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Buying Real Estate Without Cash or Credit

John Wiley & Sons

Chapter One

Vicki walked into the Intensive Training and finished the registration packet. She was a mix of so many emotions: scared, excited, anxious, hoping. As a single mom with two young kids, she had to move heaven and earth just to free up the time to be here for the next three days, not to mention the challenge she had to overcome to pay the tuition for the program out of her nurse's salary.

But she had always dreamed of providing something better for her kids. It tore her heart out when she had to drop them off at day care each morning and go off to her 10-hour shifts at the hospital. Not for the first time she thought about the child support payments that always seemed to be late. No, if something was going to be different, she thought, it's going to be up to me to make it so. That was her driving reason for stepping out on faith and committing to become a real estate investor.

She found a place to sit next to a sweet-looking woman in her late fifties wearing a red wool sweater.

"Hi, my name's Vicki." "Hi Vicki, I'm Mary, and this is my husband Leon," the woman said pointing to the man next to her. He looked to be in his early sixties.

"It's nice to meet you both. It's a little overwhelming this morning," Vicki said.

"I know what you mean. I'm not sure what to expect myself," Mary replied. Just then a short woman with aname badge that read Beth came by handing out a flyer. The woman smiled at Mary and Vicki as she handed them the paper and continued handing them out.

Vicki looked down and read the sheet of paper.

Vicki thought for a moment about what she read. Then she turned to Mary and said, "Well I guess we're supposed to share with each other a little bit about ourselves and why we're here." Vicki shared her burning why for investing and about how she was a single mom, and then listened as Mary shared her and Leon's story.

"Leon retired from the military about a year ago. He was in for 33 years. Me, I spent that time raising our four kids. But they're all grown up and out of the house now. I have three grandkids. We moved down to Florida when Leon got out. Over the past year we've been able to buy two rental houses. Plus we had our old house in Georgia where we used to live that we've also turned into a rental. We got our start after reading a book called Rich Dad, Poor Dad. That book totally changed our thinking about money."

Vicki excitedly broke in, "I read that book too! About two years ago. I've been trying to figure out how to do the things the book said to do ever since."

"Yeah, we're in the same place. That book was amazing in that it opened our minds about what it meant to be financially literate, but while it shifted our context, it didn't give us enough of what we needed to actually do the things it said to do." Vicki was nodding as she listened.

"Anyways, we started talking with real estate agents in our home town and looking at properties. I'm not sure how we did it but we were able to pick up two more rental properties using conventional financing. They both cash flow about $200 a month, but now the bank says that we have too many loans in our name and they cut us off. I've talked with a few different mortgage brokers and they all say the same thing. Because we're living on a fixed income they don't want to give us any more loans. But we don't want to sell these houses because the cash flow and value are going up each year.

"That was why when we came across Peter and David's book at our local bookstore we couldn't put it down. Here-finally-were all the details we needed to make real estate work. Both Leon and I want to be able to travel and enjoy our retirement. Plus, we've always wanted to do real estate together. That's why we joined up with the Mentorship Program four weeks ago. We've just been going through the online orientation and real estate prep course and waiting for this weekend ever since."

"I'm so glad to have met you Mary. I was so scared when I walked in here this morning, but something about talking with you and sharing my dreams, and hearing about you and Leon ... well, it's really helped to calm me down. Thank you."

Mary smiled at Vicki and reached out for her hand. "Don't you worry Vicki. I bet you're going to be great at this."

The man to Vicki's right introduced himself. "Hi I'm Tim."

"Hello Tim, I'm Vicki."

"Hi Vicki, tell me about yourself and why you're here." Vicki again shared her background and reasons for being at the training. She noticed right away that Tim was a very animated listener.

When she was done sharing, Tim said, "I've been in the corporate world for about the last twenty years, most of it in sales. I took a buy-out package from my last company when they downsized-laid off really-about 600 people. It's been tough. My wife Nancy," Tim said pointing to a professional-looking woman in her midforties, "she has been great about it all. She said that this is the chance I've always been waiting for to do something on my own. You see I've always dreamed about starting my own business. I wasn't sure what that business would be, but it would be my own deal. After being in technology sales for the past ten years where things aren't too stable, I was tired of being at the mercy of decisions that other people make. As for Nancy, she's been complaining about all the corporate politics she has to play with her company. She's one of the most competent businesswomen I've ever met, but in her company there is still that bias against woman executives. I think it's just worn on her over the years. So when Nancy and I were at a conference Peter and David held about a month ago and they explained about the Mentorship Program, we signed up."

Vicki turned to her last neighbor, a medium-height, attractive man in his midforties named Mark, and again shared her story for joining the Mentorship Program and being at the training. "Now it's your turn Mark. What's your burning why?" Vicki asked.

Mark smiled and answered, "I work for one of the larger airlines as a pilot. I've been doing it for over twenty years now. As you can imagine things have really undergone some serious changes over the past few years. I find depending on an ailing industry for my future doesn't sit well with me. Besides, my passion is music, singing in particular, and I want to use my real estate to get to a place where I can quit my job working for the airlines and lead a school choir program."

Vicki felt her spirit drawn to this gentle man and had so many questions for him. But just then she looked up on the stage and noticed that someone was standing there now. He was tall and athletic looking, and in his mid-thirties or so. As soon as he started to talk Vicki immediately recognized the voice from all the CDs she had been listening to-it was David of Peter and David!

"Welcome to the Intensive Training everyone!" David said in a warm and excited voice. "Over the next three days you are going to learn everything you need to know to go out there and succeed in your real estate investing. Let's take a moment and get real here. How many of you were scared to tell a friend or family member about your coming here this weekend? Come on, after ten years of doing this I know that many of you were scared of their reactions so you kept this weekend to yourself. Raise your hands if you did that," David asked. With David's promptings over a quarter of the audience admitted they had kept the workshop secret from friends or family.

"I want you to know that I understand. I remember when I got my start investing. I guess you could call me the first Mentorship student Peter ever had. I was terrified of telling my family and friends about my new business. I was scared that they would criticize me and tell me that I wouldn't be able to do it.

"It's not just telling them that you are starting to invest in real estate that makes you feel so vulnerable. It's telling them about your dreams. Sometimes the hardest thing to do is to share with other people that you even have dreams because so many people in our past have squashed our dreams over the years. It gets even harder when your friends and family see you start to back up your dreams with decisive action because then they often get scared that maybe you won't make it and you'll get hurt. Or they get scared that maybe you will make it and what would that mean for them in their lives.

"Here's the critical piece. When they get scared by your taking positive action by joining the Mentorship Program and being here this weekend to get to work learning how to create wealth with real estate, they don't look or sound scared. In fact, they look and sound sure that you are in danger. They tell you things like, 'You're crazy to try investing; only rich people make money investing, not people like you and me.' Or, 'That's too good to be true.' Sometimes they clothe their fears in advice like, 'I tried investing in real estate one time and it didn't work for me. In fact, I lost money in the deal. Come to think of it, every person I ever knew who tried investing in real estate lost his shirt.'

"In my family, when I dropped out of college to start my first business I heard, 'David you're crazy! You're nuts! Don't be stupid! Finish your degree.' But over the years I've learned how to translate. My family was really saying, 'We love you and just want to make sure you are safe.' How many people do you know who have given up their dreams in order to play it safe?

"If there is one thing I have learned in my years teaching people to successfully invest in real estate it's this: there is no safety in playing it safe. In fact, playing it safe is often the riskiest thing of all to do.

"My real point is that it took a tremendous amount of courage and commitment for you to be here this weekend, and I want to acknowledge you for this. You have our personal promise that we will do all we can to help you reach your financial goals. This is a commitment from the entire coaching team.

"As most of you know the coaches you'll be working with over the next year of your Mentorship Program are all extremely successful full-time investors. They could have stayed home with their families or gone out this weekend and bought another property or two, but instead they chose to be here with you. And in case you're wondering, it's not because of the money; Peter and I are a pretty frugal pair. They're here because they get something-we all get something-that enriches our lives by helping you get your dreams through real estate. Real estate has given us all so much in our lives we feel we have a great debt to repay by working with you, and it starts here this weekend.

"None of you had it easy getting here. All of you had challenges and obstacles to overcome to earn the right to be in this room. Many of you felt like the biggest challenge for you was time-finding a way to organize your life to get three full days away.

"I was talking with several of you this morning before we got started and I was talking to Mark," David said pointing to the pilot sitting near Vicki. "He shared something that has stayed with me. He said, 'David, I have a different take on the time challenge. I felt so busy in my life that I knew I had to be here. I literally can't afford to take an extra year or two to figure this out on my own. That's why I joined the Mentorship Program to begin with-to have your coaching team and systems help me shorten my learning curve to three to six months instead of a couple of years.' In an important way I think that really could be the theme of the Mentorship Program-to help you all succeed in your investing by getting you on the fast track.

"But for us to help you onto the fast track you're going to have to be open and coachable. The students I've seen who have been most successful made the commitment to listen to and follow the expertise of our coaching team.

"For many of you, the financial commitment was the biggest obstacle to your being here this weekend. I understand that the program isn't cheap, but who would want it to be? I've always felt that if money was the biggest thing stopping a person from doing what they knew in their gut was the right thing to do, then they had to find a way to make it happen. It's been my experience that whatever reason someone uses to give up in one area of life is the same excuse that person uses to quit in another area of life. Whether it be finding the money to fund a deal or the money to invest in your education, I have a core belief that says if you are committed there is always a way.

"All these obstacles aside, what do you think the real underlying obstacle for 90 percent of new investors really is?" David asked.

Several people in the room shouted out, "Fear!"

"That's right ... one of the ugliest four-letter words around-FEAR. Most people never come out of hiding and start doing their investing simply because they are too scared and they don't have a support structure to help guide them through the process. One of the things I respect most about you all here is that you stepped up to the challenge of fear and did what it took to get yourself here. I promise you that our coaching team will be right there with you every step of the way, to give you support and encouragement and to give you feedback and coaching.

"Now that we've got that out of the way, I want to give you the big picture of what you'll be learning at this workshop. First, this weekend is not about stuffing you full of facts, figures, techniques, or information. Most of you are already on information overload from all the books you've read on real estate.

"This weekend is about cutting through all that blizzard of data and leaving you with the essential core you need to get started right now and do your first deal in the next 60-90 days.

"Our job isn't to share everything we know about real estate with you in three days; our job is to give you exactly the right information you need at exactly the right time, and to provide a place for you to use that information in a way that you can't procrastinate or run away, so that when this weekend is done, you have proven to yourself that you have everything it takes to make it in real estate. I understand that we've laid out an aggressive standard for us all at this training, but time after time we've watched amazing results manifest from this very same workshop.

"We're going to start off here this morning getting you all on the telephone, making real calls to actual sellers of properties. We call this 'doing dials.' Our team has put together a list of hundreds of potential sellers for you to be calling. Now, to make the calls manageable and not quite so scary, we're going to match you all into groups. You'll be doing your dials with your calling groups. Our goal from the calls is for your calling group to set up a few appointments for you to meet with sellers on the final day of the training. Think of it as your graduation exercise-one of the final ways to tie this weekend together is for you to go out on actual appointments with real sellers. But rather than have you face this potentially intimidating situation of meeting with a seller on your own, you'll be going as part of a small team so that you not only can give each other moral support, but you can also give each other instant feedback when you're done.

"Now I'd like to introduce you to three of the coaches you'll be working with here this weekend. Many of you have already gotten to know them through the coaching calls or through questions you've posted on the discussion board. They are part of our very special coaching team. As I introduce them to you here today remember one thing: At one point in time they were all sitting exactly where you are sitting today-as beginning Mentorship students.

"All of our coaches got their start investing as Mentorship students. In fact we have always groomed our coaching team from the ranks of our successful Mentorship students. And there is a reason for this. Not only does it let you know that they can relate to what you're going through and coach you on your deals because they have done it themselves, but equally importantly is that Peter and I can trust them to teach you the way we taught them so that you get the very best we have to offer. I know they learned it the right way because Peter and I spent years teaching it to them.

(Continues...)

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Excerpted from Buying Real Estate Without Cash or Credit by Peter Conti Excerpted by permission.
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