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IWP!, flagship product is Chicago's premiere real estate Investment
magazine. Entitled Invest With Passion!, it is the tool for investors and professionals in the
Mid-West. The publication seeks to grow it's market share by providing
powerful information designed to build the reader both as an investor and a
person.
Since it's release in January of 2006, the magazine has been well received and
continues to gain momentum and support. The education, information, and
networking opportunities for the real estate investor has been long neglected.
No More!
The time is now and the momentum is building.
It's Happening!
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PUTTING
IT ALL TOGETHER
By
Geoff Thompson
There
are so many ways to invest in real estate that it is almost overwhelming
to decide where to start. Maybe I should wholesale, maybe I should short
sale, maybe I should chase foreclosures, maybe I should buy apartment
buildings, maybe I should, maybe I should and maybe I should.
The
reason I started this article out with this is because maybe’s don't make
a person wealthy. Think back on your life and how many times you have said
I should, if I had or I didn't and now look at what I might have
accomplished. This is the greatest flaw that men and women have ingrained
into them naturally. It is the fear of failure or as Anthony Robbins puts
it “Pain”. The fear of loss in most of us overrides the desire for gain.
This
article is about having vision and what it takes to live your dreams and
to live with passion about what it is that you do. First, are you happy
with where you are in life and your life's accomplishments up to this
point? The reason I ask is I know people who live paycheck to paycheck, I
have a few friends that fly around in private jets that are considered
billionaires, and I have met retirees living well below the poverty level.
The interesting thing is there is no difference between those who have
enough money to live for the next 1000 years, and those that can't afford
to put food on the table. What they do have is not enough! The majority
of us are driven to have more tomorrow than we started with today. Does
that remind you of someone? Perhaps yourself?
Going
from where you are now to where you want to be is a function of vision.
Have you ever seen someone that you knew you were smarter, stronger and
faster than seem to fall into opportunities one after another while you’re
still out there fighting through the rat race everyday. The difference
between these people and your situation is probably something as simple as
one day they woke up and realized what their actual vision was! They came
to a point of clarity and said “I know exactly what I want out of my life
and I am going to get it”. This is a defining moment for people that are
truly living there dreams, they can almost identify to the second, the
moment that they made the decision to drive their life to that next level.
I have
had the absolute pleasure of working with people that have truly
accomplished success as real estate investors. They all had different
backgrounds. However, they all share one absolute characteristic. They
became quitters. They quit saying “maybe I should” and turned it into “I
am going to!” Once they had created that vision of what their life should
be versus what it currently was. They saw dramatic and significant
change.
So here
is where we all need to start. First, decide that you deserve a better
life for you and your family. Then decide if being a real estate investor
is the vehicle that can change your life and your current situation (I
believe this is the best way to financial prosperity). From here, decide
what area of real estate investment fits your personality. Once you have
identified the proper direction for you, it is time to get educated. This
means finding people that pursue this type of investing, reading books and
getting your arms around how your particular strategy is executed. Now is
where the fun starts - it is time to take massive action! There is a
cliché that says knowledge is power. I believe, however, that knowledge
and action are the ultimate power tools.
Be
prepared to fail, be prepared for set backs and be ready to second guess
yourself and your direction. However, never, and I mean never, quit once
you get started. It is all too common to see people that have given up
when they were a fraction away from success. Do you remember the story
about Michael Wackenschauser? You probably don't because he quit before he
got there! However, you all know the basic story of Thomas Edison the
inventor of the light bulb. He failed literally thousands of times before
he created light from electricity. He had a “glowing” attitude (pardon the
pun). Everytime it didn't work, he knew another way not to do things. It
is this kind of spirit that takes us from being called a dreamer to being
a visionary! History is filled with stories of people that have risen from
incredible challenges to become memorialized for generations. They all
started with a dream that turned to a vision which lead knowledge and was
followed up with massive action! They also stood before incredible
obstacles where most people would say “I quit” after so many failures. The
truth is that nothing worthwhile is easy in this country. Another truth is
that your first million dollars is the hardest million that you will ever
make. However, there are thousands of real estate millionaires in this
country and hundreds everyday that are reaching that goal.
In my
life, I have had multiple triumphs. However, for every triumph there has
been a few failures first. Once you have been successful at doing a
specific type of real estate deal, you have created the formula for
success that will drive you to your dreams and your vision. Every time
that I become good at a certain type of deal, I expand my horizons to the
next level. And as I said earlier, I typically fail at it a few times
before I get it right.
Here's
a deal my wife and I did after investing for three years. We had truly
mastered the art of buying and holding residential rental property and
were ready to move to the next level which was commercial retail. I
received a call from a friend on a Sunday afternoon asking if I was
interested in buying a shopping center that was just built. Of course, my
response was “absolutely”. So we drove out to the property and when we got
there, we found a newly completed building that was 100% vacant. I asked
my friend the asking price for the building and he told me that it was
$2,800,000. I responded that we could not afford to purchase it. It
turned out that the seller had built the strip mall and was willing to
carry $1,000,000 in the form of a second mortgage and that the lender with
the first mortgage was going to allow us to assume it if we bought the
property. This was very exciting to us and we decided that we would pursue
the deal. We met the seller and were told that he would also transfer the
escrow of $250,000 to us for build out and leasing commissions if we
bought. To us, this deal was too good to be true. We were then introduced
to a leasing agent that explained to us that she had tenants ready to move
into the building if we bought it and just down the road the shopping
centers were getting $28 per foot. Sounds like a pretty sweet deal so far,
doesn't it?
It was
time to take the next step. We met with the seller’s accountant who gave
us these incredible cash flow projections and build-out numbers for the
center. We were going to have a no money down deal with $7000 -$8000 per
month in positive cash flow. WE LOVED THESE PEOPLE!
Here is
the reality, the accountant had one agenda which was to cure his client’s
problem regardless of the situation it would create for us. The leasing
agent was splitting a $200k commission with the gentlemen that had brought
us the deal and quickly moved to California with her boyfriend shortly
after we closed. The seller was willing to carry back the $1,000,000
because the building would sit for the next three years vacant because the
location was 10 years away from being a hot location.
This is
all information that Nancy and I learned after we closed and had
ownership. The tenants that the agent brought moved out in the middle of
the night, we ended up loaning another tenant $40,000 with an expectation
that she would start paying her rent. She did not pay the next month (or
the previous past due rent amount) and filed bankruptcy right after we
loaned her the money to get her business back on track. Half of the
building stayed vacant for three years. The new management company came
to lease the building and was able to get $14 per foot not $28 per foot.
We fed the building an average of $7000 - $8000 per month which is the
reverse of the cash flow that the seller’s accountant had given us. We
ended up several hundred thousand dollars in the red. As another tenant
moved out in the middle of the night, I went back to the friendly bank
that had allowed us to assume the mortgage in lieu of getting all of our
business accounts and asked for a short term interest only loan until we
could stabilize the building, the answer was “No”.
With
all of this being said, we went back to the seller and decided to barter
with him to take his nightmare back. We met with him and his accountant
that were willing to do this for us for a charge of $299,000 after totally
misrepresenting the merit of the deal…great guys!
Now the
reason I share this with you is because we bought this dog trusting
everyone in the deal was being honest and we took their diligence as our
own. This was mistake number one which is a lesson that you can learn from
us without going through the pain. The second reason that I shared this
story is that the last two deals I shared with IWP! went very well for us
and I want you to realize that it's easy to share your victories. However,
no one that has several wins can sustain without losing in the process.
The third reason that I shared this story is most people would go through
this kind of a situation and they would quit!
I have
gained more knowledge and experience from making serious mistakes than I
could ever have received in school, from books and from attending
seminars. The one thing that remains the same is that win or lose there is
always a vision. There is always massive action and I never quit
regardless of how hard the road is. Most people lose sight of their true
potential when the mountain continues to grow as they are climbing. They
forget to look down and see how far they have come!
**********************************************************************
Geoff
Thompson is an inspiring speaker, renowned author of “Real Estate
Revolution,” has hosted radio talk shows and the founder of Global Wealth
Solutions (GWS) - a real estate brokerage. For more information, Geoff
can be reached at 815-469-6677 or geoff@globalwealthsolutions.com |
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