11/6/11: Multi-Family Market Musings plus a Different Look at the Rat Race

Who in their right mind would buy over $300 million of real estate in the middle of a giant recession?

And if that isn’t crazy enough, who would think that people actually need and love the rat race?

In this eclectic episode of The Real Estate Guys™ radio show, we talk to two very thought provoking guys who look at the world a little differently than your average Joe.

Behind the microphones to bare their brains for all the world to hear:

• Your thoughtful host, Robert Helms
• Bestselling author, real estate entrepreneur and Rich Dad real estate advisor to Robert Kiyosaki, Ken McElroy
• Former White House director of economic policy, author and speaker, Todd Buchholz

First up in these serial interviews is our pal, Ken McElroy.  We love Ken because he’s both the real deal and a regular guy.

Obviously, anyone who has the chops to acquire $300 million of real estate in the midst of the worst financial meltdown in decades is probably worth listening to.  We’re very grateful that he’s willing to let us come hang out in his office and record our conversations to share with you!

HINT:  Spending time with uber successful people is a really great idea – especially when they’re willing to share their wisdom.

So grab your note pad and listen in as Ken McElroy muses on the multi-family market – where it is, where it’s headed and what he’s doing in it.  And even if you’re not ready to be a multi-family mogul, you’re sure to pick up great ideas that you can apply to your own situation.

Next, we bring you a sit down interview with former White House director of economic policy, managing director of the Tiger hedge fund, co-producer of the Tony Award-winning Broadway hit Jersey Boys, author and speaker, Todd Buchholz.  Yeah, he’s a real couch potato.

How, you may ask, do we always manage to find these amazing guests?  Let’s just say we leave no stone unturned in our quest to bring you thought provoking and useful perspectives!

Now Todd’s topic really has nothing to do with real estate, but a lot to do with people and what motivates them to work.  So if you’re a person and you’re working by desire or necessity, this interview has some great thoughts for you.

Todd’s written a book called Rush – Why You Need and Love The Rat Race.  Now, while many people become real estate investors so they can “get out of the rat race”, Todd’s premise is that people actually thrive not on relaxing, but in working towards worthwhile goals.  We’re guessing he’s a type A, but it’s just a theory.

We found the interview very interesting because his book speaks to the deepest needs and motivations of people to work.  Obviously, to be happy, people need to organize their activities and finances to provide the environment which fulfill their needs and motivations.  The big question then is, what do you really, REALLY want?

So, as we approach the end of another year (can you believe it?!?), it’s a great time to contemplate your motivations, goals, plans and activities.  We think this interview will help stimulate those contemplations.

And if you want to take the whole process (warning – upcoming shameless self-promotion) to a much deeper and practical level,  you’ll want to attend our upcoming goal setting workshop.

For now, enjoy these stimulating conversations with two very bright and accomplished guys.

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The National Hard Money Conference in Las Vegas – March 3rd 2011

When The Real Estate Guys™ heard that the National Hard Money Conference was coming to Las Vegas, we decided it would be a perfect opportunity to visit one of our favorites places.  Say what you want about the Las Vegas economy and real estate market, but it’s still one of the most dynamic and fun places to visit.  And because the economy is soft, there are great deals on rooms, meals, transportation and entertainment.  Too bad we didn’t have time to indulge in anything more than the conference.  But we’re dedicated to staying focused on bringing you a wide variety of interesting topics and guests!

Back when conventional funding (that is, money from banks) was flowing like water, most people equated “hard money” with “hard up”.  But that’s really a misnomer.  It’s really more like “unconventional” or “out of the box”.  Professional investors have long relied on hard money to finance properties that needed work, when the deal needed to close fast, or when the property or borrower needed a more personal underwriting.  We often say that hard money is one of the best kept secrets in real estate.  And when there’s enough in a deal, the premium you pay for the flexibility of hard money (that’s kind of an oxymoron, isn’t it?), is well worth it.

As a reminder, “hard money” is just another way to say money that comes from private individuals rather than banks, and is sometimes aggregated into investment pools.  It used to be (and is largely true today) that those pools, or “syndications”, were often managed by a local mortgage broker and the funds aggregated came from local investors.  It’s a great vehicle to allow people to put their savings to work in support of their own community.

Of course, any time there’s big money to be made, it attracts Wall Street, foreign investors and other big players.  So in today’s market, you’ll also find many hedge funds participating in the hard money market.  And in a post meltdown economy and all kinds of distressed assets available for pennies on the dollar, like white corpuscles, private money is flowing to the wound and cleaning things up.

With that backdrop, this one day convention (which was conducted by industry icon Leonard Rosen), brings together lenders, vendors, brokers, and even some borrowers, to explore the state of the industry and consider what the opportunities are in today’s market.  There was a big emphasis on teaching traditional mortgage brokers, whose business model has been under attack by both the market and the regulators, how to transition from broker to syndicator.  This obviously piqued our interest, since we are of the opinion that this is one of the greatest times in recent memory to get into the syndication business.  We felt like geniuses when some of the biggest brains in the hard money business concurred!  Of course, we feel like geniuses most of the time, whether anyone agrees with us or not.  It’s part of the delusional experience of being radio talk show hosts.

For us, the National Hard Money Conference was a chance to peek behind the curtain of this intriguing sub-set of the lending industry and talk with some of it’s major players.  And yes, we captured some great interviews and scheduled several more, so keep an ear out for some very interesting episodes of The Real Estate Guys™ Radio Show in the coming weeks.  In fact, to be sure you don’t miss any, be sure to subscribe to the podcast.  It’s free!

Mr. Rosen and his staff at Pit Bull Seminars put on a first class event.  Held in the Mirage hotel on the Las Vegas Strip, there was lots of energy and enthusiasm right from the get go.  But more than hype, the event included several guest speakers including a very sharp attorney named Jon Hornik.  The presentations were laced with perspectives, humor, technical training and valuable insider information.  Toward the end of the day, all of the speakers participated in an open forum panel and attendees were able to step up to the mic and ask specific questions.

One of the most interesting segments was when attendees were able to pitch a deal they were seeking funding for.  The answers and resulting dialog provided insight into what kind of deals are getting funded today, though the main purpose was for the audience to see what funders think about when considering a deal.  Whether you’re a borrower, broker or budding fund manager, it’s mission critical to understand how to quickly analyze a deal.  Watching pros do it was very enlightening.

There were several opportunities to network with other attendees. We made lots of great contacts, which is always a highlight of attending any event.  It’s great when the promoter pays careful attention to creating these valuable opportunities to build relationships.  As great as the internet and social media are, we doubt they will ever be as effective for getting people together as getting people physically in a room for a full day or more, to focus on a dedicated topic and share their ideas, information and contacts with each other.  We don’t know how anyone can consider themselves a professional in any industry, if they don’t make attending such events a frequent and consistent part of each year.  It’s one of the main motivations behind our annual Investor Summit at Sea™

We hope our schedule will allow us to check in on future conferences.  Leonard Rosen has been teaching hard money lending for 36 years and this was his 23rd annual conference.  He says each one is different because the market changes, creating new challenges and opportunities.  He made a passionate appeal to all attendees to be sure to continually re-evaluate their business models or risk being swept out of business by the relentless waves of change.   A big part of staying ahead of the curve is to spend time with the thought leaders if your industry.  So The Real Estate Guys™ offer kudos to Leonard Rosen for being such a leader and bringing others like him together for us to learn from!  We look forward to visiting the National Hard Money Conference again.

8/1/10: Economics, Politics and Real Estate – Interviews from Freedom Fest 2010

If you’re one of those who take The Real Estate Guys™ to the gym, make sure you carbo load first! This one’s a whopper!  Our radio audience only got an hour, but the podcast audience gets the whole enchilada.  That way whether you like American or Mexican, there’s something for everyone.

A few weeks back, we went to Las Vegas for the 7th Annual Freedom Fest conference.  This was our first time and we weren’t sure what to expect.  But after our previous interview with event founder, economist Mark Skousen, we thought it would be worthwhile.  It turned out even better than we thought!

After being near the epicenter of the financial earthquake which rocked the real estate portfolios of even the most experienced investors, we’ve put a big emphasis on studying economics.  Who cares if you’re expert at fixing up properties, managing tenants or putting together syndications if property values are crashing, tenants don’t have jobs, loans aren’t available, and people are too scared to act?

So we started looking for people who saw it coming, put their predictions in writing and got it right for the right reasons.  Hindsight’s often 20/20, but seeing the storm coming while there’s still time to shutter the windows is better.  You might not be able to avoid bad economic weather, but with advance notice at least you can prepare!

We looked at the lineup of speakers at Freedom Fest and decided this would surely be an eye-opening experience. We were especially excited about Peter Schiff, author of Crash Proof 2.0 (a highly recommended read!).  Schiff called the crisis for the right reasons – and way ahead of time.  We’re happy to say we got a lengthy interview with Mr. Schiff to see what he’s thinking now – which is the feature of our next show.

While we’re boasting about awesome interviews, we also had a chance to talk with billionaire CEO of Forbes Magazine and former Presidential candidate, Steve Forbes.  That interview is coming up in a couple of weeks, so stay tuned!  The best way to be sure you don’t miss any of our exciting episodes is to subscribe to our podcast via iTunes (shameless plug).

Today’s episode is about talking to LOTS of people! It was like one of those speed dating sessions.  Robert sat at the microphone from early morning to late at night, and Russ rounded up a long line of interesting people to interview.

Featured in this episode of The Real Estate Guys™ Radio Show:

• Your host, Robert Helms
• Co-host and cat herder, Russell Gray

And a long parade of very special guests (in order of appearance):

Jeffrey Verdon, Attorney, talks about estate planning and asset protection strategies utilized by wealthy individuals; including off-shore entities and a very interesting technique for funding life insurance.

Dave Fessler, Energy & Infrastructure Expert for the Oxford Club.  Dave discusses his views on the future of energy and infrastructure and their impact on jobs and the economy.  He also comments on “the paradox of thrift” – how consumer savings is actually fueling the recession.  He tells us how long he thinks it’s going to last, and where he believes America’s best chance for job creation are right now.

Bob Bauman, Attorney, Former U.S. Congressman, Founder of The Sovereign Society; shares his thoughts on offshore investment, asset protection, second citizenship and the growing interest many people have in diversifying globally.

Vernon Jacobs, CPA, is an expert in international taxation.  Vern tells us what to consider when investing or employing asset protection strategies offshore.

Robert Barnes, Attorney, is part one of two back to back interviews with lawyers from a premier tax and investment fraud law firm that went 3 for 3 (that’s pretty good!) in three of the top four high profile tax cases in the U.S. (you’d recognize the names).  Mr. Barnes reveals the worst thing you can do when contacted by the IRS.

Robert Bernhoft, Attorney, is part two of our tax and investment fraud attorney interviews.  Mr. Bernhoft describes what you can do to proactively avoid problems with both your investors and regulators; and shares how his firm uses specialized “non-litigation” techniques to recover misappropriated funds without going to court.

Steve Hochberg, Chief Market Analyst for Elliott Wave, works closely with Robert Prechter.  Prechter’s 2002 NY Times best seller, Conquer the Crash, accurately predicted the current financial crisis.  While everyone is running scared of inflation, Steve says DEFLATION is actually the big near term threat.  He believes we are “on the precipice of the greatest stock market decline of our lifetime.”

Patri Friedman, Executive Director and Chairman of the Board of The Seasteading Institute.  A city on the sea?  Really??? Before you write it off as Looney Tunes, go to their website and look at their management team.  These guys are all brilliant.  We’re talking Stanford, Harvard, Yale.  Wow.  Have you heard of Pay Pal?   Yeah,the founder is on their board.  And why were they at Freedom Fest?  Take a listen!

Leon Louw, Executive Director of the Free Market Foundation, all the way from South Africa!  Why?  To raise money to advance property ownership rights for blacks in South Africa. For what it’s worth, we didn’t see any evidence of racism at Freedom Fest, though it was full of “tea baggers”.  Obviously, Leon felt people at the event would be supportive of his cause. From our observations he was right.  But this isn’t a political interview. any more than our show is political.  We just  want to understand what people are thinking and doing, and how it creates or undermines real estate opportunities.  Think about the ramifications on demand in a market where a large part of the population, formerly locked out, suddenly has access to buy property.  Very interesting stuff.

Terry Coxon, author of Unleash Your IRA, shares a powerful concept for maximizing your Individual Retirement Account.  We thought we knew all about this topic, but Terry shares a strategy we hadn’t considered. Now we’re hyped to read his book.  With the demise of home equity, and a growing number of people predicting a tough stock market (at best); and lending getting even tighter from financial reform, we think IRA’s and rollover 401k’s are one of the BEST sources of private investment capital.  That makes this a topic worth exploring!

Ron Holland, editor of two financial newsletters and 30 year financial industry veteran, has something to say on the topic of IRA’s.  And it’s concerning.  He shares what he thinks is the greatest threat to your retirement account.

Terry Easton, author of Refounding America and contributor to Human Events. Terry is uber-conservative / Libertarian and has a lot to say on the topics of economics, politics and real estate.  We came to hear a lot of opinions and it just so happens that Terry has a lot of opinions.  But since they come from a long history of study and involvement, we think they’re worth listening to.

All in all, Freedom Fest was a great experience and we’re very likely to attend next year’s event.  We met great people, got valuable insights, and had our paradigms stretched (we’ve been icing them since we got back).  Most of all, we see the economy and real estate from a much broader perspective.  As we continue to seek out markets, opportunities and product niches to invest in, we are convinced a bigger perspective will pay huge dividends.

Remember – our next two episodes feature our interviews with Peter Schiff and Steve Forbes!

The Real Estate Guys™ Radio Show provides ideas, perspectives and resources to help real estate investors succeed.

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Part 2: Report from the National Association of Realtors Conference

Russ again.  Robert’s still in Belize.  I’m not jealous.  I like wearing sweaters and breathing artificially heated air.  And who doesn’t enjoy sitting in traffic?  White sand beaches, tropical drinks, warm sunny weather are all overrated.

But I’m here to talk about NAR and my three days in San Diego (which was also quite beautiful by the way).

First, the conference was huge. Lots of people, exhibitors, speakers, classes and networking.  The internet will never replace the value of meeting people face to face – or the quality of learning that occurs when you’re in a session without any other distractions.  I had a great time!

The mood was generally upbeat. The real estate industry is still tough, but Realtors exemplify the best of the spirit of American entrepreneurship.  The ship took a turn and most of the weaker players fell off the boat.  Those who remain are developing solutions and charging off into the marketplace to sell them.  This is very good for economic recovery.

Many exhibitors had offerings which focus on short sales and REO opportunities – an obviously large and growing segment of the industry.  Training, products and services to support Realtors who work or want to work with distressed owners, be they individuals or banks, will surely help the market work through this downturn and a return to normalcy.  I also think that the infrastructure to process the next wave (yes, there is another wave coming) of defaulting loans will help lessen the pain.  In other words, the real estate community is now better equipped to react to the problems caused when properties fall into foreclosure.

Another big focus at this year’s conference was on opportunities in international real estate.   In a presentation I attended, Economist Paul Brewbacker of TZ Economics told Realtors to “expect more cross border transactions in the future.”

NAR also had a dedicated International and Resort Home Pavilion on the tradeshow floor.  I attended several networking sessions where agents from all over the world met their counterparts from Asian, Europe, Latin America, the Caribbean and elsewhere.  I was excited to meet the President Elect of the Belize Realtor Association.

I also attended a very informative (I took many pages of copious notes) session on how Realtors can effectively market properties globally.  This includes selling US properties to foreign buyers and vice versa.  Technology plays a big role. It was enlightening to see the creative ways Realtors are marrying high tech with high touch to help buyers and sellers work effectively across borders.

I was also very impressed with how much support NAR provides its members in terms of educational resources and statistical data. They are really working hard to develop an understanding of what it is their customers are looking for in a very different economy.

I learned about some of the new professional designations NAR has developed to better service specific niche markets such a eco-conscience buyers, seniors, and buyer of international and resort properties.  Look for The Real Estate Guys to interview some NAR officials on these topics in the not too distant future.

As a keen observer of the real estate industry, I came away from the conference feeling optimistic about the future.  Not because of hype.  I didn’t actually hear too much of that.  But because I saw an industry that has adapted and is no longer reacting to the market and economy, but in a position to lead.  This is very good because the first thing necessary in a turn around, whether its sports team, a company or an industry is practical leadership with real solutions that work at the street level.

For the economy to thrive, each individual needs to thrive.  Flowery speeches, conceptual solutions and lofty promises are fine for politics.  But all the work is in the trenches.  When I talked to the people in the trenches, I got the feeling they aren’t afraid anymore.  They know there’s still a lot of work to do, but they’re ready to go.  I think this is good for the economy and for real estate.

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Part 1: Report from the National Association of Realtors Conference

This is Russ. I just got back from 3 days in beautiful San Diego where I attended the NAR Annual Conference.  Robert drew the short stick and had to go to Belize to handle some business. Poor guy.

In case you don’t know, the National Association of Realtors is the world’s largest trade association, boasting well over a million members. Pretty good for an industry that’s been at the epicenter of the “world financial crisis”.

I noticed the AP reported on FHA Commissioner David Stevens’ speech at NAR.  They said that Stevens told the Realtors “that concerns the agency is headed for the same financial trouble that snared Fannie Mae, Freddie Mac and the subprime sector are unwarranted.”

Really?

I didn’t hear the speech because I was more interested in what people on the front lines were thinking and feeling about the market.  Besides, we’d already commented on our observations about FHA in two previous blog posts: Are We Going to Lose our Fannie? and Hey FHA! Your Fannie is Showing. You can find those in the Clues in the News category.

Why should you care about FHA? As quoted in the AP article, Stevens said it best, “Without FHA there would be no (housing) market, and this economy’s recovery would be significantly slower.”

The surest sign there’s trouble is when a bureaucrat comes out and tells your there isn’t  (“Pay no attention to that man behind the curtain!” ).  Especially when all evidence says there is.  It’s even worse, when the “no problem” evidence provided is (again, from the AP article), “the agency has $31 billion in capital – $3.5 billion more than it had a year ago.”  But (and it’s a big one), how does that compare to the number of loans insured?  The AP article says that FHA has insured nearly a quarter of ALL new home loans made this year.

Consider these recent FHA related reports:

11/10/09 MiamiHerald.com – “FHA moves to boost condo market – The FHA recently announced more lenient, albeit temporary, underwriting guidelines for condo projects”

11/12/09 DSNews.com (reports to the mortgage default servicing industry) – “The FHA told Congress and reporters Thursday that its cash reserve fund had deteriorated to $3.6 billion – the lowest it’s been in the agency’s 75 year history.”

11/13/09 Wall Street Journal – “The FHA’s Bailout Warning – Whoops, there it is. – Critics of Fannie Mae & Freddie Mac were waved off as cranks and assured that the companies would not need a taxpayer bailout right up until the moment that they did.”

11/14/09 AP – “FHA Boss: FHA is not the new subprime” (this is the article written at the NAR conference that I opened up talking about). Hmmmm……I’m having déjà vue all over again…again.

Not to be redundant (okay, maybe a little redundant), but Supply and Demand only work when there is capacity to pay.  If 100 people are starving and there’s only 1 Big Mac for sale, one would think that the price would get bid up, right?  But that assumes (dangerous word) that those people have the capacity to pay. If they don’t, the price won’t rise.

The lesson?  Stevens is right (for now) that FHA money is a BIG part of housing.  If it goes away or is tightened, then there will likely be a dip in prices as less people can compete for available properties.  Does that mean stay away?  Not necessarily.

Eventually, private money (and there’s lots of it!) will make its way back into mortgages. Why? Because it’s profitable and real estate is real and the demand for it is forever. But until the sands stop shifting, private money will stay away. It’s no fun to play a game when the rules keep changing. As long as private lenders think they will have to compete against government (taxpayer) subsidized non-profit lenders, and/or that legislators will impede or negate their rights to recourse under the contract (i.e., stop a foreclosure or force a modification), then private money is going to stay away.

And who can blame them? But, (oops, my opinion is showing), even though all this government tinkering is designed to lessen the pain (ironically caused by government tinkering), it will also prolong it.  But I guess private money is coming to the rescue one way or the other, since taxes take private money and funnel it into housing through the government via bailouts.  Not my first choice, but that’s the way its working right now.

For joe schmo investors like us, bread and butter properties in highly populated markets with good transportation, education and economic infrastructure still make sense – as long as they cash flow and you’ve got reserves to allow you to own for 10-20 years.  Because when private money does come back and is added to all the new money we’ve added through stimulus, it’s very conceivable that prices will go up.  But if you have positive cash flow, amortization (pay down of today’s cheap loans over time), and tax breaks, you will still look good in 20 years.  And who doesn’t want to look good in 20 years?

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Rich Dad’s The Art of a Deal – Day 3 Report

Russ here again – this time I’m somewhere over Arizona in an airplane headed home after a powerful conclusion to Rich Dad’s The Art of a Deal.  This is my final report in the series.   As I write, there’s a woman sitting behind me who also attended the conference.  She’s excitedly preaching the gospel of Rich Dad to her neighbor!  It’s hard not to be totally enthused after this weekend.

True to form, Mr. Kiyosaki opened Day 3 with review.  He used repetition and discussion to reinforce the lessons.  I personally found it to be a very effective way to learn.  The discussions also allowed me to get to know many other people as I migrated from table to table to engage in conversation.  I had several delightful dialogs with Mietek, a guy from from Poland.  He shared how banking, taxes, and real estate work there.  It was fascinating information that I might never have sought out on my own.

I also met a musician from Japan, several very nice people from Estonia, others from New Zealand and Colombia.  I even met Marco Regil, a highly popular TV game show host in Latin America.  Hearing their perspectives on money, business and opportunity was enlightening to say the least.  Of course, I spoke with people from all over the US as well, and their insights were also very valuable and interesting.

When we got back into the nuts and bolts of deal making, the group engaged in several simulations.  Putting the concepts into practice was so powerful!  Going from hearing the “how to” and then watching the pros do it (while smugly thinking, “Oh I could do that”) to actually having to put deals together on the spot, quickly revealed the gaps in our comprehension.   Even though the lessons had been taught, many of us still didn’t get it well enough to be able to do it.

After each exercise, as we laughed about our obvious inabilities, rather than move on, Mr. Kiyosaki would have us analyze what attitudes and prejudices were at the root of our failure to act effectively.   His emphasis was not on the mechanics of deal making, but rather on the filters through which we process information,  and helping us see how our “context” ties back to our decisions and actions.  His point was that although we all knew what to do, when it came time to actually do it for real, most of us (including yours truly) “tightened” up and couldn’t execute effectively.  We’d get hung up on little things that didn’t matter (majoring in the minors) which would end up costing us a deal.

One of the many great quotes I captured came from Mr. Kiyosaki, “The most important thing to know is yourself.” Dwell on that because it’s a profound and powerful truth, especially within the context of developing a mindset to be a successful entrepreneur or investor.  Some might think Mr. Kiyosaki’s teaching is too philosophical, but I think to say this weekend’s training was immensely practical would be a gross understatement.  He recognizes the important distinction between knowing how to do something and actually being able to do it effectively.

I brought an 80 page notebook just for this event and it’s nearly full!  I have pages of information, ideas, action items, and contact names to follow up with.  In just one weekend, I made two deals and found several prospective correspondents to provide The Real Estate Guys audience (that’s you!) with market intelligence on their home towns.  Our new friends will provide us eyes and ears on the streets of the world and we’ll bring that information to you!

To summarize the valuable takeaways from this weekend:

• Context (how you interpret information) makes content valuable. Without it, you’re just a librarian. Context converts content into actionable wisdom (effective action).

• Trust makes contacts valuable. Without trust, your database is no more valuable than a phone directory.

• Contacts make deals possible. If you don’t have relationships, you’re not in the real deal flow – you’re just picking over the scraps on the MLS or internet.

• Deals are the currency of relationships. You don’t use the relationship to get the deal. You use the deal to get the relationship. Read that again. Now read it again. It’s that important. Get this wrong and it won’t be long until you’re out of business.

• Nothing ventured, nothing gained. You may think you know what this means, but I’m betting most people reading this don’t really get it. Fear is the thief of dreams. There are people who were afraid this event wouldn’t be worth $5,000 and 3 days of their time. So they didn’t come. Very few will do anything of lasting value with the time or money “saved” by not going. Meanwhile, I have education, relationships, inspiration, clarity and resolve. There are no guarantees I’ll get a return on the investment, but at least I’m in the game. A big lesson from this weekend is how important it is to get in the game. That’s why I love working with Robert Helms. Getting in the game is his specialty.

In closing, be aware that there’s more exciting stuff coming from the Kiyosaki camp.  We’ll keep you informed.  The economy and opportunities have changed – and more change is likely.   The Kiyosakis like real estate right now (among other things).  You may agree or disagree, but their arguments against the dollar and stocks are compelling.  If you’re serious about your financial future, it’s a perspective worth understanding, whether you choose to agree or disagree.

Meanwhile, remember The Real Estate Guys have at least two Rich Dad Advisors (Ken McElroy and Garrett Sutton) joining us on our 8th annual Investor Summit at Sea.  After this weekend, I can’t imagine why anyone wouldn’t want to take advantage of having these guys captive on a cruise ship for seven full days.  I hope you decide to take a “chance” and invest in your education and relationships by joining us.   It’s a rare opportunity to spend quality time with the same advisors who work directly with Robert & Kim Kiyosaki. There’s lots of upside and very little downside.   Think about it.  The worst case scenario is that you enjoy a great cruise.   And who knows?  You may get an idea, make a contact, or have a motivational breakthrough that will elevate you to the next level of success!

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Rich Dad’s The Art of a Deal – Day 2 Report

This is Russ again.  I’m back in the hotel room after another intense 13 hour day at Rich Dad’s The Art of a Deal event.  Another fantastic day of learning, thinking, networking and having a few seismic paradigm shifts. I continue to be blown away at the caliber of the people.  The networking alone is worth the cost and time to be here!

Robert Kiyosaki started the morning with a review of yesterday’s key concepts.  His teaching style is masterful. I was reminded how critically important review is.  One very important takeaway for me was to be careful to focus on truly learning, and not just being entertained with “new”ideas.  Winners consistently review the fundamentals.  Mr. Kiyosaki is disciplined to keep focus on the core Rich Dad principles, which provide the context for all the content he and his guest speakers provide.

One key Rich Dad principle is that rich people primarily focus on investing in assets which make them money, and secondarily on working for a paycheck.

I’ve heard that a thousand times.  But in the context of today’s economy,  it took on a much deeper meaning for me.  With the national “official” employment rate in excess of 10%, I realized there are tens of millions of people waiting for “someone” to create a job for them so they could work for a paycheck.  Meanwhile, they sit on their assets and consume their savings (denominated in dollars which are declining in value). Unfortunately, this is because most people don’t know how to invest, so they wait for a job – or worse, a subsidy check from the government.

Wayne Palmer took us much deeper into the mechanics of creative exchanging.  We started with a continuation of yesterday’s simulations.  I saw a guy from Germany (whom I had dinner with last night) trade a Michael Jackson CD for (are you ready?) travel expenses to, and three full month free accommodations in, Buenos Aries, Argentina.  Plus, he gets Spanish language lessons, Tango dance lessons and real estate sales training.  And there’s even more to the story, but I don’t have the room to share it all.  It was absolutely mind-boggling!

We observed professional exchangers working on real deals.  I thought I was pretty experienced, but the pace at which they were able to do deals blew me away.  Mr. Kiyosaki stopped them multiple times to make sure we students didn’t get lost.  During those breaks, the professionals continued to quietly do deals and still jump back into teaching mode to answer our many questions.   During one short break, while the students asked questions, the pros did four deals.  It was amazing.  I realized how liquid real estate equity can be when it’s traded in the right environment!

Rich Dad Advisor Mike Maloney, did a masterful job explaining how the US money system is currently operating, the profound impact of debt, and the potential dangers of a growing federal deficit and debt.  It was shocking and sobering, but within the context of the opportunities that are available, it wasn’t so much frightening as it was a wake up call.  What’s coming was referred to as “the greatest wealth transfer in the history of the world”.  I don’t know about you, but it seems to me that’s a claim worth looking in to.

We heard from Kim Kiyosaki, who just closed a deal using a strategy the Kiyosaki’s learned from Wayne Palmer at the Rich Dad Real Estate Summit in September.  All the details weren’t disclosed, but the deal involved the acquisition of a distressed note and an 8 figure profit.  Very impressive.  Perhaps I’ll learn more tomorrow.

I had lunch today with Rich Dad Real Estate Advisor, Ken McElroy, who told me he’s really looking forward to being a part of The Real Estate Guys’ Investor Summit at Sea next April.  I had dinner with a doctor who told me he’s ready to quit medicine because of the direction of healthcare in the US and he’s looking to buy property in another country as a Plan B.  That was a very interesting conversation.  I wonder how many other people out there feel that way?

I wish I could share all of the great things I’m learning and experiencing, but it’s not possible.  Besides it would deceive you into thinking the event was about the information.  As Mr. Kiyosaki has made clear this weekend, the content is only beneficial in the right context.  Being here is the context.

Tomorrow’s session is shorter, but I need to catch a plane right afterwards, so I’ll post the Day 3 report late Sunday or on Monday.  Have a great day!

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Rich Dad’s The Art of a Deal – Day 1 Report

Hi everyone! This is Russ reporting from my hotel room after the first day of the Rich Dad The Art of a Deal 3 day workshop. It’s 10 pm at night and the last session of the day just ended. Robert (Helms) is in Australia working on a deal, so I’m here in Scottsdale covering this event solo. I haven’t heard from Robert yet, but right now I’m feeling like I got the better end of the deal.  This event has been so amazing already, even if it ended tonight, it’s already been well worth the time and money. Even though there are hundreds here, I feel sorry for people that aren’t here!

There’s far too much content, epiphanies and stories to share in this blog. And it would be a huge disservice to you and the Rich Dad organization to try to teach what I’ve learned already. With that said, let me share a few highlights.

First, it’s a first rate event. Registration, the Rich Dad team, the resort facilities, the food and the learning environment are all top notch. More than that, everything is purposeful and focused. Robert Kiyosaki is intense in his desire to see people understand and it’s reflected by his team and the whole process.

There are people here from all over the world.  For both lecture and meals, we are always in

small groups with a big emphasis on discussion.  At breakfast, I met a man and his 11 year old daughter who had come all the way from New Zealand. In the morning session, I sat with people from Columbia. At dinner, I met people from Sweden and Germany. It’s sad to think that there were people right here in Arizona – or even California or Texas – who thought it was too far away or too expensive to come; yet these people flew for hours and at great expense. Which brings me to one of the great lessons of the day…

Value is not measured in money, but rather in benefits; and value is in the eye of the beholder. It’s amazing what people value! Robert Helms often quotes Jim Carrey from The Grinch, “One man’s man’s toxic waste dump is another man’s potpourri.”

This first day was about learning the art of doing business without cash. By now, you should know of Wayne Palmer. The Real Estate Guys have had him on the show at least twice. He’s many things, but after today I that professionally he is first and foremost a trader. Robert Kiyosaki has teamed up with Wayne Palmer to teach at this event. Mr. K emphasizing mindset (what he calls “context”) while Wayne ran us through a trading workshop that really taught us how deals get done with no money.

When cash is out of the equation, it’s incredible how deals can get done. When we got into the workshop portion and started doing deals ourselves, we saw it in action. I was able to trade something that was of no value to me to someone else who saw huge value in it. In exchange, I got something also of no value to me, but worth hundreds of dollars in cash if I were inclined to sell it. However, after today’s session, I have no intention of selling it. I plan to continue to trade until I get something that will be of great value to me.

If that’s confusing to you, don’t worry about it. It took 12 hours today to show the several hundred people in attendance how it worked. You’re not likely to get it in a blog post (though I hope you do). It’s inconceivable to me that anyone at this event couldn’t easily go back home and start trading and before too long, have gotten value far in excess of the cost of attendance. If you doubt it, watch this video I grabbed from You Tube. Wayne showed it us twice. First at the beginning to so we could get a glimpse of the concept of trading without cash. Then again after we’d gone through the exercises. I can tell you that the second viewing was far better than the first because of the context.

Check it out. Meanwhile, I’ll take another 40 pages of notes tomorrow and I’ll look forward to getting another update posted before the weekend’s out. Enjoy!

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The Real Estate Guys Descend on Dallas – October Field Trip Report

Dallas, Texas – Oct 16-18, 2009

In a whirlwind field trip, Robert Helms led a group of real estate enthusiasts on a guided tour of the Dallas area.  The group included people from as far away as Hawaii, California and Michigan and featured several guest speakers including a local real estate developer, a local property manager and a veteran out of state real estate investor.

Dallas is a huge geographic market with many diverse sub-markets.  Though impossible to cover all market areas, the field trip provided a great overview and focused on a few strategic marketplaces of particular interest.   Overall, Dallas is a very attractive real estate market.  It features a large population base, strong transportation and educational infrastructure, and a diverse economy – all nestled in the top rated state in which to do business.  According to the Governor’s office, Texas created approximately 70% of all the new jobs in the US last year.  Last time we looked, the best tenants were those with jobs!

One of the most attractive attributes of this market is the ratio between price and rents.  With today’s low interest rates, many very nice properties will cash flow quite well with a reasonable down payment.  The educational sessions on the trip focused on evaluating cash flow and how to recognize a good deal from a not-so-good deal.

The bottom line: The surveys said that everyone had a FABULOUS time on this field trip and felt it was well worth the time and money.  In fact, 100% of the attendees rated it a 4 (on a scale of 1-4) and would recommend it to others. Check out some of the comments:

“Helped me focus on my goals…and learn what to research in markets and cash flow property.  Very strongly recommend.” – Peter E., Austin, TX

“Absolutely a must! I will likely invest in this market soon.” – Markus M., Detroit, MI

“Highly recommend!  It’s great to actually seen an area that is growing and makes sense to invest in.” - Jerry B., Turlock, CA

Bummed you missed it?  No worries!  Based on the success of this trip, we’re going again December 4-6, 2009! Join us!  Then YOU can put your smiling face in these pictures!

As you can see, SPACE IS LIMITED (that’s not sales pitch – we can only fit so many people in a van), so register now to reserve your spot!

If you have questions or need help, call 1-888-489-7723 or send us a message on our Feedback page.

A field trip with The Real Estate Guys is one very effective way to discover new markets and opportunities in real estate.  We hope to see YOU on our next field trip!

The Rich Dad Real Estate Summit

9/13/09 Scottsdale, AZ – Nearly 150 enthusiastic people gathered in Scottsdale for the 2 day Rich Dad Real Estate Summit hosted by best selling author Robert Kiyosaki and conducted by Rich Dad Advisor and real estate entrepreneur Ken McElroy. The Real Estate Guys were on hand to not only observe, but participate in this inaugural boot camp which is dedicated to teaching active and aspiring real estate investors how to succeed in the “new” real estate economy.

The event featured a host of highly qualified experts in various aspects of real estate investment including property management, financing, deal sourcing and analysis, and taxation. The event started at 9 am on Saturday morning and ran well into the evening. We didn’t get back to our hotel room (at the very nice Scottsdale Plaza Resort) until close to 9 pm, but even then we weren’t done! We had 5 different real life investment deals to review in preparation for the next day when we would divide into team and prepare and present offer letters to the panel.

Though it sounds intense, the Rich Dad team did a great job keeping the energy up with lively music, regular breaks with refreshments provided, and the trademark conversational breaks where we would discuss the topic at hand with other students sitting at our table. Not only did this break up the monotony of lecture, but it really helped reinforce our understanding of the material. Teaching is a very effective learning tool. In fact, when we were talking with Robert Kiyosaki during a recording session on Monday, he said one of the reasons he works so hard teaching is because he learns so much!

In the afternoon of the 2nd day, the crowd was divided into teams and each team was assigned one of the case study properties on which to write a Letter of Intent (LOI). It was like being on The Apprentice! The pressure was mounting to finish the analysis and craft an offer that would be strong enough to win, but without overpaying for the property. As the announcer counted down the time, the tension mounted. People were running to the front of the room to submit their offer before the time ran out!

A representative from each team was called up to sit with their competitors in front of the panel of judges. One by one, each had just 2 minutes to present the offer. Then the panel would begin to question and negotiate. Having been through this process many times ourselves, we can tell you is that very realistic!

There were far more lessons than could ever be contained in this short report, but even with all of the experience we have in the real world of real estate, The Real Estate Guys definitely discovered some new things. Plus, we made lots of new friends!

Overall, we thought it was a great event – well organized, well produced and lots of fun. We can’t wait to go to the next one!

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