Today’s REI Classroom Lesson
Franklin Cruz discusses 3 ways to do well in real estate investing and also what is easiest for newer investors.
REI Classroom Summary
There are different ways to get into real estate investing and Franklin Cruz explains why rehabbing and property management might be the best to start out with as a brand new investor.
Listen to this REI Classroom Lesson
Real Estate Investing Classroom Show Transcripts:
Mike: Welcome back to the FlipNerd.com REI Classroom, where experts from across the real estate investing industry teach you quick lessons to take your business to the next level. And now, let’s meet today’s expert host.
Franklin: Hey, guys. How are you doing? My name is Franklin Cruz. I’m actually going to be teaching your classroom today, so don’t skip, don’t press pause, don’t do any of that stuff. Trust me. I promise you this tie was not for make-believe. I’m going to grab your attention and hold it tight because we’re going to be talking about crushing it.
Mike: This REI Classroom real estate lesson is sponsored by VirtualStaffNow.com.
Franklin: So a little bit about me just before we get started. I have a military background so if I am very demanding I apologize in advance. You have to talk to my wife about this. Anyway, but I spent seven years active duty in the United States Army. I served in Korea for a couple years. I was an Army recruiter, served in Operation Iraqi Freedom, and then I found the light and I said, “I’ve got to be a real estate investor.” So for the last 15 years I’ve been a full-time real estate investor.
I’m Director of Mentorship at Clever Investor. That is an amazing education company, and also we mentor people throughout the country. If you ever want to find out more information about me, it’s going to be somewhere around this site that you’re looking at. But anyway, let’s get this party started. Now I’ve got five more minutes. That’s it. So we’re going to talk about crushing it right now.
Yes, and this is a real-live chalkboard bringing back bad memories, but it’s okay. So again, we’re going to talk about three ways to crush it right now in real estate investing. So look. Step number one is there are so many things that you can make money in in real estate investing, it’s ridiculous. You literally can throw a rock and you’re going to hit at least ten different ways that you can make profit in real estate investing. Matter of fact, here’s the rock and here’s all the ways that you can make money in real estate investing. We’re only going to talk about three.
The first thing that I want to discuss with you is this. There is rehabbing. You can make money fixing and flipping. Everybody’s heard of that before. There is also, let’s talk about rentals, property management. You fix it and then you want to keep it, or you just want to keep it in itself. Then there is the easiest way that even a blind man can do, and you don’t even have to . . . matter of fact, I’ve met people with brain issues, no exaggeration. We have a student in Ohio. His name is Nick. His last name, I’ll keep it disclosed. But he literally has half a brain because a disease happened in his head that literally he only has half of it, and he makes over $100,000 doing this last thing. It’s called wholesaling. Now, again, he’s a very aptitude person but literally somebody with half a brain, think about this, is wholesaling and making six figures. So if he can do it I know that you can do it, and he’s an amazing individual in Ohio crushing it.
So anyway, a couple points I want to talk about are this. When it deals with the rehabbing, and obviously there are so many courses, there are so many things about rehabbing, all I would say is this. If you’re a beginner and you just started in real estate investing and you’re just like, “Oh, my goodness. I want to buy a property. I want to start rehabbing. I want to do everything,” I am going to tell you the best advice that you can . . .
Please, pause it right now. Take a deep breath. Write it down. Probably tattoo it on your forearm if need be. But this is going to be the greatest advice that anybody’s ever told you about if you’re a beginner and you want to start rehabbing. Here’s the advice. Don’t do it. Don’t do it. My first deal I ever did I lost $17,500 in rehabbing on my first deal. You know why? Because I had no idea what the hell I was doing at all.
Now, moving back, how would I do it? The funny part on that deal, I had the opportunity to sell the contract day one that I purchased it for $5,000. That’s called wholesaling. You get a piece of paper. Here it is. Both parties agree and you sign it, and then you sell that sheet of paper for a $5,000 profit. Now mind me, I was doing real estate investing part-time while I was still in the military. So check this out. $5,000 is three months of my pay.
Let’s think about this real quick. Again, it doesn’t take a lot of work. So let’s think about this. Ninety days of work in the military and I was working 12-hour days. Ninety and 12, that adds up to a lot of hours, and I would’ve made that in one day of work? Do you know what I told that guy when he offered that to me? I mean, think about it. I told him the only thing that you could ever tell
when it comes down to actually making money that fast, I said no.
You know why? Because I called the genius, the person that I believe in the most, my mentor at the time who knew everything about real estate investing because he’s bought and sold one property in his lifetime, the only person I could afford. I called my dad and I said . . . this is 15 years ago, “Dad, this guy is offering me $5,000 for this property. What do I do?”
You know what my dad told me? He said, “Look, son. If he’s going to give you $5,000 right now, this is what you need to do. You need to give him back that money because you know that you could make more money if you rehab it.” I said, “Dad, you’re right. He’s trying to screw me.” So what I did is I literally said no to the deal and I didn’t take the $5,000. I attempted to rehab the property and I lost, no exaggeration, $17,500 on my first deal I ever did, and I’ll never forget it, 6614 Mascotte in Tampa, Florida. If you ever want to look it up, you can make fun of me. It’s fine.
I just wanted to share with you that quick little story. I’ve got about 30 more seconds. I want to share with you this. When it comes to rehabbing, no, please, if you’re a novice don’t do it, please. Property management, not yet. Wholesaling is the way to go when you first start off. So if you can get as much training as possible in wholesaling, if you could listen to some of the videos that we’ve got about wholesaling, that’s where it’s all about. You’ve got to stay true. Get a small win. Get one breakthrough, and then you can accomplish the other items that you want to do.
But you’ve got to get that breakthrough. You’ve got to get that one person that you talk to on a lead intake form or your first buyer, or your first seller. You’ve got to get the small wins. That’s one thing that you’ve got to do. So hopefully you got something out of this. My name is Franklin Cruz, “Three Ways of Crushing It”. Find me on social media if you can, or wherever the heck else. Obviously, when it comes down to my hair, please don’t make fun of it. It’s actually real. Anyway, talk to you guys soon. Bye.
Mike: VirtualStaffNow.com is the leading virtual system provider for real estate investors. As busy real estate investors there’s nothing more valuable than our time, and VirtualStaffNow.com not only helps you find the right real estate virtual system for your business, they train them on an ongoing basis, manage them daily, and make sure they’re staying productive and effective. And in the event they’re not the right fit or need to be replaced, they handle that for you, too. Whether you need 1 or 100 virtual assistants for your team, start the process right now at VirtualStaffNow.com.
Please note the views and opinions expressed by the individuals in this program do not necessarily reflect those of FlipNerd.com or any of its partners, advertisers or affiliates. Please consult professionals before making any investment or tax decisions, as real estate investing can be risky.
Are you a member yet of FlipNerd.com, the hottest real estate investing social community online? If not, you can join for free in less than 30 seconds and get access to hundreds of off-market deals, vendors in your market to help you in your business, and you can start networking with thousands of other investors just like you. Get your free account now at FlipNerd.com.
Please check out the FlipNerd family of real estate investing shows where we host four great ongoing shows at FlipNerd.com/shows or simply search for FlipNerd in the iTunes Store.
Franklin: Hey, guys. How are you doing? My name is Franklin Cruz. I’m actually going to be teaching your classroom today, so don’t skip, don’t press pause, don’t do any of that stuff. Trust me. I promise you this tie was not for make-believe. I’m going to grab your attention and hold it tight because we’re going to be talking about crushing it.
Mike: This REI Classroom real estate lesson is sponsored by VirtualStaffNow.com.
Franklin: So a little bit about me just before we get started. I have a military background so if I am very demanding I apologize in advance. You have to talk to my wife about this. Anyway, but I spent seven years active duty in the United States Army. I served in Korea for a couple years. I was an Army recruiter, served in Operation Iraqi Freedom, and then I found the light and I said, “I’ve got to be a real estate investor.” So for the last 15 years I’ve been a full-time real estate investor.
I’m Director of Mentorship at Clever Investor. That is an amazing education company, and also we mentor people throughout the country. If you ever want to find out more information about me, it’s going to be somewhere around this site that you’re looking at. But anyway, let’s get this party started. Now I’ve got five more minutes. That’s it. So we’re going to talk about crushing it right now.
Yes, and this is a real-live chalkboard bringing back bad memories, but it’s okay. So again, we’re going to talk about three ways to crush it right now in real estate investing. So look. Step number one is there are so many things that you can make money in in real estate investing, it’s ridiculous. You literally can throw a rock and you’re going to hit at least ten different ways that you can make profit in real estate investing. Matter of fact, here’s the rock and here’s all the ways that you can make money in real estate investing. We’re only going to talk about three.
The first thing that I want to discuss with you is this. There is rehabbing. You can make money fixing and flipping. Everybody’s heard of that before. There is also, let’s talk about rentals, property management. You fix it and then you want to keep it, or you just want to keep it in itself. Then there is the easiest way that even a blind man can do, and you don’t even have to . . . matter of fact, I’ve met people with brain issues, no exaggeration. We have a student in Ohio. His name is Nick. His last name, I’ll keep it disclosed. But he literally has half a brain because a disease happened in his head that literally he only has half of it, and he makes over $100,000 doing this last thing. It’s called wholesaling. Now, again, he’s a very aptitude person but literally somebody with half a brain, think about this, is wholesaling and making six figures. So if he can do it I know that you can do it, and he’s an amazing individual in Ohio crushing it.
So anyway, a couple points I want to talk about are this. When it deals with the rehabbing, and obviously there are so many courses, there are so many things about rehabbing, all I would say is this. If you’re a beginner and you just started in real estate investing and you’re just like, “Oh, my goodness. I want to buy a property. I want to start rehabbing. I want to do everything,” I am going to tell you the best advice that you can . . .
Please, pause it right now. Take a deep breath. Write it down. Probably tattoo it on your forearm if need be. But this is going to be the greatest advice that anybody’s ever told you about if you’re a beginner and you want to start rehabbing. Here’s the advice. Don’t do it. Don’t do it. My first deal I ever did I lost $17,500 in rehabbing on my first deal. You know why? Because I had no idea what the hell I was doing at all.
Now, moving back, how would I do it? The funny part on that deal, I had the opportunity to sell the contract day one that I purchased it for $5,000. That’s called wholesaling. You get a piece of paper. Here it is. Both parties agree and you sign it, and then you sell that sheet of paper for a $5,000 profit. Now mind me, I was doing real estate investing part-time while I was still in the military. So check this out. $5,000 is three months of my pay.
Let’s think about this real quick. Again, it doesn’t take a lot of work. So let’s think about this. Ninety days of work in the military and I was working 12-hour days. Ninety and 12, that adds up to a lot of hours, and I would’ve made that in one day of work? Do you know what I told that guy when he offered that to me? I mean, think about it. I told him the only thing that you could ever tell
when it comes down to actually making money that fast, I said no.
You know why? Because I called the genius, the person that I believe in the most, my mentor at the time who knew everything about real estate investing because he’s bought and sold one property in his lifetime, the only person I could afford. I called my dad and I said . . . this is 15 years ago, “Dad, this guy is offering me $5,000 for this property. What do I do?”
You know what my dad told me? He said, “Look, son. If he’s going to give you $5,000 right now, this is what you need to do. You need to give him back that money because you know that you could make more money if you rehab it.” I said, “Dad, you’re right. He’s trying to screw me.” So what I did is I literally said no to the deal and I didn’t take the $5,000. I attempted to rehab the property and I lost, no exaggeration, $17,500 on my first deal I ever did, and I’ll never forget it, 6614 Mascotte in Tampa, Florida. If you ever want to look it up, you can make fun of me. It’s fine.
I just wanted to share with you that quick little story. I’ve got about 30 more seconds. I want to share with you this. When it comes to rehabbing, no, please, if you’re a novice don’t do it, please. Property management, not yet. Wholesaling is the way to go when you first start off. So if you can get as much training as possible in wholesaling, if you could listen to some of the videos that we’ve got about wholesaling, that’s where it’s all about. You’ve got to stay true. Get a small win. Get one breakthrough, and then you can accomplish the other items that you want to do.
But you’ve got to get that breakthrough. You’ve got to get that one person that you talk to on a lead intake form or your first buyer, or your first seller. You’ve got to get the small wins. That’s one thing that you’ve got to do. So hopefully you got something out of this. My name is Franklin Cruz, “Three Ways of Crushing It”. Find me on social media if you can, or wherever the heck else. Obviously, when it comes down to my hair, please don’t make fun of it. It’s actually real. Anyway, talk to you guys soon. Bye.
Mike: VirtualStaffNow.com is the leading virtual system provider for real estate investors. As busy real estate investors there’s nothing more valuable than our time, and VirtualStaffNow.com not only helps you find the right real estate virtual system for your business, they train them on an ongoing basis, manage them daily, and make sure they’re staying productive and effective. And in the event they’re not the right fit or need to be replaced, they handle that for you, too. Whether you need 1 or 100 virtual assistants for your team, start the process right now at VirtualStaffNow.com.
Please note the views and opinions expressed by the individuals in this program do not necessarily reflect those of FlipNerd.com or any of its partners, advertisers or affiliates. Please consult professionals before making any investment or tax decisions, as real estate investing can be risky.
Are you a member yet of FlipNerd.com, the hottest real estate investing social community online? If not, you can join for free in less than 30 seconds and get access to hundreds of off-market deals, vendors in your market to help you in your business, and you can start networking with thousands of other investors just like you. Get your free account now at FlipNerd.com.
Please check out the FlipNerd family of real estate investing shows where we host four great ongoing shows at FlipNerd.com/shows or simply search for FlipNerd in the iTunes Store.
