My MLM Dream Team

Last night I talked shop about real estate properties with a business colleague. We’ve worked together on some houses in the past and he’s very knowledgable both in real estate training courses and in actual real world experience.

Unfortunately, most of what the gurus say has led you astray. Not that their systems don’t work but the way it’s sold to you as being “easy” is totally wrong.

It takes much more dedication and persistence than the real estate gurus tell you it does. I’m not going to say it’s hard at least it’s not hard to understand.

THe tough part for the majority of people is remaining persistent pushing through all the no’s to get to those yes deals which are highly profitable and make or break your business.

WE talked a bunch about the state of the economy and his strategy moving forward

He recounted a tale of one of the properties he’s had for about 16 months.

You’ve probably heard (or been part of) a similar tale where you buy a property for a fast fix up and it turns into the nightmare on elm street.

You’ve probably seen this type of rehab projects on the A&E TV show Flip This House and there’s another show called Flip That House.

After he bought the house what he thought was going to be a 30 to 45 day fixup job turned into a six-month ordeal because of bad construction workers, no existing connections to skilled workers, and some cash flow issues.

After real estate negotiation, financing, and bringing in a partner he was able to get the property fixed up in what turned out to be a six-month process and the original budget of $40,000 mushroomed out of control into a completion budget of $62,000.

So as you can see both the time estimate and cost to repair budget were way way off. And not in a conservative way.

This has definitely been a super frustrating property for him as evidenced by him talking about various details of the project to me for roughly 35 minutes.

I could sense the pain in his voice.

Tough as it was for me to hear and I’m sure for him to say it was a good thing. It forced him to reevaluate the strategy he was using in this current market.

The biggest problem with those TV shows and what the gurus tell you is major fixup projects like that are basically construction projects. They’re a lot harder than the salesman tell you they are.

Much of this is because you don’t have any pre-existing network of contractors and subcontractors to get stuff done for you. And if you just hire a general contractor most of the time his fees are too high to make it profitable for you.

So he’s going more towards a long-term rental buy and hold type of strategy. Because in this market there are more people looking to rent than there are to buy and it’s conceivable that trend will continue for the next two to four years.

Regular people like you and me have been getting wealthy with this buy-and-hold real estate strategy almost since the beginning of time. Robert Kyosaki would call it the get rich slow method.

No matter how long it takes aren’t you willing to do whatever it takes to be wealthy?