If you have no money and no skills, you can still get wealthy by introducing people with money to smart and savvy real estate entrepreneurs who are looking for money partners. Make sure that you are offered a percentage of the deal for making the introduction, and some entrepreneurs will even make you an equity partner for making an introduction. In my experience it is always advantageous to pay anyone and everyone for a worthwhile introduction.
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Why I Focus on Real Estate
and Joint Ventures
This book, Money People Deal, focuses on the two fastest ways to real estate wealth: joint ventures and flipping real estate. While I still make use of public speaking and local marketing, I have chosen to gear my entire business around joint ventures and real estate because of the abundance of real estate (it, too, is everywhere) and the abundance of money that is looking for Joint Ventures (it’s literally everywhere). I believe in abundance and not scarcity, and that is why I’ve chosen to run my business with two limitless resources—real estate and joint venture money. Life is too short to take the slow route to wealth; create cash now, learn the rules of the game, and enjoy the fastest way to real estate wealth.
Action Plan: Review the four shortest ways to profit and plan to implement at least one of the four strategies into your business in the next sixty days.
Exclusive Bonus: Go to MoneyPeopleDeal.com and download the Bonus E-Book Double Your Income with Sandwiches and Postcards. The password to access your Bonus is “insiderbonus.”
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Chapter 2
Money, People, Deal:
The Fastest Way to
Real Estate Wealth
I
am often amazed at how lazy new investors can be with their money. Often a novice real estate investor is someone in their thirties or forties,
tired of their job, and making a steady median income. Since they have a stable job, this person is able to obtain easy credit and financing from banks. Often these investors will have access to a home equity line of credit, a wide arsenal of credit cards, and will have an RRSP account (the Canadian equivalent of an American 401(k) account) with $30,000 to $40,000 (if they’re responsible), and have $10,000 to $20,000 cash savings ready to do a deal. These investors are tired of the rat race and are ready to take the plunge into real estate with their own money.
The sad thing is that this type of new investor has been working since they were eighteen to reach this cash position, and they are now in their midthirties and ready to start investing. This investor has done things the slow way, and it has cost them decades of their life to reach this position. Time is the only real currency in life, and to do things faster, we must be educated. Education is where all wealth comes from because all wealth originates in the mind.
No matter how prepared we are or how much money we start with, the
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truth of the matter is, in business or real estate, we will always run out of money. No matter how much cash and credit we have, it always gets ‘tied up’ in a deal, and we eventually run out. This happens to every investor, whether you are Donald Trump or Warren Buffett. There is always a point where the investor must go out and raise capital to keep investing.
I began investing at age twenty-two, and the greatest advantage I acquired by starting so young is that I had virtually no cash, no credit, and no credibility when I started. I had to learn to raise cash, manage my small amount of credit, and leverage credibility. I had to learn the skills required to play the game of Money, People, Deal with no cash from day one because I started the game with nothing. I was a punk kid who had taken $2,000 worth of real estate seminars and had to make the dream happen.
My investing career didn’t take off until I learned the rules for creating deals and raising money. This skill set has allowed me to raise money for all of my deals (except my first one, where I put down a small down payment of $1,200 cash). Because I understand the fundamentals of Money, People, Deal, I have never put down money on an acquisition of business or real estate since.
Most investors think that cash is king, and they are terrified of raising money for a deal. The truth is that cash is trash; everyone has it, and it’s a cheap commodity that is worthless without the brains to manage it. Money is fickle and is easily attracted if we understand a few key principles of money.
There are three major parts to putting a deal together and raising all the cash we will ever need. They are the following:
1) The Money: The cash required to start the business or acquire the real estate.
2) The People: The team that will operate the business or asset.
3) The Deal: The business or asset itself.
Money, People, Deal: The Fastest Way to Real Estate Wealth
29
Most novice investors don’t understand the three fundamental parts of a real estate deal and waste time trying to raise money the wrong way. By doing so, they burn their credibility and look like fools to their network of potential investors.
What are the three things
required to start a business in
any industry?
Whenever I ask this question to a group of people, the first answer is usually “Money!” and this answer is 100 percent correct. Money is always required, in some shape or form, to start a business, whether it is $10 to start a lemonade stand or $10 million to build an apartment complex. When I say that I started my business with no money, what this means is that I started my business with someone else’s money. The money used to acquire real estate was raised from an investor and has grown by leaps and bounds with other people’s money. Money alone is useless and earns very low returns without the other parts of the business. Money is abundant; everyone has it, and money is always looking for a safe place to earn a handsome return.
The second ingredient required to start any business is the people who
The Three Major Parts of Putting
a Deal Together
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30
form the team that will run and operate the business. They often represent the management and the technical knowledge of the business.
The third ingredient required to start a business is the deal. Deals can be real estate properties, traditional businesses, patented gadgets, Internet businesses, etc. For the purpose of this book, we will focus on real estate as the deal, but keep in mind that a deal can be any business that makes money. In many ways, a good deal is the most valuable part of the business, especially if it’s proprietary or hard to find. A good deal can be like a magnet, quickly attracting the people and the money to get the deal done. In contrast, a bad deal can be impossible to fund.
Money, People, Deal is the game of entrepreneurship, and it has the highest rewards out of any game for those who know how to play. An entrepreneur who can assemble Money, People, and Deals will enjoy the highest returns