Printing Money!

BUILDING YOUR MOJO

2006 was a bad year for me. I can still remember driving home one afternoon and having a mental breakdown in the car before pulling into the driveway. I think Murphy’s Law was in full effect. Everything that possibly could go wrong actually had gone wrong. I went from selling $50,000,000 a year to $20,000,000. My income was cut in half.

Real estate was all I knew. Why was it slowing down? What was happening? These were the questions I was asking myself. I mean, how could I go from making $1.5 million in GCI to $700,000? Forget about net. My expenses were through the roof. First the business expenses with marketing and advertising; it was a mess. Then personal expenses—mortgage, taxes, medical, investment properties, the list was endless.

I had gotten to the point where I needed help. How could I go home and tell my wife we were in financial trouble? It was a very tough moment for me. So, I did what any other aggressive and smart real estate agent would do. Fight. I tried many things. First, I went digging through a box in the back of my closet trying to find my health insurance policy. I remember tip-toeing in the night when everyone in the house was asleep so my wife wouldn’t find out.

Like a typical man I needed to figure this out for myself. I had remembered someone telling me about health insurance covering shrink bills. I figured, hey it was worth a try. Maybe I could get some mental health counseling. In fact, I did, but to no surprise my wife did find out about it. Staying up many late nights on a couple hours of sleep, being jittery all day on caffeine, and coming home earlier and earlier might have given it away. It didn’t help that she was a licensed family and marriage therapist either.

So, I went and it lasted three sessions. For one, that’s all what my health insurance covered, and two, it slapped me in the face. It woke me up. I had this master plan my whole life to becoming successful, from writing goals every year to creating a game plan, working backwards with checks and balance systems placed in between.

From April to October 2006, I reflected on my real estate career. I internalized everything. All my life I read how real estate was the path to wealth, to success. You name the author or seminar and I read it or attended it; from Mike Ferry to Robert T. Kiyosaki, I followed everything I learned to the tee.

During the six months I was in this meditative state, I came to the realization that there was nothing wrong with me. I had the entrepreneurial mind, the discipline, the faith, and the courage to fight. I had the tools of self-educating (constantly reading books, listening to audio tapes, attending seminars) and a proven prior success record. It was actually the timing.

To further validate my belief, I went and studied some of the most successful real estate and business figures in our times who achieved success in their careers. I studied Donald Trump, George Soros, Bill Gates, John D. Rockefeller, Warren Buffett, and several other successful role models. That’s where I came to the realization of three things:

1. Success is about timing.
2. History repeats itself.
3. Successful people seek mentors.

You see, the tools and methods I was using to sell houses did not work anymore, not because they were bad, but because the market had changed. The real estate bubble had finally popped. The timing had changed. The real estate bubble money was gone and I had a choice. I could live in the past like the character Al Bundy on Married with Children, or choose to find the next real estate “hot” market.

It wasn’t new construction. It wasn’t rentals. It wasn’t commercial. I had to look further into the future. So far into the future, I had to round the globe and come back to the past. I needed Superman speed. In CashFlow Quadrant, author Robert T. Kiyosaki talks about how massive wealth was transferred from employees and self-employed individuals to business owners and investors due to the Tax Reform Act of 1986.

After the tax loopholes were taken away, the real estate market had crashed, and as a result the Resolution Trust Corporation (RTC) was formed. Remember Chapter 1?

Kiyosaki states, “The RTC was the agency responsible for taking foreclosures from the real estate crash, and transferring them to people who knew how to handle them. For me and many of my friends, it was like a blessing from financial heaven.”

This was the “a-ha” moment I was waiting for. The subprime mortgage market was melting, foreclosures had started to rise, and fear was in the air. These were the same symptoms that had made a lot of people money in the past. History was repeating itself. Money was about to be printed.

My only problem now was I had no clue where to start. I knew nothing about managing the banks’ real estate–owned properties. At that time, there might have been a class or two on short sales, but other than that there was nothing on REOs. All I knew was I had a drive, I had faith, and I was ready to take action. I was ready to build my momentum again. I wanted my MOJO back!

Therefore, I went to the basics. I hit the books. I dug up everything I could find on bank-owned properties and I made a list of all the people who might possibly be my mentor. In business there is an unwritten rule of quid pro quo, which is Latin for “this for that” or “a favor for a favor.”

I was prepared to pay for help. I realized in life you always pay. Either you pay upfront or at the end through the school of hard knocks. Therefore, I maxed out my American Express and paid for my mentor’s time. I managed to find someone who had profited from the first savings and loan busts in the late ’80s. Within twelve months I learned everything about the bank-owned property game.

No matter how much theory or studying you do, there is nothing like firsthand experience. So, on top of paying for education, I paid an even harder way—by making mistakes. Mistakes are a double-edged sword. You need them to learn, but they can cost you a lot. The key is never making the same mistake twice.

The good news was that between 2007 and 2008 the bank-owned business was just beginning. Therefore, the mistakes I made were not that impactful. If I were to make the same mistakes in today’s REO market I probably wouldn’t be writing to you today.

What I learned so far in this business is first, you need to treat it like a business. You must implement systems. The next thing you need to know is this business is very easy; it’s science, not rocket science. Most importantly, you have to have faith. You have a choice to decide every morning from the moment you wake up to do something or not. Every decision you make is a tradeoff. You are trading one outcome for another. Sometimes you make the right decision and sometimes you don’t. That’s OK.

REOs helped me build my momentum back. I love waking up in the morning having a lot of things to do. It’s exciting. That “mover and shaker” feeling is thrilling; never let that go. When you look back in life on the big screen, you will see yourself driving to the fork in the road and seeing your choices spread out in front of you.

The choice of you pursuing REOs and taking action will be the seeds in the garden you plant. The hundreds of calls you receive a couple of years from now from the customers you sold REOs to, wanting to relist their properties, will be the fruit the garden bears.

On the next page are some common things I reminded myself of when rebuilding my mojo. I wrote the following five points on a sticky note, initialed it, took a picture of the sticky note with my iPhone, and saved it as my wallpaper so that every time I turn my cell phone on, I see this:

YOU’RE BURNING WHY?

There are two things in life that will kill you. The first is self-doubt and the second is negativity. Many times I used to wake up and say to myself, “Who am I kidding, I can’t do this,” or “Who am I? I don’t know anyone special or belong to any privileged clubs.” When I first started, I used to tell other real estate agents, some of them close friends, about getting into REOs. They used to laugh and say “What makes you think you can do that?” or “That’s a fad, it will never work.”

By listening to these comments, I was slowly projecting self-doubt and fear. It was like I had a small voice inside of me telling me not to take action. Not to change. No one likes change. You have to readjust your life and circumstances, but in reality, change is the only constant. Nothing lasts forever.

I knew if I did nothing new or didn’t quench my thirst to be successful with bank-owned properties then nothing would be different. Not changing is quitting. I never quit anything in my life, and I sure enough was not going to quit then. Besides, if I did nothing, I knew already what the outcome would have been—nothing. And I knew I could always quit, so why start early?

It was very interesting. When things were bad for me, no one wanted to be around me. The criticism and cynicism was through the roof. All I would hear was “No,” “Never,” “No way.” But I knew that the greatest success stories of our nation did the exact opposite of what everyone else was doing.

During the housing bubble, agents were selling to those who were buying. During the stock bubble, they were shorting stock when everyone was buying. And I studied history, so I knew over the next ten years there would be one of the biggest opportunities to become wealthy, just like the thrift busts in the late ’80s.

No matter how many times I heard the naysayers, I kept on telling myself “Yes, “REOs are the answer.” Instead of thinking “No,” I thought, “How can I?” Every time fear crept in, it made me stronger. The small voice in my head was getting smaller and smaller. “No one can tell me no; I will not lose; failure is not an option.” I used to repeat this to myself every day either in the shower or when I was driving.

But I realized one thing while examining why I wanted so badly to be successful with REOs. It wasn’t the money. Sure, the money has blessed my family and I am grateful for it. But my burning WHY was more than that. One morning I was sleeping, maybe it was five minutes till 7 A.M., the time that I normally get up every morning, and my wife nudged me on the shoulder. She said, “Honey, why do you get up every morning?” Being half asleep with my eyes halfway open, I carefully rose, making sure not to kick our cat, paused for about three seconds, and said, “For you.”

The sole purpose of me working was for my wife and my family. I loved her and I wanted her to have the world. This was my burning WHY and the ammunition that put water on the fire of negativity and self-doubt. You see, what I wanted was not money but wealth; two very different concepts. Wealth is having a loving family, being healthy, accomplishing goals, being passionate about life, teaching others, and having peace of mind.

Money is just a scorecard. It keeps track of things. It’s a validator. When I set out and got my first REO contract, hired my first listing specialist to eventually transition to the REO Plus Model and started an automated REO machine, the money that came in was the reward. It validated the decisions I made. I always believed in the power of printing money, because money is always in abundance. Think about it. Money comes and goes. Agents have made millions in selling pre-construction homes and agents now will make millions selling REOs. It’s never-ending.

That’s why you need something deeper than money as your burning WHY. So, now I ask you. Why do you wake up each morning? What is your purpose in life? What is your mission? To guarantee success in your REO career you need a clear indication of what really drives you to succeed.

The reason why I wake up every morning is ___________________

______________________________________________________

The purpose of my life is __________________________________

______________________________________________________

My mission is___________________________________________

______________________________________________________

Here are some questions you can answer to determine your burning WHY:

Top Five Burning WHY Questions

1. What are the top three reasons that make you committed to being successful in your REO career?
2. Who is counting on you to make your REO career successful?
3. What will happen to those who are counting on you if you quit?
4. If you have a tough moment, a near mental breakdown, what one thing is going to help you bounce back and get you back on track to mastering REOs?
5. Once you become successful with REOs, what will you do with the money?

AVOIDING BURNOUT

There will be many times in the REO business you will feel burnt out and exhausted. It’s the feeling of wanting to just drop everything, shut your cell phone off, and leave town for two weeks. Too bad you can’t, but it’s at this breaking point that we can offer you some advice.

This is especially true if you are operating under the REO Bootstrap Model and have your hands on every granular detail of the REO cycle. One piece of advice I can share with you as I do with the agents I consult with is: How do you eat an elephant? Answer: One bite at a time.

I have experienced many burnt-out phases that have made me want to shut down internally. I remember the first time an asset manager reassigned a property from me; it felt like someone ripped my heart out of my chest. You know those rides at amusement parks where you drop down fifty floors at a blazing fast speed?

When I read that email from another listing agent that said, “The property was reassigned to me, please remove your listing,” that’s how I felt. I felt like I failed. So many thoughts went rushing through my head, but the one thing I always did was keep my cool. From years of coaching others, I’ve learned how many agents dropped the ball. The worst thing any one agent can do is to complain or argue with an asset manager. Even if the agent is right, the agent has no right to argue or complain to an asset manager. It makes no sense. It shows low class. It’s unprofessional. It’s a waste of time. Never bite the hand that feeds you.

Another experience that almost made me lose it was when one of my closing coordinators quit and went to work for another REO listing agent. This was a different feeling from what I described above. I was pissed off! After all I taught her, she left to work for another agent, without even approaching me or warning me. What gave her the right? I was angry. I was upset. It took about a month for me to get over it. At first, all I wanted was revenge. But then I realized there was no point. I became humble. I discovered that it’s better to teach than to hate. And believe it or not, my choice of keeping my cool is probably one of the reasons why I have become so good at coaching others and sharing my secrets for success.

There have been other times when I have had critical deadlines due that were missed because one of my listing specialists forgot to turn in a BPO or listing packet. Also, I have had buyers at a closing table who just lost their job and tried to conceal it, resulting in the lender backing out of the loan after conducting a final employment check the day before closing.

The worst one is when I have about ten different windows open on my dual monitors, as I’m working on four to five different tasks at once, and I get a phone call from an asset manager wanting to know about a specific property or situation. I’m left scrambling.

It is times like these when all you can do is take a step back, take a deep breath, and go do something else. There are only so many phone calls or texts you can send to your listing team before they will respond. They are busy just like you. They will eventually respond back. Take the time that you are waiting and go do something else; be productive with it.

I love to run. I can go for a six mile run outside on a bright and sunny day and I feel like a new person after. I also love to work out. I put my iTunes playlist on or listen to Pandora and hit the gym for a forty-five minute intense weight lifting workout as I burn out all the stress from the day.

The final thing I love to do is meditate. I turn off all electronic devices and sit in complete silence, in a relaxed and comfortable state, close my eyes, and chant a silent mantra to calm my body. I try doing this fifteen to thirty minutes before starting my day. I find early mornings are the best, right after you have had a full eight-hour rest period so you are alert and don’t accidently snooze off.

Also, since everyone else is probably still sleeping, it’s easier to concentrate. This is by far the hardest part. Try stilling your mind to produce no thoughts. It’s a great challenge. Sant Rajinder Singh, a profound teacher of the science behind meditation to all different religions in the world, states that the time you spend in mediation is equivalent of four times the amount of rest your body receives during sleep. So if you can manage to meditate for fifteen minutes, it’s the equivalent of resting for 60 minutes.

The goal is to rejuvenate or restore your body to avoid a burnout stressful situation. Unfortunately, stress has been linked to both high blood pressure and cardiovascular problems. By implementing activities such as meditation or relaxing, you can recharge your batteries to avoid a burn-out session.

The lesson is to have a strong work-life balance to avoid burning out. In the REO business, especially when starting or growing, it can be challenging. Here are an additional eight things I do regularly to avoid burning-out:

1. Think positive (“I will not lose.”).
2. Eat healthy (six small meals a day).
3. Drink protein (1 gram of protein per every 1 pound of body weight).
4. Drink lots of water (up to one gallon a day).
5. Sleep well (eight hours a night).
6. Listen to motivational music (upbeat, inspirational).
7. Play (with my cats—sorry, no dogs!).
8. Teach (my wife or mom about real estate).

What you put in is what you get out. Your body is a temple of God. Therefore, if you treat it well, it will treat you well. This includes eating, resting, exercising, and most of all, having fun. You will make a ton of money with REOs. Now spend time with your family and have fun.

Make a list of the top five things you will do to avoid an REO burnout session and itemize them below:

MANAGING SUCCESS

Success. Isn’t that what it is all about? There are many levels of success in the REO business. The first level of success is choosing to commit and be ready to embrace change by taking action. The second is obtaining your first bank contract. Next is setting up your models and developing your systems.

After that is mastering your trade and being the best you can be in the market by building your mojo, having the right attitude, and following your burning passion. This, combined with hard work, education, and discipline is the formula for success. From OCRs to post-closing, you want to be the fastest, leanest, sharpest team in your marketplace so you can make the bank’s “A” list.

The final level is achieving an autopilot, self-sustaining business that can net you a million dollars within twenty-four months. In actuality, it’s not making a million dollars that is important but what that money can buy you—time. Free time is the only commodity that you cannot get back. Having a business run by your team with you working less than twenty hours a week and spending the rest of your time with your family is what real success is about. Remember, money will come and go, but memories last a lifetime.

You have been given a unique opportunity. As an REO agent you have an opportunity to capitalize off our depressed real estate market within the next five to eight years. Starting off in this market is like finding a home worth $1,000,000 that you can get under contract for $250,000. You may not have the cash to purchase but if the deal is good enough, the money will come. If you manage to take action and build momentum, you will create motion.

Your broker, associates, friends, and other families will see your success and how it is rewarding you and will want to be a part of your expansion. Being successful and making a million dollars is nothing more than a state of mind. Your mind creates attitudes and beliefs that lead to action. With action you have the wheels of motion moving and linking up your thoughts, feelings, and beliefs and forming an unstoppable dream team that is ready to take your REO business to the next level.

However, with success comes envy. Maybe success is nothing more than a penalty of leadership. Regardless, envy or jealousy is a weak emotion that you will face after you begin building momentum and obtain success. There will be your own colleagues, fellow REO agents, who will be your best friends at conferences and then stab you when you are sleeping.

I have heard countless sad stories where competing REO agents will intentionally hire people to go to all of your listings and remove your signs, lockbox, or keys. Even worse, agents will hire people to file complaints to your supplier alleging they were customers and you did not present their offer. The worst thing I heard of was agents who would break the law.

They would find out which vacant property you have, give out the lockbox codes, and put tenants inside of them as “squatters.” They would create a proxy lease, collect the first month’s rent and security deposit, and act as if they owned the home since they met them at the door step. Then they would disappear, using fake aliases—all with the motive of you having to deal with a cash for keys situation or eviction so you delay closing on the property and making commission for an additional six months.

People will do whatever it takes to bring you down. If they can eliminate you from their market, they think they will be awarded your new assignments. This is faulty logic. The worst kind of betrayal is from people in your own organization. During the early years of my career, I had implemented the REO Bootstrap Model and had a stellar dream team. I taught my listing specialists everything there was about REOs. I put a lot of money into their pockets and taught them everything I knew about the business.

Unfortunately, the unthinkable happened. One of them got greedy. After a couple of months, I began noticing his quality of work decreasing. He would take an extra couple of hours to get back to me after I called. He would be late on the assignments. He would not visit properties during weekly inspections. He would intentionally violate our company values and ethics by ignoring phone calls from co-operating agents with the motive of placing his own “in-house” customers into homes.

The worst was when I found out he was secretly in talks with other brokerage companies with the intent to “steal” my bank contacts and branch off on his own, completely violating any and all confidentiality and non-compete agreements we had. It was a mess.

The good thing about the REO Bootstrap Model is that you as the REO listing agent are the sole contact for the bank. Therefore, everything your listing specialist does must have your name on it. If you remember the eight successful measurement tools from Chapter 11, you will know right away if your numbers are under par.

As soon as I saw my numbers off, I began tracking my listing specialist patterns and swiftly took action, firing him on the spot and cutting off all communications from our team. I locked him out of his email account, removed his signs and 800 phone numbers, and even entered comments in our bank’s platform letting it know that a certain associate was no longer affiliated with our team.

In the book Good to Great, author Jim Collins talks about getting the “right people on the bus” but more importantly getting the wrong ones off. One thing I learned, that is critical to managing success, is to be careful who you bring on your team. They must share your core values (e.g., act ethically), be a team player, be disciplined, and be passionate. Real estate is a people-person business.

There is enough room for everyone to be successful. The ones who see only “I” versus “We” are the ones who will have a short spurt of success but then phase out during the long-term. Sometimes you will be forced to charge it to the game when managing success. It’s a cost of doing business, so be prepared.

FINAL THOUGHTS

You just finished the most powerful book ever written on REOs. Our best-selling strategies and tactics have been used by thousands of real estate agents and brokers throughout the country, and now they belong to you. You possess what took us years of experience, trials, and errors in the palms of your hands.

You learned how easy it is to get in the REO business. You learned about the 90/10 REO rule, the six steps in the REO cycle, how to build your dream team using the REO Bootstrap Model and the REO Plus Model, how to use OVM and bankroll your business, and how to perfectly execute every function of the REO cycle, from the OCRs to closings. You learned what asset managers need, and the hidden secrets behind making a fortune in the REO business through the different revenue streams.

Your goal now is to hang your shingle up, so to speak, and begin implementing each one of these strategies; if you are already a REO agent, even better. We want you to fine tune your business by implementing a minimum of three to five lessons taught in this book.

We know that at times taking on a new challenge can feel daunting. It is a natural emotion. However, remember the REO boom is here now. You have a short window of opportunity to get in and cash in on the biggest ATM ever—REOs.

There is a reason you are reading this book. It is your calling to add an abundance of income to your life and your family’s. Anyone can make money during an up market, but the real professionals make money when things are going bad, in a down market. At the time this book was written, there will be an additional three to five REO booms coming nationally with final default notices, foreclosure filings, and foreclosure auctions tapering off to 2017.

As a real estate entrepreneur, your job is to find opportunities while everyone else is running away from them and getting day jobs. This is your opportunity to step into the market and make a million dollars within the next twenty-four months.

You were built for greatness. No one can do what you can. Be inspirational, be exceptional, and most of all have fun doing it. We want you to take the change out of the game and milk the REO ATM. Print money! We wish you much success and all the best on your journey in the REO business. Please remember to visit:

www.reoboom.com

Gain full access to bank asset manager’s lists, newsletters, coaching tips, and our REO podcasts as they are released. We are here to help you on your lucrative venture in the REO business.

Also, we encourage as much feedback as possible in your local REO market. Your feedback will form the basis for future editions of REO Boom. Also, if you would like to be featured or share your success story, log on to www.reoboom.com as we will be selecting a handful of REO agents to be featured in our next edition.

Lastly, remember to pay it forward and share a copy of this book with your associates, team, and/or your broker. Show how proactive you are to your broker and offer to teach some of the concepts in this book to other agents in your office at your next meeting. Sometimes, the best way of learning is teaching others.

Remember, the REO business is a team sport. There is nothing better than to be successful with your associates. As they say, “It is lonely at the top.” Make history; when you look back ten years, we want you to say to yourself, “I was a part of that.” Take action today. We know you can do this. It is your destiny. We wish you an abundance of wealth and long lasting happiness. Carpe diem!

Sincerely,

ARAM SHAH & TIM SHAH