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In this episode, you’ll discover:

  • The single best way to mingle with and get advice from the wealthiest real estate investors in your industry (1:15) 
  • How buying too many properties quickly suffocates your cash flow and brings you to the brink of bankruptcy (2:42) 
  • Why embarrassing yourself can revive a business on life support (3:21)  
  • How maxed out credit cards and not making payroll can supercharge your business’s growth (3:43) 
  • Why freezing cold weather puts buying houses on “easy mode” (even from tough sellers) (6:55) 

Hey! Want to do a deal? Need my help? No cash to make an offer? Send me a quick text at 440-389-3883 or shoot me an email at REbroker216@gmail.com and we’ll work together to get you the deal. 

Read Full Transcript

Welcome to Cleveland Real Estate Investor. On this podcast, you'll hear about every aspect of the real estate investment business. You will talk to your rockstar investors about their businesses, how they built them, where they came from, and where they're going. Who am I? I'm Joe Lieber and I've made millions of dollars from the real estate investment business over the last 20 years. If you're ready to hear the good and bad from a guy who's learned this business from the school of hard knocks and get educated by some bad ass entrepreneurs, then put your helmet on, strap on your chin strap. Let's ride.

What's up guys. Gals. Thank you for tuning in today. Appreciate you. Appreciate all you for being here and appreciate all the great emails and feedback. I get very grateful for your QC motivated. Thank you. So today, well here, before we get started and talk about today's show, I want to tell you a story about, you know, I'm in these masterminds, I'm in a couple of different mastermind groups. And for those of you who don't know what a mastermind is, a mastermind is basically, it's a group of people that get together in your business, whatever it may be. And it's all like the top achievers, right? It's the best of the best that joined these masterminds. And because they're so expensive to join, you gotta be the best, the best that before to go in them. And they should have these for every business, whether you're a dentist or a doctor, an accountant, a lawyer, or own a restaurant, whatever you do, they should have these.

(01:48): Now I'll tell you if you're in one of those businesses, you should really consider starting one. I even have a friend who has one for dentists. He has one out of Dallas. It's called freedom founders. His name's Dr. Phelps. He's a great guy. And he runs a mastermind for dentists. And these guys I've been to a couple of their events. I came in as like a, a specialist to talk about real estate and things like that. Dr. Phelps runs this thing and these dentists, they may mastermind talk about their practices and like how to grow them and challenges they're having with associates and how to hire associates and how to retain them and really cool stuff like that. I think every business should have that, but I'm in like three masterminds right now, real estate related masterminds. And we had a guy recently posts in our private Facebook group.

(02:40): And no one can see that he's having some challenges in business right now. It's not going well, it's going real bad. Like on the brink of going out of business, which is crazy to hear that from someone who carries themselves on runs at such a successful business, but he's, he's definitely, he's Kevin. Some growing pains really is what's going on. He is growing too fast and it's depleting his cash. And you don't see that very much. You don't see the real authenticity from people, even in the masterminds. You know, you get some ego stuff going on. You're supposed to be real and authentic. And a lot of guys are, but usually they don't throw it out there. Like this guy is, I mean, he's just pouring his heart out and it's so cool to see that it's not cool that he's having a challenge in his business.

(03:24): It's cool that he's asking for help. And he's smart that he's asking for help. He's asking the absolute best of the best in his business. What the hell do I do now? And the funny thing is, is as I read through these posts that all of us are giving him. Every one of us has been through the same stuff. We've all been there where our credit card gets maxed out. We've all been there. We can't make payroll going, I gotta make payroll right. Friday, what am I going to do? And if you haven't been there, then you're lying or you're not playing hard enough. That's really the bottom line. But I love how the guys really came together

(04:09): And gave him some really sound

(04:11): Advice, man, about, you know, looking at his expenses and trying to cut what you can and doubling down, making employees do another person's work and having to let some people go in order to be able to make payroll. And there are some really genuine things are there. I know all of us has experienced. I know a lot of us spend money on expenses that are freaking silly, $300 a month lease on a Xerox copier like dude, you know, I had one of those on one point about 10 years ago, like you can't do that. Like you gotta go buy a nice ink jet printer, copy, scan, whatever the hell you call it for 500 bucks cash, you can't lease one. It's too much. You know, especially if you're newer in business and you're getting things rolling. You just can't have those expenses. Sometimes a lot of foolish things that go on to all those extra softwares, you don't use that extra office staff that you probably really don't need.

(05:06): You got to run lean and mean sometimes in business, especially in business like this, you know, you really have to keep an eye to it. But I appreciate his authenticity because you're never going to get better unless you open up say, Hey man, I'm at this mastermind, I'm paying big bucks to be here and I'm having a real problem. What in the hell am I going to do? And that's how you get better transparency, you know, on this podcast, I've heard a lot of you say, Joel, you're so raw and just uncut. And I am. It's just what it is. Whether it's good or bad. This is the truth. This is my personal experience. This is my life. And this is what's happening to me. Whether it's or good. This is the reality. So I liked that. And I wanted to share that with you so right onto the show.

(05:58): So everybody wants to, so God, I love that. It's so true, Cleveland, right? Talk to my buddy today have two buddies. Today. One is in Fort Lauderdale. Now today's December 17th. So this show won't come out for probably another month, but today's December 17th. I'm talking about buddy in Fort Lauderdale, 85 sunshine, walk around with shorts on talking to me though that want to put his convertible top down. Cause it's a little hot. Another buddy is in Hawaii lives there. Same thing he's talking to me in the Palm trees are swaying and we're having a conversation. He's like, that's different because like their mood is different than mine. They're like excited, no taking over the world today. And one of them was going to Jim and another one, he actually hosts sales houses in Cleveland, but he lives in Hawaii and he he's excited. He's got like motivation.

(06:51): Like it's exciting. And I'm a motivated dude too. Don't get me wrong. I wake up every day to kick it. Yes, but it's 30 degrees. It's snowing out here right now. Mess it up. My shoes, walking in the salt and the all the ground is wet. You that slight sore throat, you know, that you wake up with. Cause so cold here, it's different, right? The vibe is different. It's been overcast for at least two weeks. I have not seen the sun and it can drain you. It can drain the energy right out of you. And this is why I get these calls from folks. Especially this time of year, they want to sell. They're just done. They're done. They're like I got the heat bill, the pills $210. Last month of the house is vacant. Haven't had tennis, not paying the water bills or grand taxes are coming due.

(07:43): Next month they are done with these houses. They didn't want to go over to them. I was in a house that I just bought today at North Ridgeville and I'll have the heat turned on yet. So I'm standing there with my project manager having a 25 minute conversation. He's just talking finally. I'm like, dude, I cannot take this anymore. It's like 18 degrees in this house. Let's get the hell out of here. Like I don't even care. Like just do whatever. Pick whatever color carpets you want. As long as I have to think about it, we're fine. But a lot of that comes from because their market conditions, you know, it's freezing. I'm looking outside of the house that has algae all over. It needs to be power washed. I'm thinking, how in the hell are we gonna power wash the house? When by the time we get to this, it'll be January.

(08:25): January is like the, the coldest month of the year. How are we gonna get this stuff done? What are we going to delay? Let's do all this inside stuff. And just plan on in April and plan on may listings. I mean, it's totally different. And what are the carrying costs like on this now, now you've got a building carrying costs and you have to like pass on deals and stuff. Because if you buy them at the wrong time of year and there's heavy carrying costs, you can't buy that stuff. The time at perfectly, everybody wants to sell these houses. Everybody wants to sell, go to the MLS, look at anything. Over 60 days on market, they want to sell it's a week before Christmas fire, some offers out there, get something and then call me because I'll buy it. If you don't want to. I was saying you can get good deals right now.

(09:10): That's the cool thing about this though. Right? They all want to sell. They don't want to hold this stuff. When people get in their mind, like I meet a lot of sellers, right? And when you're talking to a seller and you know, you make an offer to deal on a house while it's going through escrow, they spend that money. They mentally spend it already. Hell. Some of them actually do spend the money Bishop to the closing new car. I'm like, Whoa, what do you do? Oh, I knew the check was coming. Holy smokes. When bought a new car, huh? Someone mentally spend it. May I, as soon as this deal closes, I'm getting new windows at my house. I'm getting a roof. I'm taking a vacation. I'm paying off my discover card also makes a good opportunity to renegotiate. If you get into something, I see a lot of guys do this.

(09:53): I don't think it's a bad thing. I think it's very fair. A lot of times sellers have a problem becoming realistic with what they're getting for their houses. You might lock something up at a hundred grand knowing well, you want to pay 90, have your inspection, give them time to mentally spend that money. And you'll find things that you didn't find with your own set eyes. When you looked at it, you can prime renegotiate a better deal because they want to be done. It spent two, three weeks. They just want to be. They want to sell. Everybody wants to sell. They have an unwanted house they're done. And the market's doing so good around even, even regular retail deals. You know, they want to sell. They want to move up. They want to move down. They want to move sideways, whatever everything's happening right now, there are deals to be had out there.

(10:36): You guys should be finding these. You should be finding targeted lists. People that have triggers and buying these houses. I'm telling you, they want to sell more than you think. We've got a guy jerking us around in a Parma house right now. You know, trying to hold out. He goes, I get 90 grand for this power. Bungalow is too much like you're out of your mind. Five days passes at 85, 10 days passes. Now at 80. Supposedly has a wholesaler. Here's a great trick too. By the way, he has got a wholesaler giving them ADGs for it. Like he's never going to close dude. And people don't know like what a wholesaler is, nothing bad against your wholesalers. Hey, I respect you. I buy from you. So please call me. But those are, it's not going to close and 80 grand. It's not the best deal, right?

(11:22): Men are also going to try to solve for 90. That's getting a little bit on the, not so sexy side of the deal. But I said to him, I go, Hey, listen, tell your wholesale. We'll give you $2,000. Non-Refundable earnest money. Then you'll see if he's really going to close. Guess what uncle Joe is, right. Again, baby. Can't given to G's earnest money. He's like, Ooh, what? Yeah, exactly. Like, so come on, come to daddy. Let's go. I got 75, all cash. My, how the tables have turned, huh? Just like that. Great negotiating tactic. So now I got my acquisitions manager going over there to lock this deal up at 75. That'd be good. This will be going on for a few weeks now. But that's how they go. That's only go stations go sometimes, but it'll be good. And it's a good opportunity. He wants to sell.

(12:08): Just see this thing is a Parma came in and they were like, you got to fix the vinyl siding corner cap came off and the front steps into be tuck pointed. Nobody wants to hear that this time of year, that guy can't do it. And then if you don't know somebody and you're calling around Holy smokes, he didn't get filleted. I mean, call a real vinyl siding company out of the, whatever that coupon book that comes around in the mail, JB dollar or whatever. I'm like they're actually in business, but you know what I'm talking about. You Clevelanders go pick up that book and call someone for vinyl siding, do corner caps for you. It'll be unbelievable. All right guys, look, I got to cut this show a little short right now. I get ice or something fall off my roof. My kids are running in my office, so Hey, thank you for tuning in. Appreciate you guys and have a wonderful day.

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