A How-To Guide For the Current Recession
By Preston Ely
“In every adversity lies an opportunity”
– Ancient Chinese Proverb
I’m hesitant to even write this Epilogue at all. It’s been almost two years since I first published Flip Your Way to Financial Freedom, and since then, the world economy has fallen into a pretty freakin bad recession. Some people say it’s the worst ever. And it keeps deteriorating by the day it seems.
So how did I manage to flip four houses in just the last seven days for a total profit of over $40,000?
I did this in Tampa, FL where unemployment is through the roof and houses are sitting on the market for what seems like an eternity. The job market is horrible, and for the first time in Florida’s history, there are more people moving out than moving in.
I’ve sat back and watched for the past 12 months or so as the media has bombarded the world with stories of doom and gloom. I’ve had to bite my tongue as fellow marketers have used the market conditions to scare the crap out of people and motivate them to buy their widgets.
Heck, just last week I darn near bought a hundred grand worth of gold bouillon due to an article I read about how the world was going to end in a week and we needed to buy precious metals immediately. That was, of course, until I realized that the authors actually sold gold and silver.
As for myself – I have for the most part refrained from even mentioning the recession to my subscribers and customers and potential customers. Why give it more power than it should have? It hasn’t affected my life. So why should I even take the chance of frightening others?
So my hesitation in even addressing the current market conditions is twofold –
(1) Everything I’ve taught you to do in Flip Your Way to Financial Freedom still works. We use every single concept and technique that it contains on a weekly basis to this day.
(2) I don’t personally consider the market conditions in my personal life and business. Flipping houses works no matter what the market is doing. And it always will so long as our society remains free.
That being said, there are a couple things we are doing differently now in our wholesaling business than we were 2 years ago. They’re not major changes. But they’re worth mentioning.
But first – allow me to share with you my thoughts on doing business in unstable, slow, recession/depression-like conditions in general.
And I’d like to express these thoughts – in the form of song.
Hahaha. Just kidding. I won’t sing. This isn’t American Idol. I’ll hum –
It’s been said that there were more millionaires made during The Great Depression than any other time in history.
It’s also common knowledge that more millionaires are made during times of recession than all other times.
Why would this be?
I think if we look closely at human nature, the answer will surface.
We are all born with natural tendencies that in general are trying to destroy us. Allow me to list a few-
– sex with anyone and everyone
To prove my point – notice how you don’t have to try and be lazy. It’s easy, right? But how much effort does it take to be ambitious and hard working?
So how does this apply to hard times creating millionaires?
Well when times are good and the economy is growing, jobs are plentiful. The rat race never looked so good as in times of prosperity.
But when times are not good and the economy is shrinking, jobs are sparse. And people are forced to get out of their comfort zones, be creative, and go into business for theirDANGselves.
Recessions force people out of their comfort zones. And guess what – surprise surprise – this uncomfortable, new, dangerous, “unknown” way of living is where entrepreneurs spend their entire lives! Welcome to our world!
It’s a beautiful world really. No rules. No bosses. We write our own ticket. Create our own reality. Sign our own checks. We are FREE.
But it’s not the most comfortable of worlds. No rules sounds good until you realize you are now responsible for writing the rules. How will you spend your time? What will you work on today?
You’re in charge. Do you have what it takes to do this?
Allow me to answer that for you –
You can do this. You have it in you to pull this off. I did it. You can do it. It was hard at first – yes. Uncomfortable – definitely. But oohhhhhh so worth it. Oh man if you only knew (and you will, soon). The joy of freedom. There is nothing like it. Work when you want, vacation when you want, combine work AND vacation when you want. It’s glorious.
So let me help you get there. Your part of the deal is to simply do the things I tell you to do and DON’T F-ing QUIT. PLEASE don’t quit. There is nothing more sad than someone who is almost there – and then they stop just short of the goal.
There is the story of the guy who found a pick stuck in a rock from the gold rush of the 1850’s (or whenever it was). After some more digging, it was found that the pick was mere inches away from a HUGE vein of gold.
If only the guy had kept going.
You just never know how close you are to breaking through. If you do nothing more than plow ahead and don’t quit – you are almost assured success.
So my general view of flipping houses in a down (slow) market is that there is a lot of opportunity for people who normally would never have the guts to try it – to be forced to try it. And to add to that, my belief is that you should pretty much ignore the news, media, and general public. Cuz they’re all idiots. If you are bound and determined to make money, you will make money; I don’t care WHAT the market is doing.
All that being said –
Since the market turned, we have made two small changes to our business –
1. we are more focused on finding buyers than we were when the market was good.
2. We are much pickier about the types of houses we put under contract.
Regarding buyers –
This is a very slight change. There are idiots, I mean people, out there who will tell you that “Buyers are everything! Don’t even go looking for sellers until you have a buyer lined up and ready!”
There is a reason why these people are idiots. Don’t forget that.
As humans, we just looooooove extremes. There is almost no such thing as “balance” with anyone except for the wisest people in the world.
So whenever someone seems really one-sided, let that be an alarm to you. It is not just a “buyers” market during slow times, and it is not just a “sellers” market during fast times. It is always a little bit of both.
We currently sell almost all our houses with bandit signs that say the following –
I’m not kidding either. We put about ten of them around every house that we put under contract, and that is usually where the buyer comes from.
Listen to me carefully here –
There are always buyers for cheap houses out there. No matter what the market is doing. Don’t let anyone ever tell you any different.
But that being said, it is of utmost importance that you dedicate yourself to analyzing your particular market in terms of the following:
1. Who is buying wholesale houses in your area?
2. What price range are they buying in?
3. What types of houses are they buying?
In a slow market like we happen to be in now, you will usually find that your biggest customers are landlords. Some rehabbers, but mostly landlords.
Landlords aren’t big into renovations, so you will probably find that your ideal house needs minor cosmetics or less.
Landlords normally like block construction houses as opposed to frame.
Landlords tend to buy CHEAP houses that cash flow. In our farm area of Tampa, FL, our average purchase right now is under $40,000 if that tells you anything. Imagine what it must be in Butt Crack, Montana. Pennies.
So for example, in Tampa, FL, we currently look for 3 bedroom, 1 or 2 bath, block houses under $40,000 that have after-repair-values of over $100,000. And yes, we find, buy, and sell these all the time. You’ll believe it once you see it, and you’ll see it, if you do exactly what I’ve told you to do in this digital book.
Also, we are spending way less on our marketing right now. In a slow market, motivated sellers are all over the place. Our phone rings off the hook with a cheap ad in the local newspaper, a google maps listing (free), and some probate letters. No need to spend a lot of money.
Here’s what our current classified ad says, by the way –
“Cash Offer In 7 Minutes
& Close In 3 Days!”
All These Other Ads Are
We Pay Cash.
When you fax the seller a contract that documents a close in 30 days as opposed to 3, he normally won’t even bat an eye. But if he does, simply tell him your cash is tied up on another deal at the moment, but you’ll be good to go in 30 days. No big deal. And remember, it’s not your money we’re talking about here. It’s the money from the buyer that you are about to go round up real quick.
Well, my friend – that’s about it. Not much has changed since the market boom a couple/few years ago. We’re spending less on marketing and buying houses much much cheaper. That’s it. Besides that – business as usual. We’re wrapping up a deal right now that literally will net us $100,000.
You can do it too.
Make it happen.
© 2008 R. Preston Ely (Don’t steal my stuff.)
all rights reserved
Real Estate Investing Coach/Rockstar/Assassin R. Preston Ely publishes the critically acclaimed weekly ezine The Flip Factor. If you’re ready to jump-start your life, quit your boring job, make a bajillion dollars, and have more fun and freedom, get your FREE 7 Day Mini-Course RIGHT NOW at www.learntowholesale..com!
Of course you’ve read the headlines saying that not getting enough care about health may augment your risk of myriad health woes. For example Symbicort is used to treat asthma attacks. This medication works by relaxing muscles in the airways to correct breathing. Let’s talk about various remedies. A lot of young men think about “non prescription viagra“. Where you can get detail data about “viagra without prescriptions“? Don’t forget, think about “buy viagra without prescription“. Having impotency can undoubtedly complicate dating. If you have disappointment getting an erection, it’s vital to visit a qualified health care provider before pursuing any sort of medications. With well-thought-of source you get offers, that can also be redeemed at your local pharmacy with a valid prescription for any generic.