Being Open-Minded, Objective, And Optimistic with Guest Host Robert Orfino

TRE 38 | Rules In Real Estate

 

Just as skills are essential in the real estate market, we also need to have the right mindset to succeed. In this episode, guest host Robert Orfino talks about the three rules you should follow in real estate: open-mindedness, objectiveness, and optimism. With these, you can be clear on what you want for your business and pave a smooth path to reach your goals in a specific term. He also goes over the importance of looking for money and deals and the definition of “investment.” Be one step wiser in real estate investing as Robert teaches you how to take the punches of life.

Listen to the podcast here:

Being Open-Minded, Objective, And Optimistic with Guest Host Robert Orfino

We are still pushing forward on getting all the furniture in at the Airbnb. I had one of those challenges. I have a 200-pound wooden dining room table, a moving blanket, one dolly and had to figure out how to get it off the truck by myself. That was fun and over the age of 50, I don’t think anyone should be moving anything by themselves. That’s why you hire college kids, but we got it off the truck. It’s funny because the security cameras are up so there’s a video of me fumbling, yelling, cursing, screaming about this piece of furniture. It was a great deal. It was an absolutely beautiful piece of furniture. It just weighed a lot. It was trying to move like a 200-pound log that happened to be four feet wide. We had some fun. We’re getting that stuff. Hopefully you had a really productive weekend. It was lovely out and I got a little rain. I think Kathryn was over at AC’s room. She does a little work with AC. If you saw that picture with AC, myself, Derek and Jason and we are working on a few things. We are definitely excited about getting some things going here.

I’m trying to share on my Facebook and I did all my Facebook Marketplace. I’m about to hit share on all this and it’s six chairs, wall decor, table, side table. I can’t share with those people. This is your motivation. I want to keep an open mind. I saw a couple of things. I think it was Chris Bounds, he has a pretty forceful post on Facebook where he mentioned, “If you have two houses, that’s not real estate investing and you’ve got to get out there and get going and doing.” I was like “That was definitely motivation but it’s very subjective.” I’m looking at it and I’m like, “Where was I with two?” He’s right, I was in the middle of it all in two. At two, I was trying to get five. Five, I’m trying to get 50. We want you to progress that way. We want you to move into doing versus planning or talking, or certainly finding reasons not to do it.

We talk about in the real estate business, there’s wholesaling, there’s fixing and flipping, there’s buying and holding, there’s lending. There’s arbitrage and moving your taxes around, basically buying the property so that you can get the appreciation. If you ever get to that point, you have made it. For most people, we enter this world through wholesaling because the sales guys make it sound so good. You can do these houses with no money out of pocket. You may have bad credit. Who are they preying on? Right off the bat, you understand folks that are broke, folks who have bad credit. They then move into the fixing and flipping. Fixing and flipping are really difficult, but if you look at who they market to, it’s couples and young men. They push and are like, “This is going to be great. You can set your business up.” I think we talked about this, they do the comparison of Subway, “If you want to have the number one franchise in this country, Subway, you’d have to put $250,000 down. You’d have to have a $250,000 reserve. You’d probably have to buy $150,000 worth of equipment, sign a three-year lease, maybe a five-year lease. You’ve got to hire people. You’ve got to do all that and before you even make your first sandwich, you’re $750,000 in the hole.” Why don’t you become a fix and flipper when you can get this thing started now?

Getting into this business, knowing yourself is so critical. Click To Tweet

Set up your own business and it’s only $25,000, $35,000, $50,000 or $75,000, whatever they can get you for in the back of the room. What they don’t explain to you is that Subway vets their owners. You don’t get to own a Subway franchise without going through a very rigorous vetting process, including your credit, cash on hand and your skills. We go into a world where we’re taught to fix and flip and maybe we’re not vetted for. Buy and hold, guys like Jason and me in radio yelling, “You’ve got to buy. The time is the best time in the world, this is it. You’ve got to do it. You’re going to lose it. The best time to buy was twenty years ago.”

All this stuff is hitting your head and bouncing around and you’re driving along. It gets a little overwhelming and then you’re like, “I’m just going to lend them money. I’m not going to do anything. I’m going to lend the money out.” That’s a whole set of skills that you don’t know about either. When we talk about this, this is what that little Facebook picture was about. The folks out there that are taking 15% hard money, if you’re a hard money lender and you think, “I can get 15% here,” you’re either greedy and you don’t understand the market or there’s something else nefarious going on. You’ve got to understand that the folks coming to you at 15% are not the best flippers. Who would?

Open-Minded, Objective, Optimistic

In this real estate business, you’re looking for two things and two things only: money and deals. If you can’t find better than 15% hard money, you’re in trouble or you don’t have the skills. What I want to talk about is being open-minded, being objective and being optimistic. I think all those things have served me well. They’ve caused some pain in my life, but they’ve absolutely served me well. To get into it, it’s openness. I want to be open to new ideas versus closed to new ideas. I want to be objective, so objective is it is raining out. Subjective is I hate the rain. Objective just says, “It’s raining.” It’s an observation. Subjective says, “I hate the rain.”

TRE 38 | Rules In Real Estate
Rules In Real Estate: The two things you only look for in the real estate business is money and deals.

 

Optimism says, “It’s raining. This is great. The grass is going to grow. My fruit will come out. The vegetables will pop. Everything is good. All the dust and stuff get washed away. I really love it when it rains.” The pessimists will say, “It’s raining again. This is horrible. It’s scary. The roads get rough. I can’t see,” all the bad things. Going even beyond that it’s, “I can’t believe it’s raining again. This is Houston weather. This is nonsense. It’s always raining, dark and gloomy.” Now you’re being cynical. Don’t ever get there in our business. It’s okay to be skeptical for a little bit but don’t be cynical.

These things will serve you. Be open. I’ll take a step back. We’ve talked about this over and over. It takes about three years to really perfect your business, to get to a point where we’re actually doing the business. A lot of six months coaching program, 90-day coaching programs, one-year masterminds. You’ve got to run it through the years. We talked about the first year, you’re figuring it out. You’re a babe in the wilderness, starting getting a little trashy. You do a deal, you do two deals, you get going. Year two, okay. One, it works. Two, I’ve proven the concept. Three, I’ve got to build systems. You start building your systems and you get all your systems together. You’ve got a checklist here and all the Google docs over there or maybe you’ve bought some really expensive software program that tracks everything on everyone’s cell phone. You’re like Bruce Wayne, you’ve got all this stuff going on.

In year three, you throw everything you learned away in year one and two and you start over. Because in year three, you realize the real efficiencies in your business and you start making a move onto that higher set of efficiencies and hopefully be able to either remove yourself or expand. You can expand it to new product lines or you could expand it to the marketing to existing product lines. I can tell you that you often hear, “If you focus on one thing for five years, you’ll make a ton of money.” I know that I can’t do it. It is impossible for me to focus on anything for five years. I know it well. That is a fault or a benefit. It depends on how you look at it. I like to see it as a benefit. My wife would say it’s a fault. Sometimes I think maybe that’s what wives are for.

Opportunity comes along all the time. Sometimes it takes three hours, three days, three weeks, or three months. Click To Tweet

You would be able to go out there and say, “I’ve gotten to year three on a lot of models and in year four too,” and then I’m looking for, “I’ve got either double down and expand my marketing,” which is not changing your business model or you’ve taken everything you’ve learned in those first three years and you move on to something else. That’s what’s happening with Jason and I. We buy multifamily, we’re not buying towers. We’re not buying mid-rises, we buy low-rises. Let’s get into that. Low-rise is anything up to four floors. A mid-rise is going to be five to fifteen. Anything after fifteen or twenty, it becomes a high-rise. Understand that the mechanical systems are different from a four-story building than a 40-storey building, very much. We’ve done a lot of two and three-story buildings. We know how those systems work. It’s not a big leap for us. It’s not a big pivot. It’s a little bit of expansion to say that, “This is a two-story quad, there are four units here or there are eight units here and it’s only three stories high.” We’re able to shift and move into this stuff fairly quickly because it’s all based on the knowledge we have.

If you’re part of the mastermind or the membership, basically if you’ve paid us more than $1,000 in anything, we have the open Q&A and then we have our wholesaling networking hour. That’s somewhere around the Heights. Charles is going to find new locations and so we have already outgrown it. If you’re in the mastermind, it’s $7,500. If you’re in the mastermind, we’re having dinner with hopefully you and your spouses or your partner and we’re bringing it in. We’re going to have a little dinner. We’re going to go have a little Chinese food and sit down and talk about what you’re trying to do. Remember, our goal here is to help folks become millionaires, to acquire $1 million worth of wealth over the next three to five years. We want to do that for about 250 people and the whole reason we want to do that is we want to have a 250-person network of millionaires, so that when we totally screw up, we can go to our network and you lend us some money. It’s called a safety net.

Know Yourself

We were talking about expanding and moving on. You have this three-year run. At the end of three years, you sit back, you finally get that thing tuned, and then you can either double down on your marketing, which a lot of folks do in the wholesaling world. Those wholesalers that make it to year three, a lot of them double down on their marketing or expand their team out. That’s growth, that’s change and that’s all good. Someone will say, “We’re finding some good deals. I’m going to cherry-pick one a month then I’m going to put it into a buy and hold.” That’s a strategy. I love that strategy. I’d rather do that than taking the one cherry deal every month and me doing a fix and flip, but that’s just me. You’ve got to be open. At year three, once you have your bases covered and you have the opportunity to move on or to expand, then you’d be almost foolhardy not to be very objective about that. What do I have in front of me now? I can breathe. It’s year three, I’m finally breathing or it’s year four, I’m breathing now. What should I do? To that point, you have to be open. If you’re the person who could put your head down and work five years straight on one thing, God bless you, you’ll do very well. I’m not that guy. You have to know yourself. Getting into this business, knowing yourself is so critical.

TRE 38 | Rules In Real Estate
Rules In Real Estate: You better take a hard look at your business and figure out if you’re shifting or doubling down.

 

There are a lot of times I get invited to all these parties. I’m like, “No, I’m not going to that party.” “You’re not going to the party?” “No, I’m not going to party.” “Why?” “It’s because I know myself. I know if I go to that party, I’m not going to go home until 11:30. I need to get up at 4:30 every morning. It’s going to throw my sleep cycle off. It’s going to make me have a horrible day. At the end of the day, I’m going to be drinking Diet Coke while everyone else is drinking beer and I’m not interested. Does it make me antisocial? I’d love to go out to breakfast with you. Let’s go do brunch. Brunch is my thing, but hanging out until 11:30 at night? Not me. I know myself. Am I interested in going and shooting trim work up and doing all this detail work with this house you try and rip up? No. I know myself. I’m not good at it.” Understanding who you are in this business is absolutely critical. We do not want you to be anything other than who you are. You have some strengths as an individual. Every person reading this has strength. Your quest is to figure out how to maximize the productivity and the output from that strength.

There are some weaknesses that we all have. I for sure have weaknesses. I want to get my weaknesses up to the four or five-level on a scale of one to ten so that I understand what I’m doing wrong and what I could do better, but I want to focus in on my strengths. That becomes at year-three, year-four realization like, “I’m going to double down on my strengths moving forward.” How does all this happen? It’s because you have an open mind. It’s that simple. Opportunity comes along all the time and sometimes the opportunity takes three hours. Sometimes it takes three days, three weeks, three months. Are you at the point in your business where you can seize that opportunity or not? Are you at that point in yourself that you can seize it? Am I able to do this? Is there an easier way to do this? Is this an ancillary or tertiary product that I can add to my business? Yes or no?

Do The Analysis But Be Objective

Do the analyzation but be objective about it. Look at it from all four sides, all six sides and then have an understanding of, “How does this fit into my business? How does this fit into my personal life? Can I get this done? Yes. Is it worth it to get it done?” That’s another step. That’s another question. Be objective about that. One of the things we do, we talk about goals, and I think I owe this to the webinar. I owe this to you, is I ask how much money do you want to want to make a year? I want to make an easy number, $100,000. How many weeks do you want to work? I want to work for 40 weeks. That’s great. How many hours do you want to work for a week? I only want to work 25 hours a week. That’s awesome. That’s 1,000 hours that you’re willing to commit to the cause, to your career, to all this stuff. 1,000 goes into 1,000, 100. That means you have to make $100 an hour to hit your goal. You should always know that number.

You will not find opportunity in a downward spiral of negativity. Click To Tweet

Shifting

It’s hard. You find yourself skimming the pool or doing laundry and all this other stuff thinking, “I should be making $389 an hour,” and it doesn’t work that way. When you focus on your business, you have that number. The number’s 100 and you say, “This thing is going to come along, this little ancillary product, this tertiary product, the secondary product or maybe it’s my new prime product in my business. Does it make me $100 an hour? Does it fit into my goals?” There’s no feeling, there are no emotions around it. You’re very objective and just take it and understand it. If it says yes, then you can do it. I’m not telling you to switch your goals every three months. I’m saying at the end of those three years, you better have to take a hard look at your business and figure out if you’re shifting or doubling down. We’re in a real estate market. Real estate market changes every seven months. There’s some shift. It’s happening now. There is a shift happening. We may not understand it for another 60 to 90 days, but it’s happening now.

We’re talking about at that three-year mark, you’re shifting or even if you’re beginning, be open to the opportunities in front of you. When you start getting in these rooms, when you start networking and start realizing, this is why we say when you get started, spend six months understanding the lingo, the math, the acronyms or the initializations. This was pointed out to me. Understand those so that you can have intelligent conversations. When you start having these conversations, opportunities open up to you. We’re not into commercial real estate. We’re not buying office buildings. We’re not buying warehouses. We’re not buying this thing, but we do have a need to expand our office. We do have a need to hold some stuff. If we’re going to be doing 100 apartments a year, then we should be buying our toilets in bulk. You can get a bulk toilet for $47 and that saves 50% on the toilets, but you’ve got to buy them four to ten pallets at a time so we need some warehouse space and it’s in the back of my mind.

I’m not interested in being a commercial real estate owner, but lo and behold, here comes a commercial broker. He’s in our world. He shows up at some of our events. We’re having beers at Redneck Country Club. I was like, “We can go through loops and all that stuff.” He’s like, “I’ve got a guy who was door-knocking and he’s doing all this off-market. He’ll find you a deal. Tell me where. I will find you a deal.” If I can find a commercial real estate space that’s going to roughly take care of my needs and maybe have four times that space. Maybe we find a little five to ten-unit flex space and then we’re using one of those offices in the flex space and renting out the other nine but we’ve got it at such a deal. Like the Airbnbs, if we could run in at 50% occupancy, we’re good to go. We know other folks in our world who might want to rent some of that space, then it becomes something that we should be open to. I’m not saying we’re going to do it, but we should be open to it. We should look at it objectively and we should be somewhat optimistic that we have the ability within our network to help others get what they want by helping us get what we want. That’s an opportunity that comes across. My head is down and I’m only focused on wholesaling. This is the only thing I’m going to do. This is it. I may not see that opportunity.

TRE 38 | Rules In Real Estate
Rules In Real Estate: Many will lose before getting started because they us the wrong words and hang around with the wrong people.

 

Certainly in year one, you need to put your head down. Year two, you need to start figuring stuff out. Once you hit that three, four-year mark where your real estate business is shifting and things are getting done without you involved in every single step of the way, then your antenna is up. Put those antennas up so you can start looking for other opportunities. We also know that we’re looking for the individual who makes as a family $150,000, as a single $100,000, has a 700 FICO and has about $40,000 in the bank to start moving on properties. This conversation is a little bit different than that but not so much. It is amazing the folks that have already joined up on our mastermind, some of them have like, “I’ve already spent a lot of money with these other groups.” Got It. “I was told to go out and buy a single-family and there’s no cashflow there. There’s wealth. We’re definitely appreciating. That’s good.” “I’ve got like $800,000 in these properties. That’s excellent, but I’m still not able to really cashflow, move me off of my job. The question is do I do Airbnb or do I do apartments?”

When the person explained their life to me and what’s going on, I said, “Forget Airbnb. You’re not going to have enough time for that. We’ve got to find you some multiple doors.” It’s the same process. You understand how the single-family works, it’s going to be almost identical but there are going to be a few extra things you have to learn and so that’s growth. After three years, he’s learned it. He’s done it. It’s repeatable. He has a track record. He has systems in place. Now I need to expand. Let me go into small apartments. This is a guy who probably in five years will be buying big towers, A-level apartments. He’s on his path. This is what you do. It’s growth. If I was a wholesaler, then my growth might be instead of two marketing channels, I do five, which is fine but still you have to learn new stuff. You have to adjust. You have to pivot. You have to push forward or if I’m a buy and holder and I’m buying two houses a year, then maybe I’m at the point where I need to get four a year done. You go from two to four, that’s a big step. One a quarter, maybe you’re doing four and you want to go to twelve, now you’re going to one a month.

Growing, Changing, Moving Forward

We’re growing. We’re changing. We’re moving forward. At some point you might say, “Let me try this Airbnb thing.” That’s excellent. You’re open. “I’ve seen the numbers. They look good to me. I’ve looked at the places that I want to do Airbnb. I’m objective about it. These numbers make sense to me and I’m pretty optimistic that I can get 50% rentals.” Much better than the opposite sides of those being close-minded, being subjective, letting your emotions play into the business or being pessimistic or cynical about it. Be open. Opportunities are everywhere. Every meetup you go to, every dinner you go to, every networking event, any family get-together there’s some opportunity there. Whether you can identify it, find it and react to it, that’s up to you. We’ve got a guy coming in, Casey Eberhart. He’s going to be fantastic about pointing this stuff out to you. I highly recommend you come into him one-day, but we’re talking about this stuff is right in front of you.

There are potholes and heaves on your side of the street and cracks in the sidewalks that you can consider as opportunities. Click To Tweet

Get your mind straight here. You want to be able to identify opportunity and the only way you really have that opportunity come to you is by being open, objective and optimistic. This town, this Southeast Texas is a gold mine. You do not have to go anywhere else to wrap up your ten, twelve properties, whatever you need to do. We’re hitting a point where if interest rates do go down come September, you’ve got to be able to seize the opportunity because it is here. This is the year, 2019, that a few years from now you will say, “I wish I bought more homes in 2019,” because you’re already saying to yourself, “I wish I bought more homes in 2018.”

If you’ve got a few, great. If you’ve got none, you’ve got work to do, but that work can be done. Don’t think it can’t. Don’t lose before you start. That comes with that pessimism, that cynicism. Run away from that. I tell the story about when I had fraternity and alumni and all that good stuff. I had hundreds of people around me and I shut it all off and walked away and kept two friends out of that 100 for one simple reason. Every time we got together as a group, it was completely negative. There was no love. It was all fear and pulling other people down and I said, “I’ve got to get out of there.” I left 98 friends behind and kept two. There are no opportunities in a downward spiral of negativity. You find yourself in that place, know yourself. You find yourself in that spiral, run. I don’t care if it’s your wife or your mother or your father or your kids or your husband, run. You will not find opportunity in a downward spiral of negativity.

Surround yourself with people that are open, that are objective and that are optimistic. Will you lose? Will you get beaten sometimes? Yes, that’s how life works. You take those kicks in the gut, punch in the face and you move on. You learn from it and move on because I’m still optimistic. I took $500,000 personal loss. I am still optimistic. I’ve had the roughest time with my marriage when you’re in the hole, and there’s debt, and there’s no money in the future horizon. I’m still optimistic. I’ve had to leave other markets behind to go find a better market. I’m here now because I am optimistic about this market. I am open and I am ready to succeed. Too many of you will lose before you get started because you use the wrong words, you hang around with the wrong people and because everything is subjective to you from your fear. Don’t do it. We’re not waiting for a crash. We’re not waiting for an adjustment. We’re not waiting for the new school year. When we see an opportunity, we seize it. You need to do this.

We’re looking at buying six more properties for Airbnb within the next 90 days. We’re looking at two very major construction projects on top of two major construction projects we have now. I am optimistic that we can get it done. Our crews get better every week. We are finding more and more people to help us because I’m open to it. It’s the same thing with you. Going back to that post we talked about at the beginning, “I only have two houses.” What do we need to do to move forward? Be open. I need to get a little more cash. Are you open to working a second job? This guy came to the lunch, “I’m trying to figure this out. I’m not sure what to do.” I’m like, “What do you mean what to do? It’s Friday afternoon. You’re here. You could be driving Uber. Uber will make you $2,000 a month. $2,000 a month times the next twelve months is $24,000. $24,000 buys a house.” “I don’t want to do that,” “Then you’re out. You’ve already lost. “I’ve got to do that?” “Yes, you’ve lost.”

Seizing Opportunities

Be open, objective, optimistic and seizing opportunities. You have to seize this stuff. It is right there for you. It’s all laid out. Do you need a little help? Join our membership, it’s $1,000. We’ll help you out. We’ll get you through. We do a lot of Q&As, a lot of webinars, a lot of information, open-office hours, everything you need. You’ve already gotten some traction, you want to take it to the next level, join the mastermind because we’re going. We’re going to make those 250 millionaires. Do you need a little specific help on marketing or running it like a business or all those little classes? The $97 class, take it. Do you want to understand more about Airbnb? Take the one-day class, take the eight-week focus group. We’re about to start an eight-week focus group on small apartments. It’s going to be there, but you have to be open. You’ve got to open the door and take those steps. It’s so easy to sit back, be cynical and pessimistic. A lot of times it’s entertaining.

We poke around here. We know we’re poking. We probably shouldn’t do as much as we do, but we do. It’s entertaining. A little drama here and there. Jason’s quote is, “Come for the drama. Stay for the content.” I get it. We’re in the entertainment business. We’re in the marketing business, but open the door. When it comes to our profession and our business and what makes us money, we are insanely optimistic in this market. We’re also very open. Eight apartment-unit deals came to us.

I can only tell you that I’ve walked both sides of the street, the closed, cynical, pessimistic side and I’ve walked the open, objective, optimistic side. It’s a lot better on this side of the street. We still have fears. We still analyze and put some of that skeptical scientific stuff in front of us, but it’s only to determine how we do it. Go about life. Go about this real estate thing. Go about expanding your portfolio. Go about creating wealth by looking at the opportunity with this one thought, “How does this work for me?” Figure out how to make it work. Do not figure out how to say no. A lot of folks spend a lot of time figuring out how to say no. If I have any mistake, I am too eager to say yes. That’s why I have a wife. She absolutely counters all that stuff, but my wife when she analyzes these things, and she’s very smart. If you had a conversation with Kathryn, you’d understand MIT, Michigan, MBA, all that stuff. When you sit down understand with her, she is looking for how does it work, not how do we say no.

Walk on our side of the street. It’s pretty good. There are potholes on our side of the street. There are cracks in the sidewalks. There are heaves like on that side of the street, but we look at it as an opportunity. How do we make this work? How do we make it better? Do not get into that trap of spending so much time figuring out a way to say no. This is everything. I don’t care if you don’t do real estate, selling cars or you’re making garage sales, I don’t care if it’s just your job. Stay on this side of the street. Be optimistic. Be open. Be objective. It’s the greatest market in the country. You are here. You’re listening to me. It will be a sin if a few years from now you did not move forward. Be very optimistic about this market. Understand the opportunities everywhere and look for a way to say yes.

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