking bank and properties in this conversation. I’m talking about helping people that are in foreclosure, but their house or home has not yet gone to sale.

You see, here’s another example of creating Win-Win. When we have someone respond to our marketing and someone has received one of my letters, that’s in foreclosure. And they respond to us. One of the very first things that we ask is, do you want to keep your property? Do you want to keep your house? And if the answer is yes, then we’ve got us a checklist of 10 different ways that they can keep their house. And if any of those ways work, there’s nothing in it for us directly out of that deal. Of course, one of the first ways we talk about is have you talked with your mortgage lender about a deferment program to where payments that are in arrears can be put on the end of the note, and then you just start making payments currently right now.

So we go over these different ways. Unfortunately, most of the time they cause a financial distress and other reasons. The person is not able to bring their payments current or start even making payments on a timely basis. But at least they know we have these ways to offer. And if we can help them get what they want and that is keeping their home, then we do it. So that’s my first principle I want to share with you. Whenever you are beginning conversation with a seller, take on the framework and the hat of making sure that it’s going to be a win for them first. And then you’re not going to have to worry about yourself.

The second principle that I want to share with you before we get into the different ways of structuring these deals is I want you to right up front, tell the people, tell the seller what to expect in the course of you helping them out and possibly purchasing their house. For example, just this morning at 8:00AM I got a call last night from a individual that knew what we do here in the area of investing in single family houses. And they called me up and left a message last night. So I called them back at eight o’clock this morning, and we began the conversation. And here’s one of the first questions that I ask after we build a little bit of rapport. I ask the seller, I’ll say, well, tell me what your situation is. Tell me what your situation is, or just tell me about the situation.

Now, let me tell you what is so critical about you understanding and using that scripting of saying to the seller. Well, tell me about the situation. You see, when you say to someone, tell me about the situation, they could first start talking about the property and the condition of the property. The situation that the property is in. Or they could start telling you about the situation that they are personally in.

You see, when a seller contacts us and it’s an off market property, meaning it’s not listed in the multiple listing service. Then they have got a problem. Either the property has got a problem or they personally, or their family has a problem, or both. The property itself could be in distress. The people themselves could be in financial or personal distress, or both. The reason, one of the first questions I ask after building some rapport with the person. My question to them is, tell me about the situation. Tell me the situation. If they talk about the property, then I know that is one of their top motivating factors. And that is the property. They’re wanting relief of that property in some kind of way. Maybe they’re having carrying cost. Of course, they’re having carrying cost. If they still own it. Perhaps they need debt relief. Maybe the monthly financial burden of mortgage payments are just weighing them down. And you know, they just can’t stand it anymore.

I was visiting with a seller about a month ago, and that’s what it was. She had already moved into another home and still had the mortgage monthly payment, financial burden of the existing home. So when I said to her, well, tell me about the situation. First thing she started talking about were the monthly payments. So again, that’s one of the first questions you want to ask because when they answer that question, tell me about the situation. Then that’s going to tell you exactly what you need to hone in on as far as what the focus on, on solving their problem. So when I say tell them what to expect. This morning, as I was saying at 8:00 AM, when I was talking to this particular seller and we built a little rapport and you know, one of the first things they want to know is, well, how does your process work?

So after I had asked the question, tell me the situation. Well, let me tell you what her answer to the situation was. This is a house that’s located in Mill Creek, North Carolina. The situation when I asked that question, tell me about the situation. The answer was, well, there are six of us heirs to this house. It sits on the water. It’s got a nice water view, but there’s still some damage from hurricane Florence, which was a couple of years ago. And this person went on to tell me that they are the executor of this particular property and this person and the other five heirs had decided that they just want to liquidate the property and not put any more money in it. They don’t want to carry any more insurance on it. They didn’t want to pay any more taxes. And they told me without me even asking anything else beyond, tell me about the situation they said, we just want to get the mortgage paid off and not have the burden of this property anymore.

As a matter of fact, this person was actually responding to one of my probate letters that I had mailed out months ago, that my team had mailed out months ago. So I said, well, let me tell you how the process works. And so here’s how the process works. I said, first of all, I’m going to introduce to you. As soon as we finish this call, I’m going to do a group text introduction to Kim. Kim is our acquisitionist. And she’s been with us now for about 14 years. And Kim, what she does is she gets all the initial information on the property that you have. And then I ask, is it okay for me to send a group text to Kim and to you and get you two connected? So we can go in and get some initial information about the property. And the executor says, sure, that’d be fine.

I said, so after I introduce you all, Kim is going to call you, get some initial information about the property, and then we’ll do our research. We’ll find out what the after repaired value is on the property from our realtor. And then at that point, we will decide if it makes sense for us to schedule an appointment for my team to come meet you and whoever of your designee at the property and we’ll walk around and we will estimate repairs. And then from the time we estimate repairs, we’ll go from there and see if we can put together, listen closely. Put together a win-win scenario for everybody.

Now, again, that’s telling people and telling sellers what to expect. Now, there’s another very, very important part to telling people what to expect, because you see when you’re first having this very first conversation with a potential seller, there’s this skepticism that’s automatically built in. They don’t know what to expect. They don’t know how the process works. They don’t know if this is going to work out. So I want to tell you right here, and right now, how to immediately defuse any kind of stress or pressure that’s in the midst of this conversation, because I can tell you there’s already some type of pressure or distress from the seller standpoint, or we wouldn’t be having this conversation in the first place.

So here’s how you defuse the pressure. Take it off yourself if you’re brand new. And what I’m getting ready to say to you will immediately give comfort and peace and destress your seller if they are feeling stress. And here’s exactly what you say. You say, you know, I just want to let you know up front as part of our process and we’ve done many of these deals. You know, sometimes it works out for us to buy the property or in some way help you sell it. And sometimes it doesn’t work out for us to buy the property. And I just want you to know in either case that’s okay. Even if it doesn’t work out for us to buy the property or to negotiate or, you know, put a deal together. I don’t want to use the word negotiation with the seller because I’d already sets up like an inherent feeling of conflict. I want them to be at comfort and at peace. So I was like, even though, even if we can’t work out something together at the very least, I may be able to refer you to someone that can help you out of the situation.

You see that? I keep looping back to the word situation. So you see that’s part of explaining the process. Is telling them right up front, it’s okay if It doesn’t work out for us to actually work on this directly, but because my main cause and purpose and objective here is to help you with your situation. Well it works out for me to get something out of the deal or not is okay with me. My main purpose is in helping you out. Now let me give you another sub point about how this, how helping people out works out. And that is, you, God gave us two ears and one mouth, right? And the only way, not the only way, but the best way this is going to work out is if you become a listener like nobody else. I mean, when you increase your skill and talent of really listening, for example, back to the question, tell me about your situation. Now, when you say, tell me, when you asked him about your situation, you got to put on your listening cap and the taking copious notes, because the more they tell you about the situation, I can tell you what they are talking about. It’s what’s most important to them.

Now, as I mentioned a couple of minutes ago, a lot of the times, it’s not always about the price. Let me give you an example. Not too long ago, I was talking with a seller about, I was actually talking with the daughter of the mother that lived in the house. This was in a small home, over in Newport. And I was talking with the daughter and I said to the daughter, tell me about the situation. And here’s what the answer was to that question. You know, the first answer was there were six heirs on this home in Mill Creek. They didn’t want to do any more to the house. It needed repairs. The six heirs don’t want to mess with it.

When I’m talking to the daughter on this home, over in Newport, here’s the answer to the question and I’ve got my ears wide open. I said, tell me about the situation. The daughter says, well, my mother has been living in this home for years. In fact, it’s been living in this home for decades and she’s come to a point in her life to where she needs to move out because she needs to move to an assisted living area or an assisted living home. And she doesn’t know where she wants to go, but we know we need to sell the house in order to provide income and revenue to pay for the assisted living. I said, after she answered the question, tell me about the, she didn’t say anything about the property. It wasn’t the property. It wasn’t the upkeep. The problem to tell me about the situation was the mother needed to move on and did not know where they were going to go. And they needed money to start making that decision.

Since I had my listening ears on. Here was the way I structured the deal. I said, I’ll tell you what I’ll do. I’ll pay you all cash. Using private money. I didn’t tell them private money cause they wouldn’t know what I’m talking about. I said, I’ll pay you all cash for the property and I will let your mother live in her home for a another 90 days, three months, rent free. For you and the family to have plenty of time to find a place in assisted living area. And you can go ahead and get, you know, I’ll give you a partial cash upfront as a down payment before we, or earnest money before we actually close on the deal. So you all can all start. You can go in and start making arrangements on the move.

Guess what I discovered from that offer because I had my listening ears wide open. I learned after we closed, the daughter told me after we closed, she said, Jay, I just want you to know that I had another investor offer me more money than you did, but I want you to know the reason we took your offer was because you understood what my mother needed. My mother needed some cash now to go ahead and start finding the assisted living home to move into. And because you were able to work with us and give us some money up front and then close out a completely 90 days down the road, then we took your offer. Even though it was a lesser amount.

Now, let me tell you how I structured that deal. Okay? So I structured that deal with seller financing. So I told you up front in the beginning of this episode, that I was going to teach you four different ways to get more offers accepted. So this was a combination of seller financing and private money cash. Alright. So this is seller financing.

So number one way, I call it Seller Financing with Principle Only Payments or Seller Financing with Equity Payments. So this strategy can be implemented in many different ways. Seller financing with principle only payments or equity payments. That means the same thing. What that typically means is when the seller is selling a house that’s free and clear of any mortgages, have any notes or liens attached to it. Then I offer to make them payments that will go 100% towards purchase price until I cash it out.

Well, let me tell you what I did in this case. So you say, Jay, how can you give them money up front and you’d be protected? What if I take the money and run? Well, they can’t take the money and run. What we did is we went ahead and closed on the property at the agreed upon price. But all I did was a 90 day note. You see, they needed cash. In this case, $10,000. They needed cash $10,000 down to go ahead and start finding the assisted living area, moving and et cetera. So I had my real estate attorney draw up a note and a mortgage. And so I gave $10,000 down at that point of the down payment at my real estate attorneys closing office. Title was went ahead and was transferred to me.

So I own the house. I own the house. You never give a seller any money. Of course, all the money goes through the trust account, right? They get the money at closing. Alright. So now we have a note in place. And so I’m going to pay it off in 90 days. But as part of the agreement in this negotiation process, I’m not going to pay it off until the mother has moved out of a house. So you see, that’s how I structured that deal, making it a win-win scenario and giving the mother and the daughter exactly what was needed. So that’s number one, seller financing with equity payments, principle only payments, or in that particular case, a down payment that 100% of that went to purchase price. And then the balance was paid in 90 days. Now, where did that money come from? Private money, of course. But it was a combination of seller financing, a 90 day note, transfer the title and ownership at the time of closing and then paying it off with private money at the end of 90 days.

The second way that I want to teach you today on structuring deals is what’s called, Seller Financing with Interest Only Payments. Seller Financing with Interest Only Payments. This is also called Seller Financing by Your Seller Being a Private Lender. This is making the seller of the property, your private lender. Well, how in the world does that work? This strategy works when you’re dealing in higher end, higher priced properties, where the seller is very, very intent on getting their price. Okay. So I have a friend who recently negotiated a deal and the price of the property retail was $800,000. Well, the seller wanted full retail.

Well, they knew they could negotiate this deal, but they could only, they didn’t have private money lined up for $800,000 price. So they negotiated with the seller to sell to them with just interest only payments for 12 months. And for the, during that 12 months, that gives them. So it’s, you know, interest only payments can typically be less than principle and interest payments. By doing interest only payments that gave the real estate investor, my friend, plenty of time to locate a rent to own buyer on this very high end property over on the beach, it’s a resort property. And they can negotiate the deal. So that’s two ways to use seller financing, seller financing with principal only payments, seller financing with interest only payments.

There’s actually another seller financing strategy. I’ll go and share with you right now. I’m not going to have it displayed at right now, but that is, Seller Financing with NO Payments Until Cash Out. Seller Financing with NO Payments Until Cash Out. So when you have a seller, particularly on a free and clear property and they don’t need the cash flow, then you can, Oh, my podcast producer is brilliant. He’s already got it up there. Seller financing with ZERO payments. So you can negotiate the deal to where you buy it with nothing down and no payments until you find a buyer. And when you find the buyer, you use the buyer’s money to then cash out your seller, and then you retain of course the profit over and beyond the price that you all had negotiated.

So that’s two ways. Actually three ways. So now what is the next way? And y’all have heard me talk about this a lot. And that is Buying with a Subject to the Existing Note. Buying Subject to the Existing Note. So simply that is when someone will, they’re wanting retail value or they’re giving it to you at a discount. They’re willing to sell you their house, leaving the mortgage in their name, and they’re going to sell it to you, transfer the deed and you are agreeing to make the payments until you find a cash out buyer. Who’s willing to do that? A motivated seller who is interested solely in debt relief. You see the person I just told you about a few moments ago that I met about a month ago. They, that was their main motivation. When I said, tell me about the situation. And the situation was they needed a debt relief. So this strategy even works when a seller wants full retail price, where you can buy a house at full retail price, subject to the existing note, if and only if, the underlying monthly mortgage payments are less than what you can bring in per month with, you know, a rent to own monthly payment. So subject to.

And then the fourth way, of course, is Paying Cash with PRIVATE MONEY. Using Private Money. And I can tell you that this in the real world out there is the way for you to ensure, to never missing out on a deal because you didn’t have the funding. Most sellers, even though we’re talking about these different creative ways are going to require all the money. Now, if you’re wondering about how in the world, you can get private money, regardless of your credit score or verification of income, whether you’re a seasoned real estate investor or you’re brand new, that’s another reason for you to get involved and take advantage of the four free weeks that I’ve offered you. Of The Private Money Academy. So if you want private money for your deals, then be sure and get in the four week trial at www.JayConner.com/Trial.

Well, those are the four ways before I let you go on today’s show. I want to give you a strong negotiating tip and strategy on how to negotiate when it really is all about price with the seller. And that is I have got a formula. And for all of you that are in the Private Money Academy that I just offered with the trial. I have a formula that I share with all the Academy members that shows a formula to the seller as to how on average, they get only about 78% of their asking price when that is listed in the multiple listing service. So if you’ve got a seller that is just, you know, dead set on the price, then use this formula and showing them.

Here’s what I do. First of all. Well, here’s the price they want. If you put your house, if the seller puts their house in the multiple listing service at that price, first of all, national average, 6% is gonna come off of that. We’re already down to 94% of the asking price because 6% is going to go to the realtor community and commissions. Well doing business with a real estate investor, there are no realtor commissions. In addition to that, when you sell it in the multiple listing service, there’s always going to be, I say, always 99% of the time, there’s going to be a home inspection by the buyers home inspection company. And of course, what is the home inspectors job? The home inspectors job is to, is to point out every nuance of inefficiencies. And of course, anything that is not working that is intended. Well, I can guarantee you after the home, after you’re under contract to sell the house, when the seller’s under contract to sell the house and the home inspector comes along, do you think there’s going to be now more negotiation asked by the buyer of a house? Absolutely!

I rehab houses all the time. Carol Joy and I have rehabbed over 400 of them here in Eastern North Carolina. And after the home inspection, the buyer always wants more to come off of the price. In addition to that, how long is it going to take to sell the property with carrying costs? So while the property is on the market, then there’s carrying costs still going on. Mortgage payments, taxes, insurance, unexpected maintenance. In fact, I was talking to another seller this morning that it is his mother-in-law, his 91 year old mother-in-law that is wanting to sell the property. When I asked the question, what is the situation? The answer was the 91 year old mother-in-law and the family don’t want to spend money anymore to upkeep the property. And it’s just too much. And so just two weeks ago, and this may have been the cockroach that showed up for the most recent motivating factor of the seller.

When I’m talking to the son in law, he says to me, the hot water heater just went out two weeks ago. And now we and my siblings have had to replace the hot water heater. We’re done. We’re just tired of upkeeping this property, keeping the upkeep on this property and we’re ready for it to go. So again, the formula that I use on showing a seller as to what the real cost of selling a house, when in the multiple listing service versus selling to a real estate investor, many times can make the difference on whether you buy the house or not.

Well, there you have it. Not only the four ways. I think I did maybe five ways. That you can get more offers accepted. Remember the underlying principles that I went over with you as well. And that is, always creating win-win scenarios, telling people what to expect and making sure that you always have their interest first at heart. Because again, when you take care of them, you don’t have to worry about yourself. Take me up on my offer. Four weeks free trial in the membership. Jay Conner’s Private Money Academy at www.JayConner.com/Trial.

Thank you so much for joining in on the episode. If you found it valuable, be sure to subscribe, rate, and review, and I look forward to seeing you on the next episode. I’m Jay Conner, The Private Money Authority. Wishing you all the best. And here’s to taking your real estate investing business to the next level. We’ll see you on the next show.

417 Creating Karmic Debt

http://moneyripples.com/2020/08/20/417-creating-karmic-debt/

What is the number one thing that pulled Chris Miles through his hard times in the last recession?

How can you get karma working FOR you?

Is Karma instant?

Trolls beware! This episode will be hard on you. Learn and understand the concept of Karmic debt by watching this 22-minute video.

Listen to our Podcast here:

https://www.blogtalkradio.com/moneyripples/2020/07/15/417--creating-karmic-debt

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Hello, my fellow Ripplers! This is Chris Miles. Your Cash Flow Expert and Anti-Financial Advisor. Welcome you out for a wonderful show. A show that is for you and it’s about you. Those of you that work so hard for your money and you’re ready for your money to start working harder for you. Now! So you work because you want to, not because you have to. You want to be able to have that freedom. That cash flow. That prosperity. Today! Not 30 or 40 gazillion years from now, but right now! So you have that life of comfort and ease and freedom. So you can be with those that you love. Doing what you love. Whenever you want. But guys, it’s so much more than just being able to have a lot of money, right? This is about how you can go about blessing lives because that’s a rippler, you can create a ripple effect through the lives of others, through your own prosperity. Through your abundance. Through your good example. Through your talents and gifts and everything you can bring the world and money is just a magnifier of your soul.

And that is exactly why I’m so proud to be one of those Ripplers with you guys today. Thank you for allowing me to teach through you, to be able to share the knowledge and the things that I’ve gained experiences from just a few things. I haven’t learned everything in the world, but I appreciate you guys allowing me to do that. You’re sharing it with other people and allowing this message to grow and expand and bless more lives. And that’s because of you guys. So thank you so much for doing that.

Here’s a reminder. Check out our website, MoneyRipples.com. There’s great blogs on there, including videos of these very podcast you’re listening to right now. So definitely go and check those out.

And so today I’ve had a topic that I’ve kind of reserved for when it felt to be the right time. And I feel like now that time, because I feel now is the time to prepare, to gear up to really truly understand those real eternal, really those laws and principles of prosperity, right? Those laws of abundance. And this is a big one. In fact, this was one that I relied on so much during the last recession. When I was broke. When I was over a million dollars in debt. That this was one of the main things that I felt pulled me through. This is the one thing that kept encouraging me. It’s one of the main things that actually I believe truly was able for me to make a lot more money because I understood this concept, right? And there’s lots of different ways that people would call this. I’m going to refer to this as Karmic Debt.

You know, when people talk about karma, you know, like what you put out comes back to you, right? This is about creating debt, like creating good karma to come back to you. By creating good karma, good karma comes back. So creating this karmic debt, because there is a lag effect between the good things that you do that you put out in the world and the results and the rewards you get back. This is why people say, why bad things happen to good people? Wait. The story ain’t over yet. You know, if you keep waiting, it happens. Some people might talk about this as the law of the harvest, right? You don’t talk about like things in the Bible. They talk about when you sow it. And when you sow seeds and you plant, do you have to nurture it and water it and let it grow. Right? Same kind of concept, right? If you want to give or if you want to receive, you’ve got to give. See I came to get it right. I have to keep giving first. Cause that is the first thing. But if you want to receive something, you’ve got to give first.

And so I really want to go into this because I truly believe, especially when people struggle, this is when the impurities, so to speak, bubble out of you, right? It’s like, as if things are forced out of you. Then even the worst parts of you, I mean, have you noticed, especially lately where you’re under stress, some of the less attractive parts of you come out, right? You know, for me, I mean, it was a hot day and they’re telling you to wear masks and I’m going to a grocery store. I’m a grump! You do not want to say hi to me. I mean, maybe it would help. But no, it’s like, I get really grumpy and angry and I have to work on that, you know, and that kind of stuff. And we all have those little trigger moments and those things that we have, right?

By the way, if you want to have good things come to you, you got to put out good things. I hope that none of you, if you call yourself a Rippler, one thing for sure is you cannot be the type of person that I hear about trolling online. If you’re one of those people that troll people may say, Oh, I’m not a troll. I’m just trying to bring up truth. But if you’re out there criticizing, blaming, you’re ripping apart people. Try to find every little fault and every little exception to somebody’s little statement that they make, because someone doesn’t want to write a 5 million paragraph page, you know, on their social media. And you’re the one that’s to nitpick it and pull it out. Shame on you! Shame on you! For being that kind of person. If that’s what this kind of world has turned you into, I don’t even want to see you once you become later on with the world. It can get worse, right?

That’s a thing like guys, if this is you, I ask you right now. I beg you to cut it out, to actually start to be real abundant, prosperous people. Good people. Naturals. And I know it’s a minority, but those are the people that scream the loudest. Aren’t they? And I’m not saying any particular experience. I’m not pointing anybody out. So if you think it’s you, because I’m saying, Oh, Chris knows me. He’s pointing me out. I’m not thinking of you, but I have seen a lot more. And I’m sure you have too. A lot more negativity out there now. If you want something truly abundant and positive in your life, stop throwing out negative crap. Okay? Like that cannot exist. And there’s people that I swear. I don’t know how they get so much time. And maybe it’s because they’ve been laid off or furloughed or whatever, or they just don’t have business going on. But I’m telling you, there’s way more productive things you could be doing through time than going and criticizing people online. You know, just because you can hide behind your little computer and be a little coward. That is not the case.

So if you want this karmic debt to work for you, that is not what you do. Okay. That was my little soap box on that part. But again, guys, if you say I’m trying to correct people and create effect. No one cares about your corrections! Let’s be honest. Now you might opt to give people some options, right? But nobody cares about your freaking opinion that much. You know, nobody does except for you. You know? And so, I deal with it all the time. Don’t you think me, who’s the guy that’s trying to get financial advice. There’s plenty of bad advice out there. Heck, you’ve heard me talk about Dave Ramsey, but you’ve also heard me compliment Dave Ramsey too. I could go off. If I were like the people today online or to be that kind of person. I would be the person that say like, Oh, Dave’s a fricking moron! He’s an idiot! He’s totally out of touch with reality! Yeah. He’s all about paying off debt, but nobody gets rich off that!

I could totally make statements like that. Right? And especially they’re blanket statements. It’s funny how people will make blanket statements, but then they’ll criticize people for making blanket statements. The hypocrisy in the world is crazy. Guys. You don’t see me doing that, right? Now, there’s been times I have in my life. And especially when I was younger, that was dumb. Okay. I like to think that I learned some lessons along the way. Guys. He’s awesome. He’s a great guy. He does some great, good in the world. Now. It’s not the advice I would give. It’s not the advice I think is good for most people, especially those of you that are listening. If you’re looking for a much, the next step, if you’re going beyond remedial finances, right?

He’s great for remedial finances. Many of you though that are listening to his show, are beyond that. You’re already looking for answers that are outside the box. Cool. He’s got his purpose. I’ve got mine, right? So anyways, there’s a plenty of room in this world for us to be good to each other. And I highly recommend that if anything, you want to see more money coming in your life and less scarcity, be an abundant person. Act as an abundant person. Do things that create more abundance that foster it.

So let me give you an example. So when I was going through those rough times back in the last recession, right. You know, I knew that principals would govern, like I was losing faith a little bit, right. Because I was struggling. I was like, man, it seems like at first it seemed like everything I touched turned to gold and now nothing’s working. It seemed like everything was going wrong. Right? And I started to put a lot of focus on that. I started getting very bitter myself. You know, I remember I was complaining. I was fault-finding. Blaming. You just, you know, backbiting. You know, whatever you want to call it. Gossiping. You know, I had plenty of time on my hands and I was one of the blame and whine about it. And just try to talk it all out and just vent. Here’s the thing. It’s one thing to vent, you know, and just let it out and then go out and be productive. It’s another thing to just whine and complain and do nothing. And except for whine and complain the next day and the next day.

And I remember this was in 2009. So remember 2007 towards the latter half of that year, I still have writing on the walls getting desperate. You know, my finances start to fall apart. 2008 I was basically making no payments or a lot of late payments, right? Or, you know, going late on a lot of things. I was in the foreclosure process. And I remember by April, 2009, this was right before my fourth child was born my third son. And that’s when the knock came on the door and the person said, Hey, I just bought your house at the courthouse a half hour ago. When can you get out? I want to move. I bought this house for my sister. I want to move her in. And of course I was like, Oh my goodness, we’re about to have a baby in the next week or so. So can we pay rent, stay in here for a little bit. And he agreed and we paid about $2,000 to stay in the house for two more weeks.

You know. Anything to try to keep them off our back. So anyways, we did that. Had the baby. And of course we’re able to move out, find a place. All well. You know, my wife has, at the time, it was barely healing from having our child. And it was a hard, hard time. And I’m telling you, I was pretty embittered. I mean, it’s part of me was at least relieved that at least I knew what was happening because every month there was that threat of foreclosure. But because we’re trying to short sell the house, they would delay it. Right? And we, and by the way, we had short sale offers and the bank wouldn’t take it. They foreclosed on our house. $170,000 less than the offers we had for the short sale. I mean, talk about how wrong that is. I mean, that doesn’t definitely help my credit, you know, at that time now it’s gone in the past, but that time that was not a good thing for me.

You know, I was like, okay, now my credit is shot. I just lost my home and everything, you know, everything, a part of it, we just downsized into a house that was about, you know, 35% 40% of the space we were used to, you know, and it was a tough time. And I wanted to moan and complain and blame and everything else. In fact, my wife at that time did the same thing. She was trying to blame other people. It got to the point where I realized I’m the only one to blame here. Right? And of course we were losing patience. Cause we had now been going through this for nearly two years, you know, from the time that we started realize things are getting tight.

So after two years of struggle, and I know some of you guys can relate to this. Two years of struggle, it could definitely wear on you, right? Especially when you had all this faith and this hope, and then it seemed like it was just dashed to pieces. But you know, the great thing is that it got me to the right place.

One, it got me to reducing my expenses drastically over that period of time. Let me to learn to be a better steward of my money and tracking it and watching it and being careful with it. And looking for ways to create value for people. And that’s what I mean about karmic debt, right? Is that, I knew that if I want big results to come, that I got to give big. And so when I was looking at all this, I was thinking, okay, well I know these principles work. I know the principles by, so you’ve gotta be in an abundant mindset, right? When you’re in scarcity, this thing doesn’t work.

You gotta be a place of abundance. What does that mean? That means having faith, that when you apply principles, they work. You know, just like dollars full of value when you create value for people, even if you don’t see the money right away, there’s something that happens. You know, I’ve had people before telling me, even during the last recession that say, Chris, I’m creating lots of value for my employer and they’re not recognizing it. I said, fine, great. Now, granted, you still have to ask for things that you want, right? And you can do that with confidence, knowing that you went the extra mile. I had a client that same time that did the same thing. He kept getting raises because he kept creating huge value. That was his whole focus. Even after you get the next raise, he kept doing it again. And they couldn’t deny it because they knew if they didn’t hold on to someone like he was actually a creator, not a consumer.

You understand that most people, when they go to work, they are just there to consume. They create as little as possible to just get paid. So really most people will just create as little as possible in their job. So they don’t get fired. Isn’t that the truth they just try to do. What’s minimally required of them. It’s like, what’s the minimum requirement I have to do just get an A in my class just to get an A- even, right? That’s kinda what people treat life like. But when you go the extra mile, when you turn into something greater, when you go and apply weight in a way that it shows good true character. Especially when it’s tough times. That’s when the real blessings, the real results are to happen.

And I remember, for me, like I switched something like it was about June or July of 2009. I remember seeing a guy in my office. Guy that we were working with, you know, the main partner. And I could tell, even though it wasn’t really on his face, I could just sense that he was desperate. He was a little bit discouraged. And I realized I was part of the problem. I was bringing negative energy into his space. And I’m like, well, how can he produce more if I’m bringing negative energy into his space? So I made a decision that moment. I said, I’m going to switch it. I’m actually going to have, I’m going to focus on the positive. And I remember reading the book, Never Give Up, by Donald Trump. One of his more humble books, right. That says a lot. So anyways, in that book, he talked about how you’d focus on the one positive thing. Even if there was 20 negative things, you focus on the one positive. So I said, I’m going to do that.

Now it’s more than just being optimistic or being false. Right. I wouldn’t be disingenuous with my optimism. I would find something that was true. That was really true. You know, even meant I’m breathing today. Right. I would find something that was true. I would make up crap. Like, I’m so grateful for this when there’s no reality that. Now there’s something to be said about declaring something that’s not there. That doesn’t seem to be real yet. It might just be in her mind and that’s fine. But you can be, you can find ways to make an honest statement about it, right? I mean, say for example that, someone says like, Hey, like I’m not financially free yet. I don’t have all the passive income I need. You can just say, Hey, I’m on my way. Like I’m progressing towards that goal.

That’s awesome. And focusing on the progression versus where you’re not is huge. It’s huge. And where do you put that focus? And so, you know, they gotta have that level of abundance mentality that’s going with this. For this karmic debt to work. Now, as you’re doing that, it actually makes it easier. And it’s easier to keep stay motivated to keep creating value. And when I’ve had people that said, well, I’m creating value for this employer, it’s not working. Well. Okay. Well guess what, inevitably, the universe has to work in your favor, even if it means that someone else recognizes your hard work and offers you more money. And by the way, that’s happened so many stinking times to clients of mine and friends and people like that when they actually do this consistently and persistently over time. And so that’s what happens is you start to see this really work. And remember this for me was the key.

So that summer of 2009, I’m trying to have a more optimistic attitude. I’m just going, creating value. Sometimes I’m not getting paid for that value, but I said, it doesn’t matter, I’d keep creating it. I’m going to keep being in the right place, doing the right things the right time. And here’s, it’s kind of like, you know, my church, there’s a slogan that says, do what is right and let the consequence follow, right? It’s basically like, Hey, choose the right, do the right things. And then let the cards fall where they may. And usually those cards fall in your favor. That’s the thing.

And I remember it got to August, right? August, 2009. This is just before things turned around for me. And I remember thinking, you know what? I remember, I was praying to God. I said, you know, I know this works. I know these are true principles. I haven’t seen the fruit of it yet, but I know that I’ve been watering this tree. I’ve been planting it. I’ve been nurturing it and doing everything that’s needed for, to bear fruit. I just know that the fruit isn’t here yet. And here’s the thing I said, I got to this place of surrender. And I said, you know what? Even if it, whether it happens next week or this takes 20 years, regardless, I will keep creating value. I will keep building this karmic debt in my favor because I know inevitably the dam has to burst.

And I actually got encouraged by that. I was like, man, the more I create here, the more there’s going to be a blessing on the other side. The harder the pain, the more that there has to be, that polarity, right. There has to be something reverse of that. You know, Napoleon Hill in the book, Think and Grow Rich. Talks about with the seed of every adverse, with every adversity is the seed of an equal or greater opportunity. So think about that. With every adversity, with every negative thing you might have, there’s a seed of an equal or greater opportunity. I’ve also seen this be true. When you go the extra mile, you go the extra mile, there’s an amplification aspect that happens. It’s something that amplifies your results. You know, not just two fold, sometimes be ten fold of actual effort you put in, but many people don’t go quite that far.

They just get stuck. They just do the bare minimum because that’s all they feel they can handle. Guys when you go the extra mile and you start to find ways to serve people and do more, it comes back. And I can attest to that. That was August. I relent. I kind of got that place of surrender. I remember I had a huge fight with my ex my wife at that time, right? My ex wife now, had a huge fight with her. And she’s like, well, when’s this going to end? Like, I’m tired of this. And I’m like, Hey, there’s gonna be a day. I said, I told you so. That this is working. I know it. I feel it deep down. I feel it true. And I’m wondering if you guys had that feeling too, where you just know something’s going to work out. You just haven’t seen the results yet.

Well, that’s what I did, man. September, the dam started to burst just the next month. By October, I realized we’re good. We’re in a good place. Now things are really happening. By the way that happened because one, the person that was projecting negativity on. When I stopped that, allowing him to be abundant and do his thing, he had key connections. So he brought in these key people, especially in the chiropractic and dental communities, he brought them in. And the cool thing is over that period of time, I started honing my craft and getting better and better and more resourceful about finding cash, finding money. And boom! I helped them find cash and they’re raving fans and they’re centers of influence. And they start telling everybody else. And then the whole damn burst open so that by October I’m like, okay, money is flooding in.

I’ve been waiting for this for two years. And here it is. And then by just a few months later, by December and into January, I’m like, I gotta hire more coaches. I can’t handle it all. Like even by one or two, I couldn’t. It was just too much. And so I started going to train more coaches, you know. Same kind of thing that I felt lately. Although I don’t feel like it’s like this two month dam burst or anything like that. I felt that pole. That’s why last year I started late, late last year, I started like training other advisors and other people to back me up because I know that I can’t do it all. And for this ripple effect to become bigger and it impact your lives better. It’s gotta be that way. And so again, it’s about creating that upfront work. You know, that time and energy, so many people will stop it.

They won’t consistently and persistently do it because they think, Oh, it’s not working. And they stop. Trust me. If you trust in this one principle of karmic debt saying, I’m going to build up that debt so much that whether you believe in God or the universe or whatever it has to pay you back. And it has to pay you back with interest. That guys, that is the cool thing about this. So I challenge you. First be in an abundant state of mind, you know, don’t be the troll online. Don’t be the person that’s thrown out negativity, do something different. Don’t, turn off the fricking news. You know, turn off the world. The voice of the world even means you have to disconnect a little bit, do it. Get into a peaceful place. I think right now the trends should be heading more towards spirituality and focusing on your mind and quieting instilling the mind.

Because right now there’s chaos in the world. You have to have peace and abundance in a chaotic world right now. Focus on that. Start creating massive value in the world in whatever way you want to. And by the way, do it even in places that don’t pay you money. The best way to build a karmic debt is find ways to serve people that doesn’t necessarily pay. You just do the right thing and watch what will happen. It’s incredible. Not only will you feel better, but you will attract more. You will attract opportunities. People say, how are you doing this? You must be lucky. You must have some sort of magic or know something or know somebody that I don’t. The truth is guys. It’s not magic. It’s been around since the beginning of time.

People have talked about it, but right now there’s so much noise in the world. They’re forgetting real core, true principles that create massive prosperity. And if you want to even create passive income from the strategic side, you create massive prosperity. You start creating massive income now. Don’t you think you’ll hit passive income faster? I can assure you that is definitely 100% of the case. I am living proof of that guys.

So anyways, that is my advice for you guys. Create that karmic debt. Create massive amounts of debt. This is the debt that you would love and want to eat every day. So create that massive debt in your life. Make karma, work in your favor. Make it a wonderful and prosperous week and a very highly karmic debt week. And we’ll see you later.