Posted on: November 24, 2020

If you’re in the real estate business, it is highly likely that you’ve heard of Robert Kiyosaki, the entrepreneur, investor, and motivational speaker who wrote the bestselling book, “Rich Dad, Poor Dad.”

Undoubtedly, Kiyosaki has been an inspiration to many including our very own Brent Daniels. In this special episode, Brent shared the one lesson he has learned from Robert Kiyosaki that has made him a millionaire.

If you want to know how to join the millionaire’s club, this episode is exactly what you need to hear!

 

Key Takeaways

  • What true wealth is
  • Why it’s ideal that you work on your business and not in your business
  • Why it pays to keep the money for yourself
  • What legacy wealth means
  • Three main buckets lead generation goes into
  • What people are willing to trade equity for

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Episode Transcription

Brent Daniels:
I wanted to start with, who’s read this one? Who’s read this book? Rich Dad Poor Dad, right? Okay. Yeah. This is, I would say 90% of the interviews that I do on Wholesaling Inc., the first little, the spark that got people into real estate was this book. I believe it, because he sold 40 million copies of it, right? This has been on the bestseller for 20 years or something, it says. Yeah. Number one finance book of all time. The interesting thing about this book is it sparks you, but it doesn’t show you what you need to do, right? It doesn’t show you how to get deals. “Oh, great. I’m going to be a real estate investor.” Well, now what? Right? How do you find opportunities? How do you all of a sudden… So I read this book. I’m 20, maybe 21 years old.
I’ve got a mushy brain. I’m like, “Oh my gosh, this is it. I love it. I love this. This I’m going to be a real estate investor. I’m going to own so much real estate, it’s going to be ridiculous. I’m going to own it and I’m going to be wild. I’m going to get this stuff called passive income. Oh my gosh. That’s where you just, people send you money. It’s absolutely incredible.” So I’m like, “Well, what am I going to do? I’m going to go get a real estate license.” Right? Because I didn’t know anything. I got a mushy brain. I’m 21 years old. I don’t know what to do. How do you find these deals? I don’t know what escrow is or earnest money or title companies or lenders or any of this stuff, right? I didn’t even know what a realtor did. It was just something you saw on TV or commercials or you got magnets that were on your kitchen or something from these people, right?
I had no idea. So I went to real estate school. The interesting thing about real estate school is they teach you. They educate you, right? They educate you on the terms. They educate. They make sure you memorize them because you got to pass a couple of tests. Maybe not the first time. Maybe the second time. It educates you, and that’s beautiful and wonderful, but it doesn’t instruct you, right? So I want to break down because I think that there’s interesting… I want to make a parallel between this book and what it teaches, and what we are doing and how we can implement that so that there’s a how to go with this book. Does that make sense? All right. So do you guys remember when Robert Kiyosaki talks about the cash flow quadrant, right? Now, who knows what E stands for? Employee. That’s right.
This is employee. This is where 80% of America lives, right? This is where, by the way, from January 1st to the end of September, 80% of people are paying for their income tax and interest payments on the things that they buy, right? Why don’t we have savings? Because we have three months of reserves to be able to do something with, right? Why can’t we invest in real estate? Because we have three months of reserves from a job, from being an employee. This is working for somebody else, and that’s where we start out a lot, right? We’ve got responsibilities. We’ve got kids. We’ve got family. We’ve got certain bills to pay. We’re out there. So a lot of people start in here and start part-time as an employee.
But what happens is the beautiful thing about real estate is the barrier to move from an employee to a self-employed, you can make that choice right now. You could literally be self-employed right now, right? You can go out onto any street in Phoenix, any street in an older area, any in Mesa, any in Apache junction, any in wherever, wherever you want to go, Glendale, and you can find ugly houses. You can find ugly houses. And it’s 2020. You can get their phone numbers like that, right? And you could call them. Now, guess what? You are a self-employed person. You are working for yourself, right? You’re not a business yet, right? But you’re a self-employed person. You’re out there and you’re hustling it up, and I know people that stay in this realm and work completely by themselves and make a million dollars a year in real estate, right? These are the choices we have to look at when we’re looking at what we want to do to set up the foundation of our business so that we can work within our self-awareness, within what we want to do with our lives, right?
Some people say, “Listen, I don’t want to be a leader. I don’t want to read leadership books. I don’t want to manage people. I don’t want to hire them. I don’t want to train them. All I want to do is I want to get on the phone. I want to talk to distressed property owners. I want to get that deal under contract and either flip it, hold it, wholesale it, wholetail it, whatever it is.” Right? That’s what they want to do and they want to stay in this. I call this the LeBron James area, right? This is the highly-paid self-employed person, right? This is the person that is out there. They are going and they are doing it, and they are hustling and they are working and they eat what they kill, right? This is… You know what? The beautiful thing about this is… And don’t knock this. Listen, this is set up.
This is Robert Kiyosaki saying, “You need to do these things. You need to move from this quadrant to that quadrant to get there.’ No, you don’t. No, you don’t. You just got to do what you want to do. You got to do what makes you happy. You got to do what is in your DNA to be able to do what feels good in your bones, right? What feels good in your gut. If you want to stay and just stay in the world where you are sourcing your own deals and you’re selling your own deals or you’re flipping them or you’re doing whatever and keeping all the money and not having to deal with management and all those other things and payroll and taxes and all these other things, then you can stay there. You can absolutely stay there and you can make a ton of money.
But what we’re told to do is, “You got to be a business owner.” Right? “You got to start a business. You got to get people working for you.” Right? That’s wealth. That’s how you build the true wealth is, you got to start having all these people. Now you’ve got people that are making calls for you. You got people that are texting for you. You got people that are doing your acquisition management. You got people doing your sales. You got people selling your deals. You got people doing all these things, right? It’s beautiful and it takes a lot off your plate, but remember, you got to build up that engine. You are now financially responsible for those people that work for you, right? Are you ready for them? Do you have enough leadership experience? Do you want that? Do you want the sleepless nights worrying about all the things that are going on in your business?
Do you want a situation where you’ve got a business where you are growing for two to five years? You need to be in it every single day, doing every part of it, all the different hats. The marketing, the accounting, the management, the sourcing of deals, pulling lists, doing all this and finding ways to find opportunities. Do you want all of that stuff? A lot of people do, and that’s great, and you can get to the point where you are building a business where you’re not necessarily working the whole thing. Work on your business, not in your business. Great. Net a million dollars, then you can start that, right? Everybody wants to be here in two seconds because they want to delegate the stuff that they don’t want to do, right? That’s what you do. And then all of a sudden you take home 10% of the profits.
I mean, you take 10% of the gross as your profits, and now you’re making less than this dude over here that’s making $700,000 a year net to them into their family, buying property, paying off debts, winning, winning, winning. But this, yeah, you’ve got potential to expand. You’ve got potential to scale. You’ve got potential to be able to do something special and lead people, and really create a brand and create these things and have a group and a family and a team and all these exciting things to be able to get all the opportunities and to be able to focus on building the business that’s going to be longterm, so you don’t have to be hustling all the time, right? The problem is people don’t want to hustle too long. They want to get to this too soon. I think it’s a huge mistake, and I don’t want you to do that, right?
I want you to build this as much as you can, to the point where you feel comfortable being a leader and growing and building and doing that type of stuff. That’s being in the business and that’s not necessarily working day-to-day on just doing the deals and comping the deals and looking at opportunities and going to the properties and managing your crews and all these other things, right? But being a business, you can get to a position. I am here now, in my thing. I was here for a long time. In this spot I talked to 40,000, I calculated, this is not exact, for the record, 40,000 property owners, right? I called three hours a day, five days a week for three and a half years. All right? I talked over 40,000 people, built it up before this really started going, right? This was all because I needed to make money and keep it for myself, right?
Keep it for my family. And then I got to the point where now I work about 10 hours in my real estate business. It’s a million dollar business. 1,200,000 is what we’re going to make this year, on track to make, and I worked 10 hours in it, right? Which allows me to do a lot of other things. The coaching, the content, YouTube, podcasts, these types of things. Go leave. I leave Friday at one o’clock. I go to Flagstaff to my cabin. I come back Monday afternoon. I work Tuesday, Wednesday, Thursday on whatever, and Friday mornings I have my team meeting. right? But it takes a while to get there. I’ve been licensed since 2004. You know what I mean? I’ve been doing this for 16 years, right? So getting to that grind, getting into that groove, building it up and making sure that you’re keeping the money that you have.
But this is the dream, right? This is that dude sitting on the beach drinking a Corona, just kicking it, right? With his laptop going, “Ha ha ha, another wire just hit my account.” You know what I mean? It’s like, “Oh, okay.” Right? That’s the dream. That is what you get from being here, but you got to build up those skills of making sure that you have the right people around you, right? We can go into how to structure that. But right now that’s where it’s at. And then this is the supremo, right? This is when you become that investor. This is when you become that person that maybe you’re taking all the money from here and here, and you’re buying all those properties and you’re starting to get that cashflow, right? You’re starting to just invest in the properties and you’re starting to get the passive cashflow.
Or like Brian, right? Brian here, you make a bunch of money and then you start lending it and you start connecting with people that have a bunch of money and you start lending out and you become the bank, right? Now you are an investor, right? Because he lends the money. Somebody else is out there doing the flips. Somebody else is out there finding the deals. Somebody else… By the way, meet up with him if you guys need some money, all right? All Right? Okay. Good. Anyway, but this is great. This is the evolution, right? If you want it to be. If you want it to be. This can just be you owning the rentals, right? You owning these things that people call legacy wealth. Legacy wealth. What does that even mean? You’re dead. You don’t know. You’re a dead person. You’re a skeleton. You’re like, “Oh, it’s for my family.”
Where’s your family? Okay, great. They’re taken care of. How about they do the (beep) that you did to get all this (beep)? How about that? How about we teach our kids that, you know what I mean? The legacy and all these things. Name me one of the Rockefeller’s grandchildren? Anybody? Anybody? They had the most money on earth. Whatever. Exactly. It’s silly, right? But I get it. I get it. You want to change it and you want to… It makes sense if you’re coming from a really tough situation and you want to build up and you want to get out of that and you want your family to be into a different, have more opportunities. I completely understand that. But that goes into being an investor, right?
That goes into buying these assets that you were okay buying and forgetting and just building up the equity over years and years and years, or building a fund of money. Really, the evolution is you either become somebody that’s doing development and that’s not even an investor, or you invest in developments. You’re either the bank or you own a ton of rentals. You own a ton of property right? In our world. Obviously there’s other people that invest in stocks and all that other stuff, but does that all makes sense? Right? [inaudible 00:13:01] the evolution, right? So how do we get from employee to self-employed, right? This is the biggest step that people are having an issue with, because to get out of employee into self-employed, we need to be able to replace our income, right? We need to be able to not only replace our income, but now we’re responsible for our own taxes. Now we’re responsible for our own health insurance and our family’s health insurance, right? It’s not just, “Well, I make three grand a month, five grand a month, eight grand a month.” Well, what else do you have with that company?
There’s a lot of things that are involved there, right? That’s how they keep you in because they get bulk discounts on health insurance and everything else. So you’ve got, what is the jump to get here? It’s really just sourcing your own deals, right? It’s getting through the process. It is. How do you go from an idea or the faith that you can do the business or that you can do it on a high level, to the point where you’re closing your first deal, and it’s no longer faith, it’s a fact, right? When you’re growing your business and you’re doing a couple of deals here and there, but now you’re doing 10 deals or 15 deals. Or maybe you’re doing less deals, but you’re making more money per deal to where all of a sudden your income’s bananas, right?
It’s these three steps. That’s it. That’s the whole real estate business is right here, right? Now, lead generation. There’s only three main buckets that lead generation go into. The first one is get referrals, right? This is what a lot of people do as they start out, a lot of people that haven’t heard of me do, is they wait for referrals. They talk to real estate agents. They say, “Hey, listen, real estate agents. If you find a deal, I want to do a fix and flip. I want to buy a rental. I want to do something. Can you send me any deals that come your way?” Right? That’s their lead generation. There you go. Send me any kind of properties, and hopefully you can buy them or you can get the opportunity to buy them, right? Referrals. Or you become the guy or gal in your market, right? Or your area.
“Hey, listen, family, friends, Facebook, Instagram, YouTube, whatever. I buy properties. I buy them cash. I want the ugliest houses that you can sell. I want all these things. Send them to me.” Right? It’s beautiful, and this is where you definitely want to start building a reputation so that you get referrals. Because the beautiful thing about referrals are you get to keep all the profits, right? People refer you to those deals, is you’re going to keep all the profits. The problem with referrals is it’s not predictable. You don’t know when your aunt is going to talk to somebody in a bathroom of Applebee’s that just inherited a property and jibber-jabbers because she’s a quadruple expressive personality and gets you the address and phone number of this gal and passes it over to you, which has happened to me, which is a true story, okay?
You don’t know. You don’t know when that’s going to happen. You don’t know when you’re going to get the referral, so it’s unpredictable. So it’s hard to start making all your choices, all your big business decisions like going into this business full-time or growing it or scaling or hiring people or all these things, going into different markets, if there’s no predictability in your business. Does that make sense? All right, good. Second way is to buy it, right? It’s simple. It’s marketing, right? Direct mail, internet, bandit signs. Pretty much the big three, right? Those are the big three. Those are the big three that everybody talks about, which are fantastic. But do you know the average cost to get a deal from direct mail in Phoenix currently? $9,500 for one deal. $9,500. “Well, I sent out 20 and I got a deal.” Great.
Do it again. You’re going to be the richest person in Phoenix. You know what I mean? Yeah. You could get lucky on one, but to build a business on it. It’s $9,500. Do you know what it is for internet leads? $11,000. This is networking with all the top guys in their state. $11,000 to get a deal. Can you imagine spending $11,000 and hoping and praying you get a deal with no guarantee that you’re going to get it closed. I mean, how heavy would that feel? Holy (beep).
“Hey honey. Yeah. No, no, no, no. Yeah. I know. No, I know the account’s lower. Honey, I got this. I got it. No, no, no. It’s going to be incredible. No. I bought a website. No, no, no, no, no, no. The real estate thing I’m doing. Uh-huh (affirmative). Uh-huh (affirmative). Yeah, yeah. No, it costs a little bit, and then it’s for marketing. Yeah. They’re going to come. It’s going to flood through. We’re going to be so rich. It’s only 11 grand this month. Yeah, yeah, no. I have to spend 11 grand next month, too. What? You want a… what? No, I don’t want to stay at my parents.”
Right? It’s just heavy in anxiety and stress and all these things. It’s just like, “Oh God.” And the bandit signs, you know? I mean, basically Phoenix rips them down unless you’re a politician, right? Right? You can’t put out bandit signs. They get ripped down and they don’t really work here. They just don’t. So you’ve got that, and then you’ve got being proactive, right? It’s earning it, right? So you can wait for it with referrals, you can buy it through marketing or you can be proactive and go out and get it in two ways. Knock on doors, pick up the phone. People know. You know. Everybody knows in this room. It’s just being proactive. The problem with being proactive is a couple of things. One, repetitious boredom. “I don’t want to call and call and call and call for three hours a day. I don’t want to talk to 40 (beep) thousand people. I want to talk to four people and get it.” You know what I mean? I don’t want to go through that. I don’t want to be doing these things, right?
“That sounds so boring. What am I going to tell my friends? That I got to stay home to call people, to get on a phone call with people.” You know what I mean? And then we go through all these things and then, not only that, but it’s just being brave enough to actually press go the first time. You’ve got that 400 pound phone and you’re like, “Ah, you know what? I’m going to take out the trash. I got to fluff that pillow real quick on the couch, and then I’m going to make my calls. That’s it? That’s it. Yeah. No, I’m going to… You know what? I don’t want to do it in my room. I’m going to go to the kitchen. They got the high top. It’s going to be nice. I’m going to be making my calls. Oh, okay. No, no, no. Oh, you know what? It’s raining. It is just gloomy outside. People do not want to hear from me today. I am going to just do it another time.”
You know what I mean? Or, “I’m not going to make calls. I don’t like getting calls.” Right? All of these things go through our head all the time when we’re getting ready to make calls. We’re always thinking about the cause. We’re not thinking about the effect. We’re not thinking about the fact that there are six to 10, on average, national statistic, six to 10% of our market is in distress. It just is. Whether that be people behind on their payments. Whether that be people just tired of being landlords and their property’s beat up. Maybe the property’s just in really rough shape. Maybe they inherited it and they don’t have the money to fix it up. Maybe they just want to get rid of it to buy something else, right? Six to 10%. So we reach out to those six to 10% of our market, and that’s where we find our opportunities.
Because guess what? They will trade equity for speed and convenience. They will. They’ll trade the equity for speed and convenience. That never happens. Every day of the week it happens. Every day it happens. Happens every single day, because believe it or not, it doesn’t come down to the price with everybody. It doesn’t. People want to get out of the stress. People can’t fix up a property. People don’t want to deal with the property. I’ll give you an example. This is beautiful. This is the craziest. I tell this story, but it’s the craziest. We call up a gal, Cowgirl Fran. Older gal. And asked her if she would consider an offer. She said yes. We set in the appointment. We go there. My acquisition manager at the time, Tasha, calls me and she goes, “Ah, Brent? Yeah. I’m on this appointment here in South Phoenix on Desert Lane.” I said, “Yeah.” “Well, it’s an acre lot. It’s a decent property. The gal wants $5,000 for the property.”
5,000. I Google it. 220,000 on Zillow. $220,000 on Zillow. I go, “Hold on. I’m going to go right there.” Right? So I go over there and by the time I get there, Natasha comes out and she’s like, “Ah, you know what? She doesn’t want 5,000.” Oh yeah. I’m sure. “She wants 9,000.” She wants $9,000. I said, “Okay. Is she sane? I mean, do we have somebody here that can talk to her or somebody that she knows and trusts?” So I go in and I talk to her. Nice gal. All there. Drives, does the whole thing. Totally. I mean, not a crazy person, right? I mean, these are signs that you look for if it’s somebody that you (beep) that they have no idea what the (beep) they’re doing, right? This is scammy, right? You don’t want to be scammy.
That’s all you need, right? So I’m sitting there and I go, “Fran?” It’s Cowgirl Fra.” “Okay. Cowgirl Fran, do you sell a lot of properties? Are you familiar with real estate?” She goes, “I’ve been a broker for 30 years.” 30 years, a real estate broker. I go, “Well, what do you think you could sell this house for?” She said, “$200,000.” I said, “Fran, you want to sign a contract for 9,000. You want me to make $191,000 on this deal. Why don’t you just put it on the market?” “Oh honey, I just want you to make it a bunch of money. I was just so thankful you called.” What? Yeah, I’m serious. I made her take $100,000. I did. But it was still… Those are the opportunities that come, you know what I mean? It’s not all about the money all the time.
It’s crazy. We run it into it every week. I mean, we’re closing a deal. We average $28,000 a deal in our business and we close it every single week, right? Because there’s just opportunities out there if you talk to enough people, if you’re proactive enough, right? So, that’s lead generation. The next point is conversion, right? Conversion. This is where sales comes in. This is when building a relationship. This is where the collaboration comes in, right? It’s not rapport building. The ultimate rapport is collaboration. How do you know that you’re collaborating, one, with the right person? That should be the first question. This is filtering through all those leads and making sure that you pre-qualify them and see if you can actually help them out, if you should actually be the person that’s going to help this seller out of whatever situation they’re in, right? In that, we pre-qualify based on the condition, their timeline, their motivation and the price, right?
That’s the four things we must know to be able to know that we’re going on a good qualified appointment and it’s somebody that we can actually work with, right? We try to find out all of these things so that we can discover if we are wasting our time, or if these people should just be talking to a real estate agent, or if these people should fix it up a little bit and sell it themselves or whatever it is. We need to find out the condition, timeline, motivation, price. I’m telling you right now, if you’re talking… Because you guys are going to be so fired up. I know it. So going to be so fired up after this, you’re going to go home and you’re going to get some leads. You’re going to get in front of them. I’m telling you, if you get any opportunities, any leads right now that has a rough condition and their timeline is short, but their price is high, go on that appointment. Seriously.
I don’t care what they’re saying about the price. They’re going to have to be realistic. You can break down the numbers with them when you’re there of what it’ll cost to fix it up, that Zillow’s not the end all be all, Zillow’s not going to write him a check for what they have on a Google search, right? So this is just specific advice for us here. If the condition is rougher or if it just needs to be renovated, right? I’m not talking that they’re hoarders and roof rats have taken over. I’m not talking about the houses that have 17 scorpion dens in it. No, I’m just talking about if it needs some love, if it just needs to be freshened up and their timeline is right now, go to that house. Go to that house.
You’re going to get those opportunities. I’m telling you right now, locking up properties in good areas and good school districts, lock it up for whatever you can. People will buy it. People buy it. If you need help selling it, reach out to me, okay? Because I’m telling you, there’s just not enough inventory. This is a beautiful time. Everybody, “Oh, it’s too competitive.” No, it’s not. Just go after different properties. Go after the properties that just need renovation, just need some upgrading, not the ones that are totally destroyed, that just burnt down or something. I mean, obviously go after them, but go after some of these other ones. Open up the people that you are going after, right? But that’s the conversion. And then obviously you got to pre-qualify them, and then you have to go on the appointment. You’ll have to build that relationship, that collaboration so that they want to work with you, right?
I don’t care if you want to flip it. I don’t care if you want to wholesale it, whatever it is, you want to own it as a rental, you still have to get them to sign the paperwork. The only way they’re going to sign the paperwork is if they want to work with you, right? They trust you. They like you. They like what’s going on. Negotiations just come down to three things. Price, terms, and you. That’s it. But everybody’s like, “well, I’m going to just kill them. I’m going to get them at the price and the terms.” And then just complete (beep) and they lose the deal. And then we come in and we’re sweethearts and we’re listening and we get the deal, right? Price, terms, and you, and shorten the timeline. So the conversion, pre-qualify them, and then go on that appointment and get the contract signed.
And then it just comes down to exit strategy. What do you want to do? There you go. Exit strategy. What do you want to do? Do you want to own it and forever? Do you want to live in it? Do you want to flip it? Do you want to wholesale it? What do you want to do? There’s so many. But as we start out, we wholesale so that we can get the capital. We get the capital so we could get out of our job. We get the capital so that we can pay off debts. Get the capital so that we can start buying other property, right? But at some point you need to switch up the exit strategy. At some point, you need to be buying your deals, right? It takes a while and you’ve got to get into that flow.
It just depends on what your strategy is. I buy all of my properties with cash in good school districts. All of them. I don’t leverage it at all, all right? That’s just my strategy. [Pace Mowry 00:27:40] buys a thousand (beep) properties a year without any of his own money. He’s just out there going crazy. But remember, every rental that you have is its own little business, right? Your employees are the tenants, right? So just make sure that you’re set up to own a lot of properties and be able to manage that, all right? So, exit strategy. Got it? Awesome. That’s it. That’s today’s lecture for the day. I’m Professor Daniels. Thank you. Awesome. For anybody interested in joining the most proactive group in real estate investing, it is the TTP family. Go to wholesalinginc.com/TTP. Wholesalinginc.com/TTP. Check it out. Scroll down. If it feels good in your gut, sign up for a call. It’ll either be with me or my right-hand guy, and I look forward to that.

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