She sat across the desk from a master. This real estate broker was about to be grilled by one of the best question askers I have ever met. Mark sized her up quickly. With a twinkle in his eye he fired the first shot. “How’s business?” he asked.
She told us that business was great. How couldn’t it be? “I’m finding houses on the multiple listing service for .50 cents on the dollar” she claimed. “Really,” Mark said. This unsuspecting Realtor just stepped into his trap. She shook her head confidently, “Yes, I am.”
Mark told her he would buy every house she could find for .50 cents on the dollar. This, of course, made the agent very happy. She was grinning from ear to ear. “Okay, I found a condo in Phoenix you can buy for $140,000. It’s worth about $210,000.” A puzzled look came across Mark’s face. “I’m no math expert, but that doesn’t sound like .50 cents on the dollar to me” he answered. The Realtor said, “You’re right, but it’s in turnkey condition, no repairs needed.”
“But you just told me you were finding properties for .50 cents on the dollar” Mark insisted. He told her if she found any to call him. Then we wrapped up.
This meeting took place in September. 2008. Here we are, more than five years later and poor Mark is still waiting for the Realtor to call.
How to Purchase Real Estate With No (or Low) Money!
One of the biggest struggles that many new investors have is in coming up with the money to purchase their first real estate properties. Well, BiggerPockets can help with that too. The Book on Investing in Real Estate with No (and Low) Money Down can give you the tools you need to get started in real estate, even if you don’t have tons of cash lying around.
If It’s 99% True, Then It’s a Lie
Mark taught me a lot about the art of asking questions. Before I met him I would accept what most people had to say at face value. I would give them the benefit of the doubt. “Why would they lie to me?” I thought. Besides, they said what they said with such authority. They must be telling the truth. If there were a few holes in their story I would fill in the blanks myself. That was the polite thing to do right?
Like me, many people just fill in the blanks – especially when desperate. Back in 2007, l was a struggling real estate professional. My net worth went from $8 million to negative $2 million practically overnight. I would listen to any sales pitch and consider any investing strategy imaginable if it meant I could improve my financial situation. I wanted to believe these opportunities would work so I didn’t ask too many questions. It was like I didn’t really want to know the truth.
Fortunately, I learned from Mark that questions are like a shield. They protect us from the smelly stuff that my daughters always complain about whenever we drive by the dairy farm near our house. Questions can save you thousands and earn you millions.
If you’re thinking about paying someone to teach you how to invest in real estate then I advise you ask a lot of questions. Here are my top three suggestions:
- How many deals did you do last year?
- Can you show me HUD settlement statements for those deals?
- How many properties do you own right now?
If the sales person fidgets, fusses, stutters, stammers, sweats, delays or tries to change the subject then your shield worked.
My business partner Manny Romero likes to say that “if it’s 99% true, then it’s a lie.” (Tweet This Quote!) The problem with the real estate business is that many of the investors and educators you hear about or see on TV leave 1% of the story out. Why? Because that 1% will make you, and your checkbook, run for the hills.
The truth hurts doesn’t it?