Steve Trang interviews real estate veteran John Burley about preparing for market uncertainty in a politically charged environment. Burley shares insights from 45+ years of investing, emphasizing the importance of controlling emotions, raising capital during good times, and positioning contrarian to market sentiment. Listeners learn proven strategies for building wealth through disciplined investing and understanding market cycles.
Major market crashes occur every 60-90 years historically, making another crash like 2008 statistically unlikely until 2068-2098
Raise capital during good times when fear is present - it becomes nearly impossible to secure funding during actual market downturns
Only buy properties that cash flow from day one without relying on appreciation, rent increases, or low interest rates to make deals work
1:55:06Josh Stech, founder of LendingHome and Sundae, shares how he built a billion-dollar real estate lending company in just five years, scaling to 14% market share. He discusses the venture capital playbook, hiring at scale, maintaining culture with 500+ employees, and his transition to solving the property sourcing problem for investors through Sundae's marketplace model.
1:47:49Tommy Mello, founder of A1 Garage Door Service, shares his journey from massive debt to building a billion-dollar company. He discusses critical business lessons including the importance of systems, hiring for attitude over experience, and how he scaled from a local garage door business to a nationwide operation that sold for $570 million.
Get a free AI-powered review of your sales calls. See exactly where you're losing deals and how to fix it.
Get notified when new episodes drop, plus a free AI call review.
Control emotions to master money - when emotions are high, intellect is low, leading to poor investment decisions
Position contrarian to market sentiment - when everyone wants out, get in; when everyone wants in, get out
”“2% of the people I meet on the planet are extraordinary or exceptional at what they do, and that's a choice. That's what people don't wanna hear. That's a freaking choice. You have to pay the price to be great.”
”“When your emotions are up, your intellect is down. The person who can master the emotions masters the money.”
”“Right now is just about the easiest time it's been to raise money in my entire career. All you need to go in because there's so many people with money.”
”“I don't know anybody who got rich quick in my entire life. Most of them did it in eighteen months to three years. Some of them took five to seven years. Most did it. If you're gonna do it, you do it.”
23367 words
John Burley: 2% of the people I meet on the planet are extraordinary or exceptional at what they do, and that's a choice. That's what people don't wanna hear. That's a freaking choice. You have to pay the price to be great. That's not easy, and a lot of people choose not to.
We have a lot of students. They have a 100 houses and they get to 30 or 40, and, you know, they're making $15 a month. That's more than they ever made, and they've got half 1,000,000 in the bank. Like, yeah, this is good enough. I'm good.
I'm good. 18% are what I call good to great. We're a realtor. They're making a couple 100,000, 400,000 a year. They're really, really good.
They're not the top echelon, but they're really, really good. The other 80% is like, okay. They're there. Two, they really, really suck at what they chose to do, and I just kinda lump them all together. 2% is what you're teaching people to do.
They walk in a place other people don't do. And what's amazing is many of them, not all of them, but many of them choose to become that leader, that shining example. Who can be that next great one? Who is one of those names that just mentioned? Who have protege after protege after protege who are in the top 2% of the world oldest?
Steve Trang: Hey, everybody. Thanks for joining us for today's episode disruptors. Today, we got my good friend John Burley with Burley and Associates, and he's another legendary figure in the Phoenix market. And today, we're gonna be talking about how to prepare for this upcoming politically charged market. Now, guys, I'm gonna mission to create a 100 millionaires.
Information on this show alone is enough to help you become a millionaire in the next five to seven years. If you'll take consistent action, you will become one. And, guys, if you get value today, please share this episode. That way we can tell YouTube, we can tell iTunes that this is good stuff, and we can reach more people. And that way we can create more millionaires.
You ready?
John: Yeah.
Steve: Alright. So it's been about a year since you were last on the show. And, it's been an interesting environment, and we've got to hang out more. We did an event together. We've got breakfast and lunch together.
John: Yep.
Steve: And one of the things that I really admire in our conversations is that you are constantly on the street talking to people, talking to builders, talking to brokers, talking to anybody and everybody about what's going on, what are you seeing, what are you hearing. Can you talk about that?
John: Yeah. I mean so it's really, really exciting times. Mhmm. And there's lots of opportunities out there, but there's also danger out in the water. Certainly, the number one emotion in the market.
And I'm a big, I'm really, really big as a fundamentalist and looking at the emotions in the market because markets don't move logically. Mhmm. You know, jeez, the stock market moves up and down. We had a couple days where it went down. There's no logic behind it.
And then, you know, these talking heads talk about the logic. And I really, really look at the emotion. And, you know, last several years, even with the economy good at times, it's always just been fear. Mhmm. I mean, people are just scared to death, and I'm and I'm in the street because I'm I'm not really as you know, and and you're kind of a similar clock to me.
I'm not really the normal guy who does education. We do four events a year is all. I formed a private equity company in 1989. I'm a real estate guy. The difference I looked at is coming from Wall Street.
The world of Wall Street is that rather than trying to do it the old way, which I learned like everybody else, the no money down, the sub two, it and it's all really cool exciting stuff, but it's not how real businesses operate ever, you know. And so I'm more the, you know, raise the money first and then do it. We've done almost a billion dollars. We're long long term hold guys to big portfolio. So we're just in the street, You know, doing deals.
And and just a huge emotion of fear out there. Unsurety like crazy. The the doom and gloom guys and gals. And boy, if they're ever right, let me know. You know, they're, you know, we were talking just a minute ago.
I mean, I have friends who I mentioned the name who literally have been talking about the decimation of America and the great crash since the eighties.
Steve: I wasn't I'm in a, this other mastermind, and the guy made the comment. I think he was was it Peter Schiff? Is that the one who's always down? Who's the guy who's always down on the like, we're we're one crash? We're
John: Well, Harry Dent. Yeah.
Steve: Well, there's there's another guy who's really big on Twitter. He's got, like, a, podcast and everything. But he's like, yeah. Like, he's been right. Like, he's predicted 23 out of the last four recessions.
Right? Right. Just every year. Oh, this is the year.
John: This is the year. This is the year. And then
Steve: The one time it's right, I've been calling it.
John: I've been calling it. Yeah. And and and then what's interesting too is even if they're good at calling it, it's like, okay. Well, then what do I do when it happens? Mhmm.
Oh, I need money. Well, you've been acting like I didn't need money to get rich. Now if the crash occurs, I need money more than ever. And then they got like, oh, well, you just do the sub two deals. It's like, okay.
I've been around. Mhmm. I started investing in real estate in '79. You know, I had one of the largest portfolios in the state in 2008. There was 10 operators that were 500 to 2,000 houses.
Steve: Mhmm.
John: All the others went bankrupt. They all went under. It was a combination of reasons. And it's like the houses were 150, not $3.50, but they were a $150,000, and I was buying REOs by nine for $40,000 from places like Wells Fargo in bulk. So if I'm buying Oreos for $40, I ain't about doing no money down sub two deals for a $150,000.
They're they're with 500 a month, native cash flow, you know, so it's like, you know, if there really is the big downturn, there really is the big crash, which I I view to be highly, highly unlikely simply because of the exact evidence that these guys quote. So, you know, markets always, equity markets have a tendency to to trend upward. And they have, especially, real estate, which is what most of us love. Real estate has trended upward my entire life with four normal cycles. It goes through growth, and then we have periods of prosperity, and then you have recession and depression.
Depression is if a politician says recession, you're in a great recession. Let me help you out. That was a depression.
Steve: They call that a recession?
John: They called that the great recession. But The United States Of America, in her history and we have charts going back to 1765. There's actually charts globally that go back six thousand years economically. The United States Of America has had four great crashes. That's it.
We had the, 1791, which, you know, that was kinda like, okay, after the war. And and literally, our first three presidents were were destitute. Two of them were asset rich, but cash and cash flow poor. I mean, they lived off of friends because they put everything they had to get the country that we have today. Mhmm.
You know, then we had 1872. So, again, a war. Mhmm. Civil War, you know, so that and that's understandable because, you know, both sides were bankrupt and, you know, it was it was yucky. And then the next one was 1932.
Mhmm. I bet everybody called it '29, but the it really was '32. And then the next was 2008. And if you look at these, here's what they have in common. It wasn't a war because thirty two and eight weren't wars.
They happen every sixty to ninety years. And and they're coinciding with these. We've got these little ups and downs. And then usually, when you have the huge growth like the roaring twenties, then the comedown is correct because it's emotions, not logic. I mean, stuff never should have gone as high as it did, today or in '8 or in '31 or wherever it was.
Steve: In the roaring twenties.
John: It was
Steve: like, that's when everyone started investing in the stock market.
John: All leveraged all no money down. You know, the the problem with no money down is if something goes wrong, you got no money. I mean, you know, and you're over you're overleveraged, you're overextended. So if you look at history, every sixty to ninety years like clockwork, we have a great crash. The last one in 2008.
Now we don't need a calculator. Only 02/2018. Yeah. No. We're not at sixty to ninety years.
So could we have another one? Yeah. Highly, highly unlikely because it's never happened in America's history. And people are like, well, that's too short a sample. And I love the chart guys and gals who are suddenly like seventeen sixty five is too small of a chart.
You go back to what's now The United Kingdom, they go back to eleven hundred and damn, it was sixty to ninety years. You go back to ancient Rome, which we now call Italy, going back four thousand years. You go back to Greece. You go back to the Middle East. It it's, like, consistent.
And what it is is not that people it's not that history repeats itself. It's that the children and the grandchildren forget the stories of their elders. So and I don't know why. My grandfather was born in 1898, very storied life and was extraordinarily poor. Fought for forty nine years for the American in the Navy and actually went in as a as a runaway 16 year old to a three star admiral and fought in one, two Korean nom.
It wouldn't happen again today. Different times. And that was back when when men with stars died in combat, which today, that's extraordinary rare. They're not in those positions nor should they be anymore. Is, he shared with me as a young man in the sixties and the seventies so clearly what the Great Depression was like and what it was that I remembered.
So I and I can remember I owned a brokerage in on Black Monday in '87, you know, October '87. That was a bad day. Individuals weren't on computer electronic trading yet.
Steve: Stock brokerage?
John: Stock brokerage. Yeah.
Steve: It's unclear because a lot of people
John: on here are upset. Yeah. The Black Monday was '87. History repeats itself, folks, because we don't pay attention. And, I literally saw portfolios wiped out by 40%.
Mhmm. Stops not you know? So you you bought for a 100. You have to stop at 80, and it slipped to 25 before it was sold. It you just fell that fast.
And the only thing that was happening with any speed at all was institutional Wall Street's own money trying to protect themselves and their biggest clients. Mhmm. And, yeah, I remember talking to a a guy who was, like, 80 years old. It it was it's been amazing for me, but the last decade's been kinda sad in some ways. And it was sad because most of my mentors, most of my friends in life from my twenties were twenty, thirty years older than me.
Mhmm. Economically, just my peer group, we didn't have a lot in common. So I'd have buddies. It's like, yeah. I'd love to go Alaska fishing and let me talk to my wife.
And in five years, they would go once. Mhmm. But we were going on two or three of these trips every year. So I was going with men predominantly in that era who were older because that's who had the money to go. Mhmm.
And so there was a lot of wisdom. So it was nice, you know, if I have a little hiccup in my marriage, which every marriage does, I don't go talk to my buddy who's my age, who's been divorced three times. I talk to my friend who's 75 years old, who's been married for fifty two years. Yeah. Yeah.
A little bit different. And so I remember talking to this one guy who was a really big stock stockman. And in '87, it's like, we're a little '32, '42, '52, '62, '72, fifty seven years. It's a little soon. It's just a great one.
Because he was alive in '32, and he remembered '32. He wasn't baby. He was alive and a vibrant man. He's like, we we haven't crossed the sectors enough, John. He goes, I don't think it is.
But, certainly, we pulled back, and there's a captain of the ship. I mean, there's a storm out there. You need to be aware of that and be cautious. You know, and then I remember, you know, in the early two thousands, just like, okay. When?
Because we are now here. And a lot of people thought I was like this oracle because I wasn't like everybody other big in Phoenix. I didn't go under and it was it was just you know, I've talked about Steve. It was just fifth grade math, man. The houses were about $150 with insurance.
It was about $1,400 a month was the PITI, and they ran for $12.50. Okay. A 10 year old knows you don't buy this house. A 10 year old gets it. Mhmm.
Now adults were lining up and doing them no money down and all the funny money era. So we just we didn't market time with the market time is out. We just got out. We weren't buying here. We were buying in some other states.
Just cash flow plays long term. And it
Steve: makes sense to invest.
John: Yeah. And build it didn't make sense and building the war chest. I think one thing that if you look at the the great entrepreneurs and you look at the great investors, they're not greedy. And, you know, they were like, you know, look. If I can get out within if I can get out within twenty percent of the top and get in within 20% of the bottom and not try and grab those extremes, I'm gonna be so far ahead of the rest of the world.
Mhmm. Because most try and time and miss because you can't market time. Nobody knows.
Steve: Right. You
John: know, anybody out there who's, I'm sorry if this upsets people. And if it upsets you, it's you who are upset, not me upsetting you. Anybody who says they know what the market is gonna do. Let me think. Okay.
I got the two nicest words I could come up with would be they're a trickster or a fool. Mhmm. Because nobody knows what the market's gonna do. From my belief, God and Jesus Christ do. And I'm close, but they don't talk on the subject.
And I always at every event I do, I always go, hey. You know, and if and if God or Jesus is telling you, you know, catch me at the break. And so far, I've only met crazy people at breaks, because nobody knows.
Steve: Right. So you talk about you like to talk to to people because, emotions you wanna measure the emotions. So what does the emotions tell you then? Like, maybe like, if if if everyone's been kinda fearful for the last couple of years, what do you do with that information?
John: A great question. I love your show. I love watching it, and I and I love being on it. Great question. So here's the deal.
In 2010, January '10, at that point, the stock market did it last meltdown. President Obama was doing everything he could in his power to to stop it from happening, but it was doing the exact opposite because he was getting on the on TV twice a week or so and telling us everything's okay and calm down. Okay. When the president of The United States gets on TV and tell you is everything okay to calm down and it's not a war, panic button gets pushed. Mhmm.
So in '2 by 2010
Steve: Was that was that when he was saying this is the new norm?
John: New all kinds of different things. And he was trying his hardest. And every administration, regardless of party party affiliation, if you will take off your own blinders, every administration has done good things and bad things. Mhmm. You know, from our everybody's got their own personal bias, and they think theirs is the best, and their guy is the worst.
It's not the reality, if you take your blinders off. And I tried I have my own biases, but I try and take my blinders off when it comes to money and understanding it. So by 2010, you had an entire generation lose one third of everything they owned. Most of those were psychologically and emotionally scarred forever on a subconscious level, and they never overcame it, and the vast majority of them never will. Now I'm not talking about a lot of you guys and gals listening right now.
I'm not talking about hardcore, what I call the level five in investor who's willing to step in and step in and step in and get beat up and take losses. I'm talking the regular people. And look, let's get into the truth here. 90 plus percent of the people in America didn't get rich in real estate. That's a crock.
There's no basis for it. There's no evidence. Do a large number of wealthy people invest in real estate? Yeah. After they got rich.
In my life, I've been privileged to have as capital investors over 1,000 people who families that were worth 10,000,000 to over $1,000,000,000, including go back in the eighties when that was a boatload of money. It still is a lot, but that was really a lot. They make their money in real estate. They had high paying professions or they owned a business. And, yes, a lot of their wealth was within the real estate from their manufacturing plant in their personal home.
And then later, they diversified with someone like me and did a placement, but they did not make their money in real estate. It's a crock.
Steve: Mhmm.
John: It's like it's the exception, not the norm. And so in 2,010, all these people who were worth a half million to 10,000,000 plus lost everything in their minds. And they didn't really lose a third of everything they had ever made everything, you know, and they lost a third of their portfolio, which was me. Realize. Yeah.
Tenant yeah. But but the psychology and emotion. So deep down, they are so afraid of losing that I regularly meet with very wealthy people who ten, twelve, fifteen years after eight, they still have never reentered the market. Mhmm. I mean, they were in sitting in money markets and CDs and treasuries for fifteen years.
Steve: They missed out on so much.
John: And they missed out, and they don't understand why. They always had this laundry list. Why I need investment at boom boom boom boom boom. And, you know, and I don't say this to them directly because it's not my job. I'm not here to do five years of therapy with them.
The reality is the subconscious fear is so great that they're not able to pull the trigger. And this is where, you know, Wall Street and financial planning and financial planners and so many people missed the boat so much. And so many of you who asked for money don't understand. You're you're talking about all the wrong things. You're talking about your amazing rate of return and all this and rate of return and capital.
These are all red flags. I could lose my money again. Mhmm. You know? So we talk about safety and security, the things they need subconsciously to make a decision.
And then they'll move forward. We wake the money up. The money's placed and it moves forward. So we still the vast majority of people who have money today who are over 50, 55 years old, which is you know, sorry if you're younger, but, you know, the majority of people who have money who are over 60 years old. That's just the truth.
Because it takes a long time to build it plus then have the wisdom to actually keep it. Mhmm. Because you and I both know lots of people who made a bunch of money in real estate and other things and pissed it all away. Yeah. Most people I knew who were high end investors and educators by ten or eleven were bankrupt.
Steve: Yeah. So but going back as far as, like, the the emotions of the market, the things I'm looking at. Right? Because, like, I know you're talking to, like, the the guys that are building homes, building apartments. And then, like, you know, there's a few different like, you go to a KW office.
You go to this brokerage, that brokerage, and you're just talking to them. Like, you're like the man on the street. You're not writing articles.
John: Nope. Alright. You're not publishing anything. Just having conversations.
Steve: Just having conversations. Right? To figure out like, to gauge where they're at. But, like, if the developer is telling you, like, hey. We're really worried here.
If If the brokers are telling the real estate brokers telling, hey. We're really worried here. Multifamily guy is telling you, hey. We're really worried here. Like, what are you doing with that information then?
You're probably a great closer. You're spending tens of thousands of marketing, running appointments, and getting contracts signed. And we both know the only difference between where you are today and where you wanna be are those contracts that you didn't get assigned. If you had those contracts signed, you would have more money to spend on marketing, more cash on hand to hire the person that you can look in to hire, And you wouldn't lose any sleep wondering that that one contract is going to close, which would allow you to have more free time to spend with your loved ones or working on your business instead of working in your business. Once you attend our two day event, you'll walk away with all the tools you'll need to create deep personal trust, overcome any objection thrown at you, and get homeowners begging you to buy their home.
So you have a choice. You can keep doing what you're doing now and getting the results you've been getting, or you can join the hundreds of people that attended and are simply crushing their respective real estate markets. To attend our event, go to closemysales.com/realestatesales, and I'll see you there. Doing with that information then.
John: Yeah. So the information is is great. So when I look at what the masses are doing, I'm looking how to position myself the other way. We are right now continually to increase our positions. We are because we mainly do long term financing.
We're having more people cash out than we're doing acquisitions, but that's normal in this market because the market's high. We're buying what makes sense. We are right now back to an old friend subject to Mhmm. And owner financing. We're doing a lot of those.
We're in Arizona, you and I, so you don't use a land trust in Arizona. And if you're using a land trust in Arizona, then, wow, you really need to listen to somebody other than who's been teaching you a land trust in Arizona because it is, like, complete no no, and we're a full disclosure state. So you yeah. Yeah. And I do know people who end up in prison for using them in Arizona.
Steve: It's just Are there people actually teaching that?
John: Almost all of them. Yeah. Yeah. No. Almost all of the educators, you know, you got those guys and gals that have been out there for thirty, forty, fifty years teaching their 1970 information that they got from Bill Nickerson.
You know, who was the granddaddy of all this stuff or Nick Coon, both of whom were friends. Great guys learned a lot from them.
Steve: Going back to so, like, you're just positioning.
John: Yeah. You you position yourself. So so right now, the first thing is, like, look. Right now is just about the easiest time it's been to raise money in my entire career. All you need to go in because there's so many people with money.
There's so much money. I mean, there's was a couple trillion now in punching money that's non deployed. I'm not talking the total pension money. I'm talking the non deployed money. Mhmm.
Because if they're rich, it's not really IRAs and four zero one k's. That's not the term they use. It's pension because they have the better pension programs and larger contributions. And so it's raising when times are better. Meeting the meet the main need, which the main need right now from a selling point of view I mean, the main thing on larger sales is like, look, I need, in most cases, to meet your need for safety or security.
And if you don't need safety or security met, then unless you're, and I I do have several of these clients. They're just older and they want their time back. And so they'll deploy with an operator like me because they would they're gonna make less than if they did it, but they're trying to be good grandpas to make up for being lousy dads because they work too much.
Steve: Mhmm.
John: So the the time's more important than money. We have one student, Trisha, in the last five years. She's raised over a $100,000,000 that she's deployed. Just tell and most of her clients are 70 to 85 years old, and they just want long term income streams. And they want the income stream to continue for the family after they're gone because they don't want the family to get the cash.
They'd like to kinda get the income. And so right now is, you know, having that war chest, having money that you have deployed safely, deployed for more long term, which is what most people wealth want. People who are wealthy don't wanna flip their money. I mean, jeez, just think about the word flip. Most human beings are flayed to flip an egg because it might break, and you want your aunt to flip her lifetime savings with you on a real estate deal.
Steve: So then are you constantly checking the the the temperature in the market
John: Yeah.
Steve: Nonstop so that when everyone's like, hey. We're feeling really good. And when they say we're feeling really good, now you're like, okay. Maybe now is the time to back.
John: And yeah. And then you got the extremes. So you got the different people. So you got the developers, which and we're stereotyping, but we use stereotypes because they're mostly true. This isn't Fox or CNN, so we can just say real things is, like, the developers.
Their personality type is they're almost all of them. They're like a gambler. It's just compulsive. They do not know when to take money off the table. They always go bankrupt when they go bankrupt.
Steve: Always seem to go bankrupt.
John: Every fourteen to eighteen years. Jeez. I wonder why. The cycles go over and over again. We were talking earlier at once and they have a dear friend of mine who's done billion dollar transaction, who's literally gone down five times, and he's probably gonna go down to six time because he's still living and cooking and overextended like he always has been his entire existence.
Great guy. I I learned so much from him. One is when we're at the end of a run and he's all excited to get out. And, you know, so you've got the whole predominant motion of fear Mhmm. Has been since 10, will continue until those people no longer alive.
So and this is the same thing that happened after each later before people moved on within and then we end up over cooking, obviously, and then and then crashing again. Not because history repeats, but because human beings don't pay attention to it. So, you know, right now when you're looking at it, you're looking at and this is what's cool. Like, with the realtors, I know so many realtors that are just freaking out about it, about the litigation and was it a conspiracy theory? And and did n r NAR lose on purpose so that they could get rid of the buyer's broker and bring back dual agency and make six points?
I mean, there's there's some wild thoughts out there.
Steve: Saying that.
John: Oh, you'd be surprised. I've talked to a couple brokers. You know? And and well, I mean, do you wanna look at politics, all the crazy stuff people say every day, and they believe it's true? Yeah.
Well, same thing in this. You know, everything's manipulate. Everything's this. Everything's that. And you really wanna look who you're talking to because, I mean, the other thing I love is all these guys and gals who told us real estate was gonna crash this year and everything's gonna crash, which it hadn't.
Mhmm. They also said the interest rates were gonna go which way for sure. They guaranteed it. Mhmm. They didn't do anything.
And they, you know, because they don't know.
Steve: I had a lot of guarantees earlier this year that interest rates are gonna go down. I was like, why why would interest rates go down?
John: There's no reason. Mhmm. You know, the the economy is in a mixed bag. It's not as good or bad as either political party says it is, but, you know, they have to do the rhetoric they believe. Yeah.
I I wonder what happened if one of the parties decide, hey. Why don't we actually tell the truth?
Steve: Yeah. They'd be out of office.
John: That yeah. They'd probably be out of office. Yeah. Which would that be a bad thing?
Steve: I mean
John: So so I I think right now when we when we look at this, Steve, is we look at the fear. We look at operators who may look good with the flash. But, you know, when I when when I see somebody who needs to brag about their car see, when I grew up, boys bragged about their cars. Men didn't brag about their real estate.
Steve: Mhmm.
John: But men don't brag about their cars. If you need to show me your flash car to impress me, it's like, you know, anybody with a little bit of money can have any car. That's not a big deal. When I look at the real operators, from my point, the real operators who one of the things is a real operator, they learn to live within their own means. Mostly of well below their means, which is why they weathered the storms, is, you know, most of those are not piling in.
Where my summer home is is is in my neighborhood. I don't know him well, but I played golf a couple times, is the CEO of Toll Brothers. Mhmm. I've known several guys who who ran banks or and are retired now. And, you know, they're all they're scared too.
They're just like, look. We don't wanna overextend. It's been one of the problems with the building is is think about the banking. Who's running the banks today? In the late eighties, they were superstars, middle, lower, upper management.
'92, the RTC paddled like the doors of their banks. They lost their pension a 100%. There wasn't a four zero one k's yet, and they're unemployed. They they'll all of them. Then they get back.
They get to work. The superstars rise up again. And then in 02/2010, they do it again. They they destroy it. And so now they all lost their, you know, they lost their $1,020,000,000 dollar golden handcuffs programs.
Their I r not their IRAs and their four zero one k's got cut in half, and they're unemployed again. Mhmm. Now they're the CEOs and the presidents. And, you know, when I talk to them, they're like, oh, yeah. No.
The banking industry will do it again. They're just not gonna do it on my watch. Not because I'm watching, John, because I don't want to lose my money. Mhmm. So I can loan to Toll Brothers, but they don't want the money.
But the regular guys who want the money, we ain't loaning to them because it's too hot. It's too cooked. It's too overvalued. Mhmm. And just, you know, so if you look at the generation, the the effect, again, the psychology and the emotions, the guys running the banks don't wanna over lend because they don't want to bankrupt themselves.
It's not that they care about the bank or the economy or the people. Do
Steve: you think they actually do remember?
John: Oh, yeah. They do. Because, well, they lost their jobs and all their savings and everything twice. They don't yeah. They're like, it will happen again.
Yeah. Once all of us retire, then they'll they'll liberal up the borrowing and do it again. Mhmm. You know, and that's why they didn't do it. And this is just classic example of it.
They didn't repeat the four to six lending this run because it was too fresh in their memories because it was too painful to them personally.
Steve: Yeah. That makes sense.
John: So
Steve: then another thing too, you you mentioned, you know, like, the the gamblers Yeah. Where they go bankrupt. So one of the things that I learned, right, much later in the game is it's not just let's make a lot of money. Right? Because, like, the the hustle of the grind, let's make as much money as possible.
The guys that are doing the best are the guys that can play the game the longest, And you can play the game the longest if you never have to hit the reset button. So you've been exposed to a lot of people that have had to hit the reset button. So you wanna talk a little bit about your experience with those behaviors and, like, what people are watching can learn from that behavior?
John: Most hit the reset button. I never did. And I remember literally being at seminars with some names that we were talking about earlier. We're literally they were reframing the room, like, going bankrupt was the best thing that ever happened. I remember literally people asked me a break.
John, how come you never went bankrupt? I mean, it's the best thing that could happen. It's like going, I couldn't see one good thing that would come out of it.
Steve: Mhmm.
John: That was caused by lack of control of one's emotions. It was caused by greed, and it was caused by living a lifestyle they could not afford.
Steve: Mhmm.
John: Because, you know, like, most of the guys who went under in in '10, '11, '12, who had 500 to a couple thousand properties. Three in Phoenix. Three and there was 10 of us. The reason they went under was twofold. Number one, in '4 to '6, up the greatest year of their career financially, they reset their entire lifestyle, which is insanity.
Mhmm. Yeah. If you'd had ten great years off that aggregate, reset your standard of living. But up one year that's five to 10 times greater than you ever made to suddenly move into the new massive home, buy the massive cars, all the toys, the boats, all that stuff. And it's like, look.
If you wanna do that, do it. Write a freaking check. But if you can't write a check, you're not ready to do it. And then they refinance their portfolios. It's like you remember me talking with you a couple years ago.
I was just cringing all these people who alleged themselves as being experts and and authorities, you know, telling everybody to refinance all their properties. It's like that is the model to go bankrupt right there. Because if you look at True Wealth, I I don't remember Warren Buffett during booms running around and refinancing. Actually, I I kinda remember the opposite. They were building war chest and paying off all debt.
Mhmm. I don't remember Microsoft refinancing their assets during a boom. Do you? No. Because it's not what they do.
I get this asked as a lot of of the thousand plus clients I had who are all wealthy. They're like, well, how many of them are are, you know, do high leverage? And it's like, I hate to tell you guys this, but it was less than 5% had a mortgage on their own home. Less than 10% had any finances on their buildings, and almost all of them owned their buildings, their work. And those that were in the fifties had a plan within the next short few years to jettison their personal debt entirely because there's a time to leverage and then there's a time to grow up and stop.
Mhmm. Because if you want to retain the wealth, you need to be able to service the debt when times are bad, not just good. And so I've always looked at those worst case scenarios. Those worst case scenarios is why all the thousands and thousands of properties that we bought. I've never bought a negative cash flow property, not one, which means, hey.
Four, five, six. I don't buy a lot of properties. Mhmm. Because it's like I'm not gonna. You know, so success leaves clues.
And there are actual rules that are out there. For a lot of people, they don't wanna follow the rules because, well, that's hard, John. Live within my means. Mhmm. Buy what I can afford.
You know, work hard. Follow financial rules. I don't wanna do that. I just wanna get rich quick and, you know, get rich quick as a joke. I mean, seriously, those of you out there listening right now, I I can answer for me, Steve, other than a lottery winner, because I do know one person who won a lottery, do you know anybody who got rich off one deal and kept it?
No. I don't know anybody who got rich quick in my entire life. Now I have we have over a thousand students or what we call, Burley Century Club. That means they have a 100 properties in portfolio. They're making five hundred to a thousand dollars per property per month.
They would all be decamillionaires to century millionaires. We have a thousand of them. None of them got rich quick. Most of them did it in eighteen months to three years. Some of them took five to seven years.
Most did it. If you're gonna do it, you do it. And the reason we did it is we took feel like you you teach people to take a shortcut in real estate. We don't take a shortcut. All I do is I do what real businesses do.
Real businesses don't try and build their business without money.
Steve: Mhmm. I will get to that in a bit. Yeah. Yeah. So but I like the part where you said, like, don't constantly refi out.
So you look at these guys. Right? You you hear some of these guys that say tax free, income. Right? So, like, hey.
I'm gonna buy these properties. And then, every few years, I'm just gonna do a cash out refi. I'm gonna live off with that so I don't have to pay taxes. Right. So you're not a fan of that business model.
John: Not a fan at all because you what you're doing is you're imploding your own portfolio. And and, certainly, didn't all the cycles teach that? And and, god, if if you didn't get it on the other downturns, didn't you figure it out by 10 that that absolutely and positively doesn't work? You know, in that model that that, you know, like the BRRRR, it's a great concept. And by the way, not a bad way to start.
You don't have anything anyhow. So what's the diff? If you you know, you have three or four properties and you lose it, well, you were overextended and you weren't willing to learn how to raise money properly. Mhmm. So you tried to, you know, you tried to erode your assets.
But the reality is those models require three things to happen always. The the valuation must always go up. Properties must always appreciate. There are a lot of people out there that don't know real estate goes down. Mhmm.
The other thing is rents must always go up. They don't. The other thing is interest rates must always stay low.
Steve: Mhmm.
John: And they don't.
Steve: Right.
John: You know, and how many and then we see this done in bigger operators. There's so many operators out there who had no business ever being in a commercial property or ever being in an apartment complex. None. This is a different skill set, different mobile business management acumen required. Who were like, you know, their whole thing was we're gonna buy this building.
It's gonna go up in value. We're gonna raise our rent, and we're gonna refinance it. Well, the problem is interest rates went from three to eight. Mhmm. And it didn't go up like you thought, and your rents moved up a little bit, not a whole bit.
And there are so many buildings in default right now, and the banks just aren't doing a heavy amount of foreclosure because it's not in their current interest.
Steve: How much of that do you think is going on right now as far as, guys that are overextended in the multifamily?
John: It it is so massive and so overbuilt that literally most of them should be voting for the party that they hate. Mhmm. So you think massive government entitlements to tread water and float for a decade. Because the stuff's not going up in the huge value. It's not running at all.
And the rent you know?
Steve: So you think, like, a healthy percentage of multifamily that's been bought with the syndication model that we hear a lot in our circles? You you would venture to guess that maybe a quarter or half are in a lot of trouble?
John: Yes. Yeah. Without question. And I come from a securities background as you know. We've talked about this before in my world where I come from.
So I'm totally different from almost every operator I've ever met in real estate, especially the ones that are in the education side. In my world, with no losses, no complaints from clients, and nothing wrong, every eighteen months to two years, a government agency would come into your building. They give you a letter. They'd wanna talk, never talk to them. They give you a letter and you'd have thirty days to comply and it would cost you a $50,102 $100,000.
I mean, your CFO, and your accountant, your attorney would get together and give them all the information. And that's you did nothing wrong. And you didn't lose any money. So, you know, I come from compliance, man. You gotta dot your i's, you gotta cross your t's, you gotta follow the rules, you gotta follow the laws.
Most of those syndications would not survive IRS scrutiny. Most of the offers would not, follow scrutiny. And most of the offers on a follow-up, you've got a lot of flags for potential security violations, certainly, to begin investigations because what they promised and what they delivered, most of them are performing about one quarter of what they promised. Mhmm. Yeah.
And I love some of these that they're on they're on they're on the Internet talking about 20% returns, but their actual results are three or 4%. Mhmm. Which three or 4%? Damn. Just buy a treasury.
Steve: Right.
John: You know, it's crazy. So I I think that
Steve: Is that a violation? If they're if they're raising based off a 24 or four mark?
John: Well, if you're if you're if you've been doing it for a while and you have factual evidence that you do not make what you're saying, yeah, that certainly is a misleading statement, isn't it?
Steve: Well, I I guess misleading. But, like, if you were anticipating one thing and it turned out to be somebody else's
John: You you open the can. So so the whole seminar land has always been this. It's like, hey. You a thousand of you can do a violation and only one of you get caught. Don't worry about it.
No one ever gets caught for sub two. Don't worry about it. It doesn't matter that you used an entity. But don't worry. It's always don't worry about it.
That'll never happen. It'll never go wrong, but with no basis of fact. Mhmm. I mean, to anybody who's teaching how to do creative financing who says nothing goes wrong, again, we're back to a trickster or a fool is the nice thing. Okay?
Because if you've done a volume of deals, lots of things go wrong. This is real estate. And adding creative financing doesn't make it easier. It makes it harder. So I think there's a a massive number of people that are in the field who which is unfortunately largely unregulated, who shouldn't be.
Mhmm. You know, and and I think, you know, the the crowdfunding abuses and the the, you know, all these people. And and what what's just ghastly, some of these guys who teach people to raise money, they have no personal track record. They're just doing a seminar and charging 15 or $50, and they've never done it themselves in any substantial way other than, well, I bought this building in 1820. We sold it for a big profit.
Well, every building you you bought in '18 and '20 sold for a big profit. That's not skill. That's luck. The market went up. Yeah.
Yeah. And then they're bleeding in '22. How could you be bleeding in '22 on stuff you bought in '18? I don't under yeah. I understand why.
So, yeah, I think there's just a lot of dumbing down of what's involved.
Steve: I mean,
John: this is a real business. A a single one single family home is a real business. And when you start multiplying that and then bringing large amounts of other people's money in, I mean, there's rules. And there there's certainly ethics and integrity that should be followed. And and it's just lacking.
And I and I see so many people and so many you know, we're gonna buy in Terre Haute Indiana, and it's gonna go up 20%. Terre Haute Indiana hadn't gone up 20% in the last twenty years. Why is it going up 20% next year? Just because you bought a credit class c building. So Sorry, tear hot.
Steve: There's a lot of people I'm hearing. Right? You you hear the the murmurs, the the rumblings, people that raise money for syndications were basically unable to pay it back.
John: Yeah.
Steve: Right? So not to call any particular names.
John: It's a long list without even looking hard.
Steve: Yeah. So, like, do we just say they screwed up? Do we what do we say?
John: We tell the truth. Mhmm. They know what they were doing, and they never should have raised the money in the first place. Right. And most of them and especially since we have not had a downturn, most of them belong in prison.
Yeah. And that's just the truth. And And if it had funds somebody, that's cool. My grandfather taught me something that he lived and I learned. Mhmm.
What you think of me is none of my business. Mhmm. And what's implied is I don't care.
Steve: Yeah.
John: You know, the reality is and first of all, if you're doing syndications, just understand you're doing the Wall Street fee based model. So about 98% of quote, unquote Wall Street operators, private equity operators, there are a lot of different names for them. A lot of them are misnamed. They're not really called what they are. 98% of them are fee based.
Meaning, they make the majority of their money. The provider makes the majority of their money off fees. Mhmm. 2% work on the model that I've worked on since we formed the company '89, and that's profit based. Mhmm.
My clients get paid first. There's their price, and I don't receive a penny including management fees. I don't receive a penny until they make their money first. What that means is if I only get paid for performance, I have massive incentive to look out for the best interest of my client, not the benefits of my own pocketbook because my client's pocketbook is mine. Mhmm.
We're partners. I so I treat the properties to dip their mind because they are. And we're now you know, we formed the company in '89. We haven't had a losing year.
Steve: Yeah.
John: We make money every year because, you know and and the limit I have is, like so so many deals that are brought to me, especially the larger ones. Just like, look. I can't touch that with a 10 foot pole. And they're like, oh, well, it's gonna make 4% or 8%. It's like, no.
No. You gotta perform rate that in the real world, this sucker ain't making money. And I work for profits. Mhmm. So one of the drawbacks to being a true operator is when markets are high or interest rates are high or rents are low, when the things aren't lining up how you need them to line up, is you pull back out of the market quite a bit.
Mhmm. Because we only work we only do deals that make money for sure the day we buy them. I've never I mean, literally, our internal spreadsheet and we maximize the tax savings more than anybody you probably ever met in your entire life. I my whole brokerage company was based on tax side. That's what it was based on.
I always put in my tax savings or zero. See, because I've been around. I mean, I was around when the tax reform act of '86 went live in '87 with forty two day notice. And It's only forty two days. Forty two days was the notice we received, and it wiped out the buildings.
The the the savings and loan crash of the early nineties was the tax reform act crash. That's what it really was. Congress just renamed it because it was they did it. You know? And and back then because back then, it was like I was the analogies like is is in Star Trek.
You know? There was matter, antimatter put together. Nothing matters. Well, in the old days, we could take your taxable income, your w two taxable income, your dentist making a million a year, and we could do a million dollars of accelerated depreciation paper losses and just know it, no taxes.
Steve: Right.
John: So they overpaid for these buildings that lost $20 or $30 or $40 a month, But income taxes were 50%. So on paper, they were making money. And then they took it away. You can only lose $25. So suddenly, the million dollar building is worth $400.
I mean, in nine months.
Steve: Well, I remember, like It's crater. Reading about this. You know? It's like
John: I lived it.
Steve: They were saying, like, shopping malls as they exist today would never exist if it weren't for the way that the tax laws are written back in the eighties.
John: So so I mean and there's some great tax stuff out there. Look. Probably not as good as you've seen on podcast, but there is a lot of good stuff out there. Mhmm. There is, you know, cost segregation.
The vast majority of people can't qualify. Oh, you used to have your wife be in a realtor. There's seven tests, not one. And the second test is the one that nails people is that your earned income can only be 60% of your taxable income. So if you make $300 a year, your real estate would need to make substantially more than that after taxes for real.
And it's like almost nobody makes that. Buildings, they can make a lot of sense. There's a lot of good to it. And there's some operators who do it really, really well. But what we do in our internal documents, our internal spreadsheet, tax savings is zero because they can take it away tomorrow.
And boy, we are target. Mhmm. And quite frankly, unfortunately, both major parties, the real estate investors, are target. Yeah. One party were a massive target.
The other party, we still are target because it's always a good thing, you know. Just, you know, tax, you know, tax the rich people when the reality is 2% of the single family homes are owned by large institutions. 65% are owned by mommy and daddy in their own home. So the idea that Wall Street bought America is, again, just another load of cars.
Steve: Headline. Another thing you said a moment ago, 90% of America's or or 90% of wealth is created through real estate. You don't really care for that statement. Now I remember seeing this quote multiple times. Yeah.
And
John: so I But think about who said it. It was guys selling you real estate training or real estate.
Steve: It's a lot of real estate people. Well, realtors too. Right?
John: Oh, well, realtors too. Well and they're selling you real estate.
Steve: Yeah. Yep. So I remember, like So
John: I always look at who's delivering the message.
Steve: Yeah. So I saw the quote. I was like, okay. And they're they're I think they they they attributed it to Andrew Carnegie. And I was like, oh, that doesn't make any sense because he didn't make his money through real estate.
John: No. He owned a boatload of real estate, but he he made most of his money in manufacturing and and raw minerals and railroads. Yeah.
Steve: So I went and looked wherever I could find it, and there is no research None. To wreck it to to suggest that's actually true.
John: It's just another seminar land, naughty act. Yeah. Another one.
Steve: So I've never gone out and, like, blasted anyone before. It was, like, it's just one of those things I see out there. It's, like, well, that sounds pretty good.
John: Yeah. Now do a and certainly, it wouldn't even be 90%. Do a large percentage of people after their wealthy own real estate? Yes. Of course.
Steve: Right.
John: You know, do do and for many of them see. Because if you look, you know, there's a great book. It actually had some clients that were in the study, The Millionaire Next Door
Steve: Mhmm.
John: By by Danco and his partner. The majority of people who are millionaires don't have any debt on their single family home. They own the family home pretty clear, and that is a large part of the asset. And then they own their own business. And the building, they own it.
They paid it off. You know? They had a thirty or a twenty five year loan, and they accelerated as they got a little bit more successful rather than blowing all the money on a Lamborghini. They paid $10,000 or more a month and paid the building off.
Steve: Mhmm.
John: One thing that people who are wealthy, and this is hard for the whole Get Rich community, is, like, people who are wealthy have a tendency to look long term. They take the long view on everything, not the short term, which helps the emotions. Yeah. It helps the thing. You know?
And it's like, yeah. There's just no base for it. Now I bought into that because you gotta remember, I literally went to my first real estate seminar. I was 17 in 1978. I'm 63 today.
And it was by Bill Nickerson. It was $495, which was an outrageous amount of money in 1978.
Steve: A lot of money.
John: And he had he wrote the first great creative real estate financing book, how I went from how I turned a thousand dollars into a million dollars part time, something like that. Bill Nickerson, he was a real guy. He lived, just south of Fresno, California. I I drove down, took his event, took a couple events with Bill, met some other guys who were really amazing operators. And what's unfortunate is literally when a year ago, my son and I were one of these big we go to some one of these big massive conventions, thousand people, the who's who list from social media talking.
And they're literally, you know, John sitting there going like, John, wasn't that Nick Coons slide, like, verbatim? The only difference was back then, they put an overhead up, and now it's a PowerPoint presentation. And literally, most presentations, I see Steve, they're 40, 50 years old, and they're verbatim word for word. And the models worked hard but did work in the seventies and the sixties and the fifties. Mhmm.
We're in 2020. We're in 2024. I mean yeah. Yeah. Yeah.
It was yeah. The all the short term stuff and the flip stuff, it was all based on there was no one had access to the information. I mean, MLS was a phone book that came out once a month. Mhmm. If you didn't have it in so right now, if you do if you weren't in by July 28, you didn't get in the August MLS phone book.
You got in the September 1. Mhmm. And that was it. There was you you simply not in the market. No one there was no comparables.
After a property was sold, if they were giving a loan, the appraiser didn't go to get the appraise the value. He went to find three like kind properties that would justify the loan, and they were trying to justify the loans. I mean, it was just totally different world. And so there was just these massive discrepancies and anomalies in the market where, yeah, I mean, there was some amazing flip deals. But today, everybody has access to the information.
Everybody's got everything available on the computer right now. So you can't do some of those old things.
Steve: Right. And then, you know, you're talking about, like, are they wealthy because they have real estate or they're wealth or they have real estate because they're wealthy. And there's, this big thing, you know, this push the last thirty, forty years, like, everyone has to go to college and get a degree. Everyone has to go to college and get a degree. Right?
Because there's a correlation. They suggest you go to college and get a degree, you're gonna have money. But if you look at the data, really, is if you have money, you put your kids through college. Right. Right?
So it's not quite college leads to wealth. It's wealth leads to college.
John: Yeah. And I think, certainly, you know, again, if this is kinda like real estate, was that true? Sixties, seventies, and eighties going to college, much higher probability. Yeah. And, also, I mean, you know, community college was $2,500 a year.
State colleges were sub $10. I mean, I didn't go. I had a full ride athletic scholarship to Stanford that I didn't take, but it was only, like, $12,000 a year. I mean, it was you know, people didn't go and get hundreds of thousands of dollars for a four year degree to get a five year to get a fifty thousand year job. Mhmm.
College is the right choice for a lot of people and not the right choice for a lot of other. And I think, you know, my kids got scholarships, but if I hadn't got scholarships, I told them it's like, look, you're gonna go to community colleges for two years, and then I will use the money that we set aside for you to go to a four year college, but I'm not pissing away 50 or $60,000 a year. So get a scholarship, and they both got scholarships.
Steve: Yeah. We're gonna make a business decision here.
John: Yeah. They yeah. They they worked hard. So I I think for a lot of people in a lot of industries, you know, it it's a good decision. Mhmm.
You know, and again, seminar missed. I mean, look. I know lot of highly educated people who own businesses who are super successful, and I know a lot of non highly educated people who are successful. Most of them are also really, really smart. They just didn't go to college.
Yeah. You know, and then even if you go to college, you still gotta learn the street in most professions. I mean, you know, and and, you know, most of my those thousand plus people who are clients, so so I know them well, not just their financials and and most of them I mean, we've been working together for twenty years plus. I have some capital investors that literally with their families now because they passed on. We go back forty years.
Mhmm. Most of them either were doctors, dentists, those type of professions, or they own their own business, or they were not CEOs, but senior management. And the reason they were rich and work to end up working with someone like me who makes people money is because they lived well. They made a great income and then lived well within their means. And many of them literally spent their formative years living on 25 to 50% of what they earned, just plowing it into in the beginning mutual funds and then some stocks.
And then, hey, let's find, a good guy or gal who really knows what they're doing, which is why I have a thousand students with over a 100 houses. None of them had the money to buy a 100 houses. Mhmm. They used our model to raise the money to buy them in conjunction in joint venture with other people.
Steve: So that takes us to the last point here, which is, you know, we talked about how to prepare for this politically charged environment, and that's the the title for the show. But, really, there's a lot of, a lot of charge politically right now. There's a lot of uncertainty and anxiety in our economy and our market. There's a lot of questions about what's going on with the interest rates. And then, you know, one thing that's not talked about a lot is, like, what how has illegal immigration impacted the real estate market, and what happens if they all get deported?
You spent countless weeks going back and forth with homeowner only to lose a deal because the seller changed their mind, another wholesaler made an unreasonable offer, or what the seller needs from sale, you just can't pay. Now imagine you've got the ultimate control on a property that you just locked up, meaning you're on title and every decision has to go through you, eliminating virtually every external threat. That's why the installment method was created. Through installment payments, you have full control of the property as your name is now on the title. Any decision the seller wants to make now has to be approved by you.
No longer can they pull out equity, go with another buyer, or change their mind. Imagine combining the best creative finance with the flexibility of marketing the property on the MLS to collect the most amount of revenue possible, all while having total control of the property. This is just a tip of the iceberg. The concept here is simple, but implementing is challenging. So visit wholesale2024.com to learn more so you'll never have another deal blow up.
What happens if they all get deported?
John: Yeah.
Steve: So there's a lot to uncover. So how do you prepare for all that? We're not gonna talk about, like, the causes, like, the the those specific issues, but how do you prepare for all that?
John: Yeah. Huge question, and I love it. So I'd say the first thing is not what you're expecting. You're you are, but the listeners probably aren't. The first thing is understand your own psychology and emotions and where you're at.
Steve: Mhmm.
John: Understand what your emotional needs are. Understand your client's emotional needs and how to serve them best. And more importantly, not just on a conscious, but a subconscious. The next thing is you need to be super effective. So the greatest investors I ever knew were not super active in politics.
They were quite frankly I'm not saying I'm in favor of him. I wrote a book with him, but there's a lot of good and bad with with Trump. Trump gave boatloads of money to all parties Mhmm. Because he wanted things, and that's how it worked. He was an investor.
He was from New York. That's how it worked. The Clintons were as best as buddies until he ran against her, because that's how it worked.
Steve: Donate to everybody.
John: Yeah. Is the more you can step back and go, wow, I am incredibly biased and set your own biases aside and see the true picture, see both sides and the middle Mhmm. It gives you a massive competitive advantage. Massive. So it's like, you know, on our spreadsheets.
Growth is zero. Taxes is zero. Property's gotta make money today based on what I paid for, so I'm doing short term. That means I need to buy a deep wholesale, which most people have no idea how to do nor teach people to do it. Mhmm.
And it is hard, hard work. The easy way is you go the long term model and you cash flow and you only buy properties. They're gonna cash flow from day one, and you're holding them for long, long, long. I know that's not exciting or exciting or sexy nor get rich quick, but nor is anybody who's rich. And so I I really gotta look at removing my biases and understanding them.
And Your
Steve: biases your biases and your emotions.
John: Yeah. So, you know, well, our mutual friend, Keith Cunningham, always said it well. Sharon Lecter, you know, who's just a super dear friend of mine, you know, I've known forever. I'm so excited about the event the three of us are doing. Yeah.
He'll tell you about that later. You know, when your emotions are up, your intellect is down. I mean, think about your personal relationships. When you're pissed off, you say stupid things. It's like, you know, a couple times in my life when my wife and I had little bumps, which we did, we've been married thirty four years now, you're gonna have bumps, is, you know, I learned not to be my dad.
My dad had this incredible dry wit, man's man. Dry wit was great. Perfect for guys, not for your spouse. Yeah. And so I'd have this little you know, she'd do something and I'd have a zinger.
And she had been wrong, but I had this zinger. And as I learned, man, okay, about six years in America. Alright. Alright. This is not working.
I'm gonna bite my lip. I got this big scar underneath it. I'm gonna bite my own tongue. I'm gonna stop.
Steve: Mhmm.
John: And I'm gonna let my emotions come down. Because then, you know, half hour later, this is no big deal. And then I'd wait till she was called off and I was called off. Then we sit down and we'd have a logical adult conversation with no emotion where I'd let her know, hey. Look.
We've talked about this. I didn't appreciate that. Or I'm sure you didn't appreciate what I did, and we'd sort it out without the emotions. Amazing when you leave your emotions. Investing in money, man.
The person who can master the emotions masters the money.
Steve: Mhmm.
John: You know, that's where you know, it's why you get a a Buffett classic. He didn't care what anybody thinks about him. People say negative stuff about him all the time. He couldn't. He's probably just smiling going whatever.
Yeah. But he controls his emotions. When everybody wants out, he's in. When everybody wants in, he's out. Which, by the way, the greatest investors in history, virtually all of them are contrarians.
Mhmm. And they follow very disciplined rules, which is what I all I do in at at our event. I just teach my model verbatim with full transparency exactly what we do. And it's not something we did twenty or thirty years ago in Florida. It's what we're doing in 2024 today in Phoenix.
Yeah. Now we have four new deals going today. I was actually earlier looking at the text and going out. Yep. Do this.
Don't do that. We had a storm claim. I love Arizona monsoons. Boy, those are fun. Those are great.
So it's like really looking at what's there. Yeah. Obviously, the political environment's changed. Twenty years ago, it was almost a nonissue, as a real estate investor. We'll talk real estate centric right now.
Today, it's a reality. You know, I I myself in 1989 intentionally and deliberately relocated from Los Gatos to Silicon Valley to Phoenix, Arizona. Part of it was the taxes and business environment that were already raising their head in '89.
Steve: Mhmm.
John: The other part was Phoenix was in this mammoth crash. And I still remember everybody I knew. Literally, my father and my girlfriend who became my fiancee and my wife and the mother of my children. Every other person I knew on the face of the earth thought I was insane to go buy real estate in Phoenix when it was so down. And I'm like, do you hear anything you say?
It's like, but you should video yourself because you'd be amazed the things you say. It's like Macy's has a sale and you all run down. Why don't you wanna run when real estate has one? So we've definitely got environments today. I'm not saying I wouldn't invest in them.
Because, again, when as soon as I say all or nothing statements, those are God statements, not human being statements, because nothing's all or nothing for human being. But when I say those all or nothing statements is I'm limiting myself in my opportunities. Mhmm. So I would invest in blue states, but I'd make sure I knew the numbers. Some of my best investors right now, some of my best students are actually loading up huge in places like Portland and Seattle.
But they have a unique strategy, and they're buying properties for 40 to 60¢ on the dollar that have two and three year squatters and who can't be moved out, who they're giving 50 to $100,000 checks to.
Steve: Mhmm.
John: And then selling on installment contracts, which aren't regulated because they only have all these rules for evictions and all these rules for foreclosures and owner financing installment contracts are neither. Mhmm. So they're positioning himself. Deep pocket raises first, though. They needed massive capital to to weather that.
So just looking for the opportunity. Everything being bad doesn't mean it's bad. Because if it's horrible for everybody else, if you can figure out how to operate within that regime, that's a benefit. Yeah. So really looking at it and then taking taking all the hype out.
It's like so look. I mean, all these things that politicians stay from all parties, how much of it actually happens? I get asked all the time. John John, how come you're not into some of these conspiracy theories? It's like, well, because they never happen.
Mhmm. You know? The the world's gonna crash. I mean, some guys and gals with more men than in that area, but who are dear friends, who are huge, massive names in the education. Since I met them in the eighties or nineties, the world's crashing, the world's crashing, the world's crashing, the world's crashing, the world's crashing.
It didn't. Mhmm. And almost all of them misstate. It's like, wow. You said it's gonna crash every year.
You you should've kept going. Is so like, look. So how do I position myself and my capital investors to take advantage of the opportunities? So right now you know, and this a lot of people should vote the opposite way of what they're thinking. So if you're if you're into multifamily sectors, if you're overleveraged, if you're with those syndicators and by the way, if you're out there and you're doing syndications, understand, syndications are done by people who lose money, not by people who make money.
Because if you know how to make money like I do and I teach, you don't syndicate. Why would you do all that work for the pennies? Syndications are syndicators of the 98% that work for fees. You know what you're doing. You're gonna be doing a joint venture model, and you're gonna be keeping a good chunk of the profits because you earn profits.
Yeah. If you don't make profits, syndicate. Because you don't make money, you don't have to do redemptions, and it's okay. Yeah. You know, so, like, if I was a syndicator who didn't know what they were doing, hey.
You wanna vote for the Democratic Party? You don't wanna get rid of illegal aliens. You wanna jam them through the roof because those people are giving getting government vouchers for the low income housing that's so massively overbuilt right now and was so overall, so poorly constructed and is so poorly run and managed. I mean, it you know, you've seen it so many times and you can't too. Do some research.
Find a building that's owned and operated by a successful operator and look at that building and how it's run and the nonvacancy rate. And then go run one that's run by some kid who had no right to ever be in the business who's running a syndication, you know, with 40% vacancy rate and broken windows in the parking lot, and this just it looks like a war zone after a year. You know, also, if you're syndicating, look, everybody knows this class c is class c. It doesn't matter if it's brand new. It doesn't matter what you do.
Class c is class c. That's the culture. And that's not a racial statement. That's a cultural statement based on that culture. We don't own any class c properties at all because I did early because my early seminar land said buy class c because that's what Temenar Land teaches because it's cheap.
Cheap isn't necessarily good. We own the class c. And after two years of class c, I divested out of every single one of it, and I've never owned it before.
Steve: When I first got into real estate. Right? This middle like, it's 2,005. Right? Looking at this stuff.
And I was thinking, like, I hate to say this, but it seems to be, on paper, really advantageous to be a slumlord.
John: Oh, it it is on on paper. On paper. But not in a checkbook.
Steve: No. No. I learned much later on. Unfortunately, I never went down that road. But as you get into the business and you actually see how the real world works, the pro form a is very different Yeah.
Than reality.
John: Yeah. And and pro fam is just made up numbers, man. Right. I I live in you know, we we always make a joke. And and, again, if you're offended offended, well, that's on you.
There's seminar land where everything works by my course, And then there's where you and I live in the real world where most of that stuff doesn't work. So so literally, you know, if you're in class c and class d, you want government intervention, You want massive immigration, and you want massive welfare programs to prop up your cruddy buildings that are poorly managed.
Steve: Yeah.
John: Now if you're an operator who works for profits, that's the last thing in the world you want. You don't want your tax dollars spent on that. And, you know, and and again, they love the extremes because it hits the emotions because they know how what most politicians know and know well, that if they can keep you, not here, but here, if they can keep you in a high state of emotion, they can agitate you to hate or like them. And the modern model is more just hate the other guy. You don't even have to like me.
Just hate the other guy more than you hate me. Mhmm. It's like lately, it seems like jeez. And and it's boy, last few elections is kinda like, really? This is the best we got?
Really? Because it's really like it's almost like most people, like, going, well, I'm not voting for this guy. I'm not voting for the other guy or gal. It it's so I don't think either party could do what they want to do. Mhmm.
And we're never gonna see any factual, truthful numbers from at all on what the immigration really is and what the problems really are. You hear different things, and then you talk to people who are in the enforcement. But again again, it's different things because it's based on whose commercial they were on, what they're saying
Steve: Right.
John: Is, you know, the, large, large low income, obviously, is good for, nonprofit poor operators of of large multifamily. That's you know, they make that that was what you know, that's why one of the reasons that there's such problems in New York, and it wasn't the building Shrump did, but it was actually the buildings his dad did, is, you know, it was propped up by the city and state government for so long that you have just all these horrible buildings for decades and decades and decades that made bunch of money for the operators because it was all government money.
Steve: Well, in a lot of time, what we're talking about right now is is a statement that I've I've heard, and I think it's a sad statement, is that we live in a post truth world. Right? Like, you don't trust the government. You don't trust the media. Who exactly do you trust?
Right? But all that aside, though, in preparing for this, right, is just have access to a lot of capital.
John: Yeah. Raise and the thing is and this is the hard part. When it's bad, you don't raise money. So and look. I was a huge operator.
It was pre Wall Street buying houses. You knew of who I was. Mhmm. Yeah. I was one of the largest operator in Arizona and one of the largest individual operators in the country.
I mean, it was and there was some nice things back then. If you had a portfolio you need to sell, there was only a couple people in the country that were crazy enough to buy that thing. And they sold for big discounts back then, not premiums. When it hit so do so, literally, I had a capital investor who had 20,000,000 green in the bank. Actually, five of it was green stashed around his house in safes.
Literally, 5,000,000 in cash and 15,000,000 in bank. And I had given him earned for him $2,000,000 in cash flow in a little over a decade. $2,000,000 in cash flow. He had 20,000,000, and it was I was one of the first in fourth quarter eight. The the the first one was Wells Fargo that really slashed the prices because the bank didn't care.
It was almost all the properties were government insured. They weren't losing any money. Right. And the lady, Diane dropped dropped the prices. And so I told Cherry we're going in.
She's like, yeah. And she's freaking out. She's a great wife, but she's freaking out. Because for my kids, just, you know, they're in private school literally by ten. Half their friends no longer went to the schools.
And, you know, all not all, but many of their friends, mommies and daddies lost the big house that they overextended in. Their daddy's businesses failed. They got divorced. It was a traumatic time. Four of my son's friend basically lived at our house Mhmm.
Because the the the homes were so bad. And so I went in. And so I you know, this guy is like, let's go in, you know, boom. And, you know, he's like, well, it could go down more. And it's like, we're buying for $3,035,000 dollars.
I'm renting for $9.50 in my sleep. After they were all stripped back then. Almost all. So it was, like, 10 to 15,000 rehab. That'd be 40 or 50 today.
I had my own crews. And so we're we're rehabbing them then just keeping them long, long term. And out of that 20,000,000, he'd only give me 2,000,000. And I and he goes, I'm only gonna give you what you've already paid me back. Mhmm.
You're so far up. And and then in '9, Obama took away financing in Maricopa County. There are three counties in the country he pulled financing. So from '9 into late twelve in Maricopa County, as an investor on anything under four units, you could not get a loan under any circumstances. It could be a million dollar investment property.
You couldn't get $25,000 loan. And anybody who was charged state or federal couldn't loan. So and it was like, you know, I had about a 36 pity party. Because it's like, oh my god. Because we'd always bought predominantly with financing.
It's like, what are we gonna do? What are we gonna do? And it's like, okay. And this is, you know, now we're nine and we're buying and and we're going. It's like, but now my fund just my funding's dried up.
I don't have money. Where am I due? I I'm calling around to all my existing capital investors. I'm calling new people and just like, look. This is this is the sale of a lifetime, and it literally was.
Mhmm. And if you want that sale again, I hate to tell you this, guys. We're looking, yeah, about sixty to seventy years till that happens again based on history. I have a book, Money Secrets of the Rich, that sold a million copies in Australia, New Zealand, and Southeast Asia. We used to do the largest real estate education companies in the history of those countries still to this day.
Mhmm. And it's like, okay. And so this is all going through my mind. And then my wife, she doesn't swear, but she's like, I don't know how you're gonna do and everybody we knew. And then all the real estate guys are new.
They're calling me, and they need 7 figure bailouts. And it's like, do you have any assets? And it's like, k. Look. I mean, I'd loan you money to save your family home, but your portfolio is underwater.
Why did you refinance, dude? What were you thinking? Mhmm. They didn't have any assets. And and the one guy who did have assets was this big speaker.
I would never mention his name, but he's like, you know, well, I do have some property used in another country, and there's equity in them for real. And I was like, okay. Well, you need to put that entire portfolio up. And he goes, but if I didn't pay, you'd take them. I was like, oh, damn straight I would.
Steve: Yeah.
John: You want me to give you 2,000,000 cash in '11? Oh, you're damn straight. I'm taking it back. I'm taking everything good. You can keep the crap.
And she's just like, you know, you're you're John F. Burley. She said, I have no idea what you're gonna do, but you're John Eppingerly. Mhmm. Figure it out.
So I made I middle of the night, but it worked perfect because it was Australia. I woke up, and it's like, bam. I called. I knew three guys that owned brokerages. Right?
The it's ASIC down there rather than FCC, but I knew three guys who own big brokerages. Called them. One guy was interested. He flew out to The States. I met him in LA.
We talked about it. We set it up. We opened a, managed fund, which is like a mutual fund in from a US point of view, and then a, private client offering. And then I went to Australia because they crashed in ninety nine, two thousand. Western Europe and America crashed in 06/2008.
The rest of the world had already crashed. So their economy is good and our stuff's free. So I literally I'd never done it before. It was so bad. And this is why you wanna raise money now, guys, not when it's bad.
It was so bad I couldn't get Americans to give me money in volume. And some of you think 2,000,000 is a lot of money. And 2,000,000 was a good chunk of money, and and we raised close to 10 before I went down. But I went down and raised and raised and raised and then just came back, you know, with wires of boatloads and boatloads of money, and we just bought and bought and bought and bought. End of the day, eight to twelve was the best time we ever had from the company, you know, through 14.
The other thing, this was amazing. It was exactly what my grandfather described that I didn't remember. In real estate, you have turn. Some people, no matter how well you bet them, no matter how good your betting is, they don't pay. They leave friendly or unfriendly, but they leave.
But that's just the reality. Right? If you don't think that's true, then, wow, you've been to the wrong education. Because this real estate stuff goes wrong. Mhmm.
In eight to twelve during those five years, ninety one percent of my residents did nothing but stay and pay. Ninety one percent over five years. That's better than the best of times. Mhmm. Because most people, all they did we provide owner financing, so it was their home.
What most people do during bad times, regular people, they just hunker down. And most of my residents in 2004, 2006, whatever it was, they were about 40 FICO points away from a $500,000 loan. And I put into a them into a $200,000 home they could afford because that's what they could afford to pay for. They couldn't afford to pay for that. And so when everything hit the fan, they just stayed and paid.
Steve: Right. Yeah.
John: Some of them, I had to help them go get a job at 07:11 or something to pay for their bills, but there was work. It was it was bad.
Steve: So right now, though?
John: I I would raise and raise and raise and raise, which is what my best students are doing. The last last five years, Trisha's, she's raised over a $100,000,000.
Steve: Mhmm.
John: She just raises in places and raises in place because now she's build that performance and that record and she raises in place. And so when things go bad, those people will just give the money to her because most people truly believe and and they're not inaccurate. Properly managed for profit, meaning the person who runs it is the owner and they're on the line if it goes bad. Mhmm. Property managed real estate, especially the residential sector, long term sustains the bad times.
Steve: Right.
John: Even the valuation goes down, there's not a huge hit on the income stream. And so the people, like, oh, you know, I remember people, you know, of course, you know, they're all looking for something bad. Wow. Your portfolio must really be down. It's like, well, actually, we didn't buy very much in four to six.
Certainly, it's worth less than it was on paper. But the thing that matters is our cash flow. Our income stream is substantially above our debt servicing. And unlike almost everybody else I knew in real estate, I always ran my real estate company like a business, not like a real estate investment. Mhmm.
And so we've always had substantial reserves. You know, we've always had that war chest aside that money I hear you guys, oh, you don't wanna have any money non deployed. Okay. Well, like, I'm listening to a man going bankrupt. Just a matter when, not if.
Interesting. Got it from a broker in Michigan two days ago. They are having mass panic because the major lenders in Michigan are now requiring for them to show on their existing loans that the six months of reserve that they agreed to have in the loan docs, they want to see them from bank statements. They want the money. And if they don't have the money, they are calling right now.
I talked to the guy two days ago. They're calling the loans because they don't have the reserves.
Steve: So those mortgage companies are gonna be bankrupt overnight?
John: Yeah. But they're calling. And, yeah, and it the I think they're looking at is a preemptive strike.
Steve: Mhmm.
John: It's like, look, this is all gonna go bad. Let's nab the while the values are still reasonable, while we can get 60 or 70 or 80¢ in the dollar, let's nab the bad operators and they're not in default. Let's nab the bad operators today, which if you look at from that point of view, it's not a bad strategy.
Steve: Mhmm.
John: So they're gonna if you don't have the reserves and or you've been struggling to make the payments, we're gonna pull the plug now and we how we can pull the plug is you agreed in your docs to have six months operating. And with residential real estate, it's six on your rentals. All of us agreed. If you're taking a loan out last decade, you agreed that you'd keep six payments in the bank. Mhmm.
If you've got a commercial loan, you agreed you'd have six months operating cost in the bank. So they're calling loans. I literally talked to the guy two days ago in Michigan.
Steve: Yeah. Calling loans is crazy. I mean, like, for for the, you know, people are listening. Calling loans, basically, it's foreclosure.
John: Yeah. Yeah. It's foreclosure. But
Steve: it It's not a bad act. Like, you screwed up.
John: It's not a bad act on their part because what they're looking to do now and I get the strategy. Now I put a call into one of the bankers. I and he knows who I am, so I think I'll get a callback. I had to use a name. I used a name, and I think I'll get a callback.
To me, the logic to it, taking the emotion out, is like, okay. Look. So if we can call and and they're privately held banks, so they haven't sold the loans. If we can if we can call our 10 to 20% most likely to go bad in advance and sell it before the market goes, that's not a bad strategy.
Steve: It's not a bad strategy.
John: It accepts small losses quickly Mhmm. Rather than put them off for big loss. And again, that's back to, you know, not letting your emotions control you.
Steve: Right.
John: Because the greatest traders of the world, we were all trained the same. You take your losses as fast as you possibly can. When you've made a mistake, accept the mistake and get out.
Steve: So, absolutely, I think that's wisdom. And so going back to our point then is, like because, you know, I got Marcus Krueger. He's a good friend of mine. He does our taxes. And his thing is, like, you should have a million dollars in your bank at all times.
Right? And you're talking about, like, go get money. Right? So, like, regardless of who becomes the president, regardless of what happens with the Fed, regardless of, interest rates, just have money. There are two types of salespeople out there.
They're the convincers, and they're the sales professionals. For the first nine years of my career, I was the convincer. Convincers are always out there trying to convince people to meet with them and buy from them. Their strategy is to try to push hard and never take no for an answer. And by focusing on this strategy, they spend a lot of time on cold calling, the next marketing gimmick, features and benefits, how they and their company are the best, following up until their prospect buys or dies.
All of this requires time and energy. The problem isn't the model itself. It's that their approach pushes prospects away. And this is the same exact thing that happened to me before I figured out to close more sales formula. The solution?
Sell customers exactly what they want to buy. That's right. I said it. We sell customers exactly what they want to buy because I would rather get an easy sell with a happy customer instead of a difficult sell from a customer who felt sold. No.
Thanks. I did that before, and it sucks. So here's the deal. I explain everything in the closed more sales course. It's an 11 module course that shows you everything you need to know to close more sales.
The best part? You can use this in any industry, not just real estate. So no matter what you're selling and to who you're selling to, this formula will lead to easier sales. Go to closemoresales.com/salesmasterclass, one word, closemoresales.com/salesmasterclass.
John: If you've raised the money and you're placing it for cash, interest rates going up are your friend, not your not your thing. So you see, to get truly wealthy, you need to stop doing what everybody else is, which, you know, you I remember you and I first talking in, like, '17 or something. It's like, you know, and it's like, hey. Look. So don't do what everybody else is doing.
So translation, get the hell out of flipping. Mhmm. Too many people were doing the same thing in the same space at the same time and with massive bad practices, which is why we have two states now that you have to be licensed, and the ball just beginning to roll on that. I mean, the whole wholesaling business. And and, look, they created it.
Some of the biggest actors are people we know or know of who are educators Mhmm. Who or just teaching people complete just schlock. Real estate takes money. You know, and I think when I look at it, when you look at business models, real business models, it's like, look, there's four steps. Step number one is easy.
Have a great idea. And let me help you out. Real estate's great idea. Step two, raise the money. Not go try and buy it without money.
That's not in any book that worked. Raise the money. So if you look at real businesses, they do the raise before they go in. Then you have to have a system to monetize. That's where the whole wholesaling thing, you know, I got out of doing that in by the mid eighties because, like, this doesn't work.
I need so many things to work for me to make my money. The market can't go down. Interest rates can't go up. Rents need to hold I need all this stuff to happen or I'm screwed. And if I'm wholesaling under under today's March, at least in the old days, we bought the stuff at a discount.
In today's market, I mean, market hiccups in there, you're in trouble. So great idea. Raise the money. System to monetize. When we monetize, so what do we do, what our company does, and this is the normal, it's a placement fee.
So if you came on and did five houses, it's 5 it's a $10,000 per property. I make a $50,000 acquisition fee. And that covers my cost, my overhead, my living. So, yeah, my students, all those ones who are in the Century Club, those thousand thousand plus whoever 100 properties, yeah, they all made over $1,000,000 in upfront placement fees. Mhmm.
And then assist so we have the upfront montage. Just like if you go to McDonald's, you buy a hamburger, you have to give them the money before they give you the burger. You know, in the real estate investors, we're all taught you're supposed to work really, really hard and if everything goes well, then you get a check at the end. Mhmm. Maybe.
You can't get the check first. And and then what what I did and the sole thing I did with my business, all I wanted and it's not passive income as such a crock. It's residual income because we work for it. Mhmm. My clients receive pass passive income.
I receive residual because it takes work. The idea that you're gonna buy real estate and do nothing. Yeah. If you want to go in the toilet. And then, you know, just the the upfront fee, the monetizing, the the the placement fee gives us the money to take care of our past, pay our bills, operate our our own lives, pay our own bills, and then grow the company into a business.
It gives us the money to do that. It's part of the function. It's a real business. And then all I want to do and all my students do is like, look, I want five a month, 10 a month, 20 a month, and we got a lot. And I want 50 a month.
I want 100 a month. We have several I want several $100,000 a month profit after real expenses on tax returns
Steve: Mhmm.
John: For real money that comes in for decades. And that's financial freedom. That's wealth. But Yeah. There's a model and you can't defy it.
And what frustrates me and and with the social media, it's just more prevalent, so it's more frustrating. Is these people acting like you can violate all the rules of business and be a successful real estate investor. It's not true.
Steve: It's true sometimes. That's the exceptions.
John: Right. But I'm not teaching people to try to be the you know, I get people who come to my events from other events.
Steve: Mhmm.
John: And it's like some of them look. You're not looking to learn a system. You're not looking for a model. You're looking for Jesus Christ to walk in and perform a miracle.
Steve: Mhmm.
John: I'm good. I ain't that good. Yeah. We teach people how to really do it.
Steve: Systematic process.
John: Yeah. Most of our students who get financially free are financially free in eighteen months to three years. And our definition of financially free is that they have enough monthly income to pay for their life as they desire for the rest of their life. Mhmm. And that's freedom.
You know? And to me, in the old days, we call it mailbacks money because people used to used to, for real, mail it. And I do have residents who have been in the properties for twenty five to thirty plus years who literally still drop a check through a slot that we still have just for them, with money orders, or they mail the check-in every month. So I still have people who do it that way, and it's like, yeah. We'd like them to upgrade, but they're comfortable, and it's their home.
And why would I care?
Steve: Right.
John: So so what we just really looked at is is Steve is making it a replicable business model. And look, can anybody do it? Oh, hell no. And when I hear some yeah. The the other thing is you you I heard this at the first seminar I went to, and I think every seminar I've been to except for mine, this is really easy and anybody can do it.
So real quick, is real estate really easy, Steve?
Steve: Really easy. No.
John: No. And can anybody do it? No. Yeah. No.
And it's not about intellectual because I have one student who was when he was born, they called it mentally red hearted. I know today that's not the politically correct word, and he knows it's not. But he prefers that name because that's the name he grew up with. When people have a very low intelligence level, and that's how God made them, when you change their words to be politically correct, you're not thinking about the person. And so he's very limited very, very low intellect, was, you know, just functioning.
He was he was he was, illiterate when I met him. He learned to he learned to read and write. He has 600 properties cash flowing for several decades now, and he adds to the portfolio every year. When the market's off, he buys more. When the market's low, he buys he buys less.
He has capital investors.
Steve: Mhmm.
John: You know, he had to laminate everything. So on our presentation, you know, you come to one of my events. We teach the seven talking points, and he literally has them laminated because even after all these years, he's still just with his limited intellect, he needs to to look at them from time to time, and he goes through and he explains them. He meets the client's emotional needs on a conscious, but more importantly, subconscious need. He then does the placements.
He buys good solid deals and own them forever. What was funny is the event he came to, we were in Dallas, Texas, It was an amazing event. There were 17 people. So I had had who was working with a promoter, which we've done a couple times over the over the decades. And the promoter had done an event in couple of evening programs in Houston, and we literally had 17 people who were PhDs who work from NASA.
So Big Bang Theory. I got 17 Sheldons and 17, what's the, the super smart guys? I'm blanking on his name. Sheldon and Leonard. So 17 of them.
And he would, I guess, pin the penny if you know the show. Yeah. And okay. It's a fun show. So so the Sheldon and Leonard, the rocket scientist, to my knowledge, none of them ever did a deal.
Because first of all, my order was wrong. The fact that the time I'd done, you know, like, 1,500 houses irrelevant, those aren't the 12 steps to buying a house. And, oh, John, you left a bunch of stuff out. So they've got sub steps and blah blah blah. I think they got so busy doing spreadsheets for the next twenty years, they never cut a deal.
And the guy who literally was one of the lowest intellect people I ever taught in my entire life just went and did it. Mhmm.
Steve: It's funny what happens when you just take action.
John: So Yes.
Steve: We're doing an event. Yeah. Right. Who's gonna be there?
John: Okay. Well, it's August 24. It's here in Phoenix, Arizona. This started, about six months ago. Mhmm.
I've got a lot of friends who are like the top. Because, you know, I used to do the huge international tours, you know, and was friends with Zig Ziglar and Wayne Dyer and, you know, worked with Trump and, you know, known Kiyosaki for decades, used to do tons of placement for them. So I know all these amazing people. And most of them are a little older, a little tired, and they don't like the road, But they love to teach. So I started doing it, reached out to some of them.
And it's like, hey. Instead of going on the road, why don't we bring the road home? So Sharon Lechter, who is, you know, the Rich Dad series and then several other books on her on her own.
Steve: Think and Grow Rich series.
John: Think and Grow Rich series. Sharon is one of the most incredible woman I've ever met and has been nationally recognized, by the White House twice, by several organizations around the world. I mean, she's just in the who's who of everything. She's one of the most dynamic, not women, one of the most dynamic business people who ever lived. I mean, she's amazing.
And I've been dear, dear friends with her for a long time. And not seminar dear friends, actual dear friends. Mhmm. I I always loved at seminars when I've never met the person and they're introducing me as their dear friend. And I'm, like, going, we never met.
You guys sent a check. I'm here. What do you and so, Sharon and you, Steve Trang, you guys know Steve, obviously. We're gonna spend an entire day. It's Saturday.
There is a the the link you'll put up for them. And and if you need a hotel, you can grab a hotel there from out of town. We're gonna spend the whole day. Steve's I'm gonna do an opening segment. I'm gonna talk about the market and what's going on.
A lot of expansion we've talked about. Also, guys, I do q and a like crazy as Steve will be doing assurance. You got questions and thoughts, we do them. And then Sharon's gonna do an incredible talk. I love how she talks about how assets are sexy because that is the real sex.
Mhmm. And then you're gonna be doing a session, and we're providing lunch for you guys. And then what I really love and the students love is we do an expert panel where you and Sharon and I just sit there in chairs in front of the room and you guys fire them whatever you wanna ask, ask us. You wanna ask what's our favorite color or something more meaningful? I'd ask something more meaningful.
But we did ask last one I did, I actually got asked my favorite colors. Like, okay. It's purple, but whatever. Mhmm. And so just an amazing full day.
And I'm gonna go over the the the secrets to raising private money. I'm literally verbatim word for word gonna do the presentation in front of you, turn your dang phone on. I don't care. Mhmm. I'll talk to you about the an event we have coming up in September.
I do four public events a year, and that's it. And they're in Phoenix. I don't do a bunch of road anymore because, you know, as you get older, the time is way more important than the money. And I already got way more than enough. I've got more than we'll ever need.
And my main work always has been the private equity business. And I have, you know, over a thousand people who count on me to do my job. And that job is making sure that my team and our systems run it. And then we'll we'll introduce you to how we do our our business step by step. And I'll have several Century Club members.
So if you wanna meet really successful students for real, not pretend, you can talk to them. So I've been to too many events. You know how it is? The guy puts up checks and pictures of other people. Okay.
First of all, I don't wanna see anybody else's check. I wanna see mine. And I wanna see a picture of somebody who maybe didn't, maybe didn't twenty years ago. Mhmm. I'd rather talk to the guy right here who's doing it today until we'll have several of those people there.
And then Sharon's gonna be, gonna be going through, talking a lot about psychology and a lot about the business steps that she uses. And she's just an incredible businesswoman and investor. And then what are you gonna be talking about, Steve?
Steve: I think about sales and communication. You know, I think that's the one skill that if you master this skill, it doesn't matter what is going on in the world. You're gonna be compensated very well.
John: Yeah. I I yeah. I was, I was fortunate and and worked really, really hard. I I know Tommy Hopkins really, really well. He's getting on now.
He's a great guy, a giant industry. And unlike almost every sales trainer, Tommy Hopkins was he set sales records as a realtor in California that stood for over twenty years. I mean, he literally was the number one real estate salesperson in the world, and then he taught selling. Mhmm. So and so many sales guys, it's like, you're teaching sales, but you don't sell well.
You should be able to crush it. And then I, you know, I knew Zig really well who was best platform speaker I ever saw. He was amazing. And then met, Doug, j Douglas Edward, who is Tommy's protege. And and I've met so many amazing salespeople, and they all had a basis.
I knew I, met Sandler once through his people. And it's like, here's what I know about selling. And I know you you're just you're continuing to discover and grow and and change the industry. And I love because to me, you've taken the fundamentals that must be learned, and you're modernizing them. Mhmm.
You know, I look at you. You are in a place, should you choose to, you can be the next great one who who is one of those names that you just mentioned, who have protege after protege after protege who are in the top 2% of the world always because they're all trained. Mhmm. And what I love about selling is a lot of people, like, I can't be a salesperson. Like, look, god didn't no woman ever gave birth to a salesperson.
Most you and I have talked to this. Most salespeople are introverts, not extroverts.
Steve: The best story.
John: Yeah. Right now, we're doing our thing and we're on and we're teaching, but I'm an introvert. I mean, when I'm done teaching, I don't wanna go out to a party with a 100 people. I wanna go home and hang out with my family and a couple dear friends. Mhmm.
I wanna, you know and, but sales is a science and an art that can be learned. And you can go almost a 100% science or a 100% art and still be in the top two percent.
Steve: Right.
John: The most amazing that I ever met is they took what they were, and most people were either a science or an art, and then they blended them. And those are the ones in the top 2%. You know? One of the ones who his name was Tom Guirsey. He worked for Sealed Air Corp.
Sealed Air is a bubble pack company. Mhmm. They were a good sized company, but not huge. He was older than me. In '9 I met him in '85.
In 1969, Sealed Air Corp, which was like a Fortune 2,000 company, the number two salesman in 1969 made $85,000. Now to put that in perspective, Tom lived in Los Angeles, which is a a really nice subdivision in Silicon Valley. In 1969, $85,000 bought you a mansion. So it just changed it today. So depending where you live, this is 2,000,000 to $20,000,000 effective.
Number two, $85,000. Number one, Tom, $6,000,000. In one year in '69, selling bubbles. He was he was probably the greatest salesman I ever met. He and he was trained by, Jay Douglas Edwards who was Tom's trainer.
And then, you know, knew Zig and knew those guys. He had this little teeny book at thing, but he was just a sales guy. And I met him. I was going to night school to get a degree. Never finished it.
My mom, god bless her, she passed away recently. She's was still waiting for me to get a college degree so I could be somebody. I'm not kidding. She had she had PhD and a couple masters, and they were grooming Tom to maybe be the CEO. He ended up becoming president of all sales, but he didn't get the CEO spot.
But he needed to they're like, we can't doesn't matter how great sales meet. We we gotta have some degrees to take you to the board. Mhmm. And, but, yeah, it was just you know, he and he really opened my mind to, okay. Science, art.
You can go to the 2% and make $85. Mhmm. Or you can do what Tom did, and he was a science guy. You can go to bring both sides in and blend them and put them together. And and I'm just amazing tracking your work, and I look forward to when you have people who are who are just banging that.
And Yeah. I gotta say this, my friend. Your goal of a 100 millionaires is way too freaking small. I think everybody out here agrees. You're you can raise that bar massively.
Yeah. Because you're really teaching one of the most important skill sets. Yeah. I think, to me, the most important skill set is the ability to raise capital
Steve: Mhmm.
John: And provide value for those you raise it for. So not some schlock like all these syndication guys out there who are just trying to make fees to pay their own bills and and cover their Mercedes payment. But really teach people to provide value. And and, obviously, one of the big skill sets that's learned, you know, on raising money is to understand the psychology and emotions of the sales process. And for those of you out there, you don't need both.
Embrace your engineer brain, your science side, or embrace your art brain. Both work phenomenally. And we both know people who are incredibly successful, who are only one or the other. Yeah. And and those are the 2%.
You know? And I always kinda looked at, you know, in every profession, whether it's speaking, whether it's real estate investing, whether it's being a waitress, whether it's being, you know, a guy who's a mechanic. It's like, you know, 2% of the people I meet on the planet are extraordinary or exceptional at what they do. And that's a choice. That's what people don't wanna hear.
That's a freaking choice. You have to choose and you have to folks, you have to pay the price to be great. That's not easy. And a lot of people choose not to. We have a lot of students.
Like, I'm a half 100 houses and they get to 30 or 40 and, you know, they're making $15 a month. It's more than they ever made and they've got half 1,000,000 in the bank. Like, yeah, this is good enough. I'm good. I'm good.
Yeah. And then about 18% are what I call good to great. I mean, they you know, they were realtor. They're making a couple 100,000, 400,000 a year. They're really, really good.
They're not the top echelon, but they're really, really good. And then the other 80% is like, okay. They're there. Two, they really, really suck at what they chose to do, and I just kinda lump them all together. And then in the 2% is what you're teaching people to do is that that point o 2%.
I mean, those just they walk in a place other people don't do. And what's amazing is many of them, not all of them, but many of them choose to become that leader, that shining example. Zig, for me, was one of them.
Steve: Absolutely.
John: You know, just a beak you know, we have talked about in an industry filled with yuck was just a shining beacon.
Steve: Mhmm.
John: You know, and and, you know, didn't think he needed to embellish or lie or tell stories to get money from people. He went out and did his thing and told the truth and was straight and
Steve: bam. Yeah.
John: Yeah. He was incredible.
Steve: Absolutely impactful, influential. You know? He's still I always go back to that line. Right? You can have anything in life you want so long as you help enough other help enough other people get what they want.
John: It's my favorite Zigism. I, shared the stage with him 18 times, and his second to last talk, was in public talk was in San Diego. And I flew out to say goodbye. And he looped a little bit. His brain was off.
Mhmm. He looped a little bit, but he freaking crushed it. Yeah. And and he he was just going into my favorite clothes, and he and I I would love to stand up because Zig looked to the right. Most men look he looked to the right, and I would be on the right of the wings.
And he just looked over, and he gave me a wink, and then he did his pump thing, and he went into the clothes. And this is, like, what a moment. It was great. And he was he was a blessing. And his son's doing a really good job with his work.
His son, Tom, doing a good job. Really good job. Yeah. He was amazing guy.
Steve: Yeah. I got to see him speak only once. It was one of those get motivated events.
John: Yeah. Oh, that were, yeah. Was it get I think it was get mode early nineties in Phoenix was the first time, they had brought me in just local guides, speak on real estate and, you know, it was kinda my it was down where the Suns play. Mhmm. It was one of would have been '92 or three.
One one of my first stadium gigs. And it was kinda like, you know, you gotta you gotta adjust your psychology. It's like it's only a 100 people, but it's really 12,000 and yeah, and just going through that process.
Steve: Is it is it Lou Brown? Who who is the motivational speaker? Les Brown?
John: Les Brown. Oh, Les is amazing. So we
Steve: had Les. We had Zig. We had Colin Powell.
John: Yep.
Steve: The coach from U of A.
John: Yeah. I think he had Bush.
Steve: I didn't
John: Bush senior did a lot of those. I I met a couple couple of the president at those events, and then did some international stuff with Zig. He was he was phenomenal. I was was so blessed to be in a position to where I got to get on a bunch of those stages. Yeah.
Steve: Would you ever outsell Zig?
John: No one ever outsold Zig. I came close. The the most amazing Zig I ever saw so we're in Singapore. Richard Richard can't events, and there was about 8,000 people. He's currently the largest promoter in the world, has been for about fifteen, twenty years.
Actually, owns the intellectual property of some of the biggest names that exist today because they were in financial trouble in 10/1112. And Richard, he loves he lives his money like I do. So when they were all in trouble, Richard's sitting on tens and tens of millions of dollars that he banked during the good times. Mhmm. And so several of them signed, lifetime contracts with him and signed over the rights to their material.
And I won't mention names, but it's some of the biggest names in the history of the business. He still owns the intellectual property. And, so the the buzz in the backroom is we're gonna get the old man today. We're gonna get Zig because it was estimated that 70% of the room owned this product. Mhmm.
So it's like, there's no way this guy does it today. And so Zig's like he get he gets going, go, okay. So I need all of you to stand up. You, sir. Stand, please.
Thank you. And you, ma'am, in the back, I need all of you to stand up. And I need you to turn around and look. Don't move yet. I need you to turn around and look.
So you've noticed that we set up double the tables, which he did had them do. Because here's what I need to do. I need you and we need to do this in an orderly fashion. And you can you can still hear me and listen to me when you're like, I need those of you in the back to start moving the back. You, ma'am.
Yes, sir. Yes, you. They may go in back. And they're just following the directions. It's just like he had them hypnotized.
And And he goes, now here's the thing. I know that most of you in the room already own my product. And the product I'm offering today is the exact same product you already own. And I think you're already owning it, I'm paraphrasing, is a testament to our success. So as you're lining up in the back and you're getting your credit cards out, here's what I want you to do.
I want you to decide and you can decide it on the way home or now after you get it. I want you to decide, are you gonna go home and find the old course and give the old course to your friend or family member that you love the most? Who needs it the most? Or you're gonna give them the new course? They're both the same.
Go to the back. And then and what and and I was standing on my favorite spot was they're gonna write, and a thousand plus people go to the back with their chart going down. And the other guys are just like,
Steve: no way.
John: And that was, the second time they could give me a wink. It wasn't the last one. He looks over. He just I'm just like, nailed it. Just crushed it.
Yeah. Because everybody else would have been like, what do I do? 70% own? What am I supposed to do? I don't have a new product.
I don't have a new offering. I don't have nothing.
Steve: Yeah. But you guys dig with his personality and his infectious enthusiasm. Oh, I'm sorry. A way.
John: Yeah. Yeah. Un yeah. Unbelievable. He taught me a lot, about putting yourself in state to properly present.
And it was unlike so many people in the and you've been in some green rooms. And there's a lot of great people in the green rooms, but there's a lot of not great people. He was truly and genuinely there, and in his mind was just service, service, service, service, service. And he was more concerned. I believe it was genuine because I spent some a lot of time with him in in the gym and running.
Genuinely, he wanted to impact and reach the person who couldn't afford the course more than the person who could because he felt they needed the help more. Mhmm. Which was just, you know, to me, why is the beacon light, which is just night and day from those people in the green room. Most people in the green room are just counting up their dollars and need the money.
Steve: I've heard some nightmare stories. Stories.
John: I've seen some nightmare stories that are just unbelievable. Yeah.
Steve: So, again, guys
John: Peter Lowe was the guy who did the, the seminars where you saw Zig the first time. I haven't I haven't heard or seen from Peter in twenty years. He was Canadian.
Steve: So we're doing event August 24. You're speaking. Sharon speaking. I'm speaking. We got the link in the show notes.
We got a QR code right here. Scan it with your phone. We look forward to seeing you guys August 24. It's a stupid low price. So
John: It it's it's so affordable, and we're providing lunch. And it really this is look. You may be able to see Steve or Steve or I around, but getting to see Sharon in an intimate, like, event like this, this doesn't happen very often at all. Yeah. I mean, it's like it shouldn't do this anymore.
So, I mean, she'll does do stuff, but it's usually thousands and thousands and thousands of people or it's online and all that. So, I mean, if you ever wanted to meet, you know, one of the great minds behind the whole Rich Dad series and all that thought process and yeah. I mean Sold
Steve: 35,000,000 books.
John: 35,000,000 books. Yeah. That makes my million look like a little teeny baby nothing. Yeah. She's phenomenal.
And and you'll learn so much, and she's gonna be there hanging out. You know, we're gonna be there the whole time, and available for you guys. Lots of questions. And then we'll have lots of team members there that are students that are very successful. And then, obviously, if you haven't had a chance to come hang out with Steve, first of all, you should already come to one of his trainings.
But if you haven't, then come see Steve there. And if you don't know who I am, come and meet me.
Steve: Perfect. Awesome. Thank you so much.
John: Thank you, buddy. I appreciate it.
Steve: Yep. Thank you guys for watching. Make sure you click on that link, and we'll see you guys August 24.
John: Shout out to Steve Train. Jump on the Steve Train. Disrupt us.
